Case study: How Şekerbank 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.

Şekerbank conducts an annual prioritization analysis to identify topics that align with high stakeholder expectations and areas where it can make a meaningful impact, while also reviewing its current list of priority topics. This dynamic and collaborative process draws on the insights of numerous stakeholders, as well as relevant regulations, standards, corporate strategies, and key developments on the global agenda. In 2023, Şekerbank’s topics, assessed using the ‘double materiality’ approach, were categorized into three tiers: priority, high priority, and very high priority. For the 2023 Double Materiality Analysis included in its report, Şekerbank engaged both internal and external stakeholders. The bank employed the impact assessment tools provided by the United Nations Environment Programme Finance Initiative (UNEP FI) and the online ENCORE platform (Exploring Natural Capital Opportunities, Risks, and Exposure). The evaluated topics, which received consensus, were incorporated into the prioritization matrix.

Additionally, Şekerbank participated in the “Sustainability Sub-Working Group” meetings organized by the Turkish Banks Association (TBB), viewing these gatherings as valuable opportunities to share experiences and collaborate with stakeholders in the banking sector, leveraging its expertise in sustainable banking practices. Şekerbank also supported the 9th edition of the Sustainable Finance Forum, organized by SKD Turkey since 2013 and held at Borsa Istanbul in partnership with Global Compact Turkey. During the forum, Şekerbank’s Deputy General Manager and Co-Chair of the SKD Sustainable Finance and Risk Management Working Group, Fatma Nur Çetinel, moderated the panel titled “Meeting the Financing Needs of Earthquake-Affected Regions with Long-Term and Sustainable Resources.” Furthermore, Şekerbank’s Financial Institutions and Investor Relations Unit Manager participated in the panel on “Green Transformation and Sustainable Finance from the Perspective of Financial Institutions,” which was part of the “Credit Literacy Week” organized by the Credit Bureau (KKB).

Beyond its financial services, Şekerbank undertakes initiatives to raise its customers’ awareness of climate change. Şekerbank holds individual meetings with clients in its corporate and commercial segments to assess their sustainability performance. Additionally, through its developed software, Şekerbank enables interested clients to calculate and report their carbon footprint, supporting their sustainability efforts.

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

In its 2024 PRB Impact Report Şekerbank reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:

Şekerbank is committed to conducting its sustainability-related risk and opportunity analyses with utmost integrity, ensuring that the information provided is comparable, verifiable, and clearly understandable. In identifying potential risks and emerging trends that could impact its future financial stability, Şekerbank incorporates key frameworks from the United Nations, the World Bank, and the Basel Committee, alongside national legislation, regulations, and academic research. To establish effective processes for monitoring, managing, and overseeing sustainability risks and trends, Şekerbank draws guidance from the principles outlined in the Standards published by the Sustainability Accounting Standards Board (SASB), specifically IFRS® Sustainability Disclosure Standards S1 and S2. Beyond climate-related risks—both transition and physical— Şekerbank has identified environmental, biodiversity, and social risks within the scope of Environmental, Social, and Governance (ESG) standards, which are fundamental to its sustainability approach. Şekerbank also monitors its green asset ratio and analyses how these risks could impact the bank’s business model and value chain across short, medium, and long-term horizons. The processes for identifying, assessing, and prioritizing these risks and trends are integrated into Şekerbank’s existing risk management frameworks.

In 2009, guided by the International Financial Corporation (IFC), a member of the World Bank Group, Şekerbank established its Social and Environmental Management System (SEMS), which has been continuously updated to align with evolving national and international regulations. As one of the first banks in Turkey to incorporate environmental and social considerations into lending decisions, Şekerbank has set industry standards by adhering to principles that promote sustainable banking. Its practices have served as benchmarks within the sector, fostering a culture of sustainability. To evaluate social and environmental risks, Şekerbank utilizes specially designed questionnaires, and verifies their effectiveness through field visits. SEMS applies across Şekerbank’s Project Finance, SME Banking, Agriculture Banking, Corporate, and Commercial Banking segments, ensuring proactive management of social and environmental impacts in all its lending activities, from SME to corporate loans (excluding individual loans), regardless of the loan amount.

Şekerbank’s environmental and social risk assessment guidelines are developed in accordance with the international data classification criteria based on the NACE codes established by the European Bank for Reconstruction and Development (EBRD). Customers are evaluated using a globally comparable classification system—A indicates high risk, B medium risk, and C low risk—providing detailed insights into their risk profiles. Şekerbank’s sustainability initiatives are supported by collaboration with its digital teams and the use of digitized processes. For example, the integration of the Environmental Business Certificate module into Şekerbank’s digital SET platform allows the bank to monitor, measure, and tailor services and products to meet its sustainability objectives effectively.

Furthermore, as part of its Responsible and Sustainable Banking approach, Şekerbank actively works to protect customer rights and prevent potential adverse effects. Şekerbank participates in the Cerise SPTF Client Protection Pathway, an international initiative, and has been audited by MicroFinanza Rating (MFR), authorized by Cerise SPTF. During the audit, Şekerbank engaged directly with its customers through focus group discussions to assess compliance, resulting in the bank receiving a gold certification for its efforts.

UN Principles for Responsible Banking: Accelerating a positive global transition for people and the planet

With over 300 signatory banks representing almost half of the global banking industry, the Principles for Responsible Banking are the world’s foremost sustainable banking framework. Through these Principles, the banking community takes action to align core strategies, decision-making, lending and investment with the UN Sustainable Development Goals and international agreements such as the Paris Climate Agreement.

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The combination of all the above empowers FBRH to provide first class Principles for Responsible Banking (PRB) assurance services.

References:

This case study is based on published information by Şekerbank, 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.sekerbank.com.tr/uploads/291/Sekerbank-PRB-Report-2024.pdf

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