Environmental and Social Risk Management in Loans

The financial sector is in a critical position with its guiding and encouraging role in the transition to a low-carbon economy. Yapı Kredi acts with this awareness and assumes the responsibility of accelerating the transition to low-carbon energy sources. We support energy efficiency, renewable energy and other low-carbon energy sources with our products and services.

We are one of the founding signatories of the United Nations Principles for Responsible Banking (UN PRB), which requires banks to take action for sustainable development. We set targets by measuring the impact of our operations in line with the principles, and we report on our progress on an annual basis. We offer financial solutions to sustainable development problems with various products and services, such as green bonds, sustainability-related loans, renewable energy and energy efficiency loans, women entrepreneur loans, agriculture loans, green mortgages and green car loans. We design financing tools that align with our customers' sustainability goals and strategies, and develop our sustainability-related loans, green loans and social loans accordingly.

We have been taking part in the Turkish Residential Energy Efficiency Financing Facility (TuREEFF) program since 2018. As part of the TuREEFF program, we provide loans to SMEs investing in energy efficiency, and support energy efficiency investments in residences. We have diversified the resources we provide for renewable energy projects by having issued our first green bond in early 2020 in compliance with the ICMA Green Bond Principles.

As part of the transition to a low-carbon economy and the fight against the climate crisis, we declared that we will no longer finance coal-fired power plants and new coal mining projects in order to minimize environmental risks. In doing so, we are financing the growth of renewable energy resources in line with the target of a low-carbon economy.

We also encourage our customers to take steps towards sustainability. In the sustainability-related loans that we extend to our corporate and commercial customers, we set targets to improve their sustainability performance, regardless of the loan's intended purpose. If these targets are achieved within the loan period, we offer certain advantages in loan terms. We consider sustainability consulting to be one of our areas of activity, and stand out in our sector as a bank that provides comprehensive advisory services to its corporate customers.

In the awareness that the financial sector is fully capable of transforming the real sector, we adopt sustainable business practices across our entire value chain, including our customers and suppliers. With regard to the analyses we use in lending decisions, we have expanded the scope out of financial evaluations to environmental and social impact assessments by identifying potential risk and impact-preventing actions.

We demonstrate a strong risk management approach in accordance with the standards of international financial institutions thanks to the “Environmental and Social Risk Assessment System” we implement in order to manage the impacts of the projects and investments we finance. We offer healthier and more durable credit management with our perspectives of social responsibility, environmental awareness and sustainability.

We expand our sustainable and innovative product portfolio with each passing day, and help create a sustainable world with our financial solutions. Our primary goal is to support the local economy and do our best for our customers in their sustainable development journey. In full awareness of the environmental and social responsibilities that the financial sector has to assume, we aspire to take the leading role in Turkey’s sustainable finance landscape.