Risk Management

Environmental and Social Risk Assessment and Monitoring Process

In line with its “Role Supporting Sustainable Development” and “Responsible Banking Approach”, the Bank adopts sustainability principles in both its own operations and customer relations by using the Environmental and Social Risk Assessment Procedure in credit evaluation processes. Sustainability principles have been aligned with the World Bank Standards in the light of comprehensive analyses and evaluations by various units of the Bank, such as the Sustainability and Environmental Social Impact Management Unit, Engineering, Corporate Banking and Project Finance Unit, and Credit Allocation Units.

In this process, the policies and procedures of International Development Organizations were carefully reviewed, and a framework approved by the Bank’s Board of Directors was established.

The Bank conducts its Environmental and Social Risk Assessment and Monitoring processes in compliance with national and international legislation and global standards. The main, but not limited to, standards that the Bank considers in this process are listed below:

In addition, the List of Non-Financed Activities in the Bank’s policy is consistent with the WB Exclusion List. The Bank’s environmental and social risk assessment procedure is applied at every stage of credit assessment regardless of the type, sector, or amount of financing. This reflects the Bank’s commitment and industry-leading role in managing environmental and social risks. This process includes the following steps:

Environmental and Social Risk Categorization

Identification of Contractual Environmental Social Obligations

Environmental and Social Monitoring throughout the Credit Period

Non-Funded Activities List Check

Preparation of Environmental and Social Action Plan and Informing the Customer

Credit Disbursement (depending on Environmental and Social progress)

Environmental and Social Assessment Annual Impact Reports

Non-Funded Activities List Check

Preparation of Environmental and Social Action Plan and Informing the Customer

Credit Disbursement (depending on Environmental and Social progress)

Environmental and Social Assessment Annual Impact Reports

Environmental and Social Risk Categorization

Identification of Contractual Environmental Social Obligations

Environmental and Social Monitoring throughout the Credit Period

With this approach, the Bank aims to achieve its own sustainability goals and guides its customers in this direction.

During 2022, the total number of projects included in the environmental and social risk assessment process was 112. Details of the risk categorization and grading of these projects are presented in the table below.