Case study: How Areti Bank 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.

Areti Bank recognizes the vital role of engaging with a diverse range of stakeholders to strengthen its sustainability efforts and align with global initiatives. This thorough engagement involves partnerships and collaborations with key organizations that help to shape and improve the bank’s sustainability practices.

A major partnership is with the United Nations Environment Programme Finance Initiative (UNEP FI), where Areti Bank works collaboratively to incorporate environmental considerations into its operations, utilizing their expertise and frameworks.

This alliance enables the bank to implement best practices in sustainable finance and align with international environmental objectives. Throughout 2023, Areti Bank has worked closely with UNEP FI on various initiatives, particularly within three working groups: Nature, Just Transition, and Adaptation. These groups aim to develop guidelines for establishing targets that banks can use to reduce environmental and social risks, while also promoting sustainable practices. Through this collaboration, Areti Bank helps in creating industry standards and best practices that support global environmental goals.

Additionally, as a signatory to the UN Global Compact, Areti Bank is dedicated to promoting principles pertaining to human rights, labor standards, environmental sustainability, and anti-corruption. The bank engages with the Global Compact network to exchange knowledge, share experiences, and participate in initiatives, such as webinars and accelerators, that encourage responsible business practices. This involvement bolsters the bank’s capability to incorporate these principles into its operations and cultivate a culture of responsible business conduct.

Areti Bank is also part of the Partnership for Carbon Accounting Financials (PCAF), which enables the bank to measure and report the carbon footprint of its financial portfolios. By evaluating climate-related risks and opportunities, Areti Bank integrates carbon accounting into its risk management practices and establishes targets for carbon reduction that align with global climate objectives.

Furthermore, Areti Bank collaborates with the Partnership for Biodiversity Accounting Financials (PBAF), which focuses on embedding biodiversity considerations into financial decision-making. This partnership allows the bank to develop methodologies and standards for assessing the biodiversity impacts of its operations and financed activities. By implementing biodiversity accounting practices endorsed by PBAF, Areti Bank enhances its capacity to manage environmental risks and supports sustainable development goals related to biodiversity conservation.

Areti Bank is also a participant in the Net Zero Banking Alliance, committing to align its lending and investment portfolios with net-zero emissions targets by 2050. By collaborating with other alliance members, the bank formulates strategies, sets interim targets, and applies measures that contribute to overarching efforts to combat climate change.

Moreover, Areti Bank has made a Fossil Free Commitment, vowing not to finance or invest in fossil fuels or related assets, and instead focusing on renewable energy projects. This commitment aligns with global efforts to restrict climate change and promotes sustainable energy solutions.

The stakeholder engagement process at Areti Bank is systematic and comprehensive. The bank identifies relevant stakeholders based on their influence, interests, and expertise in sustainability and finance. Key stakeholders include regulatory bodies, industry associations, nongovernmental organizations (NGOs), customers, investors, and community groups.

Regarding the issues addressed and results achieved, Areti Bank’s collaboration with UNEP FI and PCAF enhances its environmental risk management practices. The bank measures its carbon footprint and implements strategies to reduce greenhouse gas emissions linked to its financed activities. Through engagement with the UN Global Compact and PBAF, Areti Bank strengthens its commitment to human rights, labor standards, and community development, particularly regarding financial inclusion.

Stakeholder feedback is essential to Areti Bank’s action planning. The bank conducts consultations, workshops, and stakeholder meetings to gather insights and feedback on its sustainability initiatives. This collaborative approach fosters the co-creation of solutions to shared challenges. The results of stakeholder engagement inform the bank’s impact assessments, allowing it to prioritize actions such as enhancing sustainable finance offerings, increasing transparency in reporting, and scaling up investments in green technologies.

Looking ahead, Areti Bank remains dedicated to deepening its engagement with stakeholders, expanding partnerships, and integrating sustainability considerations into its core business strategy. By working with diverse stakeholders, the bank aims to generate positive impacts, mitigate risks, and contribute to global sustainable development goals.

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

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

Client Engagement for Sustainable Practices:

Areti Bank is committed to promoting sustainable practices among its clients by incorporating environmental, social, and governance (ESG) considerations into its core banking operations. The bank actively collaborates with stakeholders to advance sustainability in various ways.

To begin with, Areti Bank implements comprehensive policies that guide its approach to sustainable banking. These policies prioritize the integration of sustainability criteria within lending decisions, investment strategies, and client engagement processes. By embedding these criteria at the heart of its operations, the bank ensures that a significant portion of its financial activities contributes to a more sustainable future.

To facilitate the transition of clients toward more sustainable economic activities, Areti Bank plans to offer a variety of sustainable finance products. These will include green loans and investments that provide favourable financing terms for renewable energy projects, clean technology initiatives, and sustainable production practices. Additionally, the bank will introduce ESG-linked products that tie financial terms and conditions to specific environmental and social performance metrics, encouraging clients to enhance their sustainability practices.

Areti Bank is also developing a strategic initiative called Areti Advisers, which will provide advisory services to help clients understand and adopt sustainable investment practices. This service will assist businesses in implementing cleaner production technologies and practices to reduce environmental impact. Furthermore, the bank aims to offer strategic guidance for clients in crafting sustainability strategies aligned with international frameworks such as the Sustainable Development Goals (SDGs) and the Paris Agreement.

To evaluate the effectiveness of its sustainable banking initiatives, Areti Bank will monitor a range of indicators. These metrics will include quantifying the number and value of loans granted for sustainable energy projects, environmental technology ventures, and other green initiatives. The bank will also assess the integration of ESG criteria into client relationships and investment decisions and report on the environmental and social impacts achieved through client projects supported by its financing and advisory services.

Areti Bank aspires to create positive societal and environmental impacts through its client engagements. Environmentally, the bank plans to contribute to reducing greenhouse gas emissions by financing renewable energy projects and promoting resource-efficient practices. Socially, it will address inequalities by supporting initiatives aimed at improving access to clean energy, enhancing employment opportunities in green sectors, and fostering inclusive economic growth.

Looking to the future, Areti Bank intends to intensify its efforts to promote sustainable practices among clients. This includes increasing the availability and diversity of green financial products to meet evolving market demands and regulatory requirements. The bank also seeks to launch educational programs and workshops to enhance clients’ understanding of the benefits of sustainable finance and best practices. These educational initiatives will be integrated into the Areti Academy program, offering comprehensive resources for clients and staff. Additionally, Areti Bank plans to strengthen partnerships with government agencies, NGOs, and industry associations to collaboratively advance sustainable development goals.

Through these extensive efforts, Areti Bank reaffirms its strong commitment to sustainability, fostering positive environmental and social impacts while supporting clients in their journey toward more sustainable business practices.

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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References:

This case study is based on published information by Areti Bank, 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://aretibank.com/wp-content/uploads/2024/08/PRB-Report-Areti-Bank-09-08-2024-09_59_18_605.pdf

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