Environmental and Social Loan Policies
Garanti BBVA initially set up Environmental and Social Loan Policies (ESLPs) in order to minimize the indirect impacts of loans granted by the Bank and put them into practice in 2011. Garanti BBVA believes that informing its stakeholders, particularly its customers and employees, about its ESLP is an important opportunity to raise public awareness with respect to sustainable development.
Loan requests received by Garanti BBVA are first subjected to the ESLP; projects which do not comply with the policies are rejected. The ESLP, which is applied on all loans without a threshold, is based on the following principles:
- Garanti BBVA pays regard to maximizing the environmental and social benefits in financing projects considering their environmental and social impacts.
- Garanti BBVA supports the protection and management of natural biodiversity. It takes in consideration the measures which will protect biodiversity and the natural habitat in the financing of projects.
- Garanti BBVA supports efforts to increase energy efficiency and the transition to a low carbon economy.
- Garanti BBVA subjects new projects with an investment value of more than US$ 10 million to the Environmental and Social Impact Assessment Model (ESIAM) which was developed by the Bank. With this model, projects are categorized and graded according to their characteristics, size, sensitivity, location and the possible social and environmental impacts. The Bank’s decisions are based on the risk rating calculated in accordance with the model.
- The following financings are not subject to the ESIAM:
- Acquisition and privatization loans,
- Construction loans (excluding mass housing projects),
- Short- or long-term loans, that do not include the realization of any project,
- Loans provided to a project that is already operational (provided that those projects do not create an additional impact), and
- Refinancing loans for ongoing projects (provided that those projects do not create an additional impact).
- Following the application of the ESIAM, Garanti BBVA may request from the project owners that an Environmental and Social Monitoring Plan (“ESMP”) is prepared, applied and regular reports are submitted for projects, which have higher risk ratings. The Bank expects the ESMP to be prepared in detail and with content that fits the project’s scale and risk level, as well as the Bank’s evaluation system.
- It is imperative that the results of the assessment of environmental and social impacts are shared with the Credit Committee. The limit for total investment amount, policies and the assessment process may be revised or updated, if deemed necessary by the Sustainability Committee.
- Garanti BBVA does not finance activities that are banned or restricted by national legislation and/or international agreements to which Turkey is a party. The Bank also does not finance the activities, projects or companies listed below. Without carrying out any environmental and social impact assessment, and applying any limits.
- Companies involved in the production of weapons of mass destruction and landmines,
- Individuals or companies found to employ child labor, or who violate human rights
- Individuals or companies that deal with the production and trade of asbestos fibers or radioactive substances (excluding healthcare equipment, quality control devices and situations in which use of radioactive substances is extremely limited or insignificant, or in situations where there is sufficient protection),
- Fishing activities which are deemed to constitute overfishing,
- Forestry activities which cannot be sustainably managed,
- Individuals or companies involved in the production, warehousing, transport and trade of hazardous chemicals (petroleum and petrochemical products) in large quantities according to their industrial scale,
- Activities carried out in wetlands defined as RAMSAR (Convention on Wetlands of International Importance) areas,
- Individuals or companies involved with products and/or activities that fall under the scope of CITES (Convention on International Trade of Endangered Species),
- Activities that threaten the cultural heritage qualifications of sites classified as UNESCO World Cultural Heritage.
- Garanti BBVA pays regard to ensuring that the projects it finances satisfy the social and environmental standards required by legislation and the Bank’s policies, that the impact assessment is undertaken by the project owner(s), if necessary; that prescribed measures are taken by the project owner(s), and that project owners have effective internal audit systems. When necessary, the Bank suggests extra measures to mitigate negative effects and requests the project owner(s) to take the necessary measures.