Environment
Introduction
The first pillar of the ESG Strategy: The natural environment
In line with the ESG Strategy, Bank Pekao will become even more involved than before in Poland’s energy and environmental transformation and protection in line with the principles of the European Green Deal. As part of this effort, the Bank anticipates arranging financing for new sustainable projects both through new financing for sustainable projects that include green and social projects and through supporting the issuance of ESG bonds of the Bank’s clients. In line with the objectives set out in the Strategy, the Bank will continue to implement environmental improvements in its locations and will focus on monitoring the consumption of raw materials and other materials as well as less waste activities. Bank Pekao wants to be responsible to future generations by carrying out activities for climate neutrality. The aspiration in this area is to reduce own emissions in 2024, and then achieve its own climate neutrality in 2030.
| ESG STRATEGY IMPLEMENTATION INDEX 1. PILLAR – ENVIRONMENT |
IMPLEMENTATION 2020 | IMPLEMENTATION 2021 | TARGET FOR 2024 |
| (PLN million) | |||
| 1. Financing sustainable projects | n/a | 929 | > 8,000 |
| 2. Supporting the issuance of clients’ ESG bonds | n/a | 5,934 | > 22,000 |
| 3. Share of green financing | 3.2% | 4.1% | > 4.0% |
| 4. Share of high-carbon financing | 1.3% | 1.2% | < 1.0% |
| 5. Change in the balance sheet exposure in nominal terms in relation to high-carbon activities as compared to the exposure at the end of 2020 | n/a | -11 | < -1,900 |
Bank Pekao S.A. financed almost PLN 1 billion of sustainable projects, e.g. green consumer loans (over 4-fold increase of the balance sheet volume y/y), green corporate mortgages (21% increase of the balance sheet volume y/y), green loans to strategic customers (9% increase of the balance sheet volume y/y).
Support for the Bank’s customers’ ESG bond issues amounted to nearly PLN 6 billion, where the main customers were strategic and public sector customers.
The share of green financing increased to 4.1%, mainly due to the green bonds of strategic and public sector clients covered by the Bank and the financing of further loan agreements.
The share of high-carbon financing declined to 1.2% percent as a result of reduced sales of loans and bond issues to entities in high-carbon sectors (i.e., coal and lignite mining, electricity and heat generation using coal and lignite, high-carbon industrial processing, electricity trading, distribution, and transmission, coal wholesaling, and coal furnace manufacturing). This reduction resulted in a decrease in nominal balance sheet exposure of nearly PLN 11 million compared to 2020.
The methodology of disclosure of ESG indicators in the 1st pillar of the ESG Environment Strategy was based on the following assumptions:
- Financing sustainable projects means financing in the form of loans and green or social leases38 on the basis of contracts concluded in a given reporting year,
- Supporting the issuance of customer ESG bonds are funded green bonds and social bonds for new contracts entered into during the reporting year,
- The share of green financing is the share of green loans, leasing and covered bond issues as at 31/12/2021 in the Bank’s gross financing,
* As defined in the ESG Strategy:
Green financing: includes environmental projects aimed at, among others, reducing CO2 emissions and carbon consumption and producing energy from renewable sources with balance sheet exposure to corporate client bonds issued for ESG purposes in the portion corresponding to the bank’s investment policy.
Financing with a social impact (social impact): includes projects supporting sustainable social development, improving the quality of life of citizens and ensuring access to public infrastructure, implemented by local governments and social organizations.