QNB FİNANSBANK A.Ş.

Climate Impact & Sustainability Data (2021, 2022)

Reporting Period: 2021

Environmental Metrics

Total Carbon Emissions:37480 tCO2e

Scope 1 Emissions:14,950 tCO2e

Scope 2 Emissions:22,537 tCO2e (location-based), 0 tCO2e (market-based)

Scope 3 Emissions:1,503 + 2,425 + 11,306 + 1,337 + 29 + 216 + 7,624 + 430 + 0.18 = 24,900 tCO2e

Renewable Energy Share:100%

Total Energy Consumption:101,242 MWh

Water Consumption:111,796 m3

Carbon Intensity:0.00000108 tCO2e per TRY of total revenue

ESG Focus Areas

Climate Change
Sustainability
Social Responsibility
Governance
Biodiversity
Water Security
Forestry

Environmental Achievements

Reduced GHG emissions by approximately 67% since 2017 due to energy efficiency and sourcing 100% of electricity from renewable sources in 2021.
Saved 720,200 kWh of electricity in 2021 through energy efficiency projects in Data Centers, resulting in approximately 340 tCO2e GHG emission reduction.
Reduced paper consumption by 82% since 2015 due to digitalization.
Achieved 100% renewable electricity consumption in 2021.

Social Achievements

Launched QNBEYOND Idea Camp to evaluate and reward employee ideas, resulting in the creation of Kiralarsin.com, Turkey's first carbon-neutral delivery e-commerce platform.
Offered employees access to platforms to invest in sustainability-related funds since July 2021.
Implemented “Step by Step Export” program to support SME companies in export industry.

Governance Achievements

Established a Sustainability Committee (SC) in 2019 to provide oversight for sustainability initiatives.
Implemented sustainability-linked KPIs for May 2021 and Nov 2021 syndications (approx. USD 685 MM total).
Provided climate change-related incentives to all employees, including monetary rewards for energy reduction and efficiency projects.

Climate Goals & Targets

Long-term Goals:

Net-zero emissions by 2053 (aligned with Turkey's target)

Medium-term Goals:

Prepare Science Based Targets (SBT) and perform accordingly
Obtain and deliver low carbon funds
Be a mediating bank in cap and trade schemes
Raise awareness on environment and setting sector-specific targets with a well-below 2 degrees and striving for 1.5 degrees trajectory, based on scientific climate scenarios by 2023.

Short-term Goals:

Issue a Green Bond &/or Sustainable Bond
Manage Carbon Footprint including Scope 3 emissions
Obtain funds on low carbon economy & finance
Deliver low carbon products
Raise awareness on environment via trainings and CSR activities and products

Environmental Challenges

Inability to attract co-financiers and/or investors due to uncertain climate-related risks.
Potential future carbon tax scheme or Emission Trading System (ETS) in Turkey.
Chronic physical risks from climate change, such as rising temperatures increasing energy costs.
Acute physical risks from extreme weather events affecting operations and customer repayments.
Changing customer and market expectations due to the transition to a low-carbon economy.

Mitigation Strategies

Procured IREC certificates to source energy from renewable generation and avoided financing new greenfield coal projects.
Implemented an Environmental and Social Risk Assessment Tool (ESRA) for project loans exceeding USD 10M and a tenor of 24 months or more.
Developed energy efficiency projects in Data Centers and branches.
Implemented a Sustainability Coordination Team to monitor emerging regulations.
Introduced the “Step by Step Export” program to support SME companies in export industry.

Supply Chain Management

Supplier Audits: 45% of suppliers have sustainability principles in contracts

Responsible Procurement

Sustainability principles added to supplier contracts since 2019
Supplier Code of Conduct under development
Prioritizing suppliers with high reputation and ability to manage their own risks
Allocating extra budget for environmentally safe options

Climate-Related Risks & Opportunities

Physical Risks

Flooding
Extreme weather events
Rising temperatures
Rising sea levels

Transition Risks

Regulatory changes (carbon tax, ETS)
Market shifts
Inability to attract co-financiers and investors

Opportunities

Reduced indirect (operating) costs through energy efficiency
Demand for sustainable products and services

Reporting Standards

Frameworks Used: GHG Protocol, UN Global Compact, UN Sustainable Development Goals (SDG), ICMA Green and Social Bond Principles, IFC Performance Standards, GRI

Certifications: LEED (for headquarters building), ISO 14064-3 (for emissions verification)

Sustainable Products & Innovation

Kiralarsin.com (carbon-neutral delivery)
Digital Bridge (digital transformation platform)
Enpara.com (direct banking model)

Awards & Recognition

Digital Bridge awarded 'Europe’s Best Innovative Bank' at World Finance 2021
Digital Bridge ranked first in 'Best Digital Strategy' at European Customer Centricity Awards

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:14,786 tCO2e (Scope 1) + 23,285 tCO2e (Scope 2 location-based) + other Scope 3 emissions

Scope 1 Emissions:14,786 tCO2e/year

Scope 2 Emissions:0 tCO2e/year (market-based)

Scope 3 Emissions:637,358 tCO2e/year (estimated)

Renewable Energy Share:100% (electricity)

Total Energy Consumption:104,832 MWh/year

Water Consumption:124,789 m3/year

Carbon Intensity:0.00000032 tCO2e/TRY (Scope 1 & 2)