Green and sustainable products

In 2023, Bank Pekao published the Sustainable Finance Framework. It defines the eligibility of investments financed with the proceeds of EMTN bonds issued by Bank Pekao. In order to be fully transparent, it also includes a description of the process of review and selection of projects, management of funds and allocations of resources, and rules for reporting allocations and environmental and social impacts. Projects funded under the Sustainable Finance Framework include the following categories: renewable energy, sustainable construction, clean transportation, energy efficiency, sustainable water and wastewater management, pollution prevention and control, accessible basic infrastructure, access to basic services: health care. The document was prepared in accordance with applicable international standards published by ICMA and LMA. The framework has also received an independent party’s opinion (SPO) issued by Sustainalytics, which confirms its credibility and positive impact.

One of the Bank’s key tasks in supporting environmental protection and sustainable development activities is to issue payment cards on eco-friendly plastic. As of March 28, 2023, the Bank is issuing the MasterCard Corporate Debit FX card on eco-friendly plastic. The MasterCard multi-currency card is made from 99% recycled PVC from post-industrial waste. As a result, its production reduces total energy consumption by 54%, while its carbon footprint by 75%. By reusing plastic, it also reduces the use of non-recycled materials by 98%. The Bank now also offers a Credit Card with Bison made of recycled plastic. In line with the Bank’s ESG strategy, the Bank will continue to increase the share of cards on eco-friendly plastic in 2024.

99

%

recycled PVC from post-industrial waste

In September 2023, the first loan agreement was signed with the European Bank for Reconstruction and Development (EBRD) for EUR 150 million for Pekao Leasing, secured by a guarantee from Bank Pekao. The funds will be used to support Polish micro, small and medium-sized enterprises affected by the Russian invasion of Ukraine. About 60% of the loan will finance green investments, in line with the EBRD’s approach to the green transformation of the economy, including, among other things, improvements in energy, resource and water efficiency, renewable energy and waste minimization, supporting Polish companies in increasing the use of efficient technologies. The Bank was the coordinator and guarantor in the transaction.

In 2023, Bank Pekao was involved in a number of projects aimed at improving the energy efficiency of business customers, implementing green projects, financing renewable energy sources (such as wind farms, photovoltaic installations or low-emission urban transportation) and social projects.

Major ESG projects financed by the Bank in this area in 2023 include:

consortium financing linked to the sustainable development for an energy company in the amount of PLN 600 million,
consortium financing linked to the sustainable development goals of one of the largest groups in the media and telecommunications industry in the amount of PLN 1.2 billion,
investment financing for the construction of a wind farm in the amount of PLN 95 million,
consortium financing of financial institutions of a loan linked to sustainable development for a total of PLN 1.65 billion,
financing of the construction of a 1.2 GW offshore wind farm as part of a consortium of financial institutions loan for a total of PLN 3.9 billion,
joining an international consortium that will finance the construction of a tramway line in Kraków as part of a public-private partnership formula. The Bank’s share of financing exceeds PLN 0.5 billion.

In addition, Bank Pekao:

served as co-organizer and co-bookrunner of a PLN 3.49 billion issue of 7-year sustainability-linked bonds for Poland’s largest provider of integrated media and telecommunications services,
served as sole arranger for the issuance of green Eurobonds (Climate Awareness Bonds) for an international financial institution for an amount of PLN 400 million,
was the co-organizer and dealer of a green bond issue of a company belonging to an international real estate development group in the amount of PLN 180 million,
was the co-organizer and dealer of 3.5-year green bond issue of a company belonging to an international real estate development group in the amount of PLN 340 million,
was the organizer of social impact bond issues for local governments: Lublin (PLN 150 million), Toruń (PLN 140 million) and Łódź (PLN 160 million),
issued EUR 500 million worth of 4-year green senior non-privileged Eurobonds under EMTN’s EUR 5 billion medium-term Eurobond issuance program; the funds raised from the issue will be used to provide financing or refinance eligible projects in accordance with the Bank’s Sustainable Finance Framework.

In 2023, the Bank continued its special Express Loan offer for individual customers, supporting the financing of consumer investments for environmental purposes. Funds granted on promotional terms could be used for expenses associated with the purchase or installation of:

renewable energy sources (solar collectors, solar panels/cells),
central heating boilers (excluding coal and eco-pea boilers), heat pumps and using geothermal heating,
roofs, windows, doors, and home insulation materials,
electric or hybrid passenger cars and electric motorcycles and scooters, electric bicycles.
domestic bio-treatment plants,
ventilation with heat recovery, domestic water treatment plants from own intakes,
rainwater recovery system.

As part of the Express Loan, we maintain a high share of sales with document acceptance in electronic channels, i.e. Pekao24 online banking and PeoPay mobile application. In 2023, as many as 83% of the transactions were conducted as part of the “paperless” option.

Supporting environmentally friendly solutions for individual customers was the EKO Housing Loan, under which loans were available for primary or secondary market properties equipped with solar panels, photovoltaic panels or cells, or heat pumps.

83

%

of the transactions were conducted as part of the “paperless” option.

Pekao TFI offers the Pekao Ekologiczny sub-fund, aimed at supporting sustainable investments. Companies from environmentally friendly and pro-environmental sectors (renewable energy, electromobility, energy efficiency, recycling and waste management) are selected for its portfolio. In analyzing their selection, in addition to financial factors, ESG issues, i.e. environmental, social and corporate governance aspects, were equally important.

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