Climate Change Data

Environmental Metrics

ESG Focus Areas

• Community
• Workplace
• Responsible Services
• Environment

Environmental Achievements

• Estimated energy consumption reduction of 4% in 2017 compared to 2016
• Recycled approximately 290,000 kg of paper
• Recycled 1,900+ kg of metal

Social Achievements

• More than 2,500 new patients received treatment from the Bank of Cyprus Oncology Centre (36,000+ in total since 1998)
• Co-organised five debates between students and Cypriot leaders with 500+ students participating
• 460+ staff volunteers supported community initiatives
• Contributed €470,000 to funds raised for the Cyprus Anticancer Society
• 8,800+ hours of training on financial crime issues for all staff
• 99% of staff participated in e-learning programmes

Governance Achievements

• The Board of Directors maintains a “zero tolerance” approach to acts of bribery
• Implemented robust regulatory framework aligned with CBC Directive and EBA Guidelines
• Shares of the holding company listed on the London Stock Exchange, complying with both the London Stock Exchange Corporate Governance Code and the Corporate Governance Code of the Cyprus Stock Exchange

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• New procedures and criteria introduced for the supply chain, ensuring a smooth and transparent process in the selection of suppliers
• Adopted and upgraded supplier assessment and selection procedures

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G4 (In Accordance - Core)

Certifications: ISO 9001:2015 (International Banking, International Business Units, International Lending Units), ISO 50001 (two data centers)

Third-party Assurance: Centre for Sustainability and Excellence (CSE)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• 2017 Best Corporate Governance Award, Cyprus, by World Finance (UK)
• 2017 Bank of the Year Award (Cyprus) of Corporate Insider’s Business Excellence Awards
• Best Private Banking in Cyprus 2017 (Global Finance magazine and Euromoney magazine)
• Best Subcustodian Bank in Cyprus 2017 (Global Finance magazine)
• Best Bank FX Providers 2017 (Global Finance magazine)
• Citibank Award of “USD Straight – Through Processing (STP) Excellence Award”

Environmental Metrics

ESG Focus Areas

• Community
• Services
• People
• Environment

Environmental Achievements

• 5% estimated reduction in energy consumption due to replacement of existing lights with new more efficient LED in 12 buildings
• Recycled approximately 9,800+ kg of miscellaneous appliances-machines
• Recycled approximately 735,000 kg of paper

Social Achievements

• More than 2,300 new patients received treatment at the Bank of Cyprus Oncology Centre (39,500+ in total since 1998)
• Co-organised with NGO Reaction five debates between students and Cypriot leaders
• 850+ staff volunteers supported our community initiatives
• 97% of staff participated in training programmes
• €485,000 funds raised for the Cyprus Anticancer Society #stiMaxi

Governance Achievements

• 97% of all employees attended short e-learning seminars and passed the relevant assessment on regulatory compliance topics
• 20,900+ hours of training on financial crime issues for all members of staff
• 3,092 customer relationships terminated/suspended and 1,467 potential new customers rejected exclusively for compliance reasons
• 668 customer complaints concerning all lines of business within the bank were handled within the time frame set up by the competent authorities

Climate Goals & Targets

Environmental Challenges

• Reducing greenhouse gas emissions
• Maintaining high standards in Know Your Customer activities and transaction monitoring

Mitigation Strategies

• Implementation of policies, measures and day-to-day practices to reduce carbon footprint
• Strict written instructions sent to all employees to set rigorous standards in KYC activities and transaction monitoring

Supply Chain Management

Responsible Procurement

• Expanding the larger bidders’ list by 10%
• Adopting and upgrading supplier assessment and selection procedures

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards (In Accordance-Core)

Third-party Assurance: Centre for Sustainability and Excellence (CSE)

Sustainable Products & Innovation

• 1bank services and mobile applications
• allNET customer portal
• CASH360

Awards & Recognition

• Best Corporate Governance Award (Cyprus) World Finance (UK)
• Bank of the Year Award (Cyprus), Corporate Insider’s Business Excellence Awards
• Best Private Bank in Cyprus, Global Finance magazine
• Best Private Banking in Cyprus, Euromoney Survey 2018
• Best Subcustodian Bank in Cyprus, Global Finance magazine
• Most Active Bank in Cyprus, EBRD (European Bank for Restructuring and Development) relating to the Trade Services
• IDEA was declared the National Winner for Promoting the Entrepreneurial Spirit in the 2018 European Enterprise Promotion Awards

Environmental Metrics

ESG Focus Areas

• Society
• People
• Services
• Environment

Environmental Achievements

• 7.4% estimated reduction in energy consumption in 2019
• Installation and connection of 100KW photovoltaics to cover part of the electricity needs of IT building.
• 390 thousand kilograms of paper recycled in 2019

Social Achievements

• More than 40,000 patients treated at the Bank of Cyprus Oncology Centre since 1998.
• €530,000 raised through the 'Fight against Cancer' campaign in 2019.
• Approximately €340,000 offered for the support and enhancement of more than 120 NGOs in the Health pillar.
• Over 100,000 pupils participated in educational programmes offered by the Bank of Cyprus Cultural Foundation since 1985.
• Approximately €560,000 offered for the support and enhancement of more than 180 NGOs, associations, municipalities, schools, sports federations and sports academies in 2019.
• Refurbished computers and other office equipment provided to schools, associations and NGOs.
• 1,011 training days allocated to financial crime issues for all Bank employees.
• All staff trained on health and safety through e-learning sessions.
• Approximately 1,000 volunteers/staff members engaged in social outreach activities in 2019.

Governance Achievements

• Implementation of a Group Data Protection Policy.
• Zero tolerance policy for money laundering and terrorism financing.
• 2,760 customer relationships terminated/suspended, and 1,469 potential new customers rejected for compliance reasons in 2019.

Climate Goals & Targets

Environmental Challenges

• Persistently low interest rate environment impacting profitability.
• Challenging economic conditions resulting from the COVID-19 outbreak.
• High level of Non-Performing Exposures (NPEs).
• Climate change and climate-related risks.

Mitigation Strategies

• Sustained focus on strengthening its balance sheet, improving asset quality and efficiency.
• Sale of non-performing loans (Project Helix) and sale of 49.9% holding in CNP Cyprus Insurance Holdings Ltd.
• Voluntary Staff Exit Plan (VEP) to reduce costs.
• Active management of funding costs and ongoing running expenses.
• Digital Transformation Programme to enhance productivity and reduce operating costs.
• Focus on realising collateral via consensual and non-consensual foreclosures.
• Real estate management via REMU.
• Exploring alternative measures for accelerating NPE reduction, such as NPE sales, securitisations etc.
• Monitoring environmental legislation and aiming to conduct business in a responsible and sustainable way.

Supply Chain Management

Responsible Procurement

• Introducing new procedures and criteria for the supply chain, ensuring a smooth and transparent process in the selection of suppliers.
• Adopting and upgrading supplier assessment and selection procedures in all areas of cooperation.

Climate-Related Risks & Opportunities

Transition Risks

• Transition to low carbon economy impacting customer behaviour.

Awards & Recognition

• 'Best Consumer Digital Bank in Cyprus' award for 2019 by Global Finance

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• 2,020,000 Kg of paper recycled
• 548,488 kWh of energy savings

Social Achievements

• €2+ million contributed to Cyprus Anti-Cancer Society since 1999
• SupportCY Network established to foster collaboration between businesses, NGOs, and the public sector
• €600,000+ financial and in-kind contribution by all SupportCY members
• ~800 participants at “Well at Work” programme webinars

Governance Achievements

• 52 audits conducted for Quality Regulatory Requirement
• 256 hours of employees’ training for Market Abuse
• 115 hours of employees’ training for Insider Dealing
• Internal programme “ethos” to enhance the ethics and Risk culture

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and its economic impact
• Climate change and its socioeconomic impact

Mitigation Strategies

• Utilised digital tools and channels for resilient operating models and seamless customer experience
• Adopted new workforce models suitable to challenging circumstances
• Developed transformational solutions, contactless technologies, and digital service delivery models
• Accelerated focus on ESG issues to support sustainable business opportunities and job creation

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Climate Change
• Governance
• Social Responsibility

Environmental Achievements

• ~5,200,000 kWh reduced from energy saving initiatives since 2018
• 315,000 kg of paper recycled
• €463,108 invested in energy saving initiatives in 2021
• 158,816 kWh of solar energy production

Social Achievements

• Launched Antamivi Card reward scheme, generating €232mn in partner turnover
• SupportCY Network expanded to 130+ members, channeling ~€780,000 into society
• Bank of Cyprus Oncology Centre treated 16,640 cancer patients
• IDEA Innovation Center supported 12 start-ups

Governance Achievements

• Formulated first ESG strategy
• Conducted 196 meetings with analysts, investors, rating agencies, and correspondent banks
• 27 Board of Directors meetings and 92 committee meetings held
• 68 internal audits conducted
• 556 hours of training for MiFID

Climate Goals & Targets

Environmental Challenges

• Climate-related risks (fires, floods, extreme heat)
• Regulatory expectations regarding climate change and sustainability
• Transition to a low-carbon economy
• COVID-19 pandemic impact

Mitigation Strategies

• Developed ESG strategy with targets for carbon neutrality and net-zero emissions
• Implemented Risk Identification and Impact Assessment workstream
• Developed Data and Disclosures workstream
• Invested €60mn in ESG bonds
• Pandemic Plan activated to protect employees and customers

Supply Chain Management

Responsible Procurement

• Vendor Qualification
• Vendor Monitoring
• ESG criteria in RFPs/RFQs

Climate-Related Risks & Opportunities

Physical Risks

• Fires
• Floods
• Extreme heat

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of green products and services

Reporting Standards

Frameworks Used: GRI Standards (2021), SASB disclosure framework (Version 2018-10), ISO 26000, UN Sustainable Development Goals, UN Global Compact, UNEP FI Principles for Responsible Banking, TCFD recommendations, EU sustainable finance framework

Certifications: ISO 50001:2018, ISO 37001, ISO 19600

Third-party Assurance: The CSR Agency (limited assurance)

UN Sustainable Development Goals

• 3.6
• 3.8
• 4.3
• 4.4
• 4.5
• 4.7
• 5.1
• 5.5
• 8.9
• 8.10
• 9.1
• 11.1
• 11.4
• 11.A
• 12.2
• 12.5
• 12.6
• 12.B
• 13.1
• 13.3
• 14.1
• 14.2
• 17.14
• 17.17

The report details how various initiatives contribute to these SDGs.

Sustainable Products & Innovation

• Environmentally friendly car hire purchase
• Environmentally friendly home/business renovation loans
• Environmentally friendly energy loans

Awards & Recognition

• National Certification as “Equality Employer”
• Best Corporate/Institutional Digital Bank Award
• Best Consumer Digital Bank in Cyprus
• Best Asset Management Company of the year 2021
• Best Private Banking and Wealth Management

Environmental Metrics

ESG Focus Areas

• Climate and environmental risks

Social Achievements

• A primary ESG target approved under the ESG strategy by the Board is ≥30% women in Group’s management bodies by 2030. As at 31 December 2022, there is a 27% representation of women in Group’s management bodies

Governance Achievements

• Continuous enhancement of structure and corporate governance

Climate Goals & Targets

Environmental Challenges

• Accelerating climate change could lead to sooner than anticipated physical risk impacts to the Group and the wider economy and there is uncertainty in the scale and timing of technology, commercial and regulatory changes associated with the transition to a low carbon economy.

Mitigation Strategies

• The Group has put in place targets which set transparent ambitions on its climate strategy and decarbonization of its operations and portfolio to achieve transition to a net zero economy by 2050. An overall ESG strategy and working plan is thus in place to facilitate these ambitions and address the ECB expectations. A dedicated ESG team, the Risk Management Function as well as other resources have been mobilised across the Group and are engaged in various streams of work such as the measuring of own and financed emissions, the integration of climate risk in the risk management framework and the enhanced green products offering.

Supply Chain Management

Climate-Related Risks & Opportunities

Transition Risks

• Accelerating climate change

Reporting Standards

Frameworks Used: CRR, CRD

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Social Achievements

• Launched ‘Well-at-Work’ initiative - an employee wellbeing/care program
• 33% representation of women in Group’s management bodies (defined as the EXCO) and a 41.35% representation of women at key positions such as Managers, Heads, Leads, Team Heads (defined as the wider Group Leadership).

Governance Achievements

• Continued to identify opportunities for updates and training on developments on key areas – on banking, regulatory compliance, ESG and other key topics.
• Improvements in sustainability efforts

Climate Goals & Targets

Environmental Challenges

• Changes in the external environment including economic trends and competition, and their underlying factors or enablers such as geopolitical influences and regulatory changes.
• Competition from domestic banks, international banks and financial technology companies operating in Cyprus and in other parts of Europe and insurance companies offering savings, insurance and investment products.
• A possible deterioration of the macroeconomic environment stemming from the impact of high inflation and the resultant high interest rates or other factors could lead to adverse financial performance which could deplete capital resources.
• The Group’s business and performance are materially dependent on the economic conditions in, and future economic prospects of, Cyprus where the Group’s operations and earnings are predominantly based and generated.
• The Group is also dependent on the economic conditions and prospects in the countries of the main counterparties it conducts business with.
• The Group, operating in a small, open, services-based economy with a large external sector and high reliance on tourism and international business services, is susceptible to adverse changes in economic conditions caused by geopolitical uncertainties.
• Accelerating climate change could lead to sooner than anticipated physical risk impacts to the Group and the wider economy and there is uncertainty in the scale and timing of technology, commercial and regulatory changes associated with the transition to a low carbon economy.

Mitigation Strategies

• The Group has a clear strategy with key objectives to enable delivery and operates within defined risk appetite limits which are calibrated to be within the Group’s Risk bearing capacity.
• The strategy is monitored closely on a regular basis.
• The Group remains ready to explore opportunities that complement its strategy, including the diversification of income.
• The Group manages business model risk within its Risk Appetite Framework, by setting limits in respect of measures such as financial performance, portfolio performance and concentration and capital levels.
• An internal stress testing framework as part of the Group’s ICAAP is in place to provide insights and to assess capital resilience to shocks.
• The Group is continuously monitoring the current affairs and the impact of the forecasted macroeconomic conditions on the Group’s strategy to proactively manage emerging risks.
• The Group includes related events in its stress testing scenarios in order to gain a better understanding of the potential impact.
• The Group is closely monitoring the developments, utilising dedicated governance structures including a Crisis Management Committee as required and has assessed the impact the crisis has on the Group’s operations and financial performance.
• The Group is committed to integrate C&E risk considerations into all relevant aspects of the decision-making, governance, strategy and risk management and has taken the necessary steps to achieve this.
• The Group has put in place targets which set transparent ambitions on its climate strategy and decarbonization of its operations and portfolio to achieve transition to a net zero economy by 2050.
• Dedicated teams both within Risk Management and Investor Relations & ESG Department, as well as other resources, have been mobilised across the Group and are engaged in various streams of work such as the measuring of own and financed emissions, the integration of climate risk in the risk management framework and the enhanced green products offering.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: CRR, CRD