Our Sustainability Approach

Since our inception on April 13, 1954, we have committed to adding value for our customers, employees, shareholders, and society by effectively and efficiently managing the assets and values entrusted to us, drawing strength from our foundational culture. We remain dedicated to supporting our country’s balance sheet.

Today, we serve our customers by offering a range of products and solutions in Corporate, Commercial, SME, Retail, Public Institutions and Local Administrations, Agricultural Banking, and Private Banking, all while adhering to the management practices and work mentality required in modern banking. In addition to our core banking products, we are also engaged in investment banking and capital market activities; we have been offering financial products widely ranging from leasing to factoring services to our customers through our financial subsidiaries with the high technology required by the age. Besides, we continue to play an active role in international markets with the long-term and affordable funds we provide from abroad.

In line with our sustainability vision, we aim to create a more livable world for future generations. In this context, we restructured our organization in 2024 and established the Head of Sustainable Banking within our Bank, further strengthening our sustainability governance framework. Through the Sustainability Committee, the Bank’s highest decision-making body in terms of sustainability, we define our sustainability strategy and policies, ensuring that necessary actions are implemented promptly. Our Sustainability Sub-Committee functions as a supporting body under this committee, based on the belief that faster decision-making shall add momentum to our sustainability journey. Our Committee monitors performance by integrating these strategies and policies into the Bank’s activities and formulating sustainability strategies and policies in economic, social, and environmental areas. We also have Sub-Working Groups with specific areas of expertise, such as Climate Risks, Environmental Social Risk Management System, Integrated Management, and Science-Based Targets, which commenced activities in 2024 following the Sustainability Committee’s decision. These working groups are tasked with monitoring global and national best practices and legislation, as well as coordinating relevant projects within the Bank. The Science-Based Targets Working Group, also formed in 2024 under the Sustainability Committee, reports to the Sustainability Sub-Committee and oversees the initiatives related to the Bank’s science-based targets. Additionally, we advance our sustainability efforts through the Sustainable Banking Department, Environmental Management Department, and Environmental and Social Impact Analysis Department, integrating sustainability into our business processes. You may find our Sustainability Governance Structure here.

In 2017, we aligned the banking processes of the Head Office departments and all branches with the ISO 9001 Quality Management System as part of our quality-oriented growth strategy. We then documented these processes with the “ISO 9001: 2015 Quality Management System.” In addition, we have also documented that our banking activities minimized the direct impact on the environment in line with international standards by obtaining the ISO 14001: 2015 Environmental Management System certificate in 2017. Within this context, we have ensured that all VakıfBank employees would be working in ISO 14001 certified buildings in 2024 through our endeavors since 2018. Obtaining the ISO 45001 Occupational Health and Management System certificate, we succeeded in becoming the first bank in Türkiye to establish an Integrated Management System (ISO 9001-ISO 14001-ISO 45001) in 2021 and to receive the certificate after the Integrated Certification Audit. We have thus managed quality, environment and OHS management systems under one roof. In 2023, we defined our energy policy and integrated it into our Integrated Management System in line with our purposes and goals. As a result, we achieved continuity in ISO 50001 Energy Management System certification in 2024. We have also successfully completed the 2024 interim audits and ensured the sustainability of the Integrated Management System in this period as well. As VakıfBank, we also possess the ISO/EIC 27001:2013 Information Security Management System Certificate. Additionally, we obtained the ISO 27701:2019 PDMS Personal Data Management System certificate in 2024. You can find detailed information about our certificates here.

Our corporate governance approach is built on three key pillars: sustainability-oriented projects, a vision for digitalization, and risk management practices aligned with international standards. As VakıfBank, we are committed to upholding principles of transparency and accountability through our robust corporate governance structure. In 2024, our dedication to transparent and sustainable governance policies earned us the “Best Corporate Governance Organization” award from the Corporate Governance Association.

We take part in international platforms with our sustainability efforts and lead the industry by breaking ground. We continue integrating sustainability into our corporate strategy for a more livable future by increasing our environmental, social, and governance performance.

In 2019, we became the first Turkish public organization to announce our commitment to reducing carbon emissions by participating in the Science Based Targets initiative (SBTi). This partnership includes CDP, Global Compact, World Resources Institute (WRI), and World Wide Fund for Nature (WWF). Our goal is to combat climate change, one of the most pressing global environmental challenges, by encouraging companies to establish emission reduction targets and guiding the climate transition process, particularly in the private sector. By 2022, we completed our submissions and set our science-based targets for reducing carbon emissions. In 2023, we became the first Turkish Bank whose science-based targets were approved by the SBTi. As VakıfBank, we aim to support low carbon financing and integrate ESG criteria into our loan policies in order to achieve SBTi targets and provide continuous support and resources to our customers in reporting and reducing their greenhouse gas emissions. In 2024, we established the Science-Based Targets Working Group under the Sustainability Committee to coordinate and advance our efforts toward achieving science-based targets. Additionally, we initiated efforts to reach “net zero” emissions by 2050. Recognizing our responsibility to minimize the impact of climate change on humanity, we have placed sustainability at the core of our strategies. We continued our efforts in alignment with our Climate Transition Plan, published in 2023, which includes our declaration of “Net Zero Emissions.” This plan assesses the need for change and transformation driven by climate change from a comprehensive perspective.

We have been participating in the Carbon Disclosure Project (CDP) Climate Change Program since 2015, sharing our climate change strategy, governance, risk management, carbon emissions data, and targets with foreign investors and the public. In 2024, we maintained our ‘A’ rating in the Climate Change Program and improved our rating to ‘A’ in the Water Security Program, as part of the CDP assessments involving over 24,800 organizations worldwide. As a result, we were honored to be included in CDP’s 2024 Global A List for both Climate Change and Water Security programs. We offer sustainability-themed products, constituting one of our sustainability approach’s essential components, to our customers’ usage to support socio-economic development by considering all society segments. This way, we not only address customers’ financial requirements but also contribute to social development with our financial support.

Acting with the awareness that our greatest impact on the environment and society is created through financing, we assumed the responsibility to assess the environmental and social impact of the projects we finance. Within this scope, we established the Environmental and Social Risk Management System in 2022 to assess and manage non-financial risks such as environmental, social, governance and occupational health and safety risks and their potential impacts for project finance loans of USD 20 million and above. In addition to project finance loans, we aim to include the entire loan portfolio (excluding retail loans) in this risk analysis process for the coming period.

As a leading and an active bank in international markets, we recognize the significance of sustainable banking in accessing global funding sources. In 2024, we further demonstrated our commitment to sustainable development by securing around USD 4 billion in sustainability-themed funding through our responsible financing approach. We conducted a study using Sustainalytics’ methodologies, a prominent independent global firm that provides research and ratings on sustainable banking as well as environmental, social, and corporate governance for investors. As of May 2024, our ESG (Environmental, Social, Governance) risk rating score for 2023 is 18.6. Thus, we have established ourselves as one of the banks with a low-risk rating in the banking sector. You can access our Bank’s comprehensive ESG Risk Rating Report, prepared by Sustainalytics in 2023, here.

In 2024, we continued our efforts to direct the resources obtained through financing instruments into projects that benefit the environment and society. In this context, we updated our Bank’s Sustainable Financing Framework in 2023 to align with the expanding scope of sustainable financing. We have received a Second Party Opinion from Sustainalytics, one of the world’s leading companies, for our updated Sustainable Finance Framework. The “Sustainable Finance Framework,” enhancing the capacity of our sustainable products and services, can be accessed here.

We maintain our collaborations in national and international platforms within the scope of our efforts to create value in terms of sustainable economy, society, and environment. We are among the UN Global Compact participants, the world’s largest sustainability initiative before the United Nations. We are the first Turkish public institution to sign the Women’s Empowerment Principles (WEPs).

In 2024, we volunteered to participate to the Corporate Sustainability Assessment (CSA) Survey prepared by S&P Global, which we believe shall constitute the basis for our sustainability performance and guide us in improving our performance.

In 2024, we were rated by JCR Eurasia Rating based on four main topics such as “Shareholders,” “Public Disclosure and Transparency,” “Stakeholders” and “Board of Directors.” Upon evaluations, we achieved a very high level of compliance with the CMB Corporate Governance Principles. We received a score of 9.38 points in the CMB Corporate Governance Principles Compliance Rating and maintained our position on the Borsa Istanbul Corporate Governance Index in 2024, having joined in 2023.

We maintain our place on the BIST Sustainability Index since it was first created in 2014. Since 2017, we have been involved in the FTSE4Good Emerging Markets Index, which responsible investors primarily follow.

Besides our financial performance, our Integrated Annual Reports, including our approach and performance in economic, environmental and social areas as well as our Bank’s value creation model, are in compliance with the Integrated Reporting Framework published by the Value Reporting Foundation.

GRI 2-22, 2-29, 3-1, 3-2

Determining the Materiality

We define determining our materiality, as the starting point of our sustainability approach. With this perspective, we explicitly address the importance of our prioritized issues in the implementation of our strategies and the link between our activities and our priorities in our report. In the report, we also share our value creation model, prioritization analysis, financial and non-financial performance, medium and long term objectives regarding material topics, risks and opportunities as per capital elements, and our corporate governance and risk management approach in detail. We review our prioritization analysis triennially.

In 2022, we re-addressed our Bank’s sustainability priorities with the participation of stakeholders. Considering sustainability standards and global trends, we conducted a literature review and created a list of topics. We identified the topics that had an impact on our Bank, on societies, and the environment. In this period, we re-assessed our priorities within the framework of the Bank’s strategy, global and sectoral trends, risks and opportunities, and the opinions of our executives. Besides, we have determined the materiality matrix by taking into account international guiding principles and outputs in the field of sustainable development such as GRI Standards, United Nations Sustainable Development Goals, United Nations Global Compact, CDP, Task Force on Climate-related Financial Disclosures (TCFD), and the trends shaping the sector.

Our prioritization survey was open for the participation of a broad group of stakeholders, including our commercial, corporate, SME, retail, and individual clients, municipalities, NGOs, journalists, consultants, investors, analysts, and academics. We asked all stakeholders who took part in the online survey to sort the material topics identified by taking their expectations from VakıfBank into account.

We analyzed the outputs together with VakıfBank’s material topics and divided the materiality matrix into two classes: “topics for which we believe we shall create the utmost value and which are essential for our strategy” and “topics that create fundamental value for the implementation of our strategy.”

In light of these efforts, we also reviewed our material Sustainable Development Goals and concluded them to be SDG 4, SDG 8, SDG 9, SDG 10, and SDG 12.

GRI 2-22, 2-29, 3-1, 3-2