Case study: How Banca Transilvania works with its clients and customers to encourage sustainable practices

Stakeholder identification and consultation

Please describe which stakeholders (or groups/ types of stakeholders) you have identified, consulted, engaged, collaborated or partnered with for the purpose of implementing the Principles and improving your bank’s impacts. This should include a high-level overview of how your bank has identified relevant stakeholders, what issues were addressed/results achieved and how they fed into the action planning process.

As Banca Transilvania develops the Sustainability Strategy, an essential step is to engage with all stakeholders to grasp their views on BT’s approach to sustainability and evaluate the impacts—both positive and negative—of its actions.

This engagement aims to pinpoint key material themes that will illuminate stakeholder perceptions and establish a foundation for sustainability objectives. The potential material themes identified through this analysis are grounded in:

• The broader context of sustainability, particularly within the financial banking sector
• International sustainability reporting standards (including GRI Standards, SASB, TCFD, and ESRS draft)
• Current (such as SFRD and EU Taxonomy) and upcoming legislation (like CSRD)

Banca Transilvania conducts a materiality analysis on an annual basis, during which it engages stakeholders to identify and validate critical topics and stakeholder expectations. The material topics were defined based on areas where BT can influence the economy, society (including human rights), and the environment through its business activities and relationships:

Economic and Governance Issues:

1. Economic value generated
2. Business compliance, ethics, and accountability
3. Risk management
4. Environmental impact of portfolio
5. Sustainable financing
6. Digitalization and cybersecurity
7. Procurement policy

Environmental Issues:
8. Resource consumption and waste management
9. Action against climate change

Social Issues:
10. Responsible employer
11. Access to financial services, financial inclusion, and education
12. Investing in communities
13. Stakeholder engagement

Following the mapping of these topics, stakeholders were categorized into 11 primary groups: employees, retail customers, companies, shareholders, governmental and regulatory authorities, financial institutions, investors, suppliers, business partners (such as consultants and auditors), NGOs, and industry associations.

In its role as a bank that supports the entrepreneurial ecosystem in Romania, BT has established a physical one-stop shop aimed at fostering the growth and development of the entrepreneurial community. At STUP, BT and BT Mic have created an infrastructure that connects entrepreneurs with service and product providers essential for starting, running, or managing a business. STUP also organizes events for entrepreneurs and aspiring entrepreneurs, in collaboration with both BT and partners of this initiative. This hub is open to all entrepreneurs, irrespective of their banking affiliations, with no membership fees required. It offers free advice and discounted products and services from BT’s partners. In 2022, STUP achieved the following:

• Hosted 63 events with 2,043 attendees
• Facilitated the opening of 6,567 accounts on its dedicated resources platform
• Provided access to 244 business solutions
• Welcomed 4,500 entrepreneurs

Through STUP, BT engages with entrepreneurs and early-stage companies to better understand their challenges and needs, beyond just financing.

BT believes that collaboration is vital for fostering sustainable growth. Therefore, it actively participates in initiatives that reflect the foundational values and principles of the organization. Partnering toward shared goals not only yields positive outcomes but also strengthens Banca Transilvania’s commitment to sustainability. Relevant partnerships promoting sustainable growth include:

• Romania Green Building Council (RoGBC)
• Romanian Microfinance Association
• European Microfinance Network (EMN)
• Social Finance Alliance
• Education Cluster Association C-EDU
• Agro-Food-Ind Napoca Cluster Association
• Transylvania Creative Industries Cluster Association
• Women Entrepreneurs’ Employers’ Association

How did Banca Transilvania work with its clients and customers to encourage sustainable practices and enable sustainable economic activities?

In its 2023 PRB Reporting and Self-Assessment Template Banca Transilvania reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:

Banca Transilvania collaborates with its clients and customers through various initiatives:

1. 1. Engagement Campaigns: These campaigns aim to educate customers on the climate change impacts of Banca Transilvania’s products and services. Banca Transilvania’s sustainability strategy outlines essential actions to raise awareness and promote entrepreneurial education regarding ESG issues. This includes events focused on green finance, energy efficiency, and climate risk management. In 2022, the Green and Sustainable Loans Department led three campaigns to inform BT’s clients about non-reimbursable financing programs that support renewable energy production (PNRR, Large Infrastructure Operational Program) and enhance the energy efficiency of production facilities and equipment. These efforts (3 campaigns) reached 17,690 informed clients. Additionally, BT launched campaigns directed at retail customers highlighting special offers for credit card holders at partner stores featuring sustainable products. For the period of 2023-2025, BT aims to host at least two national events in Bucharest and Cluj Napoca, inviting companies from various counties to participate.
   2. ESG Integration in Lending: BT promotes ESG awareness through its lending procedures and policies, which mandate the implementation of an environmental and social risk management system for all credit applications. Each transaction is assessed for its environmental and social risks. For transactions exceeding specific thresholds or involving moderate to high risk, additional insights are provided by the bank’s ESG specialized team. All clients and transactions are evaluated for the potential impact of non-financial factors on business operations and proposed transactions. Responsible lending principles (financing that incorporates environmental, social, and governance factors in the credit and risk analysis) are applied across Banca Transilvania’s loan portfolio, differentiated based on proportionality (e.g., varied environmental and social risk analysis forms depending on transaction value), including evaluations of the environmental management system, pollution prevention measures, compliance with occupational health and safety, and climate risk assessment. Since June 2021, the bank has adopted EBA guidelines on loan origination and monitoring, which require the incorporation of ESG factors into credit and risk assessments. A thorough ESG analysis is conducted for clients with proposed exposures over RON 25 million, utilizing questionnaires and data collection. Simpler assessment tools are employed for clients with exposures below this threshold, considering their nature (mostly SMEs) and the lesser exposure amounts.
   3. Materiality Analysis Engagement: Banca Transilvania engages with clients and customers in the materiality analysis process for non-financial reporting, identifying significant ESG topics that form the basis for its sustainability reporting. Clients and customers are recognized as key stakeholders, and both businesses and individuals are consulted during this process.
   4. Code of Ethics and Conduct: Banca Transilvania’s engagement is reinforced through its Code of Ethics and Conduct, which enforces a zero-tolerance policy towards bribery and corruption.
   5. Data Protection and Cybersecurity Policies: Engagement also encompasses Banca Transilvania’s commitment to data protection and cybersecurity, essential concerns for the bank from both social and economic perspectives.

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References:

This case study is based on published information by Banca Transilvania, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://www.bancatransilvania.ro/files/app/media/relatii-investitori/prezentari-roadshows-ri/Prezentari generale/PRB-Reporting-and-Self-Assessment-Banca-Transilvania-31.07.2023-UNEP-FI.pdf

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