Six pioneering banks in the Turkish finance sector show the way to a sustainable future.

4 October 2019
- 5 min Read

The Principles for Responsible Banking, implemented by the United Nations Environment Programme Finance Initiative (UNEP FI), and in which 130 banks with a total asset volume of more than USD 47 trillion worldwide are the founding signatories, were launched at the United Nations General Assembly meeting held in New York on 22 September 2019. Among the banks to commit themselves to implementing the UN Principles for Responsible Banking were Garanti BBVA, ING Investment and Development Bank, Şekerbank, TSKB and Yapı Kredi from Turkey, which have taken on a mantle of global responsibility for sustainability which will set an example for all sectors.

The six leading banks of the Turkish finance sector, which signed the Principles for Responsible Banking, drew attention to the importance of the issue by organizing a joint press conference in order to convey how the transformation that the banking will implement in all business processes in this vein will contribute to society and a sustainable future. The meeting was hosted by the Deputy General Manager of Garanti BBVA, Ebru Dildar Edin, the ING Turkey Deputy General Manager, Öcal Ağar, the Investment and Development Bank Deputy General Manager Satı Balcı, the Şekerbank Deputy General Manager Aybala Şimşek, the TSKB Deputy General Manager Ece Börü and the Yapı Kredi Group Director Mehmet Erkan Akbulut with the participation of Melsa Ararat, a Faculty Member of Sabancı University and the Director of the Corporate Governance Forum.

“The Principles for Responsible Banking have been determined as a result of joint study conducted by banks from Turkey, which includes Garanti BBVA.”

Ms. Ebru Dildar Edin, the Deputy General Manager of Garanti BBVA, which is one of the 30 founding banks to have established the Principles for Responsible Banking, provided some details about the subject and their work on sustainability. “About two years ago, the United Nations Environment Programme Finance Initiative (UNEP FI) started the ball rolling for the creation of a common roadmap for Banks on this issue. It invited 30 banks from all over the world to write the Principles for Responsible Banking. The Principles for Responsible Banking were determined as a result of the joint efforts conducted by these banks, including Turkey’s Garanti BBVA. Over a period of nearly 2 years, we have consulted more than 500 stakeholders and worked on how to implement these 6 principles. On September 22, we opened these principles for signature at the United Nations General Assembly, with 130 banks signing these principles on the first day alone. These banks represent one third of the entire sector globally in terms of asset size. Six Banks from Turkey sitting at this table have committed to comply with these principles.”

“We are proud to be one of the 30 founding banks that have contributed to the establishment of the UN Principles for Responsible Banking.”

Mr. Öcal Ağar, the Deputy General Manager, speaking on behalf of ING, which is among the banks committed to implementing the Principles for Responsible Banking, said “As the ING Group, we are proud to be one of the 30 founding banks that have contributed to the establishment of the UN Principles for Responsible Banking. In our journey of more than 10 years, where we have prioritized sustainability, we have voluntarily accepted the Equator Principles, which have been set out to be implemented in the financing of all projects worth USD 10 million or more since 2003. Moreover, the ING Group has shaped its work according to the Terra approach which we announced last year. We have prepared a road map for each sector to adapt to the climate and announced the first report of this initiative, in which we recently created the climate report for these sectors. In this context, ING Turkey also takes into account social responsibility and environmental risks in project financing and acts in accordance with the related principles. The finance sector possess the resources to take the necessary steps that can make a difference on the road to sustainability. We believe we need to work with other banks in order to be successful in combating climate change. Thanks to this cooperation, we will support the transition to a sustainable world.

“We have been supporting the development of our country with the projects that we have financed for 44 years, and we continue our work with this mission.”

Ms. Satı Balcı, the Deputy General Manager of the Development and Investment Bank, emphasized the importance of the Principles for Responsible Banking for a sustainable future in the finance sector. She said, “Our basic approach at the Development and Investment Bank is one of sustainable development, and our bank provides financing to projects which serve this understanding. With our signature on the Principles for Responsible Banking, we have upheld our commitment to our activities which we have conducted to date for sustainable development and a sustainable future. We are taking on an important responsibility in order to accelerate our activities on this issue. Drawing attention to the sustainability approach, the topics it contains and the depths of the understanding of the future that this consciousness will shape, Ms. Satı Balcı said that as the effects of climate change start to be felt, sustainable approaches are gaining importance and new concepts have begun to enter our lives, with more to follow in the coming years.” She added that she believed these new signatures received today would deepen sustainability efforts in the finance sector and play an important role in the formation of new concepts.

Aybala Şimşek: We have been playing a pioneering role in financing sustainable development for 66 years.

Ms. Aybala Şimşek, the Deputy General Manager of Şekerbank, which is one of the 130 banks that participated in the Principles for Responsible Banking as the founder signatory, underlined that these principles, which one-third of the global finance sector signed, have the power to transform the world economy. “The UNEP FI Principles for Responsible Banking provide a global framework for all participating banks; however, each bank is expected to implement these principles in the context of its own strategy. As a bank that has served as a pioneer in its sector in financing sustainable development for 66 years since its establishment, and as a bank that has undertaken many firsts in this field, we regard responsible banking as an inheritance that we have taken over from the Anatolian farmers, who were the founders of our Bank”, she added. “We strive to increase the welfare of hundreds of thousands of households which we have reached thanks to the widespread structure of our credit and our extensive branch network in rural areas, and we strive to support rural development and production.”

Ms. Şimşek said that the bank had provided over TL 1 billion worth of financing support to date in the field of energy efficiency, with EKOkredi, Turkey’s first energy efficiency financing product, and had introduced energy saving to a total of nearly 109,000 people while preventing 6.4 million tonnes of CO2 emissions and achieving 30 billion kWh of energy savings. She stressed that sustainable development provided an important opportunity for the sector to acquire alternative resources, adding, “thanks to the success we have achieved with EKOkredi, we have so far acquired 45% of the foreign resources on our balance sheet in order to provide financing for energy efficiency and renewable energy investments.”

Aybala Şimşek said that the global financial sector played an important role in preventing the destruction of the ecosystem which is as

an important part of the efforts to tackle climate change. She stated that in this context, the bank had undertaken an important mission in increasing agricultural production and encouraging agriculture.

Ms. Şimşek had the following to say on the subject; “Meeting the food needs of a growing population is one of the most prominent issues

in the issue of sustainable development worldwide. As a bank established with the purpose of financing sustainable agriculture, we work hard in order to reach the goals set here in Turkey to support rural development and increase agricultural production. In this context, we have provided TL 8 billion in financing to 109,000 farmer families over more than four years with the “Family Farming Banking” which is a first in Turkey and the world, the main goal of which is to prevent migration from rural areas to cities. Ms. Şimşek said “Today, as a bank that allocates 58% of its total credit portfolio to SMEs divides and touches more than 350,000 farmers in across Turkey, we will continue to improve our lending processes, which are the first and only of their kind in Turkey, in order to ensure widespread access to finance and prosperity, and we will continue to add value to an ever increasing number of people, society and the environment.”

“Approximately three-quarters of our credit portfolio consists of sustainability-themed investments.”

Ms. Ece Börü, the Deputy General Manager of TSKB, which is one of the founding signatories of the Principles for Responsible Banking, said “as a bank that has been working with the mission of a sustainable and inclusive development for 70 years, we provide financing to the investments that produce by protecting the future, and we measure the environmental and social risks of all projects regardless of the amount. At the point we have reached today, approximately 73% of our total credit portfolio consists of environmental and social themed investments such as renewable energy, energy and resource efficiency, environmental investments, women's employment, support for regions which have a priority in development and occupational health and safety. In addition to the funds that we provide from global development financing institutions, we create additional resources for such investments with the sustainable bonds, for which we are the pioneers in Turkey. Speaking on behalf of TSKB, I would like to state that we have contributed directly to 14 of the 17 Sustainable Development Goals through all of these activities. While supporting our country's transition to a low-carbon economy with the investments that we finance, we also make a difference with our sustainability practices within the organization, and we are leaving behind our 10th year in carbon-neutral banking.

She summarized the work that TSKB has undertaken on the issue of sustainability as follows and stated the importance of the issue; “On the other hand, we find it highly important that the banks to act jointly in order to establish a financing approach that has the effect of preventing climate change and protecting natural resources. The Principles for Responsible Banking implemented by UNEP FI, which we become a member of in 2009, are setting an excellent example in this sense. We are delighted to be providing a contribution to such a union of power with leading banks in Turkey and the world as a founder signatory.”

“For Yapı Kredi, being a founding signatory to the UNEP FI Principles for Responsible Banking this year- when we are celebrating our 75th anniversary - is of special importance for us.”

Mehmet Erkan Akbulut, the Group Director of Yapı Kredi, which is among the signatory banks, offered the following assessment: “This year, when we are celebrating our 75th anniversary, has a special meaning for us to commit to the UNEP FI Principles for Responsible Banking as a founding signatory. We have been among the signatories of the Istanbul Stock Exchange's (Borsa İstanbul) Sustainability Index since 2014 and the Turkey Sustainable Financing Declaration of the Global Compact since 2017. In addition, we have been sharing our environmental and social performance with the public transparently in our sustainability reports since 2011. Therefore, the Principles for Responsible Banking form a complementary framework in our sustainability journey, rather than a beginning at Yapı Kredi. As one of the founding banks to have signed the Principles for Responsible Banking, we seek to respond to the needs of our society, our stakeholders, our investors, our customers and especially the future generations. In this context, I believe these principles will guide our bank and our sector in our quest to generate sustainable value for all our stakeholders and future generations. I believe these principles will guide our bank and our sector in terms of creating sustainable value for all our stakeholders and future generations.”

About the UN Principles for Responsible Banking

The principles that determine the roadmap for banking, which constitutes two thirds of global finance worldwide for sustaina ble development and a better future, also form the basic framework of the future sustainable banking system. In a sense, the Principles for Responsible Banking, which define and shape the position the banking sector will take in the 21st century’s society and economy, aims to maximize the impact of the banking sector for societies to achieve their goal of sustainable, equal and prosperous future.