Metrics and Targets

The results of implementing the Bank’s climate policy objectives and directions set out in the ESG Strategy are subject to quarterly internal supervision, in accordance with the provisions of the internal regulations governing the processes of developing and monitoring the ESG Strategy. For the timeframe of the ESG Strategy (2021-2024) we did not set reduction targets aligned with the requirements set forth in ESRS E1.

The targets outlined in the ESG Strategy are linked to performance metrics used to assess the effectiveness and efficiency of undertaken actions (a detailed description is provided in Table 6 below), expressed in the appropriate unit depending on the assigned target (these targets refer to financial quotas, not carbon dioxide equivalent as they were not intended as financed emission cutting targets). The metrics reported below were methodically designed and implemented prior to the introduction of the requirements stemming from the European Sustainability Reporting Standards. Where possible, we have directly referenced the relevant ESRS E1-4 requirements concerning the reporting of metrics related to our undertaken actions. The specified targets and metrics relate, at the level of the credit and investment portfolio, to reducing the Bank’s exposure to transition risk associated with maintaining exposure to high-emission sectors, as well as to seizing business opportunities linked to climate change mitigation and adaptation.

As noted in the introduction to this subsection, the target related to reducing greenhouse gas emissions from own operations and the supply chain (beyond the credit and investment portfolio, i.e., Category 15 of Scope 3) has been set beyond the horizon of the ESG Strategy and refers to 2030. Thus, it aligns with the provisions of the Paris Agreement and the European Green Deal, aiming for climate neutrality of the EU economy by 2050.

As part of the ESG Strategy implementation, we have set a number of measurable quantitative and directional targets (see Table 9 below). The reference values of indicators used to assess the effectiveness of undertaken actions have been established, where applicable, for the baseline year designated for the ESG Strategy covering 2021-24, which was set as 2020. Throughout the four-year implementation period of the ESG Strategy, we have not set intermediate targets or milestones, neither for targets related to reducing greenhouse gas emissions from own operations nor for actions concerning the credit and investment portfolio. During the ESG Strategy’s duration, we have not modified the performance metrics.

We have not established targets directly related to environmental issues; however, the green financing eligibility criteria defined within the ESG Strategy are based on the environmental objectives presented in the EU Taxonomy. The Bank has also not involved external stakeholders in the target-setting processes for the ESG Strategy.

The methodology for the above disclosures is based on the following assumptions:

We have not set climate targets related to the decarbonisation of our credit and investment portfolio. However, we have implemented a strategic directional goal associated with calculating portfolio-financed emissions within Scope 3 (Category 15) in 2024. In subsequent years, these calculations will serve as the foundation for defining appropriate methodological frameworks and a timeline for the reduction of financed emissions, ultimately achieving net-zero financed emissions by 2050, in line with the Paris Agreement and the pathway to limiting global temperature rise to a maximum of 1.5˚C above pre-industrial levels.

In 2024, we adopted strategic decarbonisation directions for the energy generation and iron and steel sectors, which will form the basis for further actions within the framework of the transformation plan under regulatory requirements.

The objective of the disclosure requirement is to provide insight into the Bank’s total energy consumption in absolute terms, to enhance our energy efficiency, to assess our exposure to coal, oil, and gas-related activities, and to determine the share of renewable energy in our overall energy mix.

When preparing the energy consumption information required by regulations, we report only the energy consumption from processes that we operate or manage as a Group. In the calculations presented below, we applied the same control boundary used for greenhouse gas emissions calculations within the Group. Our presented figures exclude raw materials and fuels that are not combusted for energy production – given our business profile as a financial institution, we do not conduct such operations. We also do not use fuel as a raw material.

The quantitative information provided in Table 10 below regarding energy consumption is expressed in megawatt-hours. Where the original information was provided in a different unit, we have converted it to megawatt-hours using the appropriate conversion factors. The data we present refers solely to final energy consumption (actual energy used by the Group). We generate renewable energy for our own needs, and to avoid double counting, we report this energy only within fuel consumption.  We do not apply energy consumption offsetting methods, and the energy we generate is not sold to third parties. We also do not include energy acquired within the Group in the category of “purchased or acquired energy”.

Due to the nature of Pekao Group’s business activities, we do not account for steam, heat, or cooling (considered as “waste energy”) from third-party industrial processes. Similarly, we do not account for renewable or non-renewable hydrogen. For the purpose of calculating Scope 2 greenhouse gas emissions, we have classified electricity, steam, heat, or cooling as originating from renewable and non-renewable sources in accordance with a prudential approach. In other words, we have considered energy to be sourced from renewables only when its origin was explicitly stated in contractual agreements with our suppliers.