Environmental and Social Risk

ENVIRONMENTAL AND SOCIAL RISK

Physical Climate Risk Assessment for Garanti BBVA
Physical Climate Risk Adaptation & Actions

Banks face risks associated, in particular, with occupational health and safety and with financing activities that could result in adverse impacts on the environment and society. Failure to timely and duly address these risks may result in reputational damage and consequently a loss of investor support and customer loyalty, among other challenges.

Garanti BBVA sees its proactive management of these risks, such as those arising from climate change, not only as critical to its success but also as one of its most essential duties to its stakeholders. Through its effective approach to sustainability embedded throughout its organization, Garanti BBVA monitors a variety of environmental, social and occupational health and safety indicators, benchmarks itself against best practices worldwide, takes steps to close the gap, raises the awareness of employees and collaborates with its peers, financial institutions, customers and business associations.

Garanti BBVA also implements an Environmental and Social Impact Assessment Process (ESIAP) in line with international best practices to perform an effective risk assessment of its loan portfolios and to ensure an active risk management.

Within the scope of ESIAP, Garanti BBVA ensures that the projects financed by the Bank satisfy the social and environmental standards required by legislation and the Bank’s policies. If necessary, the Bank also ensures that the project owners undertake an impact assessment, take prescribed measures, adopt sector-specific good practices, and establish adequate control mechanisms.

Garanti BBVA has a Sustainable Finance Team, which comprises of 8 full-time members as of 2021 year-end, and is responsible for embedding sustainability criteria into core business. Reporting to the Responsible Banking and Sustainability Committee and chaired by a Board Member, the Team’s responsibilities regarding the management of environmental and social risks include the following: evaluate policies, strategy and implementation principles for environmental and social risk management; ensure that risk management principles are widely embraced throughout Garanti BBVA and its subsidiaries through controls at different levels; provide technical and implementation support on E&S risk-related measures to customers and other departments. At Garanti BBVA, the implementation of Environmental and Social Loan Policies related to ESIAP processes, Corporate and Commercial Loans Risk Management, Retail and SME Loans Risk Management are under the responsibility of all related business lines and/or the Investment Banking and Finance Department.

The application scope of the environmental and social risk management system can be reached at the Environmental Social Risk Management Section on the website.