Our Sustainability Approach

Since we commenced our operations on April 13, 1954, we proceed to deliver essential contributions to the growth and development of the country’s economy with the mission of continuously increasing the values we add to our customers, employees, shareholders, and society by effectively and efficiently managing the assets and values entrusted to us by the strength we derive from the foundation culture.

Today, with the management and working mentality required by modern banking, we serve our customers through the products and solutions we offer in Corporate, Commercial, SME, Retail, Local Governments and Agricultural Banking, Consumer, and Private Banking. In addition to our core banking products, we are also engaged in investment banking and capital market activities; we have been offering financial products widely ranging from leasing to factoring services to our customers through our financial subsidiaries with the high technology required by the age. Besides, we continue to play an active role in international debt capital markets with the long-term and affordable funds we provide from abroad.

As a well-established institution, our sustainability approach is all about leaving a more inhabitable world to future generations with our operations. In this context, the authority to coordinate our sustainability practices effectively and swiftly lies within the Sustainability Committee, which is our Bank’s senior decision-making and responsible body. Believing that faster decision-making will add dynamism to our sustainability journey, we established the Sustainability Working Group as the supporting structure that operates under this committee. Our Committee monitors performance by integrating these strategies and policies into the Bank’s activities and formulating sustainability strategies and policies in economic, social, and environmental areas. Upon a Sustainability Committee decision, we formed Sub-Working Groups for specific areas of expertise, such as Climate Risks and Environmental Social Risk Management System, and Integrated Management Working Group this year. These working groups are in charge of monitoring best practices and regulations in and outside Türkiye and coordinating the projects in this area across the Bank. Additionally, we continue our sustainability efforts through the Sustainability Service, Environmental Management Service, and Environmental and Social Impact Analysis Department. You may find our Sustainability Governance Structure here.

First, we harmonized the Head Office units’ banking processes and all branches with the ISO 9001 Quality Management System. We documented them with the “ISO 9001: 2015 Quality Management System.” In addition, we have also documented that our banking activities minimized the direct impact on the environment in line with international standards by obtaining the ISO 14001: 2015 Environmental Management System certificate in 2017. In this context, we have ensured that all VakıfBank employees work in ISO 14001-certified buildings in 2022, with our certification studies, which we have been continuing since 2018. We succeeded to be the first bank in Türkiye to establish the Integrated Management System (ISO 9001-ISO 14001-ISO 45001) and to receive the certificate subsequent to the Integrated Certification Audit by obtaining the ISO 45001 Occupational Health and Management System certificate in 2021. We successfully passed the 2022 interim audits and ensured the sustainability of the Integrated Management System. We plan to set our energy policy and obtain an ISO 50001 Energy Management System Certificate in 2023 and include it in our Integrated Management System in parallel with our goals and objectives. At Vakıfbank, we also have an ISO/EIC 27001:2013 Information Security Management System Certificate. Here you may find detailed information about our certificates.

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We take part in international platforms with our sustainability efforts and lead the industry by breaking ground. We continue integrating sustainability into our corporate strategy for a more livable future by increasing our environmental, social, and governance performance. We are the first Turkish public institution to announce its commitment to reduce carbon emissions by participating in the Science Based Targets initiative, which many international pioneering organizations lead to contribute to the fight against climate change, one of the most critical global environmental problems of today. In 2022, we set our science-based targets to reduce carbon emissions and finalized our applications for the Science-Based Targets initiative (SBTi). In this context, we have been participating in the Carbon Disclosure Project (CDP) Climate Change Program since 2015 and share our climate change strategy, governance, risk management, and carbon emission amount and our targets on these issues with international investors and the public. We have also preserved our performance score of B at CDP Climate Change Program in 2022. In addition, by supporting CDP's Water Security Program, we released our first report at VakıfBank in 2022, and scored B-. This was yet another step we took to manage water-related risks and raise awareness.

We offer sustainability-themed products, constituting one of our Sustainable Development approach’s essential components, to our customers’ usage to support socio-economic development by considering all society segments. In this way, we do not only address customers' financial needs but also contribute to social development with our financial support.

With the awareness that our most significant impact in the environmental and social field is through financing, we consider it our responsibility to evaluate the social and ecological implications of the projects we finance. Within this scope, we established the Environmental and Social Risk Management System in 2022 to assess and manage non-financial risks including environmental, social, governance, and OHS risks, and their potential impact for the project finance loans worth USD 20 million and above in the first stage. In addition to project finance loans, we aim to include the entire loan portfolio (excluding retail loans) in this risk analysis process for the coming period.

As a pioneering and active bank in international debt capital markets, with an awareness of the importance of sustainable banking in accessing international funding sources, we take essential steps, complete the necessary preparations, and seize opportunities depending on market conditions. We increased sustainability-themed funds and continued to support sustainable development driven by our responsible financing approach also in this period.

Besides, we carried out a study in line with the evaluation methodology of Sustainalytics, one of the leading independent global companies in providing sustainable banking, environmental, social, and corporate governance research, and rating services to investors. After this study, we achieved to improve our ESG (Environmental, Social, Governance) risk rating score from 19.8 to 19.1 (low risk) in 2022, becoming one of the banks with a low-risk rating in the banking sector.

We have also become the first bank to adopt a sustainability approach for expected credit loss provisions under TFRS9. As part of the Fit for 55 Package released by the European Commission in 2021, the Carbon Border Adjustment Mechanism introduced emission reporting obligations effective as of 2023 and carbon tax payment obligations as of 2026 for five carbon-intensive sectors (cement, electricity, fertilizers, steel&iron, and aluminum). Accordingly, our Bank reviewed the transition risks of those manufacturers who export to the EU but are unable to make a transition to low-carbon manufacturing methods and technologies. Consequently, our Bank increased the expected credit loss provisions for customers operating in the cement, electricity, fertilizer, steel&iron, and aluminum sectors under TFRS9.

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Pursuant to the TFRS9 legislation, we also lowered the expected credit losses reserved for customers falling into the scope of YEKDEM (Renewable Energy Resources Support Mechanism) established to promote the generation of renewables. This way, we pursued positive discrimination for these customers in all our processes, taking their positive environmental contributions with their support for renewable generation into account.

We also maintain our collaborations on national and international platforms within the scope of our efforts to create value in terms of a sustainable economy, society, and environment. We are among the UN Global Compact participants, the world’s largest sustainability initiative before the United Nations. We are the first Turkish public institution to sign the Women’s Empowerment Principles (WEPs).

In addition, we were chosen for inclusion in the Bloomberg GEI for the fourth consecutive year.

In 2022, we volunteered to respond to the Corporate Sustainability Assessment-CSA, prepared by S&p Global which we believe will constitute a basis for our sustainability performance and guide us in improving our performance.

At VakıfBank, we struck a deal with JCR Eurasia Rating for Corporate Governance Rating services in November 2022. We will have a presence on Borsa Istanbul's Corporate Governance Index in the coming period.

We attach importance to disclosing our performance with transparency. As a result, we maintain our place in the index since 2014, when the BIST Sustainability Index was created. Since 2017, we have been included in the FTSE4Good Emerging Markets Index, which responsible investors primarily follow.

In addition to our financial performance, we published our first Integrated Annual Report in 2020, which includes our approach and performance in economic, environmental, and social areas and our Bank’s value creation model. Our report, which has an important place in our communication with our stakeholders, is compatible with the Integrated Reporting Framework published by the Value Reporting Foundation.

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