Global Compact Turkey’s “Declaration on Sustainable Finance” has been updated

Banks affect a wide stakeholder ecosystem and they play a significant role in the distribution of financial sources. By focusing on financing areas such as renewable energy, women empowerment, and supporting disadvantaged groups, taking environment, social justice and human rights as a basis, banks have gained a definitive position in providing sustainable development.

As Garanti Bank, we regard leading the way in spreading responsible banking and sustainability practices as our responsibility. In 2019, we became the only bank from Turkey to be involved in the process of launching United Nations Environment Programme Finance Initiative (UNEP FI) Sustainable Banking Principles. Accordingly, we continue to form collaborations on sustainability and responsible banking, in both local and international levels, which have high multiplier effect.

In 2017, we signed the Global Compact Turkey Declaration on Sustainable Finance, which foresees the evaluation of environmental and social risks in credit processes and the integration of these risks into related policies, with UN Global Compact, of which we are a member of, and other 6 banks from Turkey. Thus, we supported Global Compact Turkey’s aim of communicating the concept of sustainability by introducing sustainability benchmarks into the credit facility policies of finance institutions.

The Declaration, which encourages moving the existing practices in the finance industry forward and motivating all players for a sustainable future, was updated in December 2018. The banks must now evaluate the environmental and social effects of the projects that they finance if their respective contribution is USD 20 million or higher. This threshold was previously USD 50 million in the Declaration. Also, the signatory banks committed that they would employ at least one employee for a position that involves environmental and social factors in its job description.

Banks which could become signatories to the Declaration for the first time will be able to determine the minimum investment amount limit as USD 50 million on their first year. After the completion of the first year, minimum investment limit will be USD 20 million for each signatory bank and it will be compulsory that the bank will employ qualified staff.

Our Bank’s Executive Vice President Ebru Dildar Edin, who is also Global Compact Turkey’s Sustainable Banking and Finance Working Group Leader, commented: “In 2017, the leading 7 banks of Turkey signed this Declaration. We stated that we would act not only as a business partner providing financial support, but also a corporate citizen that will protect the interests of society and environment. I believe that this group, which represents 45% of Turkish banking industry in terms of size of assets, has determined the reference point for sustainable finance with this Declaration.

One of the promises we made after the first signatures was raising the bar every year. In this regard, one of the updates we made in the Declaration is reducing the USD 50 million investment threshold, through which we will implement high environmental and social standards, to USD 20 million. This means that 7 banks, which lead the way by signing this Declaration, will introduce more customers to these standards. Another update is the obligation for all signatories to employ staff related to these matters. This way, we aim to allow our new signatories to internalize this process in a quicker fashion.”

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