Our Natural Capital - VakıfBank Integrated Annual Report 2025

Climate Change and Environmental Performance of the Bank

We continued our efforts toward our net-zero emissions target by adopting nature-positive approaches.

We have initiated our investment in a solar power plant with an installed capacity of approximately 30 MWe, which is planned to be completed and operational in 2026.

We have adopted as a primary goal the continuous improvement of our environmental, social, and governance performance by conducting our banking activities in line with international sustainability standards, and integrating sustainability into our corporate strategy for a more livable future. In this context, we are aware of the impacts of climate change, one of the greatest challenges of our time, on both our operations and the financing we provide, and we aim to manage these impacts in the most effective way. By effectively managing the risks posed by climate change, we aim to play an active role in the transition to a low-carbon economy.

As VakıfBank, we continue our efforts to measure our greenhouse gas emissions and set targets in line with the Paris Agreement’s goal of limiting the temperature increase to a maximum of 1.5°C. We continue our work unabated to achieve the targets approved by the Science Based Targets initiative (SBTi) in 2023 and reach net-zero emissions by 2050. Details of our SBTi-approved targets can be found here.

For the effective management of our environmental data, we carried out comprehensive improvements to our environmental database in 2025. With the Subscriber Registration System we launched, we have made all subscription information for our branches, ATMs, and units traceable on a single platform. We directly source a significant portion of the consumption data used in our emission calculations and transfer it to our internal systems through integration with distribution companies. Thanks to our consumption data tracking system, which is integrated with our invoice payment processes, we accelerate our data collection processes, reduce our operational costs, and contribute to the reduction of our carbon footprint.

In our Environmental Management Department, staffed by 12 full-time employees, we not only regularly monitor and audit this data but also guide all our units to reduce natural resource consumption and greenhouse gas emissions. In this context, the “Greenhouse Gas Emission Calculation and Reporting Regulation” was updated under the coordination of the Environmental Management Department. Greenhouse gas emissions began to be calculated in-house following the updated calculation regulation and improvements to the system infrastructure. Our efforts to establish a systematic structure for this process are ongoing.

Our Bank considers not only its own operational activities but also the value chain it influences through its credit and investment relationships. In line with this holistic approach, our efforts to systematically measure and manage emissions originating from our credit and investment portfolio are ongoing. We conduct our financed emissions calculations under the PCAF open-source standard, which is aligned with the Greenhouse Gas Protocol, and have integrated the technical principles of the methodology into our bank’s internal systems. As a result, the calculations have been transformed into a standard, traceable, and comparable structure. Efforts to calculate Scope 3 Greenhouse Gas Emissions, together with national and international regulations, have made it imperative, beyond mere necessity, to develop databases based on financial data for environmental, climate, and sustainability matters. Accordingly, work has begun to establish a system for collecting our customers’ environmental data. We have published the “Internal Carbon Pricing Regulation,” to manage the Bank’s climate-related risks, support the integration of greenhouse gas emissions into financial decision-making processes and strategic goals, and evaluate low-carbon practices.

As VakıfBank, we calculate our greenhouse gas emissions at all our locations according to ISO 14064-1:2018 standards and have them verified by independent accredited organizations. In this context, we prepare a “Greenhouse Gas Inventory Report.” Furthermore, by ensuring transparency, consistency, reproducibility, and reliability in the assessment and reporting of our organization’s water footprints, we benefit stakeholders, enable the calculation and verification of water resources and water usage quantities, achieve targets, and create a foundation for future CDP (Carbon Disclosure Project) declarations. As VakıfBank, we calculate our water footprint according to ISO 14046:2014 standard and have it verified by independent accredited organizations. In this context, we prepare a “Water Footprint Inventory Report” in accordance with the “ISO 14046:2014 Water Footprint – Principles, Requirements and Guidelines” standard.

We transparently present our strategies, performance, and how we manage risks and opportunities related to water security, climate change, and deforestation to our investors and the public. In this context, in the 2025 Carbon Disclosure Project (CDP) assessments, where over 22,100 organizations worldwide share their data, we maintained our “A” rating, the highest assessment level, in the Water Security Program by preserving our sustainable and consistent performance. In the Forest Program, which we participated in for the first time, we earned the highest “A” score based on our strong governance structure, comprehensive risk and opportunity management approach, and strategic practices, thereby advancing our environmental performance across multiple dimensions. In the Climate Change Program, we received a “B” rating. Thus, we achieved the success of being included in CDP’s 2025 Global A List for the Water Security and Forest programs.

As VakıfBank, we have begun to integrate forest and nature-related risk assessments into our risk identification and evaluation processes through the Environmental and Social Risk Management System (ESMS). We utilize comprehensive climate scenarios (e.g., NGFS, RCP 4.5/8.5) and national ecosystem risk assessments to determine geographical and sectoral exposure to biodiversity loss, land degradation, and deforestation. We classify the tourism sector as environmentally sensitive due to its dependence on pristine natural ecosystems, including forested and coastal areas that are becoming increasingly vulnerable to climate-induced habitat loss and environmental degradation. Consequently, we subject loans for tourism projects in ecologically sensitive regions to review under the Environmental, Social, and Governance (ESG) risk framework. As of 2025, for all project finance applications exceeding USD 10 million, we have incorporated nature-related risk criteria into the process, in line with Türkiye’s Environmental Impact Assessment (EIA) Regulation and IFC Performance Standards. Through scenario-based geographical prioritization, we have enabled the identification of areas with higher risks of drought and soil erosion, guiding more informed credit allocation.

These developments have improved the identification of nature-related risks that could affect portfolio performance, reputation, and compliance with upcoming global regulations such as the EU Deforestation Regulation. Furthermore, by emphasizing forests, biodiversity, and land-use change, we are preparing to align our risk management with nature-focused frameworks such as the Task Force on Nature-related Financial Disclosures (TNFD).

In August 2025, our Bank published its first Turkish Sustainability Reporting Standards (TSRS)-Compliant Sustainability Report, detailing our sustainability efforts and targets. The report comprehensively assessed transition risks, physical risks, and related opportunities arising from climate change.

Among the transition risks specified in our Bank’s TSRS-Compliant Sustainability Report is the impact of the Carbon Border Adjustment Mechanism (CBAM), which, starting in 2026, will impose additional costs on carbon-intensive companies exporting to the EU. CBAM was assessed as a risk factor that could narrow companies’ profit margins and weaken their credit repayment capacity. Accordingly, reducing the share of carbon-intensive sectors in our portfolio, supporting green transition processes, and prioritizing sustainable finance opportunities form the basis of our strategic approach.

Among the physical risks, it was noted that increasing heat waves, water crises, floods, and forest fires could lead to a contraction in tourism revenues and a decrease in hydroelectric production, thereby putting pressure on the solvency of companies in the tourism and energy sectors. In the coming periods, our Bank aims to consider the potential negative impacts of these effects on loan repayments and to measure the potential impact of the risk.

The evaluation of financial opportunities arising in this process was as much a priority as the management of climate risks, and in this context, sustainable finance was highlighted as a significant area of opportunity in our report. Our Bank accesses cost-effective and long-term resources through thematic funds from international institutions. With green loans and carbon reduction-based products, we both meet customer needs and contribute to Türkiye’s low-carbon development process. This approach strengthens our Bank’s regulatory compliance, creates a long-term competitive advantage, and serves our sustainable growth targets.

Additionally, we prefer to use high-efficiency products to reduce energy consumption at our Bank. In this context, we use central heating and cooling systems, high-energy-efficiency servers, Class A inverter air conditioners, and energy-efficient products. We use LED systems for lighting and centrally shut down computers and phones after designated hours.

Additionally, we have an investment in a solar power plant with an installed capacity of approximately 30 MWe in the Kozluk district of Batman province, for which the installation decision was made in 2025 and which is planned to be completed and operational in 2026. As a Bank that has been sourcing its electricity from renewable energy sources for many years and documenting it with I-REC certificates, we aim to meet a significant portion of our consumption directly from our own generation once this investment, currently in the planning and installation phase, becomes operational. By doing so, we aim to transform our renewable energy use into a permanent and structural model, strengthen our energy supply security, and reduce emissions from our operations.

GRI 3-3, 101-2, 101-4, 101-5, 101-6, 101-8, 201-2, 306-1, 306-2

In 2025, we provided over TL 22.6 billion in financing for 27 renewable energy projects with a total installed capacity of 1,711 MW.

During the 2025 audit period, we documented that we manage the direct environmental impacts of our banking activities in compliance with international standards under the Integrated Management System.

The electricity generated by the project, which will be implemented with modern technologies, will be fed into the national grid, contributing to our country’s renewable energy capacity. At the same time, our transformation toward our net-zero emissions targets will be supported by a tangible production infrastructure. This investment, as a strong reflection of our sustainable finance approach in practice, is a significant milestone in our goal of reducing our environmental impact and contributing to Türkiye’s energy transition.

In 2023, we commissioned water purification systems at our Head Office building in the Istanbul Financial Center and in all our branches (excluding sub-branches). With this initiative, we aim to minimize plastic use. In this context, we demonstrated our environmental commitment by reducing our plastic consumption from large water jugs and PET bottles by 12% in 2025 compared with 2024. In addition, we continued our e-waste campaign, which we started in previous years, in 2025. We disposed of the e-waste we collected through TUBİSAD and converted it into a donation to Darüşşafaka.

As of 2025, we have put a total of 335 hybrid vehicles and 151 electric vehicles into service. We have commissioned electric vehicle charging stations at our Head Office in the Istanbul Financial Center. Through all these practices, we achieve energy savings and conduct the monitoring and reporting of our Greenhouse Gas Emissions in accordance with the “Greenhouse Gas Emissions Data Collection and Calculation Regulation.”

We ensure the continuity of our ISO 50001 Energy Efficiency Management System certification. We continue to reduce our energy consumption.

As in previous years, during the 2025 audit period, we obtained ISO 9001, ISO 14001, ISO 45001, ISO 50001, and ISO 10002 standard certifications under the Integrated Management System, documenting that we manage the direct environmental impacts of our banking activities in compliance with international standards. We have ensured that all VakıfBank employees work in ISO 14001-certified buildings. As part of our Paperless Banking initiative, we also track our Integrated Management System documentation in an electronic database. Additionally, to ensure the systematic progress of audit processes, we implemented the ISO Integrated Management System Representative assignment, already present in our branches, in our Bank’s departments as well, thereby increasing awareness and inclusiveness at the departmental level.

In 2025, we became a carbon-neutral Bank by offsetting more than our Scope 1+2 greenhouse gas emissions, which were verified with an ISO 14064 certificate. As targeted, in 2025 we joined I-REC, the international certification system that documents the generation of electricity from renewable energy sources. During this period, we also sourced 100% of our electricity consumption (excluding international operations) from renewable energy. Our environmental data can be accessed here.

Every year, we conduct internal audits at all our locations through the Board of Auditors and external audits through independent audit firms. In case of non-compliance found during audits, we create a corrective action form and work to resolve the issue. To reduce our environmental impact, we also prioritize the management of our waste, segregate our hazardous waste, and carry out initiatives to reduce our per capita waste generation. We have also completed the management of our hazardous and non-hazardous waste, bringing it into compliance with local and international regulations. We segregate recyclable and hazardous waste and ensure its disposal without harming the environment. We continue to increase our recycling rate by placing recycling bins at all our locations.

Additionally, under the Zero Waste Project carried out jointly with the Ministry of Environment, Urbanization, and Climate Change, we had obtained a Zero Waste Certificate for all our locations as of 2022 and for our head office building in the Istanbul Financial Center in 2024. In 2025, we also qualified for the Zero Waste Certificate for our newly opened branches and, as part of our commitment to environmental responsibility and supporting ecosystems, we made a sapling donation on behalf of the branches that received the certificate. We conducted weekly surveys on Zero Waste practices to evaluate employee participation and feedback. At the same time, we transitioned to an automated declaration process by integrating the monthly waste declarations that must be submitted to the National Environmental Information System platform of the Ministry of Environment, Urbanization, and Climate Change (formerly the Integrated Environmental Information System) with our internal systems. Through this approach, we reduce our operational workload while increasing data accuracy and traceability, supporting the digitalization of our sustainability management processes.

In addition, under the ISO Integrated Management System, we effectively manage the environmental impacts of waste oil generated in our company’s cafeteria and similar operational areas. In this context, we segregate waste oil at the source and store it temporarily under appropriate conditions. We arrange for waste oil to be collected by licensed waste collection and disposal companies under contractual agreements in accordance with applicable legislation and standards, and ensure it is disposed of in a manner that does not harm the environment. We document all processes related to the collection and delivery of waste oil, monitor them in compliance with the recovery/disposal certificates provided by licensed disposal companies, and periodically review them in line with our continuous improvement goals. With these practices, we comply with legal requirements and contribute to the sustainable management of natural resources. In this context, we disposed of a total of 7,895 kg of waste oil in 2025.

We are aware that financing sustainable development plays a crucial role in combating climate change. In this context, we prioritize renewable energy investments and provide financial support for sustainable energy investments and projects. In 2025, we provided over TL 22.6 billion in financing for 27 renewable energy projects with a total installed capacity of 1,711 MW. We will continue to provide financial support for renewable energy and resource efficiency projects in the upcoming period.

As VakıfBank, we have prioritized sustainability-focused financing as part of our environmental and social responsibility approach. We have guided the economy by supporting the transition to a low-carbon economy through sustainable bond issuances, green loans, and investment instruments that consider environmental impact. To extend this approach to our retail customers, we launched the Recycle Card project on March 17, 2025, featuring cards made from 100% recycled materials. We have made environmental sustainability an integral part of our future strategies. Accordingly, by introducing the eco-friendly Recycle Credit Card to our customers, we have not only offered a payment instrument but also created an ideal option for everyone who adopts an environmentally friendly lifestyle. We have set a tangible example of environmental responsibility in the financial sector; we produced our card from 100% recycled materials and, by using rPVC, achieved 69% lower carbon emissions compared to standard PVC cards. For every one million cards printed, we reduced our environmental impact by saving nine tons of CO2 emissions and 4.42 tons of pure PVC. Compared to the 623.61 kg of CO2 emissions caused by 30,000 cards made from PVC, we achieved a CO2 saving of 304.2 kg with rPVC cards. With the Recycle Credit Card, whose inner and outer layers are both made entirely from recycled plastic, we offered an environmentally conscious alternative that encourages sustainable consumption and strengthens environmental responsibility in the financial sector.

We provide our employees with training on energy efficiency and climate change to raise awareness and develop environmentally conscious behaviors, such as energy conservation and waste segregation at the source, both within and outside the Bank. During this period, 29,181 of our employees participated in e-learning training on sustainability. In this context, we positioned sustainability among our corporate priorities in 2025 and provided our employees with 33,466 hours of sustainability training. To ensure the effective monitoring of sustainability practices, we provided Integrated Management System and Internal Auditor Training to 70 employees in our audit teams, totaling 5,408 hours of ISO training. Additionally, a total of 649 employees were certified through Integrated Management System and Auditor Training, ensuring that all our branches have at least one certified employee. Furthermore, 904 employees benefited from the digital environmental management system training, and 14,646 employees benefited from the e-Zero Waste training as part of the Zero Waste Project.

We also added the “Sustainability and Environmental Management” category to the V-LAB Innovation Platform to evaluate our employees’ opinions and suggestions on environmental and sustainability issues. We updated the content on our website in light of global developments and best practices, and we strengthened public awareness of environmental and climate change issues through blog posts focused on financial literacy and sustainability. In addition, we continued to publish monthly Sustainability Bulletins to inform our employees about environmental and social developments in our country and around the world and to raise awareness throughout the Bank about the causes and consequences of global warming and extreme weather events.

During this period, we also supported the plastic cap campaign run by the Spinal Cord Paralytics Association of Türkiye (TOFD). Our employees collected 2,300 kg of plastic caps, which provided wheelchairs for three individuals in need.

We continued our “A Forest for Every Year” sapling donation campaign in 2025, which has been running since 2019 to enable our employees to contribute to nature and green spaces.

You can access our Environmental Policy here. It was established as part of our sustainability efforts to protect the environment and to continuously improve our environmental performance, thereby helping to ensure the sustainability of natural resources.

Renewable Energy Type-2025	Number of Projects Funded	Funding Amount for Projects (TL)	Installed Power (MW)
SPP	22	15,376,007,196	1,287
WPP	5	7,176,280,120	424
Total	27√	22,552,287,316√	1,711√

√ It has been subjected to limited assurance by the Independent Audit Firm.