Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainable agriculture
• Renewable energy
• Energy efficiency
• Sustainable forest management
• Waste management
• Affordable housing
• Social inclusion
• Education
• Economic inclusion

Environmental Achievements

• In 2018, the sustainable agriculture line totaled EUR 103.3 million, spread across 1,220 loans to 963 borrowers. 11.8% of loans were certified organic.
• Loans to renewable energy producers and developers of renewable energy plants accounted for 39.7 M EUR of the Bank’s sustainable financing in 2018.
• CRN provided loans for a total of EUR 443.1M to energy efficiency projects, of which 67.2% were directed towards energy efficiency solutions in buildings.
• As for sustainable forest management, the Bank has helped financing of 370.2 hectares of forestry land with a carbon sink effect in its growth phase estimated at 15,280 tCO2eq.
• CRN’s sustainable loan portfolio also includes EUR 25.8M, spread across 74 loans, dedicated to recycling, including recycling of industrial waste, manufacturing of commercial products from recycled materials and clean-up of industrial waste.

Social Achievements

• Regarding social housing, CRN has provided mortgages to individuals and developers in order to enable low-income people to access affordable protected housing (“VPO”) or regulated price housing (“VPT”). The total investment is EUR 644M, spread across 7,127 loans to 6,821 individuals and 61 legal entities.
• The social inclusion lending line involves a wide range of socio-cultural programs that aimed at fostering social cohesion, such as providing EUR 50.3 M to 280 social organizations that seek to include groups at risks of social exclusion e.g. immigrants, the gypsy community, young people, drug users and the elderly unemployed.
• As for education, CRN financed new buildings, equipment and infrastructures, as well as international scholarships for university students and professional training.
• CRN has developed a lending line dedicated to economic inclusion through small loans to entrepreneurs. During the past decades, the Bank has supported 1,700 new businesses that led to the creation of 3,400 jobs, of which 381 were generated in 2018.

Governance Achievements

• CRN’s internal process in evaluating and selecting projects is managed by the Sustainability Committee, which consists of representatives from the primary departments involved in lending activities (Corporate and SME department, Institutional Clients department, Housing department, Commercial and Marketing department and the Risk department) together with the Treasury and Capital Markets, Legal & Reporting and Human Resources departments.

Climate Goals & Targets

Environmental Challenges

• Potential environmental and social risks include (i) land use and biodiversity issues associated with large-scale infrastructure development, (ii) potential environmental impact of monoculture forest plantation, and (iii) risks that loans to education and social inclusion programs do not reach vulnerable groups.

Mitigation Strategies

• CRN has implemented exclusionary criteria for large-scale hydro projects (installed capacity > 20MW) and technology and equipment for large-scale hydro projects are excluded from the Framework.
• CRN has implemented an exclusionary criterion for afforestation operations located on land designated as primary forest, high conservation value areas, or legally preserved areas.
• CRN track record in leading social impact-driven projects to disadvantaged people proves the Bank’s ability to provide loans to well-designed social programs.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Green Bond Principles 2018, Social Bond Principles 2018, Sustainability Bond Guidelines 2018

Third-party Assurance: Third-party verified

UN Sustainable Development Goals

• SDG 4
• SDG 7
• SDG 8
• SDG 10
• SDG 11
• SDG 12
• SDG 15

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Loans totaling EUR 504.3 million in renewable energy projects in 2019.
• Loans totaling EUR 463.7 million in energy efficiency projects in 2019, resulting in 14,003.70 tonnes/year CO2 reduction compared to average Spanish homes.
• EUR 134.7 million in sustainable agriculture loans, with 16.36% of loans having European ecological certification for organic production.

Social Achievements

• EUR 628.6 million in social housing loans, benefiting 6,930 borrowers.
• EUR 50.9 million in social inclusion loans supporting over 3,000 people.
• EUR 24 million in education loans supporting 58 training centers with over 35,000 students.

Governance Achievements

• Sustainalytics ESG rating ranks the bank among the best performers in the financial sector in 2019.
• Transparency policy meets generally accepted international sustainability criteria.
• Third-party verification of the report by AENOR.

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Green Bond Principles (GBP), Social Bond Principles (SBP), UN Sustainable Development Goals (SDGs), EU Taxonomy

Certifications: Covered Bond Label, DZ Bank Sustainability certification

Third-party Assurance: AENOR

UN Sustainable Development Goals

• Not disclosed

The report maps the framework’s sustainability lines against the UN SDGs.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainable Agriculture
• Renewable Energy
• Energy Efficiency
• Sustainable Forest Management
• Waste Management
• Social Housing
• Social Inclusion
• Education
• Economic Inclusion

Environmental Achievements

• Sustainable farming line totaled EUR 108.4 million, spreading across 1,653 loans to 1265 borrowers in 2020
• Loans to fund Renewable energy projects reached EUR 30.4 million in 2020
• Provided loans totaling EUR 593.4 million in 2020 for energy efficiency projects
• Financed EUR 1.3 million in 2020 to support forestation, reforestation and the development of forestry plantations
• Sustainable loan portfolio includes EUR 21.6 million dedicated to waste management projects

Social Achievements

• Total investment in social housing was EUR 595.8 million in 2020, including 7,047 loans to 6,998 individuals and 49 legal entities
• Social inclusion lending line amounted to EUR 56.4 million in 2020, involving socio-cultural programs
• Financed EUR 26.7 million in new buildings, equipment, infrastructure as well as international scholarships for university students and professional training in 2020
• Provided companies, especially SMEs, EUR 808 million of financing to support and maintain their economic activities and jobs under different government schemes during the COVID-19 pandemic

Governance Achievements

• Internal process in evaluating and selecting projects is managed by the Sustainability Committee

Climate Goals & Targets

Environmental Challenges

• Land use and biodiversity issues associated with large-scale infrastructure development
• Risks that loans to financed programmes do not reach targeted groups
• Risks of predatory lending

Mitigation Strategies

• Spain’s environmental legislation requires private and public entities to be in alignment with regulations concerning environmental issues
• CRN implements the government’s criteria and methodology to target its intended population groups. A Code of Conduct is applicable to all employees.
• CRN has a CSR strategy which outlines CRN’s commitment to identify, evaluate and manage the ESG risks associated with its portfolio. Exclusionary criteria restrict the use of sustainability bond proceeds from financing payday loans or predatory lending activities. Compliance with Royal Decree-Law 6/2012.
• Commitment to Do No Significant Harm Criteria as outlined by the current EU Taxonomy

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2021, EU Taxonomy

Certifications: EU Organic, PEFC, FSC

Third-party Assurance: Third-party verification

UN Sustainable Development Goals

• SDG 4
• SDG 7
• SDG 8
• SDG 10
• SDG 11
• SDG 12
• SDG 15

Investments in eligible categories will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Increased sustainable loan portfolio to over EUR 4,500 million by 31 December 2022.
• Improved energy efficiency in buildings through financing renovations.

Social Achievements

• Supported 60,924 people and companies in 2022 through sustainable loans.
• Provided EUR 3.5 million to support 31 professional associations.
• Invested EUR 12.3 million in 37 social organizations promoting social inclusion.
• Provided EUR 19.7 million to 46 sports bodies.
• Invested EUR 9.6 million in 108 cultural bodies.
• Provided EUR 2 million for healthcare and social inclusion of elderly and dependent young people.
• Invested EUR 4.6 million in 10 organizations supporting people with disabilities.
• Developed the Soziala Digitala program to support digitization of institutions working with people with disabilities.

Governance Achievements

• Received a negligible ESG risk rating from Sustainalytics in 2022.
• Achieved DZ Bank Sustainability certification with above-average scores in all four areas (Economy, Environment, Social, and Governance).
• Aligned its loan portfolio framework with the EU Taxonomy of Sustainable Activities and the UN Sustainable Development Goals.

Climate Goals & Targets

Environmental Challenges

• Data limitations in obtaining detailed information on each loan exposure, resulting in the sustainable portfolio potentially being larger than indicated.
• Economic impact of the Covid-19 pandemic and the war in Ukraine on SMEs.

Mitigation Strategies

• Active participation in Covid financing lines and loans to SMEs, borrowers in remote districts, and entrepreneurs.
• Provided EUR 75 million in loans to 300 customers to mitigate rising costs.
• Provided EUR 914 million in Covid-related loans to 5,594 companies.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: EU Taxonomy of Sustainable Activities, UN Sustainable Development Goals (SDGs), ICMA's Green Bond Principles, ICMA's Social Bond Principles, Covered Bond Label

Certifications: DZ Bank Sustainability certification, AENOR verification of CSR Report

Third-party Assurance: AENOR

UN Sustainable Development Goals

• Goal 7
• Goal 8
• Goal 11
• Goal 12
• Goal 13
• Goal 15

The Framework's sustainability lines are mapped against the UN SDGs.

Environmental Metrics

ESG Focus Areas

• Profitability, solvency and risk management
• Ethics, integrity and good governance
• Strategy
• Responsible and transparent marketing
• Mission, vision and values of the Bank
• Digitization
• Transparency and responsible communications
• Customer services department
• Contribution to economic growth and development
• Personal development
• Marketing channels
• Range of products and services
• Equality, diversity and work-life balance
• Social action
• Responsible purchasing
• Sustainability strategy
• Support for environmental protection initiatives
• Sustainable finances
• Reducing the environmental footprint

Environmental Achievements

• All electricity used in 2023 was supplied from renewable sources.
• Continued reduction in paper and toner consumption.
• Implementation of energy efficiency measures in branches (air conditioning, lighting, signage).
• Supported 73.53 hectares of forestation and cleaned 349.14 hectares under the Forestry Plan.

Social Achievements

• Launched and implemented the Bank's Equality Plan.
• Continued the Plan for Digital Training of Older People.
• Held the Gainditu Awards in Bizkaia and the first Social Commitment Awards in La Rioja.
• Supported various social organizations with digital tools.
• Continued the Experience Programme for young people.

Governance Achievements

• Continued to improve internal governance framework.
• Maintained strict compliance with all national and international regulations.
• Implemented a Criminal Compliance Management System (CCMS) certified by AENOR.
• Developed a new Brand Centre to comprehensively define the two brands (Caja Rural de Navarra and Rural Kutxa).

Climate Goals & Targets

Environmental Challenges

• Rise in interest rates making it harder for customers to pay installments and increasing early repayments.
• Heavy competition for credit due to market liquidity.
• Regulatory uncertainty regarding socially responsible investment.
• Lack of data on CO2 emissions from many business customers.
• Difficulty in accurately measuring scope 3 emissions.

Mitigation Strategies

• Careful management of bad debt.
• Competitive products offering good returns to customers.
• Active drive for new customers.
• Development of the sustainability module for the MiFID Suitability Test.
• Use of sector estimates and national benchmarks for calculating financed emissions.
• Implementation of a methodology developed by a third-party expert consultant for calculating the carbon footprint of the loan portfolio.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Handbook with ethical principles (fit and proper person, morality and ethics at work, recognized experience and quality).

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Fire
• Earthquakes
• Desertification

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products and services
• Growth in green finance.

Reporting Standards

Frameworks Used: GRI Standards, Act 11/2018 of Spain

Certifications: UNE 19601:2017 (Criminal Compliance), DZ Bank Sustainability certification

Third-party Assurance: AENOR

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 11 (Sustainable Cities and Communities)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

Various initiatives align with these SDGs, including renewable energy financing, support for SMEs, sustainable housing, waste management, and carbon footprint reduction.

Sustainable Products & Innovation

• Sustainable investment funds
• Green mortgage-backed covered bonds
• Loans for sustainable farming, renewable energy, energy efficiency, etc.

Awards & Recognition

• Nomination for the Global Capital Covered Bond Awards in the Best Pioneering Deal category.