Climate change mitigation and adaptation [E1-2]

We integrate climate aspects into our internal regulatory architecture and implement them across individual areas of how the organisation operates as factors supporting sustainable development. Most internal regulations refer not only to climate-change aspects but are directly linked to the natural environment, social issues and corporate governance. The regulations outlined below address the mitigation and adaptation aspects identified in the IRO process, both with respect to our own operations and the management of our credit and investment exposure portfolio.

We integrate climate aspects into our internal regulatory architecture and implement them across individual areas of how the organisation operates as factors supporting sustainable development. Most internal regulations refer not only to climate-change aspects but are directly linked to the natural environment, social issues and corporate governance. The regulations outlined below address the mitigation and adaptation aspects identified in the IRO process, both with respect to our own operations and the management of our credit and investment exposure portfolio.

When shaping selected internal regulations, we rely on external standards and market norms, in particular market best practices, which we indicate each time in the description of the relevant regulation.

As part of the double materiality assessment, we identified the main groups of internal and external stakeholders that have the greatest impact on the entity’s operations. Among internal stakeholders, the most important for us are employees and employee/trade union organisations; among external stakeholders – shareholders, customers, banking-sector supervisory and regulatory authorities, as well as our suppliers and business partners. We do not conduct thematic consultations for the purpose of setting targets and directions for the regulations forming the internal rules that make up the climate policy; however, we remain in ongoing dialogue with internal and external stakeholders through channels appropriate for a given group (e.g., the General Meeting of Shareholders, results conferences, participation in industry associations, internal communications). In the process of creating relevant regulations, appropriate operational units are involved each time from a competence perspective.

All of the above regulations are internal and take into account the interests and proposals of key stakeholders in a given area (e.g., employees and employee organisations). At the same time, as a rule, these regulations are not discussed with external stakeholders and are not made publicly available in their full wording. The key provisions of selected documents are published on dedicated pages of the Bank’s website (e.g., [the Strategy]).

The overriding document supporting the identification of opportunities related to climate change mitigation and adaptation and indicating possibilities to reduce our adverse impact on the climate, is the Strategy. ESG is an integral part of our business strategy; however, the Strategy itself does not establish targets, directions of action and development in the form required by regulatory solutions introduced by the European Sustainability Reporting Standards defining specific characteristics for these elements.

The Strategy sets our directions of action both in the field of our own operations and with respect to credit and investment activity. The final wording of the Strategy is the result of dialogue among the Bank’s internal stakeholders. The document was adopted by the Management Board and approved by the Supervisory Board and made available to our stakeholders on the [Bank’s website]. The fulfilment of strategic commitments in the sustainable development area is monitored by the ESG Council, comprising members of the Management Board and designated operational units. The achievement of key targets set out in the Strategy in relation to climate change and adaptation is communicated to stakeholders in annual non-financial reports.

In the context of climate change mitigation and preventing further change, the calculation and monitoring of the carbon footprint in scopes 1 and 2 and in the supply chain (scope 3, categories 1–14) remain an important element. To this end, the Bank implements several initiatives, including the introduction of environmentally friendly improvements at Bank locations, helping to optimise their operation and contributing to reduced consumption of energy and consumable materials.

For credit and investment activities (scope 3, category 15), we see the Strategy as offering the greatest opportunities to leverage our business opportunities by increasing activity in the area of:

  • financing green projects, including investments in renewable energy sources,
  • low-emission transport,
  • energy-efficient construction,
  • energy efficiency,
  • circular economy,
  • biodiversity,
  • protection against pollution and protection of water resources, and
  • developing products supporting the transformation of customers.

To better identify the effects of our actions and their impact on the scale of financed emissions, we also continue calculating the carbon footprint of the loan and investment portfolio (scope 3, category 15).

We use our business capabilities to support activities related to mitigation and adaptation processes. We help customers – both in the retail segment and in corporate and enterprise banking – to reduce the environmental impact of their activities and adapt to new climate conditions. We implement these activities through the development of products and cooperation models. We see significant potential in developing solutions supporting climate change mitigation and in creating adaptation projects that support climate transformation. We also participate in government and EU programmes concerning these activities.

The climate policy relating to own operations and the supply chain, in addition to the general direction indicated by the Strategy, is described in the following documents:

  • the Energy Consumption Optimisation Policy in Bank Polska Kasa Opieki Spółka Akcyjna, relating to climate change mitigation in the day-to-day functioning of Bank employees,
  • the Procurement Policy in Bank Polska Kasa Opieki Spółka Akcyjna, integrating ESG factors into the procurement process,
  • the Supplier Code of Ethics of Bank Pekao S.A., relating to suppliers’ own practices with respect to climate change mitigation.

The Bank has guidelines that support our efforts to reduce our adverse impact on the climate in the area of own operations (e.g., energy consumption management) and selected aspects of the supply chain (Supplier Code of Ethics). In December 2025, we adopted the Transition Plan for the Pekao Group, covering both the loan and investment portfolio and our own operations. The decarbonisation targets established by us for our own operations are described in more detail in chapter E1-1. In 2025 itself, we did not have specific regulations implementing our strategic, long-term decarbonisation ambitions set for our own emissions (Scopes 1 and 2). As the Transition Plan was adopted at the end of 2025, the relevant internal regulations and guidelines will be adjusted to our articulated ambitions to best support our efforts.

Since 2019, the Bank has had in place the Management Board-approved Energy Consumption Optimisation Policy in Bank Polska Kasa Opieki Spółka Akcyjna, setting out principles and guidelines for the rational management of energy as part of operating activities; its overarching purpose is to minimise adverse impacts on the natural environment and support efforts to counteract climate change.

The Policy promotes efficient resource management, including the properties and technical equipment used in the Bank’s operations. Its guidelines cover, among other things, optimising energy consumption in buildings, implementing energy-saving solutions and the responsible use of infrastructure. By implementing these measures, we contribute to reducing greenhouse gas emissions from the Bank’s own operations. The owner of the document is the Real Estate Department, which is responsible for updates and oversight of correct implementation of the adopted principles. The regulations contained in the Policy apply to all employees of our Bank and organisational units that perform tasks related to the management and maintenance of owned and leased properties, as well as units responsible for the procurement of equipment and user furnishings.

We seek to embed environmental considerations – particularly measures aimed at limiting adverse impacts on climate change – into the processes for establishing and maintaining cooperation with external parties, including suppliers. These matters are governed primarily by two documents: the Procurement Policy of Bank Polska Kasa Opieki Spółka Akcyjna (hereinafter: the Procurement Policy), updated in 2024, and the Bank Pekao S.A. Supplier Code of Ethics (hereinafter: the Supplier Code of Ethics), which is available in full on our website at [Supplier Code of Ethics].

The Supplier Code of Ethics supplements the Bank’s internal regulations and includes, inter alia, provisions promoting climate change mitigation as well as compliance with social and corporate governance factors. Under the document, each supplier is required to submit a declaration confirming that it has familiarised itself with, and will comply with, the provisions contained therein.

By implementing the above principles, the Bank seeks to build a responsible and sustainable supply chain in which environmental, social and ethical aspects form an integral part of business relationships. Further information on both documents is provided in section [ESRS G1]

One of the development directions set out over the Strategy’s horizon is the refinement of existing solutions and the introduction of new solutions and tools supporting the assessment of our clients’ ESG risk. With respect to managing sustainability risk within the loan and investment portfolio, we are further developing existing internal regulations and process guidelines so that they support the delivery of our strategic ambitions and align with regulatory requirements and market practice.

In the area of lending and investment activity, matters relating to managing business opportunities linked to climate change adaptation or mitigation, as well as to minimising our adverse impact on the climate, are governed and embedded within the credit process – at a scope and scale commensurate with the customer segment and the type of financed transaction – by a number of internal regulations, with the key documents being the Credit Risk Strategy (approved by the Supervisory Board) and the Credit Risk Policy (approved by the Management Board).

The objectives of these regulations are:

  • effective management of credit risk within the Bank and the Pekao Group;
  • integration of ESG risk (including climate change risk) into the credit process.

The Credit Risk Policy complements the Credit Risk Strategy by focusing on the assumptions and guidelines for credit risk, including ESG factors. The provisions of the Credit Risk Policy and the Credit Risk Strategy cover all units involved in transaction origination and assessment, as well as in risk management and the credit portfolio. The owner of the above regulations is the Integrated Risk Management Department.

Both the Credit Risk Strategy and the Credit Risk Policy support limiting our adverse impact on climate change processes. As a general rule, we do not provide financing for new projects and we limit other financing in sectors classified as high-emitting, such as hard coal and lignite mining, the generation of electricity and heat using hard coal and lignite, the provision of services supporting hard coal and lignite mining and extraction, and the manufacture of machinery and equipment for coal mining. Exceptions apply to projects supporting the transition in the Polish energy sector.

The Credit Risk Policy is accompanied by a set of detailed regulations dedicated to the identification and assessment of risk in the sustainability area, in particular climate risk, in relation to strategic and corporate clients, small and medium-sized enterprises, business clients, and the financing of local government units. These regulations enable us, inter alia, to identify high- or medium-emitting portfolios and exposures and thus assess the potential for managing the portfolio’s carbon footprint so as to limit our impact on climate change.

In addition, we regulate ESG risk management processes by means of a dedicated procedure approved by the Vice President overseeing the Risk Management Division, owned by the Risk Strategy and Development and ESG Department. The regulation sets out, inter alia, activities for identifying ESG risk and the methods and tools used to measure and control it. In particular, the procedure governs the operation of a strategic limit relating to green financing for the Bank and the Pekao Group, understood as the minimum percentage share of green financing within the financing portfolio.

The regulation also introduces a range of internal indicators supporting the monitoring of exposure to high-emitting financing (in the field of fossil fuels and energy generation from fossil fuels) as well as the intensity of greenhouse gas emissions within the financing of the corporate and enterprise portfolio. The procedure also introduces and governs the mechanisms for climate stress testing in the area of credit risk and sets out methods for identifying ESG risk at the level of economic sectors.

The detailed regulations also serve an informational and educational role by describing the key aspects of ESG risk, including climate (transition risk and physical risk) and environmental risk; defining the concepts of green (sustainable) and brown (high-emitting) finance; and specifying the scope of information and data used in the ESG risk assessment process in respect of an individual exposure. Relevant parties cooperating in the operation of the credit process participate in establishing and implementing the content of the credit regulations. We make selected information relating to the Bank’s ESG risk appetite available to external stakeholders.

Responsibility for implementing and amending the regulations follows from the Bank’s internal regulations and is assigned to the Risk area. In addition, the regulation also specifies the manner and scope of ESG risk information and data provided by Pekao Group companies to the Bank.

In the area of products and client cooperation, responding to market needs and capturing the related opportunities is of key importance. Since 2023, the Bank’s investment policy has been governed by the Sustainable Finance Framework Pekao S.A. (hereinafter: the Framework). This document not only provides an issuance framework for the Bank’s own sustainable bonds but also sets out the conditions that must be met for the subject matter of an investment transaction entered into with a client to be considered sustainable in environmental or social terms.

The issuance framework, which has received a positive Second Party Opinion (SPO) from an independent third party, Sustainalytics, is made publicly available on the Bank’s website, ensuring transparency for all stakeholders. Responsibility for managing the process governed by the Framework follows from the Bank’s internal regulations and is linked to the Corporate Banking, Markets and Investment Banking area and the Enterprise Banking Division.

The Framework enables eligible investments to be financed using funds raised from EMTN bonds issued by the Bank. The document describes the project selection process, impact management, and the allocation of proceeds and impact reporting. For the specified types of economic activity, the criteria for classifying eligible projects in the area of climate change mitigation are based on selected technical screening criteria of the EU Taxonomy (in accordance with Annex I to Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021). The Framework is aligned with international market best practice:

  • the Green Bond Principles of June 2021 (as updated in June 2022);
  • the Social Bond Principles of June 2023;
  • the Sustainability Bond Guidelines of June 2021 published by the International Capital Market Association;
  • the Green Loan Principles of February 2023;
  • the Social Loan Principles of February 2023 published by the Loan Market Association.

The operating principles for green products, or products supporting sustainable finance, depend on the type of product offered and the client segment:

  • for individual customers and consumer loans, the offering is governed by the Act of 20 May 2016 on energy efficiency, which introduces a national final energy savings target to be achieved by the end of 2030 of 5,580 thousand toe, implemented from 1 January 2021 to 31 December 2030. The 2030 target will be delivered, inter alia, through the system of energy efficiency certificates;
  • for enterprises, we use the European Funds for a Modern Economy Programme operating under the Act of 14 March 2003 on Bank Gospodarstwa Krajowego;
  • financing for corporate clients is governed, inter alia, by the Sustainable Finance Framework, which was prepared in accordance with applicable international standards published by ICMA and the LMA (as described above), as well as on the basis of an individual offer tailored to the Client’s needs and market standards.

Minimum reporting requirements for policies:

POLICY NAME Link to IRO Approving Body Scope (Bank/GROUP)
Pekao Group Code of Conduct Non-discrimination Bank Management Board Group
Policy for the New Product Implementation Process at Bank Pekao S.A. Product access
Access to information		 Supervisory Board Bank
Bank Pekao Strategy for 2025-2027 Product access Supervisory Board Group
Customer Experience Management Model Non-discrimination
Product access
Access to information		 Division Director Bank
Principles for creating marketing communications of Bank Polska Kasa Opieki Spółka Akcyjna Responsible marketing practices
Access to information
Non-discrimination		 Bank Management Board Bank
Policy on cooperation in the field of communication and marketing within the Bank Polska Kasa Opieki Spółka Akcyjna Capital Group. Policy on managing the Brand Architecture of the Bank Polska Kasa Opieki Spółka Akcyjna Capital Group Responsible marketing practices
Access to information
Non-discrimination		 Bank Management Board Group
Marketing Policy of Bank Pekao S.A. Responsible marketing practices Bank Management Board Bank
IT Security Strategy for 2025-2027 Consumer privacy Bank Management Board Bank

Having regard to the Strategy, which assumes the achievement of climate neutrality by 2050 and support for clients in their transition, the key actions undertaken by us in 2025 in relation to climate policy concerned both our own operations and our lending and investment activities.

We developed a Transition Plan, which operationalises the ambitions set out in the Strategy. The reduction targets defined in the Transition Plan were linked to actions constituting decarbonisation levers and to a broad set of monitoring indicators, together with the governance and monitoring structure for the Plan.

Actions relating to our own operations were focused primarily on climate change mitigation and were aimed at reducing our carbon footprint in Scopes 1 and 2. The most material actions in relation to the lending and investment portfolio consisted in offering financing linked to the management of sustainable development risks and opportunities in the area of climate change mitigation and adaptation to climate change.

Actions relating to our own operations were conducted within day-to-day Bank’s activities.

We did not identify any incidents in which the conduct of our own operations or the financing of clients would have resulted in material harm incurred by third parties. Accordingly, no supporting or compensatory measures were undertaken.

Pursuant to Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021, and having regard to the nature of our activity as a financial institution, the Bank’s capital expenditure (CAPEX) and operating expenditure (OPEX) are not subject to an assessment as to eligibility or alignment with the EU Taxonomy’s sustainable development criteria (including the use of nature-based solutions, engineering solutions or dedicated technological solutions). The expenditure and outlays incurred by us in our own operations during the period covered by the Strategy are also not financially material from the perspective of the entity’s operations. We apply a prudent approach aimed at avoiding classification errors and the risk of greenwashing, as well as the inability to directly translate the outlays and expenditure incurred into the implementation of the directions of actions and assumptions of climate policy. Where it is possible to reliably identify relevant actions and the related outlays, we will disclose the respective amounts in subsequent years.

In 2025, we carried out initiatives consistent with the Bank’s strategic assumptions at our locations, aimed at limiting the negative impact on climate change and supporting climate change adaptation processes. The most important of these include:

  • reducing the floor area of properties by 9.7% compared to 2024,
  • covering part of the volume of purchased electricity with guarantees of origin for energy from renewable sources. The volume of energy covered by the certificate in 2025 amounted to 28,242 MWh,
  • improving the energy efficiency of properties and the emissions intensity compared to 2024 by 7.4% (in accordance with the market-based method) and 5.9% (in accordance with the location-based method),
  • decarbonising the vehicle fleet by increasing the share of hybrid vehicles in the fleet from 12% to 69%.

In addition, in 2025 we carried out an issuance of our own ESG bonds in the amount of EUR 500 million (PLN 2,127.6 million at the NBP exchange rate as of 21 September 2025).

Taking into account the specific nature of a financial institution’s business, the allocation of significant funds to finance Poland’s energy transition and the adjustment of our product offering to changing demand for financial products, whether directly linked to investment objectives or provided through sustainability-linked financing structures, are the most important actions to support sustainable development, particularly climate change mitigation and adaptation. Our strategic priority is – as mentioned earlier – to develop products and a model of cooperation with clients that supports the transformation of their business activities, as well as to develop educational activity for clients. As the Transition Plan was adopted by the Management Board in December 2025, the actions reported by us as at the end of 2025 were not yet linked to potential reductions in financed emissions in 2025. However, these actions were considered leading decarbonisation levers in the lending and investment portfolio even prior to the adoption of the Transition Plan. Basic information on the products and financial solutions offered is made available by the Bank to external stakeholders on its website.

In 2025, we published the Strategy. One of the assumptions of the document is to finance green projects in the amount of PLN 9 billion. Green financing comprises renewable energy sources, low-emission transport, energy-efficient construction, energy efficiency, the circular economy, biodiversity, protection against pollution, and the protection of water resources.

In 2025, we provided green financing with a total value of PLN 8,492,232,930. In addition, we supported the issuance of our clients’ ESG bonds in the amount of PLN 2,300 million. In September 2025, under the EMTN programme, the Bank again issued green bonds with a nominal amount of EUR 500 million (XS3185322909). The issuance is based on the Sustainable Finance Framework in force at the Bank since 2023. Investors also included the IFC (International Finance Corporation), part of the World Bank Group, with which Bank Pekao officially entered into a long-term partnership at the beginning of September. The funds invested by the IFC will be allocated to sustainable investments, in particular in the area of sustainable water management.

Achieving environmental objectives requires not only internal commitment, but also openness to cooperation. Therefore, we actively engage in ESG initiatives, establishing partnerships that support the transformation of the economy and strengthen our actions for sustainable development.

  • GREENPACT European ESG Summit Congress – National Chamber of Commerce (Krajowa Izba Gospodarcza):

Once again, we acted as the Gold Partner of the GREENPACT European ESG Summit Congress, organised by the National Chamber of Commerce on 24–25 November 2025. Four representatives of the Bank took part as panellists; additionally, we hosted one panel devoted to financing the energy transition.

The Congress was addressed to a broad group of participants: representatives of business, investors, scientists, public administration and social activists. In 2025, the Congress focused on the role of the green transition in building competitiveness and on the importance of voluntary business engagement in sustainable development.

  • ESG Standard Platform – National Chamber of Commerce (Krajowa Izba Gospodarcza):

We act as a substantive partner for the ESG Standard Platform run by the National Chamber of Commerce. As part of the cooperation, we develop a section devoted to financial matters, publishing monthly articles.

The actions are mainly aimed at companies from the SME sector seeking support in implementing sustainable development principles, as well as large enterprises managing extensive supply chains.

The outcome of the partnership in 2025 included the development of a dedicated finance section, the organisation of a thematic webinar, the participation of a National Chamber of Commerce expert in events organised by the Bank, and monthly promotion of materials in the social media of ESG Standard and National Chamber of Commerce. A representative of the Bank also participated in the work of the ESG Committee.

  • Guide to Sustainable Energy Transition – Polish ESG Association (Polskie Stowarzyszenie ESG):

We were invited to cooperate on the project Guide to Sustainable Energy Transition as a substantive partner responsible for developing a chapter devoted to financing the energy transition. The publication was addressed to companies operating in various sectors – from SMEs to large manufacturing plants. The project involved representatives of private enterprises, public institutions and government agencies (such as PARP (Polish Agency for Enterprise Development), NFOŚiGW (National Fund for Environmental Protection and Water Management) and PAIH (Polish Investment and Trade Agency)).

The outcome of the partnership included, among other things, the publication of a chapter devoted to financing issues in the Guide to Sustainable Energy Transition and the possibility of using the guide in the Bank’s educational and promotional activities. The guide’s premiere took place in November 2025.

  • Ziemianie Atakują! – Nowe narracje (Humans Attack! – New Narratives):

We assumed the role of the main patron of the Ziemianie Atakują! – Nowe narracje project, supporting actions related to the energy transition. The partnership focused on promoting good practices in reducing energy consumption, reducing emissions and developing low-emission energy sources.

The initiative was aimed at entities implementing transformation objectives in the energy sector, including enterprises implementing pro-environmental solutions.

The outcome of the cooperation included conducting research, organising workshops, and developing a free communications guide for companies involved in the energy transition. The partnership also covered promotional activities in social media, press publications, meetings with editorial teams, and mailings to a base of approximately 8,000 recipients. The project’s pre-premiere took place during PRECOP in Katowice, and the premiere took place in November 2025.

  • Green Bonds: From trends to practice – Warsaw Stock Exchange (GPW):

In April 2025, the Bank’s experts led workshops Green Bonds: From trends to practice organised by the Warsaw Stock Exchange (GPW). The event was addressed to people interested in deepening their knowledge of green and sustainable bond issuance. During the workshops, we presented the latest market statistics and trends, discussing experiences related to issuing green bonds both in the domestic and international markets. We also presented practical case studies enabling a full understanding of the preparation and execution of an issuance – including the implementation of a green bond framework and the process related to a Second-Party Opinion.

  • Guide for issuers on green bond issuance – Warsaw Stock Exchange (GPW):

At the invitation of the Warsaw Stock Exchange (GPW), the Bank’s experts provided substantive support in developing the Guide for issuers on green bond issuance. The initiative aimed to educate capital market participants on issuance standards and legal and regulatory requirements. The publication provided a practical overview of the green bond issuance process, including detailed guidance on financing pro-environmental projects, defining environmental objectives, linking proceeds to specific investments, and the reporting process, ensuring compliance with sustainable development principles.

In the retail customer segment, we implement the assumptions of the Strategy by introducing products dedicated to pro-environmental objectives, which respond to the needs of the market for financing for natural persons. The Bank maximises its business opportunities in this area by continuing to offer:

  • Loan – a cash loan with a 0% commission and a reduced margin/interest rate, where the customer uses it for ECO purposes connected with the purchase/installation of, inter alia, renewable energy sources like solar collectors, photovoltaic panels/cells including energy storage, central heating boilers (excluding coal-fired boilers and boilers fuelled by “eco-pea coal”), heat pumps and geothermal heating systems, electric or hybrid vehicles, household bio sewage treatment plants, heat recovery ventilation, domestic water treatment stations for own water intakes, or a rainwater recovery system;
  • ECO residential loans – a loan offer with a reduced margin where the customer, within the financed property, invests in energy-efficient installations, e.g. solar collectors, photovoltaic panels/cells including energy storage, heat pumps or central heating boilers using geothermal heating.

From 1 November 2024, we implemented a new process enabling the assessment of energy performance criteria already at the stage when the customer applies for a mortgage loan. If the customer meets the EP indicator criteria required by the Bank, the customer also benefits from a lower margin. The Bank aggregates data on the Energy Performance Certificates provided for statistical purposes.

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