Case study: How MKB 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.

MKB regularly identifies and updates its stakeholder list each year, evaluating their influence on the Bank and their reliance on MKB’s performance (impact level).

In 2023, MKB recognized 12 primary stakeholder groups: shareholders and investors, employees, clients, suppliers and contractors, governmental authorities, regulatory bodies (the Bank of Russia), financial institutions, professional and expert communities, rating, ranking and ESG agencies, local communities, nonprofit organizations, and the media.

For each stakeholder category, the Bank employs specific communication channels to effectively ascertain their needs.

To evaluate the effectiveness of its stakeholder communication, MKB periodically conducts satisfaction surveys. Furthermore, the Bank conducts annual surveys to gauge the importance of material topics, which are later reported in the Bank’s annual reports.

The main channels, methods, and outcomes of stakeholder interactions in 2023 are detailed in the corresponding section of MKB’s Annual Report.

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

In its 2023 PRB Report MKB reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:

MKB aims to adopt a responsible approach in its dealings with clients, suppliers, and business partners.

To foster sustainable practices among its corporate clients and manage potential negative impacts, the Bank developed its Environmental and Social (E&S) Procedure in 2021 and updated it in 2023.

Additionally, the Bank approved its Responsible Investment Policy during the reporting year.

Both the E&S Procedure and the Responsible Investment Policy outline several measures for addressing the E&S aspects of clients’ negative impacts, including:

• A commitment to refrain from providing financial support to projects or borrowers engaged in sectors deemed to have an unacceptable level of negative impact, as detailed in the E&S exclusion/restrictive list.
• Stricter requirements for Category A projects (those with significant adverse environmental and social risks) in line with the Bank’s approved model list of such projects.

By developing its ESG finance framework, MKB aims to encourage clients to reduce their negative environmental and social impacts and support the shift towards sustainable development.

By assessing the ESG risks of its borrowers, recommending measures to enhance their environmental and social responsibility and offering green financing, MKB facilitates their transition to a sustainable and responsible business model.

MKB has established a set of bylaws for suppliers and contractors to promote sustainable practices, including:

• Supplier and Contractor Code of Conduct
• Procedure for Managing Environmental and Social Impact during Design and Procurement Stages
• Code of Corporate Ethics
• Anti-Corruption Policy

In 2024, MKB planned to revise its current E&S, Health and Safety (H&S), and Energy Efficiency & Conservation (EE&C) Integrated Management System Policy or develop a comprehensive Sustainability Policy.

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.

FBRH Principles for Responsible Banking (PRB) Assurance:

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• • • FBRH is a GRI Certified Training Partner (Global), ISEP Training Centre and a member of CPD.
    • FBRH builds trust. Over 200 reviews from top professionals from around the world demonstrate our ability to build strong, trusting business relationships.
    • FBRH possesses a unique skill set that combines ESG/sustainability certified training, experience in advisory services and report preparation, and ESG/sustainability report assurance.

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 MKB, 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://ir.mkb.ru/en/sustainability/disclosures/reports

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