About us
Sustainability
The context in which businesses operate has been transformed by a variety of environmental, social and governance (ESG) aspects such as climate change, human rights and business ethics as well as concurrently unfolding trends such as biodiversity loss, unsustainable use of natural resources, human demographic shifts, social and economic inequalities and a pandemic.
Driven by our core values (Dynamism, Diversity and Expertise) and base values (Customer Focus, Professionalism, Integrity and Transparency) our vision is to maintain our position as an efficient and adaptive bank. In order to live by this vision, it is crucial to adopt a ‘people, planet and profit’-oriented way of doing business while maintaining in-depth understanding of ESG issues and effectively monitoring of related outcomes.
Main drivers of our sustainability agenda are:
- Adopting an overarching and inclusive sustainability framework to meet stakeholder needs and expectations with an ambition to contribute to sustainable development and stimulate the necessary internal and external transition. We believe this is crucial to maintain long-term value creation approach for our key stakeholders and serve future prosperity.
- Complying with all related regulatory requirements and supervisory expectations as set by competent authorities in the area of sustainability/ESG.
- Pursuing our operations in line with the long-term sustainability objective of ‘future proofing’ our business model.
- Being guided by the national/international leading sustainability/ESG standards, frameworks, and initiatives to ensure we are able to capitalize on opportunities to increase positive ESG impact and effectively manage risks and reduce negative impacts via our sustainability efforts.
By way of enhancing the sustainability governance process within the bank, we have restructured our Sustainability Committee to holistically address sustainability and ESG issues by having representatives from each key function. CEB’s Managing Board has the ultimate responsibility for all sustainability matters while the Sustainability Committee acts as an advisory body of the Managing Board.
Climate action failure is identified as the most severe risk, followed by extreme weather and biodiversity loss. That is why our number one priority lies in collaboration and transparent dialogue with our clients regarding the societal and environmental impacts of their business.
Environmental Objectives
The environment pillar of ESG takes into consideration an organization’s utilization of natural resources and the effect of its operations on the environment, both in its direct operations and across its value chain through indirect impact. The environmental issues have proven to threaten the sustainable economic growth. Therefore, effective identification and management of these issues has a paramount role in achieving our business plan. Leading environmental issues such as climate change, air pollution, biodiversity loss and water scarcity already threaten business continuity across multiple sectors and geographies at a global level.
As a financial institution and a responsible corporate citizen, we are mindful of our role to address these issues and respects the following environmental objectives while conducting our activities:
- Minimizing the negative impact of direct (own) operations on the environment (CO2 emissions, natural resource consumption, waste generation etc.),
- Evaluating and where possible optimizing the negative impact of indirect (financed) activities on the environment (portfolio CO2 emissions, biodiversity, air/water/soil pollution, waste generation, natural resource consumption and circular economy etc.),
- Complying with all applicable environmental regulations and supervisory expectations.
We have joined the Partnership for Carbon Accounting Financials (PCAF) and committed to contribute to the efforts on measuring and disclosing financed emissions to manage risk and identify opportunities associated with greenhouse gas emissions.
Credit Europe Bank is conscious of its responsibility to conserve natural resources and continually aims at a more efficient use of the resources required for its business activities.
Social and Governance Objectives
Along with mainstream social topics considered as part of ESG such as human rights, labor relations and working conditions including workplace health & safety; and product/service safety and quality, social factors now also incorporate the impact of modern supply chain systems and the adoption of technology and digitalization across all business sectors. By embodying the necessary moral codes and business ethic, we conduct our day-to-day business with utmost respect and effort for the following main social and governance objectives:
- Ensuring Human Rights are well-respected across the value chain,
- Maintaining labor rights, including providing social protection, non-discriminative and inclusive working environment for its employees,
- Paying utmost importance to customer protection,
- Contributing to peaceful and inclusive societies,
- Maintaining effective governance structure,
- Contributing to the global fight against corruption, bribery and tax evasion.
Sectoral Business Plans and Commitments
Our Business Model and Strategy incorporates long-term credit-worthiness of certain sectors when considering the associated ESG impacts. We prioritize the sectors to develop specific ESG-oriented policies based on the ESG risks associated with the nature of the activities conducted within a particular sector or the sector’s high contribution to CEB’s overall portfolio carbon emissions at a consolidated level.
Fossil Fuel Business Plan
Our planet is facing a range of environmental challenges, including but not limited to climate change, deforestation, air and water pollution, and dwindling biodiversity. In fact, according to World Economic Forum’s 2023 Global Risk Report, 6 out of 10 most severe risks in terms of long-term impact on global economy, and therefore on the governments and individuals, are environmental risks, chief among them failure to mitigate climate change. In order to limit the rise in global temperatures to 1.5°C, a significant transformation of the fossil fuel dominant energy system is needed.
As a financial institution, we are aware of the urgency of climate action and our role in addressing climate change, and aim to contribute to the transition to sustainable development. Since most of our climate-related impact is indirect via activities we finance, we monitor our corporate portfolio carbon emissions and evaluate sectors having high climate impact and/or significant share in our portfolio emissions. Mindful of these facts, we periodically review our sector-specific business plans to increasingly align with the global climate goals.
The increased scrutiny and pressure on companies from key stakeholders such as investors, creditors and society (depositors), as well as uncertainties over long-term demand for fossil fuels, have the potential to leave significant amount of fossil fuel assets stranded in the future. While considering this business (phase-out) plan, our primary concern is not the increased credit risk (at least not over the short to medium term), because CEB's exposure to coal and oil & gas is only during transit, and we have no direct exposure to upstream activities in these sectors where the biggest risk of stranded assets lie. Accordingly, we do not expect any impacts concerning climate-related stranded asset risks. Therefore, the main driver of this Business Plan is to ensure business resilience through portfolio diversification while limiting our exposure to sectors with high environmental, social and governance risks.
The following sections covers the list of activities in fossil fuel value chain, including coal and oil & gas, that we commit to discontinue providing direct finance to. In addition to this list, we also determine a sector-specific phase-out in line with our mid- to long-term sustainability objectives.
Prohibited Activities:
Coal
- No direct financing to greenfield or existing coal mines
- No direct financing to greenfield or existing coal power plants
- No direct financing to coal mine developers
- No direct financing to coal infrastructure projects or expansion of the existing coal infrastructures
Oil & Gas
- No direct financing to extraction of conventional oil and gas (neither Greenfield projects nor existing facilities).
- No direct financing for the infrastructure for transportation (pipeline) of conventional oil and gas sources.
- No direct financing to extraction and production of unconventional oil and gas (neither greenfield projects nor existing facilities). Unconventional oil and gas resources covers shale oil or gas, tar (oil) sands as well as onshore and offshore oil and gas resources located in the Arctic region.
- No direct financing to companies developing unconventional oil and gas projects or expanding existing facilities.
- No direct finance to companies developing oil and gas projects or expanding existing facilities located;
- On a protected area or wetlands of international importance covered by the Ramsar Convention[1], or
- In increasingly complex operating environments, including deep offshore waters.
- No direct financing for the infrastructure for transportation (pipeline) of unconventional oil and gas sources.
- No direct financing of physical trade of oil and gas extracted from unconventional sources.
Phase-out Plan:
Coal
- No outstanding direct exposure to companies involved in the prohibited activities listed above.
- Stop thermal coal (and lignite) trading before the end of 2024, in line with our medium to long-term ESG targets.
- Exit from companies before the end of 2024 that derive more than 25% of their revenues from thermal coal extraction or coal power generation.
Oil & Gas
- No outstanding direct exposure to companies involved in the prohibited activities listed above.
- Exit from companies before the end of 2025 that derive more than 10% of their revenues from unconventional oil and gas.
Marine Finance Business Plan
Marine Finance is one of the main activities we conduct under corporate banking. Managing the ESG risks related to Marine Finance portfolio is one of the main drivers of our Business Plan. Carbon emissions intensity of our Marine Finance portfolio constitutes a considerable share of our overall financed emissions.
To the extent of aligning with the carbon emissions reduction strategy set by the International Maritime Organization (IMO), we have set main acceptance criteria for Marine Finance transactions based on their energy efficiency and emissions performance according to the upcoming Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII) regulations. By doing so, we aim to contribute to IMO’s ambition to reduce shipping’s total annual GHG emissions by at least 50% by 2050 compared to 2008.
Commercial Real Estate Business Plan
The rise of ESG’s role in Commercial Real Estate (CRE) can be traced to climate change as buildings are currently responsible for around 39% of global energy related carbon emissions: 28% from operational emissions, from energy needed to heat, cool and power them, and the remaining 11% from materials and construction. As weather patterns rapidly become more extreme, energy consumption will increase accordingly to maintain comfortable temperatures.
As of 2021, all new buildings in the EU must be nearly zero-energy buildings (NZEB); a building that has a very high energy performance, while the nearly zero or very low amount of energy required should be covered to a very significant extent by energy from renewable sources produced on-site or nearby.
As of 1 January 2023, an office building located in the Netherlands must have at least an Energy Performance Certificate (EPC) ‘C’ rating. If the building does not meet the requirements by then, it may no longer be used as an office.
Extreme events like flooding, water shortages, and even tropical storms are increased in severity due to heightening climate change, with clear potential impacts in terms of the maintenance or even viability and insurability of CRE assets.
By way of factoring in these developments as part of our risk acceptance criteria, we determined the minimum energy performance requirement as an EPC rating of ‘A’ or above for new buildings and ‘C’ or above for existing buildings.
Stakeholder Engagement
We value our stakeholders' diversified interests. We incorporate their views and concerns into our decision-making and strategy development process by determining which ESG topics they consider to be relevant to our way of doing business. This process forms our periodic materiality assessment as part of sustainability reporting obligations. The resultant material topic list is the basis of our transparent disclosure regarding the approach we take on managing each topic together with our performance and targets where applicable.
In addition to materiality assessment process, we maintain an ongoing stakeholder dialogue at varying frequencies, such as constant dialogue with customers and employees to annual information sharing with different stakeholder groups such as customers, shareholder, and regulators. By doing so, we aim to strike a balance between meeting differing needs of each stakeholder group.
The methodology we use during materiality assessment of ESG topics each year together with the outcomes of the process are detailed in our Annual Report.
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[1] List of Wetlands of international importance (10 December 2021) – periodically updated on Ramsar Convention website.
