ESG Impact on Sustainable Finance and Lending

Products and Services Contributing to Sustainable Finance

Environmental and Social Impact Management in Lending Activities

Ziraat Bank recognizes the transformative impact of financial institutions on economic activity in securing economic prosperity as well as environmental and social sustainability. Aware of its responsibilities towards nature and society, the Bank has established the Environmental and Social Impact Management System and assesses the environmental and social impacts of its lending activities through a risk-based approach. 
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Adopted and enacted by the Bank’s Board of Directors in 2020, the Environmental and Social Impact Management Policy serves as a complement to the Sustainability Policy. 
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Under the Ziraat Bank Environmental and Social Impact Management Policy;

• Maximizing the environmental and social contributions of the financed projects is of critical importance.

• Activities prohibited/restricted by national legislation and international conventions to which Türkiye is a party are included in the List of Unfinanced Activities and are not financed regardless of their amount. 

• The new/capacity increase investment projects and customers requesting loans not included in the List of Unfinanced and above a certain amount are subject to the Environmental and Social Risk Assessment Model developed under the Environmental and Social Impact Management System, and the environmental and social risks of the project/customer are categorized and monitored as low-medium-high. 

• Support is provided to customers to prevent/mitigate OHS risks that can arise in the financed investment projects.

• The Bank aims to develop its products and services in line with the principles of sustainable development, promoting the sustainable management of natural resources, protecting biodiversity, combating climate change, and supporting social development. The Bank encourages its customers to invest in these areas with sustainability-themed products, such as sustainable agriculture, renewable energy, resource efficiency, environmental protection technologies, and reforestation. 

• The Environmental and Social Impact Management System is reviewed and regularly shared with the Bank’s stakeholders with the aim of continuously improving its performance.

The reports to be prepared during the lending process for projects whose investment amount exceeds USD 50 million are evaluated using the environmental and social risk assessment model under the Environmental and Social Impact Management Policy in Lending Activities of the Bank. 
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In order to identify the environmental and social impacts of the projects to be financed, the risk category of the project (A, B, or C) and the relevant actions to be taken by the customer are determined based on the criteria set out in the Environmental and Social Risk Assessment Workflow Form. In this context, if the environmental and social risk category of the project is set as A, the environmental and social risks of the project are considered as maximum, and if it is set as C, they are considered as minimum. 

Risk Category A:

• The projects in Category A are the ones that could potentially have diverse, irreversible, or unprecedented and severe adverse social and environmental impacts.

• An independent Environmental Expert prepares an Environmental and Social Risk Assessment Report and Action Plan.

Risk Category B:

• The projects in Category B are those that could potentially have limited adverse environmental and social impacts, which can be few in number, occur only in specific locations, are largely irreversible, and for which mitigating measures have already been taken.

• Should it be decided to prepare the Action Plan, based on the evaluations of the Bank’s Environmental Expert, it is preparedby an independent Environmental Expert orby the Bank’s Environmental Expert.

• If it is decided to seek the opinion of an Independent Environmental Expert, the process set out above for Category A applies.

Risk Category C:

• The projects in Category C are those that will have minimal or no social or environmental impact.

• The “Environmental and Social Assessment” page of the Environmental and Social Risk Assessment Workflow Form is not issued. No Action Plan is prepared.