The world is undergoing a significant social, environmental and economic transformation. Many practices that we know and are familiar with are no longer applicable and capable of fulfilling our needs under the current conditions. In the past decade, we have witnessed a radical change in the expectations of communities from businesses. In the next decade, we will be seeing much more demanding societies that are more aware of their power given these revamped expectations. In the light of these, Garanti BBVA puts responsible and sustainable development in its focus and develops innovative practices to respond to its stakeholders’ expectations.

For the whole world, 2020 has seen habits replaced by radical changes due to the COVID-19 virus that emerged in Wuhan. From March when the first virus case in Turkey was reported until the end of 2020, Garanti BBVA continued to work at full speed on innovative products, services and initiatives in the area of sustainable finance and development amid the pandemic. One of the main enablers of this speed was the digital investments that the Bank has been making for more than 25 years. During this period when the whole world was confined to their homes with the spread of the pandemic, the banking sector witnessed an unprecedented speed in terms of digital transformation.

The Bank continued to mobilize its human and intellectual capitals along with financial capital also in this period in a bid to support responsible and sustainable development, one of its strategic goals. Taking into consideration the effects of the pandemic process that plagued 2020, the Bank strove to understand the conditions surrounding its customers and other stakeholders, and to develop solutions catering to their needs.

Green and sustainable loans/bonds are quite important within the 2030 Agenda that ranks high among material topics. As of year end2020, the total volume of sustainable borrowing market exceeded USD 1.9 trillion.1 Just in the first half of 2020, the total volume of sustainable bonds and loans reached USD 270 billion despite the pandemic. This figure is reached at USD 655 billion as at the end of the year. Developing innovative financial instruments and solutions such as the green loan and gender loan, Garanti BBVA keeps supporting the expansion of the sustainable bonds and loans volume in Turkey with the steps it has taken.

The Bank collaborates with its peers and the business world at a global level to identify new opportunities, to determine emerging best practices and products, and to remain a leader in sustainable finance and development in Turkey.

In this framework, Garanti BBVA actively takes part in, or holds seats as chair or member on the boards of directors of, 27 initiatives in total, including a number of intermediary platforms such as the United Nations Environment Program Finance Initiative (UNEP FI), Principles for Responsible Banking, Global Compact Turkey, and the Turkish Business Council for Sustainable Development (BCSD Turkey).

Garanti BBVA considers the Principles for Responsible Banking, in the constitution of which it was actively involved, which reached 200 signatories worldwide by end-2020 and was signed by seven banks from Turkey, as a global guide in the projects that it finances. The Bank evaluates the products in its loan book against non-financial criteria that make an environmental, social and/or governance (ESG) risk or impact, as well as financial parameters in the light of these Principles. The Bank, guided by the Principles, aims to set new targets and further improve its performance each time, rather than following the same decisions.

Remaining as a constituent of 10 sustainability indices in total including the Dow Jones Sustainability Emerging Markets Index, Garanti BBVA analyzes the sector’s leading practices in environmental and social areas, and originates new areas for continuous improvement. The Bank shows the way for sustainable pathways through being involved in the development of collective policies and position papers of the private sector, which numbered 11 in 2020.

Garanti BBVA diversifies financial instruments provided for lowcarbon and inclusive growth, and cooperates with international financial institutions for low-cost funding. Drawing on its intellectual capital, the Bank introduces innovative financial resources that incorporate pioneering applications and sustainability criteria, as well as the first social bond issue ever carried out by a private bank in an emerging country.

With the Green Loan it has launched in 2018, Garanti BBVA urge borrowers to improve their sustainability performances throughout the term of the loan. Borrowers may become entitled to advantageous loan interest or commission rates made available against improved performance in environmental, social and corporate governance areas that satisfy the predefined criteria during the term of the loan. The Gender Loan, which was introduced in a similar structure in 2019 by Garanti BBVA, represents a first in the world. Under the Gender Loan, Garanti BBVA grants discount both on cash loan margins and non-cash loan commission for improvements borrowers secure in gender equality.

In 2020, we have seen the effects of the economic and social crisis stemming from the pandemic in every department of life. Notwithstanding, Garanti BBVA kept offering gender loans, sustainability-linked loans to encourage its customers to adopt more sustainable business models. Again in 2020, Garanti BBVA authored the world’s first-ever Sustainabilitylinked Syndicated Facility by tying its own borrowing processes to ESG criteria.

As climate change continues to be one of the most significant global crises in the 21st century, responsible finance approach is molded to address climate change issues in addition to societal challenges such as fostering employment through supporting SMEs in growing their businesses. Having allocated 100% of its project finance support for greenfield energy investments to renewables in recent years, and thus increasing the total lending to this area to date above USD 5.3 billion. Garanti BBVA’s support to green and environmentally-sensitive energy continues with the use of 100% renewable energy for electricity in all of its branches and buildings outfitted with compatible infrastructure. Garanti BBVA considers its systematic and long-lived initiatives carried out within the scope of its community investment programs as a key element of its responsible business concept. The Bank identifies its strategic priorities in this framework in line with the social sensitivities in the country and the world, BBVA Group priorities, stakeholders’ expectations and necessity areas.

Accordingly, the Bank creates shared value through its strategic community investment programs focusing on material topics such as quality education, culture and arts, entrepreneurship, and environment.

It is among the various goals of Garanti BBVA to support the growth and resilience of SMEs, women entrepreneurs and startups, who are key to sustainable development of the economy, and help them improve their environmental, social and ethical performance, besides producing solutions for their financial needs.

Through Garanti BBVA Partners Acceleration Program, the Bank helps flourish the entrepreneurial ecosystem in Turkey, and aims to support and accelerate early startups and initiatives with the potential to attract investment and grow.

The Bank facilitates women entrepreneurs’ access to financing, encourages them to realize their full potentials through Turkey’s Woman Entrepreneur Competition, and executes free-ofcharge educational collaborations to ensure sustainability such as the Women Entrepreneurs Executive School. Through Women Entrepreneurs Meetings, the Bank targets to help women entrepreneurs build new collaborations and penetrate new markets through experience and information sharing that they need.

Carried out by the Teachers Academy Foundation (ÖRAV) founded and sponsored by Garanti BBVA, the 5 Pebbles: Social and Financial Leadership Program is intended to build on teachers’ knowledge of social and financial literacy and to enable them to teach these skills to their students as well. ÖRAV’s support to teachers is ongoing during the formidable pandemic that is affecting the whole world via innovative online activities. The Foundation’s initiative to this end launched in 2020 with the support of Garanti BBVA is the web seminars series named Teachers without Distance.

Culture and art make another area in which Garanti BBVA intensifies its initiatives within the scope of the Community Investment Programs. Regarding active participation in cultural life, the development of individual and collective cultural liberties among the core components of personal and also sustainable societal development, Garanti BBVA founded SALT in 2011. SALT reaches the society through SALT Beyoğlu, SALT Galata locations and SALT Ankara Office; being an archetype and constantly evolving cultural institution, it plays a major part in the creation of the memory of Turkey’s cultural heritage and in raising awareness of it.

Making it a priority to assume responsibility and take action in emergencies prevailing in the countries where it operates, Garanti BBVA took big steps in fighting the coronavirus pandemic throughout 2020. After making donations for provision of equipment and supplies for state university hospitals, the Bank procured 500 ventilators to be delivered to the Turkish Ministry of Health. Last but not least, the Bank donated 45 thousand saplings for reforestation efforts in Hatay that suffered from forest fires.