TSKB and Sustainable Banking

TSKB’s sustainable banking approach seeks to create enduring value for all stakeholders through strong corporate governance principles and social responsibility projects.

You’ll find some of the milestones in TSKB’s sustainability journey below:

TSKB breaks a global ground: Basel III Complaint Sustainable Tier II Bond

TSKB has emerged as the first bank to issue a ‘Basel III Complaint Sustainable Tier II Bond’ on international markets, adding yet another pioneering practice to its sustainability portfolio.

The proceeds from the bond issuance will be used to support renewable energy and resource efficiency investments addressing climate change as well as healthcare and education projects for social good. TSKB will also submit an Impact Report to its investors annually to provide them with an insight into the impacts of the projects financed through the funds from this bond issuance.

The first Integrated Report in Turkish finance industry

TSKB stands out as the first bank to issue an Integrated Report, also known as the next generation of reporting, in the Turkish finance industry.

TSKB issued its Integrated Report to reach another key milestone in sustainable banking and reflected its operations, funds, products and services as well as the added value it has created and will further create in this report based on 2016 results, using a holistic approach as a leverage to offer its stakeholders a thorough insight.

Turkey's first green bond

TSKB has broken yet another ground to become the first Turkish bank to issue a "Green/Sustainable Bond" on international markets. The proceeds from Turkey’s first Green/Sustainable Bond issuance will be used to support renewable energy and resource efficiency investments addressing climate change as well as healthcare and education projects for social good.

This innovative achievement by TSKB has received awards on various platforms:

  • EMEA Green / SRI Bond Deal of the Year - Euromoney & GlobalCapital (2016)
  • Green Bond Deal of the Year- Thomson Reuters/ International Financing Review (2017)
  • Green Bond Deal of the Year (runner-up) - Bonds & Loans Awards Turkey(2017)
  • Structured Financial Transaction (Winner) - Bonds & Loans Awards Turkey (2017)
TSKB Statement on Climate Change

Fighting climate change currently emerges as the most important and urgent matter to maintain a healthy and sustainable life for our planet and our societies, as recognized by the 195 countries that signed the Paris Agreement in 2015.
At TSKB, the leading bank in sustainability in the Turkish finance sector, we are aware of the fact that we have key roles and responsibilities in the fight against climate change, as each government, industry, organization and individual does.
We support Turkey's transition to a low-carbon economy by expanding the climate finance, information exchange and sphere of influence we employ.
Furthermore, we also know that the climate change risks and opportunities we face as a financial institution arise from our own operations and the environmental and social impacts of the investment projects we finance. We establish our climate change strategy by fulfilling the requirements of this awareness.

a) Management of Environmental and Social Impacts from Our Own Operations (Internal Environmental Impacts)
Since 2006, we have been monitoring and managing our internal environmental impacts via the ISO 14001 Environmental Management System certification we have, making us the first bank in Turkey to acquire such certification.
To this end, comprehensive amendments in ISO 14001 Standards implemented in 2015 specifically in terms of leadership, risks and opportunities have also been rapidly transposed into the business processes of our Bank. This made TSKB the first Turkish bank to have certification in compliance with the new standards.
Under ISO 14001, the great importance we attached to efficiency practices enabled us to have savings in many consumption items between 2005 and 2015.
In the given period, we consumed 27% less electricity, 48% less paper, 42% less natural gas and 29% less water.
As Turkey's first carbon-neutral bank, we aim to reduce our emissions every year and have been offsetting our carbon footprint for remaining emissions since 2009 through the Gold Standard carbon certificates we buy from voluntary carbon markets. As the first Turkish bank holding an ISO 14064 certificate, we have also been getting the quantification for our greenhouse gas emissions verified every year since 2012.
We have aimed to reduce our greenhouse gas emissions by a total of 10% by the end of 2016 compared to 2012 levels. We have taken all required measures to this end and expect to satisfy this target by 2016 year-end. The target for the next period is to take greenhouse gas emissions down by 10% until 2021 year-end compared to the average of the last 5 years (2012-2016). Since 2009, we have been using 100% green energy from renewable energy resources at our service buildings.
Under our objective to improve our internal environmental impacts, we have committed ourselves and undertaken to establish our emission reduction targets as "science-based targets", to invest in operational efficiency efforts, to continue using 100% green energy in our service buildings, offsetting our carbon footprint every year through the carbon certificates we obtain on voluntary carbon markets, and maintaining our ISO 14001 and ISO 14064 certification.

b) Management of Environmental and Social Impacts from Our Lending Operations
At TSKB, as we do not collect deposits from customers, we provide medium to long-term funds mainly from international and supranational financial institutions to finance the investments contributing to the development of Turkey. We satisfy the expectations of such institutions in terms of the impacts of climate change as well as environmental and social performance. To this end, we systematically assess and manage our environmental and social risks from our lending operations. 'TSKB Environmental and Social Risk Evaluation Tool' is applied to every investment project we finance irrespective of the amount of investment. With this model, the potential environmental and social impacts of such projects are assessed in consideration of national and international criteria, and the risk level is thus determined. In accordance with the level of risk determined, we ensure that our customers take measures to prevent or mitigate environmental and social impacts considered to be negative, and draft an Environmental and Social Action Plan when necessary. We also monitor their environmental and social impacts in line with this plan. This enables us to consider climate, environmental and social impacts while assessing the investments we finance.

c) Supporting Transition to a Low-Carbon Economy
We have provided USD 3.2 billion of finances for renewable energy projects having a total installed capacity of 4,272 MW within the framework of the long-term sustainability loans we have extended in order to support Turkey's transition to a low-carbon economy. These projects allowed for a total greenhouse gas emission reduction of 7.2 million tons of CO2 equivalent annually. In a similar vein, we have extended total finances of USD 493 million for 73 energy efficiency projects by 45 companies. Through these projects, we not only had an energy saving of about 3,500,000 Gcal but also attained a total greenhouse gas emission reduction of 1.9 million tons of CO2 equivalent. We also extended total finances of USD 122 million for 45 resource efficiency projects by 15 companies and thus supported the savings of 51,800 tons of raw materials, 12,000 tons of wastes, 367,500 tons of water and 1,425,000 Gcal of energy, equivalent to an annual 820.500 tons of CO2.
In addition to extending loans for a specific theme, we have also been the first financial institution to issue 'green/sustainable bonds' in CEEMEA (Central, Eastern Europe, Middle East and Africa) by creating a new financial instrument on the matter. We committed these funds exclusively to the financing of green and sustainable projects. We plan to maintain and improve our support to our customers in the future in terms of their investments for fighting climate change and their needs during the transition to a low-carbon economy.

d) Advocacy for fighting climate change
As TSKB, we are a leading advocate of the need for understanding the impacts of climate change and taking required measures. We have continuous communication on the matter with our customers, employees, suppliers, source providers, financial institutions, initiatives we are a member of, NGOs, public agencies and other stakeholders. We display and maintain our operations to this end through the support we provide and the commitments we make to various initiatives.
*As TSKB, we support climate change activities and efforts at high level global meetings. For instance, we attended COP 18, COP 21 and COP 22 to offer our support and inform our stakeholders on our activities on relevant matters.
*We are a signatory to the declaration called "Principles to Mainstream Climate Action within Financial Institutions", which is established by the IDFC (International Development Finance Club), under which TSKB is the only member from Turkey, is signed by 26 financial institutions from developing and developed countries with a total financial power of USD 11 trillion, and undertakes to consider climate-related matters in investment and consulting operations.
*We are also a signatory to the declaration to support, as national, regional and multilateral development and financial institutions, transition to a low-carbon economy, issued by the European Long-Term Investors Association (ELTI), to which TSKB is the only member from Turkey.
*We have also signed the World Bank declaration "Putting a Price on Carbon" on carbon pricing.
*Every year, we regularly report our efforts on the matter under CDP's Climate Change Program.
*Since 2009, we have been publishing our sustainability report every year to share with our stakeholders our activities on climate change and sustainability. We plan to continue sharing such activities in our sustainability reports and/or integrated reports in the future.
*Regarding the information sharing on our climate change activities and acting together on common goals, we meet our national and international stakeholders on various platforms and build partnerships. To this end, we actively sustain our membership and provide support to initiatives such as the United Nations Global Compact, United Nations Environment Programme Finance Initiative, World Business Council for Sustainable Development – Turkey Branch and Global Reporting Initiative.

This statement is prepared by TSKB Sustainability Committee and approved by the CEO of TSKB.

Financial Support for Sustainable Investments Projects
  • Having so far supplied resources for more than 210 clean energy projects, TSKB has single-handedly brought about the addition of 5.332 MW of installed capacity, which corresponds to about 15% of Turkey’s total renewable energy capacity.
  • The energy saved by the more than 120 energy and resource efficiency projects financed by TSKB corresponds to the energy required to heat a city of 2.5 million people for a whole year.
  • All the investments to which TSKB has supplied funding so far have reduced Turkey’s annual CO2 emissions by 13 million tons.
  • TSKB provides financing to energy and resource efficiency, renewable energy, sustainable tourism, and environmental protection investment projects. Such projects make up 57% of the bank’s loan book as measured by value.
  • Besides financing the Turkish private sector’s transition to a low-carbon economy and to a more efficient level of production, TSKB also provides companies with consultancy support on such issues as well.
Quantification of projects’ environmental and social risks during the credit-assessment stage

TSKB has been quantifying the environmental and social risks inherent in every project to which it has supplied financing since 2005. The TSKB Environmental Risk Evaluation Tool (ERET) is an evaluation model that rates projects on the basis of five criteria under forty-five separate headings. The results of such evaluations are taken into account in the project assessment, financing, and investment monitoring processes.

Turkey’s first Carbon-Neutral Bank

As a supporter of sustainability projects in Turkey, TSKB has been deploying a sustainability management system (originally set up in 2005) to quantify the environmental impact of all of its activities and to identify strategies to reduce it.

In late 2006, TSKB became the first Turkish bank to be awarded ISO 14001 Environmental Management System certification. In 2008 it became Turkey’s first carbon-neutral bank by effectively erasing its carbon footprint and has remained so ever since.

In 2012 TSKB became the first member of the Turkish banking industry to be awarded ISO 14064-1 Greenhouse Gases certification on account of its efforts to control greenhouse gas emissions in line with its support for sustainable living .

Since its launch of its environment management system, TSKB has reduced its CO2 emissions by 40% and has improved its electrical energy, natural gas, paper, and water consumption performance by 25%, 32%, 27%, and 32% respectively.

Integrating sustainability into every business process

TSKB revised its sustainability structure by establishing “TSKB Sustainability Committee” in 2015. The Committee consists of two Board Members and two Executive Vice Presidents. It has a Sub – Committee, consisting of 16 managers from several departments of the bank, reports directly to the Committee.

The first financial services company in Turkey to publish sustainability and integrated reports

TSKB published its first sustainability report in 2009 and has been doing so ever since. In 2013 it distinguished itself as the first member of the Turkish financial services industry to publish a sustainability report qualifying for GRI A+ certification. Since 2015, the sustainability reports have been published in GRI G4 format.

In its sustainability reports, TSKB analyzes its customers’, business partners’, and employees’ expectations and it integrates them into its sustainability strategies.

TSKB has published the first integrated report of the Turkish financial services industry for the year 2016, in which it presents in an integrated manner the values it created for the society in different areas within the framework of this report.

National and international sustainability initiatives with which TSKB cooperates
  • Signature to the declaration prepared by ELTI – IDFC of which TSKB is the only member from Turkey
  • The first Turkish bank to join the United Nations Environment Programme Finance Initiative (UNEP FI)
  • A member of the Carbon Disclosure Project since that project got under way
  • One of two original financial institution signatories to of the Water Disclosure Project in Turkey
  • Turkey’s first development & investment bank to subscribe to the United Nations Global Compact
  • An organizational member of the Global Reporting Initiative (GRI)
  • One of two financial institutions to hold seats on the Steering Committee of the Global Compact Local Network of Turkey
  • Head of the Role of Sustainable Growth in the Financial Sector Working Group, founded in 2009 by the Banks Association of Turkey (TBB)
  • Member of the Business and Sustainable Development Association (SKD)
  • Member of the Long-Term Investors Club (LTIC)
Our priorities in social responsibility projects: “Environment” and “Sustainability”

Through its social responsibility projects, TSKB seeks to foster an awareness–especially in the business and academic communities–of climate change, energy and carbon management, and all other environmental issues that pose risks to the world’s future.

Since 2007, TSKB has been conducting a comprehensive social responsibility project whose underlying principle is “Our Priority Is Environment”.

Some of the activities undertaken as part of this project:

  • Turkey’s most comprehensive environment portal: www.cevreciyiz.com
  • NGOs & Nature Day
  • Mimar Sinan University Sculpture Competition
  • Conferences exploring environment, energy, and sustainability issues
  • Turning Winds, a book by the author Özcan Yüksek
  • Turkey’s energy efficiency portal www.tskbenerjiverimliligi.com
  • Sustainability Workshops for university students
  • The İstanbul Foundation for Culture and Arts İstanbul Music Festival’s first “Zero-Carbon Concert”
  • Turkey’s resource efficiency portal www.tskbresourceefficiency.com
TSKB subsidiaries distinguish themselves on sustainability issues too

Escarus (set up to provide sustainability-related consultancy services), YF Securities (Turkey’s first carbon-neutral brokerage house), and TSKB Real Estate Appraisal (the first company in Turkey to be authorized to provide appraisal and consultancy services for “green building” investments) are among the “best-practices” business partners with which TSKB collaborates in the provision of sustainability services .

TSKB’s sustainability-related awards and recognitions
  • Green Bond Deal of the Year- Thomson Reuters/ International Financing Review (2017)
  • Structured Financial Transaction (Winner) - Bonds & Loans Awards Turkey (2017)
  • Green Bond Deal of the Year (runner-up) - Bonds & Loans Awards Turkey(2017)
  • EMEA Green / SRI Bond Deal of the Year - Euromoney & GlobalCapital (2016)
  • Best Energy Infrastructure Deal: Kizildere 3 geothermal power plant project in Turkey (2016)
  • Organisation with the 2nd Highest Corporate Management Rating - BIST Corporate Management Index (2016)
  • Carbon Disclosure Project Türkiye: Highest points received in the “Transparency” category in the “Climate Change Leadership” awards (2015)
  • Accepted to BIST Sustainability Index (2015)
  • Highest Corporate Report Transparency rating given to a bank by Transparency International (2015)
  • Low Carbon Hero Award – Sustainable Production and Consumption Association,SPCA (2015, 2016)
  • Corporate Governance Association of Turkey: “Company with the Highest Corporate Governance Rating” (2012, 2013 & 2014)
  • Financial Times & International Finance Corporation: “Sustainable Bank of the Year” European Regional finalist (2011, 2013)
  • Carbon Disclosure Project Türkiye: Highest points received in the “Transparency” and “Performance” categories in the “Climate Change Leadership” awards (2013)
  • Financial Times & International Finance Corporation: “Eastern European Regional Sustainable Bank of the Year” (2008, 2009 & 2010)

Türkiye Sınai Kalkınma BankasıTurkey’s comprehensive environmental portal cevreciyiz.com is supported by TSKB.

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