| Environmental
Banking
Upon an audit carried out by representatives
of TÜV Rheineland International Certification
and Audit Company it has been declared that the Environmental
Management System (EMS) prepared by TSKB meets all
the requirements for international certification. Consequently
TSKB has become the first and only Bank with Turkish
capital to receive the DIN EN 14001:2004 Environmental
Management System Standard Certificate in Turkey.
The protection of the environment is one of the most
pressing issues facing our world today. It is not only
economic and political developments but also social
and environmental factors and risks which will increasingly
shape the business cycle of the contemporary world.
TSKB regards sustainable development as a fundamental
aspect of development & investment banking activities
and aims to minimize the potential environmental risks
attached to these activities.
TSKB has always been considering environmental issues
when financing projects since the 1980’s. In
recent years, the influence of the environmental liability
on the banking industry has gained significant momentum.
Throughout the world, some banking institutions have
therefore adopted environmental risk management programs.
Giving priority to new global banking dynamics, TSKB
has completed the project for the implementation of
an environmental risk management system (EMS) that
covers its banking activities.
TSKB is the first Turkish-owned financial institution
to integrate the ISO 14001 series of voluntary compliance
standards for environmental practices into all aspects
of its operations, both internal and external.
Banking activities themselves generate pollution, albeit
on a small scale relative to manufacturing industries.
The physical operations of banks are not pollution-intensive
and thus are not a primary environmental concern of
banks. On the other hand lending operations incorporate
higher environmental concerns through the environmental
impact of the projects financed. Environmental risk
management for banks is the process of assessing and
managing these risks. Therefore, environmental risk
management for bank has two components:
1. Risk assessment: identify real environmental risk,
and identify which investments are acceptable.
2. Risk management: reduce or mitigate risk and make
unacceptable investments acceptable.
During the implementation of EMS and ISO 14001, TSKB
analyzed environmental impacts and established the TSKB
Environmental Policy, environmental objectives
and targets as well as the TSKB environmental program.
As mentioned, banking activities mainly raise environmental
risks indirectly due to lending activities. Therefore,
in order to evaluate environmental credit risks, TSKB
developed a special tool (ERET-environmental risk evaluating
tool) to allow an assessment of environmental as well
as health and safety credit risks related to a certain
client or a certain project in the lending activities
of TSKB.
In 2007, ERET Model was prepared for 67 projects
and clients for new credits equal to or above US$2
million. Each time a loan for a specific
project is being discussed, a risk evaluation is
conducted.
Category and number of projects reviewed in 2007
| ERET Categorization |
Number of clients reviewed |
Number of projects reviewed |
| A |
0 |
0 |
| B |
18 |
6 |
| C |
49 |
61 |
| Total |
67 |
67 |
*This risk rating allows a concise, up-to-date assessment
of environmental, health and safety risks of the client
and of the project with a score of A indicating high
risk, a score of B indicating medium risk and a score
of
C indicating very low risk.
In order to minimize their
external impact, TSKB ensures that all projects to
be financed comply
with all
relevant legal requirements. Regarding internal
impacts of the bank, TSKB promotes the sustainable
use of natural resources
and energy efficiency, paying attention to recycling,
re-use and the appropriate disposal of materials.
A sustainable approach to the environment is an
investment to the future. In national and international
scale
TSKB will always pursue sustainable development.
In this way, TSKB will continue to contribute to
sustainable
development in harmony with the environment.
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