The growing impact of the Environmental, Social, and Governance (ESG) movement presents an inescapable challenge that stakeholders across the political, social, and economic spectrum must face. As the global scenario evolves, businesses will need to place a greater focus on integrating ESG practices into their operations and business models, consistently evaluating their impact and sustainability in the medium to long term.

National and supranational entities, including the European Union, the OECD and the United Nations Global Compact, are deploying extensive resources to drive ESG transformation. This will increasingly affect countries, industries, companies, and individuals.

Bank of Valletta (BOV) aims to be a catalyst in this transition while embedding ESG in its own strategies, business, and operational model. As a major player in the local economy, BOV is already offering various products reflecting the Bank’s commitment. From commercial and personal eco-loans to ESG Funds and investments, BOV’s suite of products is geared towards a more sustainable tomorrow and financial well-being.

Can BOV lead Malta’s shift to sustainability? “I don’t think it’s a question of can, but more of how we can do it best,” says the Bank’s Chief Personal and Wealth Officer, Simon Azzopardi. “As Malta’s largest bank and the biggest company quoted on the Malta Stock Exchange, this is a moral obligation as much as a natural choice. People out there are perhaps not entirely aware of just how much BOV is doing on the sustainability front,” he tells

As BOV embarks on its new strategy for the next three years, ESG becomes central both from an internal and customer-facing perspective. “I hope this interview helps to widen the awareness of ESG and expose BOV’s DNA to a wider audience.”

In his telling, BOV is the spearhead leading the accelerating change towards a greener, fairer, and better-governed future, thanks to specially designed credit and investment products that encourage clients to put sustainability at the heart of their financial decisions.

“Last year, we provided €35 million in mortgages and personal loans with a green dimension. That is €35 million – no small amount – invested in sustainability, whether it’s an electric vehicle, solar energy, or green home improvements.”

Nine percent of the credit facilities extended by the Bank in 2023 were classified as green, thanks in no small part to a partnership with the European Investment Bank and the Malta Development Bank that allowed BOV to offer zero percent rates on loans for investments in energy-saving projects.

The interest generated by these products was “remarkable – there was the ‘wow’ factor thanks to interest rate and the soft terms; everybody wanted it,” says Mr Azzopardi, excitedly revealing that BOV has similar ESG-driven products in its pipeline.

Just as promising, he says, is the steady demand for the Bank’s own eco-loans, which “shows a certain level of maturity that reflects the slow but steady shift in culture that is necessary to make the green transition successful.”

Even without the involvement of other institutional partners to share the risk, the 3.25 percent rate offered by BOV on (unsecured) loans with a sustainability dimension is “among the best, if not the best, rates offered on the local market.”

The Bank’s ability to focus its incentive structure towards national priorities is no accident. Mr Azzopardi admits that the return on customer deposits remained unchanged during a period of high interest rates from the European Central Bank but points out that this allows BOV to pass through the benefits on specialised low-interest loans instead.

Investors with an appetite for a higher return were provided with alternative capital and interest rate guaranteed unit-linked insurance products and sustainable investments sourced from reliable partners.

Apart from the attractively low interest rate, BOV’s eco-loans have other benefits. They do not require any upfront contribution, have no processing fees, no early repayment penalties, and can be stretched out over a 15-year repayment period.

“The Bank’s positioning in the local market has enabled it to provide the most beneficial conditions for its lending products with the best interest rates on the market. Our bank deposit rates remain low, but we continue to offer very attractive alternatives through fixed income products designed by our Fund Management and Life Assurance subsidiaries.”

All these factors, Mr Azzopardi says, make BOV’s eco-loans “a quite competitive offering” that is also drawing a lot of attention from business customers. “We have seen private entities within the transport sector that have invested heavily in electrification,” he says. “The business case for fleet operators of, for example, delivery vehicles, is that the nature of driving in Malta is particularly suited to battery-powered vehicles.”

Turning to the investments side, Mr Azzopardi explains that regulatory updates now oblige institutions like BOV to ask their clients to disclose their sustainability preferences: “If you tell me that 20 percent of your investments should be ESG-driven, we are obliged to meet your expectations with suitable products.”

The Bank’s partnerships with Fidelity International and MAPFRE have broadened its investment product offering, enabling it to fulfil specific investment needs. “Today, we can provide ESG-driven portfolios irrespective of whether you are a cautious, balanced, or aggressive investor.”

An investor might wish to invest only in companies that are committed to employing persons with special needs, or companies that are pursuing rigorous green investment strategies: “so there we can be quite surgical.”

Mr Azzopardi also reflects on what constitutes risk in an environment where European and global policies are becoming more demanding, in sync with the increased recognition of climate-related risks faced by companies, the need to give back to society, and the obligation to run businesses responsibly.

BOV does not just execute and advise; it also provides clients with the information they need to make informed investment decisions. It assesses each and every instrument it provides access to, drawing information from international giants like Bloomberg and Refinitiv. The breadth and sophistication of the Bank’s offering in this area is expected to expand, according to Mr Azzopardi, who notes that “appetite is still growing in this area.” New stimulus will come from financial literacy programs, an area where BOV continues to increase its presence.

He acknowledges that the demand for sustainable investments is still “in its infancy.” However, he is quick to add that it is rising, albeit “at a calmer pace than the demand for green loans.”

There is more appetite for ESG-driven securities coming from institutional investors, like insurance companies, spurred on by their own regulatory obligations. All in all, with a projected compound annual growth rate (CAGR) of 12.9%, ESG assets are on pace to constitute 21.5% of total global assets under management (AuM) in less than five years.

“2030 is just six years away. 2050 is 26 years away. It may look like a long time, but these important milestones are approaching us fast. We’ll need to see some large-scale economic and social transformations by then if we aim to meet goals not to harm the environment or society, that have been agreed to at the European level and abide by a set of good governance principles, for example, those set out by the OECD or the United Nations Global Compact.”

The last question, then, is how he feels about occupying a leading role in this important transition. Has he seen anything like it before?

“I have seen material changes in decades of banking. Some had very apparent and visible results; others changed society with impacts that were not so obvious to the casual observer. If you go back some 25 years, that was a time when many people had substantial capital overseas, in British and Swiss banks. The authorities at the time introduced different amnesties, leading to a large inflow of money that made a material impact on the domestic economic scene and led to substantial growth in assets under management held with local financial institutions. It also led to a silent transformation in culture where paying some tax started to become accepted as an alternative to paying no tax. I am proud to say that I was part of the Bank’s wealth management team that oversaw this transition back then.”

This shift towards a more sustainable future, Mr Azzopardi believes, “will have a bigger impact on society, because it is about the air we breathe, the social dimension of the people around us, and the way we behave where better governance is exercised.”

The Chief Personal and Wealth Officer certainly ticks all the right boxes, exuding genuine commitment to the tasks ahead. But how does BOV view that commitment? Is it ready to lead the way in this economic transition?

“BOV is the largest bank in Malta, considered systemically important by the ECB. We are the largest company on the local stock exchange. To be honest, I don’t think we have a choice but to lead it! The upshot is, we’re prepared.”


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