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Area of Compliance |
Environmental Policy |
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Contributing Departments |
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Department responsible for the document |
Environmental and Social Risk Management Group |
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Corporate units engaged in the implementation |
The entire staff/all employees of TBC Bank Group PLC and its subsidiaries |
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Reviewed by |
The Management Board |
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The Supervisory Board |
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Approved by |
The Board of Directors |
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The Supervisory Board |
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Version |
Date |
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Version I |
v1 |
1 May, 2020 |
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Current Version |
V2 |
20 August, 2020 |
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Date of next update |
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TBC Bank Group PLC (“TBC PLC”) is a public limited company registered in England and Wales. TBC PLC is the parent company of JSC TBC Bank ("TBC Bank") and a group of companies (together “TBC Group”), that principally operate in Georgia in the financial sector and other closely related fields. TBC PLC also recently expanded its operations in Uzbekistan.
TBC Bank, together with its subsidiaries, is a leading universal banking group in Georgia, with a total market share of 39.4% of loans and 39.8% of non-banking deposits as of 31 March 2020, according to data published by the National Bank of Georgia.
AEP Annual Environmental Plan
EMS Environmental Management System
E&S Environmental and Social
IFIs International Financial Institutions
ISO International Organization for Standardization
GHG Greenhouse Gas
TBC PLC recognizes that its operations can have direct and indirect impacts on the environment and the community in which it operates. TBC PLC’s objective is to responsibly manage the environmental and social risks associated with its operations in order to minimize negative impacts on the environment. This approach enables us to reduce our ecological footprint by using resources efficiently and promoting environmentally friendly measures to mitigate climate change.
In order to communicate this philosophy to its stakeholders and shareholders, the Supervisory of TBC PLC and Board of Directors of TBC Bank has adopted the Environmental Policy which describes Group’s commitment to sustainable finance as an integral component of responsible corporate governance. TBC Group is committed to conducting its own business in an environmentally and socially responsible manner. In maintaining international best practice in environmental and social risk management, we are committed to ensuring our customers are also fulfilling their environmental and social responsibilities. We recognize that identifying and quantifying environmental and social risks should be part of the normal process of risk assessment. With regard to our customers, we regard compliance with applicable environmental, health and safety and labor regulations and the use of sound environmental, health and safety, and labor practices as important factors in demonstrating effective corporate governance.
The policy applies to all companies within TBC Group and each and every company should comply with it from the day of its registration or the date when it became part of the group. The TBC PLC’s environmental management system applies to all operations and services at its head offices, branches, outlets, service centers, training center, archive and warehouse and all daughter companies. All group members will endeavor to assign responsible staff for implementation of environmental management system within each company. The exception can be made for daughter companies having minimal utility consumption, using the Bank’s premises and/or have limited internal capacity of human resources. However, these companies will be managed centrally by TBC Bank’s Environmental and Social Risk Management Group including respective data disclosure into the Annual GHG Emissions Reporting.
Interested parties of the EMS are the TBC PLC, clients, stakeholders and shareholders, suppliers, and service providers of and for the Group. As of the time of approval of this Policy, most of these parties, do not have any concrete expectations with regard to the implementation of an EMS in TBC PLC.
The international financial institutions (IFIs) and TBC PLC are the exception. The IFIs have concrete expectations when it comes to the methodology of the E&S risk assessment of clients as well as of sustainability finance. Therefore these expectations became compliance obligations, which have to be fulfilled by TBC PLC.
Since the expectation of the other interested parties are fulfilled and exceeded by the implementation of ISO 14001:2015 standard, no further requirements, expectations or obligations of interested parties have to be considered in terms of EMS. Should this change in the future, the company will react accordingly.
The Head of Environmental and Social Risk Management Group (Environmental Coordinator) is responsible for updating this Policy. The document can be revised at any time if there are enquiries from staff or if any developments occur, otherwise it is revised in regular periods according to TBC PLC’s requirements. Approval is conferred by the Management. All staff has access to the current version of the Policy at all times.
As the largest financial group in the country, we fully understand the importance of doing business with minimal impact on the environment. Thus, the main principles of our Environmental Policy are as following:
The purpose of this Environmental Policy is to describe the Environmental Management System (EMS) within the company which is based on ISO 14001:2015. It defines the structure on how to document its core regulations and guidelines. In this respect the policy sets verifiable standards for the further development of the EMS. The Management and all staff of the TBC Bank are obliged to comply with the regulations of the Environmental Management System.
Top management of the Group is showing leadership and commitment in respect to the EMS and is taking accountability for the effectiveness of the system, by defining the framework of the system through the Environmental Policy (including the Environmental Principles) and ensuring its establishment. It has the overall responsibility to coordinate the implementation of the EMS, making needed resources available, giving responsibilities and authorities to relevant staff and communicating and promoting the importance of effective environmental management and continual improvement of the environmental performance.
The Environmental and Social Risk Management Group is a full-time unit staffed by employees. It is dedicated to overseeing the implementation and operation of EMS and reporting environmental management plans and results to the regular Environmental Committees on the quarterly base. The Environmental and Social Risk Management Group is part of SME and Corporate Business Credit Risk Department which reports directly to a member of the Management Board.
With regards to EMS, the Environmental and Social Risk Management Group is responsible for technical support in all areas, including:
The Environmental Management System includes four directions/pillars. More specifically, this involves implementing an internal environmental management system which addresses the resource consumption and other environmental impacts of daily operations in TBC Bank, manages the environmental and social impacts of its lending activities, uses sustainability finance to promote energy efficient, renewable energy and social investments by clients and covers external communication meaning the grievance mechanism, annual disclosure of GHG emissions from TBC PLC’s own operations and various reporting of the E&S risk performance for IFI’s, stakeholders and interested parties.
Banking is not a high-polluting activity, so the implementation of an internal environmental management system to address the resource consumption of the group (direct effect), is not expected to have a significant impact on the surrounding environment. However, TBC Bank has reviewed all of its operational activities, procured items, and outsourced services that it can control (present and planned), and has identified all environmental aspects relevant to the business. These are subcategorized into indirect and direct environmental aspects and their environmental impact.
Direct environmental aspects relate to activities that can be completely controlled by TBC Bank and/or by internal management decisions. These include the usual starting points for corporate environmental protection: Emissions into water or the air, recycling and disposal of waste, resource and energy consumption.
Indirect environmental aspects, in contrast, have impacts that are only indirectly caused by the activities, products or services of an organization. They can be the result of interaction with a third party, and can be influenced by the company itself only to a limited extent or to a certain degree, e.g. the selection and composition of services, behavior of clients, etc.
The aspects are listed in the Register of Environmental Aspects, which is part of the Annual Environmental Plan. Each identified environmental aspect is subject to a qualitative risk analysis based on three dimensions:
According the methodology described in the Environmental Policy, depending on this analysis it is determined if the aspect can be considered as significant or not. Both positive and negative environmental impacts can be considered.
The Environmental Legal Check is conducted on the annual base. Compliance with the law is one of the preconditions for certification of the EMS. Therefore the applicability of environmental legislation and the institution’s compliance with it must be monitored. TBC Bank is subject to few legal requirements regarding its environmental aspects. The Environmental Legal Register details the specific legal and other requirements applicable to TBC Bank, and shows how the requirements apply to TBC Bank’s environmental aspects.
Additionally, following documents were elaborated and approved:
With regards to the core activities of TBC Bank (lending) however (indirect effect), significant share of SME&Corporate business clients are environmentally impactful sectors such raw material extraction, mining, energy or construction and infrastructural development industry. By assessing and monitoring the environmental and social impacts as part of the credit risk analysis of business clients, incentivizing the use of environmental best practices in their businesses and engaging in sustainability financing, TBC expects to mitigate the negative environmental impact of the financed businesses. Doing so, TBC has developed Environmental and Social Risk Management Procedures to ensure that appropriate, risk-based, sector specific, environmental and social risk assessment is applied to its commercial lending activities. These procedures are fully integrated into the credit risk management process in TBC Bank and are routinely applied to all commercial (i.e., with legal entities) transactions.
The objective of applying these procedures is to focus upon the environmental and social issues associated with commercial lending and investments in order to maximize the opportunities for environmentally and socially responsible and sustainable economic development, and to minimize TBC Bank’s exposure to environmentally or socially derive financial, reputational and legal risks and liabilities associated with its financial transactions.
TBC Bank’s Environmental and Social procedures include transaction Qualification, and the Risk Categorization, Identification and appropriate Assessment, Mitigation and Control, and Monitoring and Reporting of environmental and social risks. The procedures incorporate appropriate consideration of IFC Performance Standards and EBRD Performance Requirements (PRs) and ADB’s Safeguard Requirements (SRs).
Implementation of this ESMS ensures TBC Bank’s own operations comply with both PS/PR-1(Social and Environmental Assessment) and PS/PR-2 (Labor and Working Conditions) and applicable ADB’s SRs. For all commercial transaction, TBC Bank will endeavor to ensure that customers demonstrate an organized and systematic approach to environmental and social risk management to ensure compliance with local and national environmental, health and safety, and labor regulations and standards.
In implementing these procedures TBC Bank routinely conducts trainings of relevant officers in collaboration with IFIs and relies of the use of a variety of publically available environmental and social risk management tools including, but not limited to, local regulations, EBRD’s Environmental and Social Risk Management Manual (e-Manual v4.0), website supported by IFC https://firstforsustainability.org/, FMO’s sectoral guidelines for environmental and social risk assessment and ADB’s ESMS Template for Banks and Funds, which are unified in sector specific ESDD forms developed by TBC Bank.
As an integral part of its Environmental Policy, TBC Bank has commitment towards Sustainable Lending Development within the company. Standardization of Sustainable Finance including energy efficiency, renewable energy and resource efficiency financing as for private as well as for business clients is vital. To ensure credibility of the eligibility criteria of Sustainable measures TBC Bank has partnering with international financial institution to conduct local market research and set benchmark for Green Finance to streamline and considerably enhance the existing green lending operations through the establishment of the dedicated Green Lending Guidelines, which launch will be complemented by respective capacity building measures.
External communication (both incoming and outgoing) is handled and documented with clear responsibilities within the company. Outgoing external communication includes the Environmental Principles, the Annual Environmental Performance, and other relevant information and marketing materials.
The Annual GHG emissions report summarizes the environmental performance of TBC Bank and is directed to stakeholders and all interested parties. It lays down the results achieved in the last year with regard to the EMS. The Report has to be easily and freely made available for anybody interested in the environmental performance of the company, therefore it is published on the webpage: https://www.tbcbankgroup.com/responsibility/our-environment
Other marketing material is discussed with and coordinated through the marketing group, which manages all centrally-issued marketing material of TBC Bank.
Incoming communication regarding TBC Bank's environmental management is managed in the same way as formal communication received by the organization on all issues, only that here the Environmental and Social Risk Management Team is also informed.
Received communications are also documented by the Environmental and Social Risk Management Team. It is also responsible for reporting on communication from external interested parties in management reviews, including e.g. complaints. Records of all communication will be kept, including responses according the TBC Bank’s Procedure for addressing External E&S Queries and Concerns. Interested parties may submit their query on the webpage: http://www.tbcbank.ge/web/en/web/guest/e-s to the following e-mail address: E&[email protected]
To ensure credibility of the Environmental Management System, the preparation project for the certification process according ISO14001:2015 standards has been already launched. The certification is envisaged to be in the implementation phase in 2020.
Greenhouse gas emissions
As a premium-listed company trading on the LSE, TBC PLC is required to calculate and report upon the greenhouse gas (GHG) emissions stemming from its direct operations. For this purpose, TBC PLC has established a comprehensive internal environmental system to manage its GHG emissions within the Group and is committed to reducing its GHG emissions by closely monitoring consumption of fuel, gas and electricity. For more details please refer to Annual Report: bit.ly/33rHasn.