Processes to remediate negative impacts and channels for affected communities to raise concerns (S3‑3)

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  • Processes to remediate negative impacts and channels for affected communities to raise concernsS3-3
    Processes to remediate negative impacts and channels for affected communities to raise concerns

In the context of corrective actions, we have not identified cases where the Group has a significant direct and negative impact on communities. Such a potential negative impact may occur in relation to the activities of our business customers. Due to the nature of our business relationship with them, we have limited influence on their activities, including remediation. Nevertheless, we monitor whether and how such actions are implemented.

With regard to the financing of investment projects within the Corporate and Investment Banking (CIB) Division, the application of the Equator Principles prevents the Bank from having a negative indirect impact. The clients minimise potential negative effects by implementing a plan (ESAP – Environmental & Social Action Plan). This is prepared by an independent consultant in cooperation with the project’s financing banks. However, if such an impact cannot be avoided, we strive to ensure that clients minimise the impact on the community and implement the appropriate countermeasures, both in the social and environmental areas. Clients of the Corporate and Investment Banking Division whose projects are evaluated using the Equator Principles methodology are obliged by contractual provisions to inform us of negative environmental and social events related to the investment. The contract specifies sanctions or conditions for the disbursement of subsequent tranches of financing related to the client’s compliance with the relevant standards (also specified in the contract). At the same time, we require these clients to have a grievance mechanism in place for the affected community for each investment project. The client is obliged to inform the community about this mechanism as part of the stakeholder engagement process.

In the process of assessing the client’s environmental and social risks, we also verify that the client has put in place mitigation measures in the event of a negative impact and what their stance on the issue is. Such verification takes place in connection with the periodic review of clients of the Corporate and Investment Banking Division subject to the ‘’Social, environmental and climate change risk management policy’’. Information about possible negative impacts and the corrective measures implemented by the client are taken into account when making a credit decision.

When managing reputational risk, we monitor whether the client carrying out controversial activities has offered compensation to affected communities and whether it is committed to community engagement. We conduct annual reviews, as well as ad hoc reviews if we identify a significant reputational factor on the client side. If we assess that the client’s business requires corrective action, the compliance function commits the business unit to periodic reviews, the frequency of which depends on circumstances of the specific case. The business unit carries out media monitoring combined with direct dialogue with the client.