Sustainability at Eurobank

In the demanding and constantly evolving business environment shaped by sustainability criteria requirements and expectations, the financial sector plays a crucial role in the sustainable transition of the economy. Banks are called upon to contribute to this goal through two channels. Firstly, through financing the sustainable transformation of businesses, acting as accelerators for their clients’ green transition projects to reduce their portfolios’ impact on climate and the environment. Simultaneously, as major organisations themselves, they undergo their own transformation, by improving their impact on the natural environment, society and the business environment. The sustainability impact of banks directly contributes to achieving the ambitious goals of the EU Green Deal, especially the target for climate neutrality by 2050.

The Bank’s vision is to be the leading bank creating prosperity for customers, employees, shareholders and society at large through innovative solutions. Eurobank’s vision is embodied in a two-dimensional Sustainability Impact Strategy, the financed impact of the Bank’s portfolio and the operational impact of its operations, with a long-term and ambitious plan through which Eurobank is redesigning its activities and operations over the next decade towards a future with lower carbon emissions, an innovative digital environment, a diverse, inclusive and equitable society, and a strong governance environment that enhances market confidence. In line with Eurobank’s commitment to the UNEP FI Principles for Responsible Banking, development of the Sustainability Strategy is aligned with the requirements for identifying the most significant positive and negative impacts on the societies and environment where it operates.

The Operational and Financed pillars of the Sustainability Strategy are combined for addressing Eurobank’s path towards Net Zero by 2050. Aiming to align its operations, portfolio and investments with the ultimate objective of reaching Net Zero by 2050, the Bank has committed to transitioning all GHG emissions from its lending and investing portfolio to align with pathways to Net Zero at the latest by 2050, with interim targets. In line with the Operational Impact pillar of the Sustainability Strategy, with the aim to minimise negative impact across the value chain to promote environmental stewardship, the Bank is committed to attain Net Zero status for its operational impact by 2033.

Focusing on the social aspect of ESG, Eurobank aligns its actions with corporate values, principles and commitments by issuing policies that outline zero tolerance for various types of violation and discrimination as well as policies for equal opportunities with fairness and meritocracy, irrespective of gender, nationality, age or other traits, throughout the entire employee life cycle (i.e. recruitment and selection, learning, performance, talent and career development, reward management).

Committed to actively contributing to achieving the United Nations Sustainable Development Goals (SDGs) and the 2030 Agenda goals, the Bank has been a signatory of the UN Global Compact since 2008. In September 2019, Eurobank signed the UNEP FI Principles for Responsible Banking (PRB), affirming its commitment to play an active role in implementing the SDGs and the Paris Agreement on Climate Change. In full compliance with its obligations relating to implementing the Principles, the Bank issues PRB Progress Reports. Eurobank also acknowledges and applies international standards related to sustainability. The adopted list of standards and framework evolves dynamically, in line with industry practices and sustainability related emerging developments.

In line with its commitment to address climate change, the Eurobank Holdings has joined the Net-Zero Banking Alliance (NZBA), reinforcing its dedication to aligning its lending and investment portfolios with net-zero emissions by 2050 or sooner, in line with the most ambitious targets set by the Paris Climate Agreement.

In the context of networking with market for sustainable development issues, the Bank participates in the ESG Coordinating Committee of the Hellenic Bank Association, the Corporate Responsibility Committee of the American-Hellenic Chamber of Commerce and the UN Global Compact Network – Greece.

Sustainability requires a collective effort, built on shared understanding and alignment with supervisory initiatives, international standards and best practice. Most importantly, it involves fostering a culture of sustainability that addresses climate change challenges, accommodates social needs, particularly focusing on the expectations of younger generations, and safeguards prudent governance. This ensures that the challenging and prolonged transformation journey is undertaken for the right reasons: our common future.

The Operational Impact Strategy (OIS) defines the Bank’s operational sustainability priorities and objectives. ESG/OIS is deployed through milestones and KPIs that support the long-term objectives set across multiple project streams, spanning over the next decade.

The Operational Impact Strategy is developed and deployed along 3 pillars and corresponding corporate objectives:

Environmental Impact: Minimising negative impact in its operations to promote environmental stewardship and attain climate neutrality.

Societal Impact: Providing a diverse and inclusive environment for its people and clients, while fostering sustainable development and prosperity for the benefit of society.

Governance & Business Impact: Focusing on building ESG awareness, internally and across its value chain, while intensifying its efforts for ethics and transparency.

The OIS is supported by a governance structure of project streams (one per each commitment) and the supervisory ESG/OIS Committee. Progress is regularly reviewed at the ESG Management Committee.

Each project stream is planned with milestones, KPIs, annual targets and long-term interim targets, serving the declared commitments. Links are established with ERB 2030 Transformation streams as well as corresponding ISO management system standards, to ensure substantiation and certification of activities, validate target setting and measured performance, and systematically monitor progress through internal reviews and external assurance.

The Bank endeavours to foster favourable economic, social and environmental outcomes across all facets and sectors of its financing activities, with a commitment to sustainability and responsible stewardship. To achieve this objective, the Bank’s Financed Impact Strategy is structured around the following 4 strategic pillars:

• Client engagement and awareness to adapt their business so as to address climate change challenges.
• Actions for supporting clients in their transition efforts towards a more sustainable economic environment.
• Enablers and tools, such as frameworks and products, to underpin sustainable financing.
• Assessment and management of climate-related material exposures and risks.

GRI 3-3 ATHEX A-G3

During the 2024 Strategy Review exercise, 120 milestones were planned for 2024 and interim targets were set. The following is a breakdown of targets per each of the 14 commitments / project streams:

Progress on Operational impact against targets for 2023

The Group is committed to specific Operational Impact targets, including both quantitative and qualitative elements. In 2023, the first year the Operational Impact Strategy (OIS) was implemented, the Bank successfully managed to accomplish the 2023 impact targets. More specifically, the following outcomes are noted:

• 139 milestones were planned for 2023
• 149 milestones were completed in 2023
• 18 milestones were carried over to 2024

Indicative achievements are as follows: 

Regarding progress and performance related to short-term operational targets, refer to the “Sustainable Operations” section.

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The Bank acknowledges that sustainable development is key to prosperity. To this end, its commitment to support the transition to a greener economy by offering financing solutions that foster growth and sustainable development is at the core of its Financed Impact Strategy.

As a signatory of the Principles for Responsible Banking (PRB), the Bank has been developing targets that will enable mitigation of the negative and amplification of the positive impacts arising from its financing activities.

Leveraging on tools and enablers, such as the climate risk assessment exercises and the Sustainable Finance Framework, the Bank’s strategic approach is to support the achievement of the climate and environmental objectives through financing, advisory and capital raising solutions to current and potential clientele.

The Bank sets and refines its targets, and is in the process of establishing comprehensive management mechanisms, KPIs and milestones to better implement and monitor the progress made towards achieving them. Aligning the Bank’s activities with the Paris Agreement on climate change, the EU Sustainable Finance Action Plan and the UN SDGs is an integral component of this target setting process.

The Bank’s Financed Impact Strategy evolves based on the following key components:

In line with its commitment to address climate change, Eurobank Ergasias Services and Holdings SA (Eurobank Holdings) has joined the Net-Zero Banking Alliance (NZBA), a bank-led, UN-convened alliance of banks worldwide, reinforcing its dedication to aligning its lending and investment portfolios with net-zero emissions by 2050 or sooner, in line with the most ambitious targets set by the Paris Climate Agreement. The key enablers towards this ambition are listed below.

The Bank has set the following targets for sustainable finance disbursements in the following years:

Portfolio targets
New disbursements €2 billion in new green disbursements to businesses by 2025 20% of the annual new corporate disbursements to be classified as green, environmentally sustainable
Green stock / Exposure evolution 20% stock of green exposures by 2027 for the corporate portfolio (up from 11% in 2022)
Recovery and Resilience Facility (RRF) Mobilise €2.25 billion total green RRF funds in the Greek economy by 2026

Sectoral targets
Renewable energy 35% of new disbursements in the energy sector to be directed to Renewable Energy Source (RES) financing
Green buildings 80% of disbursements related to the construction of new buildings to be allocated to green buildings

Aiming to continuously enhance its Financed Impact Strategy, and within the scope of its Net Zero commitment, the Bank included additional targets that will enable it to deliver its “Portfolio alignment” and “Net Zero” strategic pillars.

“Portfolio alignment” and “Net Zero” strategic pillars
Align loan portfolio and investments with a net zero carbon footprint by 2050 by developing a robust action plan and roadmap, including intermediate targets to net zero and commitment.
Actively support clients’ climate transition with an ambition to further increase sustainable financing going forward.
Implement the ESG Risk Assessment, supported by the roll out of the Hellenic Bank Association initiative (Interbank ESG Questionnaire), ensuring a harmonised assessment approach for the Bank’s clients.
Further integrate climate risk regulatory requirements into its business strategy and risk management framework, leveraging on key initiatives: Governance, policies and control framework. Climate risk modelling and data management. Commercial strategies/sector policies.
Continue to contribute to the residential green lending sector through the state subsidised Exoikonomo programmes.

In addition to the above, the Bank introduced additional targets for 2024 for its corporate, investment and retail banking portfolios:

Corporate and Investment Banking green targets for 2024
New exposure to high emitters No new investments in fixed income securities (excluding exposures in Sustainability / Green Bonds) towards the top 20 most carbon-intensive corporates worldwide.
Increase sustainability-linked loans The Bank will double its annual disbursements of sustainability-linked loans

Retail Banking targets for 2024
Maintain the same growth in absolute terms for Retail Banking new green disbursements (or more than 50% increase vs. 2023).

Progress on Financed impact against targets for 2023

Making progress along the two pillars of the Sustainability Strategy, the Bank aims to maximise its contribution towards achieving the Paris Climate Agreement’s targets and the UN SDGs. Through a set of actions with measurable targets, the Sustainability Strategy reflects the Group’s vision in the short, medium and long term in relation to the environment, its social footprint, with focus on its people, and the sustainability impact on the market and its portfolio.

The Group is committed to specific Financed Impact targets, which include both qualitative and quantitative elements. More specifically, the relevant achieved targets for 2023 include:

Qualitative targets

Roll-out of its Sustainability Strategy, leading to tangible outcomes  Significant progress in the integration of CR&E risks in its 3LoD Model  Incorporation of climate risk elements in the Remuneration Policy  Deployment of the ESG Questionnaire, which has been developed at interbank level with the coordination of the Hellenic Bank Association  Integration of the ESG Risk Assessment process, a combination of the internal Climate Risk Scorecard and the Interbank ESG Questionnaire Operationalisation of the web-based Sustainable Finance Assessment Tool for classifying and evaluating sustainable financing opportunities for the Corporate portfolio Assessment of CR&E risks through Sectoral Analysis and forward-looking Scenario Analysis, as part of the Task Force on the Climate-related Financial Disclosures (TCFD) report Alignment of its Risk Appetite with the articulated Sustainability Strategy Incorporation of climate risk aspects in collateral valuation Publication of the TCFD Climate-Related & Environmental Risk Report Disclosure of Eurobank’s GHG financed emissions for loan, bond and share positions, based on the Partnership for Carbon Accounting Financials (PCAF) methodology Performance of training sessions for its employees in relation to Climate Risk, Sustainable Financing, ESG Risk Disclosures and ESG Risk Assessment Implementation of awareness initiatives for its clients, including the Digital Academy series of ESG webinars

Quantitative targets

Achieved target of 20% green/environmental new corporate disbursements More than 50% of new corporate disbursements in the Energy Sector were directed to RES Solid 100% of corporate disbursements related to construction of new buildings were directed to green buildings More than 2 times increase in its new green disbursements towards households and small businesses € 2.1 billion green/environmental exposures as of 31.12.2023, c. 14% of CIB portfolio € 0.2 billion in assets under management in sustainability-focused mutual funds € 0.6 billion exposure in green / sustainable bonds in its Banking Book

Climate and environmental risk scenario analysis

As the global financial sector is increasingly recognising the importance of understanding and managing CR&E risks, scenario analysis has emerged as a valuable tool for assessing the potential impacts of climate change on financial institutions. Eurobank aims to provide an in-depth analysis regarding climate change transition and physical risks, so as to evaluate its resilience and adaptability to climate change. This methodological approach measures impacts based on different scenarios and time horizons (2030, 2040 and 2050), despite the uncertainty surrounding the timing and magnitude of climate change.

The analysis aims to enhance the Bank’s understanding of CR&E risks, inform strategic decision-making, and facilitate the integration of climate considerations into its risk management framework, as well as to inform the Bank’s approach on identifying vulnerabilities, seizing opportunities and aligning business strategies within the context of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

The Bank’s strategy remains adaptive, as evidenced by the scenario analysis that compares financial evolutions across sectors and geographies over various scenarios and time horizons.

The Bank uses 4 representative scenarios from the Network for Greening the Financial System (NGFS) to analyse CR&E risks to the economy and financial system:

1. Orderly: Net zero 2050
2. Disorderly: Delayed transition
3. Hot house world: Current Policies
4. Too-little-too-late: Fragmented world

The Bank assesses the physical impacts on its strategy using 2 scenarios: RCP2.6 and RCP8.5.

For further information on Transition and Physical Risk Impact, refer to TCFD Climate - related & Environmental Risk Report 2023.

The Group applies the elements of the Three Lines of Defence (3LoD) model for the management of climate-related and environmental (CR&E) risks, as well as ESG aspects. The 3LoD model enhances risk management and control by clarifying roles and responsibilities within the organisation.

The updated ESG Governance structure aims to further enhance the effective oversight of sustainability matters at Management/Board level. Direct reporting lines are described in the section below.

Over the past year, the Bank has taken significant steps to enhance its sustainability governance model, and support the roll out of its Sustainability Strategy and the integration of ESG and C&E risks.

Eurobank enhanced its sustainability Governance model and supported the roll out of its Sustainability Strategy and the integration of ESG and C&E risks.

Enhanced Governance Structure and Committees

• Oversight of climate risks at management body level through allocation of responsibilities to Board and management committees.
• A Board Member is responsible for climate-related and environmental risks.
• Establishment of 2 Committees that supplement the governance arrangements in the area of ESG / climate risk, i.e. Environmental, Social & Governance Management Committee and Climate Risk Stress Test Committee.
• Appointment of Group Senior Sustainability Officer to lead the sustainability initiatives.

Integration of CR&E Risk Management across the 3 lines of defence

• Dedicated teams within the CIB and Retail Divisions, for overseeing ESG and sustainable financing activities.
• Automated process established to assess and classify sustainable financing opportunities.
• ESG Unit responsible for designing and monitoring the Operational Impact Strategy (OIS), monitoring the Operational sustainability performance and coordinating sustainability-linked operational activities that enhance the Bank’s Impact. In this context, the Unit is responsible for collecting, calculating and reviewing data related to the operational impact, in line with the associated certified management systems (ISO 14001/EMAS, ISO 50001, ISO 14064). The Head of the ESG Unit acts as secretary to the Eurobank Environmental, Social & Governance Management Committee (ESG ManCo).
• Group Sustainability Risk responsible for managing and monitoring CR&E risks, PMO office for implementing the Climate-related and Environmental risks roadmap, and designing and monitoring the Financed Impact Strategy, along with the Business and Risk Units.
• Intensive training on ESG, Sustainable Finance and CR&E risk topics to Bank personnel.

The roles and responsibilities of the key governance bodies / committees / divisions are outlined below.

Eurobank Holdings / Eurobank Board of Directors (BoDs/Boards)

The Eurobank Holdings / Eurobank Boards’ role is to offer entrepreneurial leadership to the Group in the context of prudent and effective controls facilitating the assessment and management of risks. The Boards establish the Group’s strategic objectives, ensure the availability of essential financial and human resources for the Group to fulfil its purpose, and evaluate management performance. The Boards define the Group’s values and standards, ensuring that its responsibilities to shareholders and others are acknowledged and fulfilled. All members of the Boards are required to act in the best interests of the Group, aligning with their legal duties. The Eurobank Holdings / Eurobank Boards have assigned an executive member as the Board Member responsible for climate and environmental risks. As part of their duties, this member updates, at least on a semi-annual basis, the Eurobank Holdings / Eurobank Board Risk Committees (BRC), which, in accordance with their Terms of Reference, are responsible for overseeing (among others) the climate related and environmental risks, at least on a semi-annual basis. As per international best practices, effective Board oversight with respect to the Group’s Sustainability Strategy is also safeguarded through the regular inclusion of ESG items in the agendas of Board Meetings.

Eurobank Holdings / Eurobank Board Risk Committee (BRC)

The Eurobank Holdings / Eurobank Board Risk Committee (BRC), among others, oversees the implementation of the strategies for capital and liquidity management, as well as for all material risks of the Group, including climate-related and environmental risks, as identified through the Risk Identification and Materiality Assessment (RIMA) process and listed in the relevant RIMA report, to assess their adequacy against the approved risk appetite and strategy. In addition, the BRC determines, among others, the principles which govern risk management (including climate-related and environmental risks) across the Bank and the Group in terms of identifying, measuring, monitoring, controlling and mitigating risks. To this end, the Committee approves risk principles, risk policies, risk procedures and risk methodologies, and the Specific Risk Management Framework (e.g. Climate and Environmental Risk).

Eurobank Management Risk Committee (MRC)

The Eurobank Management Risk Committee (MRC) is responsible for overseeing the risk management framework of Eurobank. As part of its responsibilities, the MRC facilitates the reporting to the BRC on a wide range of risk-related topics under its purview, including climate and environmental risks. The MRC ensures that material risks are identified and promptly escalated to the BRC and that the necessary policies and procedures are in place to prudently manage risk and to comply with regulatory requirements.

Eurobank Environmental, Social & Governance Management Committee (ESG ManCo)

The Eurobank Environmental, Social & Governance Management Committee (ESG ManCo) provides strategic direction on ESG initiatives, reviews the Sustainability Strategy prior to approval, integrates the elements of the Sustainability Strategy into Eurobank’s business model and operations, approves eligible assets based on the Green Bond Framework, regularly measures and analyses the progress of sustainable goals and performance targets, and ensures the proper implementation of Sustainability-related policies and procedures, in accordance with supervisory requirements and voluntary commitments. It is chaired by the Board Member responsible for CR&E risks.

Eurobank Climate Risk Stress Test Committee (CRSTC)

The Eurobank Climate Risk Stress Test Committee (CRSTC) is responsible for designing and executing the Group’s CRST Programme, as well as for coordinating all activities relating to Climate Risk Stress Testing, including risk identification, scenario design and stress test execution, and reviewing and challenging the output at each stage of the process prior to escalating to the Executive Board.

Group Senior Sustainability Officer (GSSO)

The Group Senior Sustainability Officer (GSSO) is responsible for leading and coordinating the Group’s sustainability initiatives, for both operational and financed impact.

GSSO manages Sustainability, co-manages, as a secondary reporting line, along with the Senior Risk Executive Officer the Group Sustainability Risk, coordinates Sustainability Center of Excellence of CIB and Retail and oversees the sustainability programs of international subsidiaries.

The role of the GSSO is to foster a deep understanding of sustainability principles and practices across the organization by building a culture of sustainability and collaborating together with senior management to embed sustainability into the Group’s strategic decision-making processes. GSSO secures and allocates resources effectively to support the Group’s sustainability initiatives and advocates for necessary investments in sustainability projects and technologies. GSSO serves as the liaison between the Group and Market/External Stakeholders, closely monitoring industry trends, regulatory changes and best practices in sustainability and ensuring that the Group remains at the forefront of sustainability innovation and compliance.

ESG Unit

The ESG Unit acts as a custodian of ESG Principles and Culture to enhance the Bank’s Impact, and as a cross-functional coordinator to ensure alignment on sustainability issues and interdependencies, as well as compliance with relevant existing and upcoming operational impact related regulations. Specifically, the ESG Unit is responsible for designing/reviewing the Operational Impact Strategy and monitoring its implementation, with a leading role in selected areas, also providing support to international subsidiaries. Furthermore, the ESG Unit coordinates and prepares ESG operational impact-related reports in line with applicable standards/regulations, in cooperation with involved subject-matter responsible Units, while it is responsible for the UNEP FI PRB implementation.

Being responsible for the oversight of the Bank’s overall ESG operational performance, its key roles include the centralised management of Sustainability Ratings, seeking continuous improvement in related scores. The ESG Unit also manages the ISO Management Systems under the related provisions of equivalent policies and the Operational Impact Strategy. The ESG Unit collects, calculates and reviews data related to the operational impact, in line with the associated certified management systems, while it also ensures implementation of corresponding initiatives (e.g. operational net zero transition, energy self-production, energy and emission monitoring, green building certifications, recycling and circular economy management).

Business Units

The Business Units – Corporate and Investment Banking, and Retail Banking – are primarily involved in executing all portfolio-related sustainable activities, including the implementation of the Financed Impact Strategy. Key responsibilities are classified, inter alia, under the following 3 main categories:

1. Sustainability Strategy Executing and monitoring financed and specific operational sustainable goals and performance targets in line with the Net Zero Strategy.
2. Sustainable Financing/Funding and Investments Identifying sustainable financing opportunities, and designing relevant solutions and sustainable products. Performing the sustainable financing assessment, in line with the Sustainable Finance Framework. Implementing and monitoring the Sustainable Investment and Green Bond Frameworks.
3. ESG and CR&E Risk Management Performing the overall ESG Risk Assessment. Identifying and implementing mitigation action plans for ESG and CR&E risks. To effectively manage ESG and sustainable-financing activities, dedicated functions within CIB and Retail namely, the Sustainability Centre of Excellence are being formed. In the meantime, the CIB ESG coordinator is responsible for overseeing ESG and sustainable financing activities. Regarding the Retail Banking Unit, the Bank has introduced 2 ESG coordinators, for Retail, Business and Individual clients respectively, who are responsible for organising and supporting sustainable-related activities.

Group Sustainability Risk (GSR)

The GSR has the overall responsibility for overseeing, monitoring and managing sustainability risks. More specifically, the GSR prepares and maintains the Bank’s Sustainability risk management policies, processes and methodologies, in collaboration with the ESG Unit, and the Business and Risk Units. In addition, it leads the development and implementation of the Sustainability risk-related framework, policies and processes, in coordination with other units, as well as acts, monitors and reports the progress of the implementation of the developed Climate Risk action plan and reports to the Board for Sustainability risks matters.

In addition, the GSR reviews and challenges the involved stakeholders as to setting the Financed Impact Strategy (including Net Zero action plan), as well as monitors the Financed Impact Strategy and reports financial targets and KPIs. The GSR also leads the 2nd line of defence independent sustainable lending re-assessment process against the Sustainable Finance criteria, including the characterisation of products of the Retail Portfolio as sustainable. Furthermore, the GSR develops and maintains the Climate Risk Stress Testing Framework, as well as the Scenario Analysis and Stress Test methodologies, and coordinates the performance of Sustainability Risk scenario analysis and relevant stress test exercises at Group level.

Group Compliance

Group Compliance’s key roles and responsibilities include:

1. Regulatory compliance
   • Monitors the regulatory environment and emerging trends around sustainable financing, and informs the Bank of the respective changes/enhancements to the relevant policies and documents regarding sustainable financing offerings.
   • Issues a regulatory bulletin, which includes regulatory developments and their impact on the Bank’s operation.
   • Monitors the alignment of the Bank’s activities with applicable laws, rules, regulations and standards, including sustainable finance regulatory aspects.
2. Compliance risk assessment
   • Designs appropriate risk assessment methodologies for compliance risk.
   • Establishes a monitoring programme for the relevant activities within its area of responsibility.
   • Assesses conduct risk in relation to sustainability financing.
3. Policy updates
   • Maintains the Bank’s conduct-related policies, including their sustainability components.
4. Product offering monitoring
   • Provides advice and recommends controls over the Bank’s sustainability product offerings, while it also checks that promotional statements do not misrepresent products or services offered to customers, through its participation in the Products and Services Committee and related processes.

Internal Audit Group (IAG)

The role of the 3rd line of defence within Eurobank’s governance and organisational structure is allocated to the IAG, for the independent review of the adequacy and effectiveness of the internal control framework. The IAG mandate covers all processes, risks and mechanisms, for all business lines and internal units. In recent years, the IAG has recognised ESG/CR&E internal controls and the risk management framework as areas of focus, and has taken several initiatives and actions within its strategy. These aim to ensure adequate coverage of the area, in line with the Bank’s strategy, as well as industry and regulatory developments.

Specifically, the IAG strategically focuses on the ESG/CR&E risks, building on the following pillars:

• Methodology/ Infrastructure – The Management of ESG/CR&E risks and the Bank’s initiatives are recognised as a separate auditable area, subject to risk assessment. Furthermore, climate risk is recognised as a separate risk category, assessed in all relevant areas of the audit universe, in line with the Bank’s risk taxonomy. This category will be extended to cover the entire spectrum of ESG risks, in line with respective developments in the Bank’s risk definitions.
• Resources – The IAG has extended its pool of professional qualifications/ certifications to the area of sustainability, with one staff member certified in Sustainability and Climate Risk, and with more auditors in the pipeline to obtain relevant industry professional body certifications. This comes simultaneously with other initiatives in place, aimed at further upskilling through dedicated training sessions, on-the-job upskilling (participation in and consultation on the Bank’s projects and initiatives around sustainability) and increased awareness (e.g. IAG ESG Focus Group focused at sharing knowledge on sustainable practices and regulatory initiatives). At this stage, the IAG has opted to embed the right mix of skills and knowledge within its existing organisational structure, given the multifaceted nature of ESG risks, affecting all businesses and operations of the Bank, to a siloed approach, aiming at a holistic consideration of the Bank’s ESG risks.
• ESG / Audit Universe Coverage and Audit Planning – Following the infrastructure steps described above, since 2021, the IAG has been carrying out several assignments around sustainability, along with monitoring the Bank’s initiatives in this area on a risk-based approach. Key areas of focus include risk materiality, governance and strategy, C&E risk management framework, product design and offering, reporting disclosures, etc. These initiatives come in addition to the existing coverage by IA in sustainability areas, such as consideration of AML perspectives in loan origination (governance-social financing practices), review of compliance with the code of conduct or market practice codes (governance operational and financing practices) and relevant non-recurring and forensic audit work.

Alignment of the Remuneration Policy with the Bank’s CR&E risks objectives

The Bank has established a Remuneration Policy that is applicable to all Bank employees and covers their total remuneration. The Remuneration Policy forms an integral part of the Bank’s corporate governance practice. It is developed in accordance with its operational model, business strategy, objectives and long-term interests, and incorporates measures to avoid conflict of interest.

The Remuneration Policy promotes sound and effective risk management. It is consistent with the objectives of the Bank’s business and risk strategy, corporate culture and values, and risk culture, with regard to environmental, social and governance (ESG) risk factors, including long-term interests of the Bank and the measures used to avoid conflicts of interest, while it should not encourage excessive risk-taking on behalf of the Bank. The Bank ensures that remuneration practices are aligned with their overall risk appetite, taking into account all risks, including climate related and environmental risks, reputational risks, as well as risks resulting from the mis-selling of products. More specifically, the Remuneration Policy has been designed to:

• Be consistent with and to promote sound and effective risk management.
• Stimulate behaviour consistent with climate-related, and environmental and sustainability risks approach.
• Comply with the Bank’s voluntary commitments.

Its basic principles are to:

• Be gender neutral and non-discriminatory in any aspect of its implementation.
• Safeguard that remuneration is sufficient to retain and attract executives with appropriate skill and experience.
• Monitor that internal equity between all Units is applied.
• Avoid excessive risk-taking, even in the case of direct or indirect sustainability risks.
• Link remuneration with long-term performance.

Dedicated group-wide programme to address the requirements of the ESG ecosystem

Eurobank launched a dedicated Group-wide initiative, namely “Programme Field”, with the aim to develop and implement its Sustainability Strategy, integrate and effectively manage climate risks, fulfil its UNEP FI PRB signatory commitments, and ensure readiness to comply with sustainability-related regulations (i.e. EU Green Deal, ECB Guide on climate-related and environmental risks, EU Taxonomy Regulation, etc.). Through this initiative, the Group has identified, assessed and implements relevant action plans addressing CR&E risks within the 3 lines of defence.

Integration of ESG Risk Management across the 3 lines of defence

The Group applies a model of defined roles and responsibilities regarding the management of ESG/CR&E risks across the 3 lines of defence, considering all relevant guidelines and regulatory requirements:

• 1st line of defence The Business Units (CIB and Retail Banking) are responsible for assessing, managing and monitoring risk levels in all risk categories, including ESG/CR&E risks. The CIB ESG coordinator, which is being evolved to a Sustainability Center of Excellence, along with the Retail Banking ESG coordinators, are responsible for undertaking all relevant ESG and sustainable finance activities. In addition, the role of the ESG Unit in the 1st line of defence includes the responsibility for designing and monitoring the implementation of the Operational Impact Strategy, as well as Sustainability Reporting, Environmental & Energy Reporting (EMAS Report, Greenhouse Gases Emissions Report per ISO14064) and Sustainability ratings.
• 2nd line of defence The Group Risk Management (GRM) is independent from the Business Units and is fully responsible for setting the risk strategy and risk appetite framework, including ESG/CR&E risks. Within the GRM, a dedicated Group Sustainability Risk has been established, with the overall responsibility for overseeing, monitoring and managing ESG/CR&E risks and sustainable financing activities, in cooperation with the other GRM Units, as well as with Group Compliance.
• 3rd line of defence The Internal Audit Group (IAG) independently reviews the adequacy and effectiveness of the internal control framework in place regarding ESG/CR&E risk management, following a risk-based approach.

Sustainable Finance Framework Assessment Tool

The Group developed a web-based Sustainable Finance Framework (SFF) Assessment Tool for the Corporate & Investment Banking (CIB) portfolio, so as to underpin the classification and evaluation of sustainable/green financing opportunities in a structural manner, as part of the loan origination process. The SFF Assessment Tool is delivered through an online platform, a workflow-based application which automates the process of assessing the Bank’s financing solutions against the criteria defined in the SFF.

ESG awareness and capacity building

Eurobank is placing great emphasis on building capacity among its employees, so they are able to support its clients on their sustainability journey and their green transition. To this end, in addition to launching ESG initiatives for its clients, Eurobank implements an ESG upskilling plan for its employees. Eurobank’s internal awareness sessions regarding ESG and CR&E matters cover both members of the management body and other stakeholders across the Bank (e.g. business and risk units). Additionally, the Bank has offered training to stakeholders from all 3 lines of defence (i.e. business units, risk management units, Internal Audit) regarding the SFF, to enhance their understanding. Specifically, the following awareness programmes are in place.

Employee ESG awareness training modules

Since 2022, the Bank has launched “ESG Thinking”, an ESG awareness programme for employees, consisting of the following modules:

• Module 1 – ESG and World
  Fundamentals of ESG, megatrends and related risk and opportunities as well as the importance of ESG within an organisation described through business cases.
• Module 2 – ESG and the Bank
  Key drivers of ESG, its impact on the banking industry and the ESG regulatory landscape. The ways in which the Bank engages with sustainability through frameworks, initiatives and products.
• Module 3 – ESG and Me
  Content aiming to cultivate an open and growth mindset when dealing with sustainability issues by motivating employees to take personal action through practical steps personally and professionally.

Since 2022, 2,543 employees have participated in the ESG Thinking programme, totalling 3,132 learning hours.

Dedicated training sessions to Business Units

Apart from the general upskilling programmes, during the past years the Bank has conducted dedicated sessions tailored to the requirements of specific business units and functions, crucial for delivering the Bank’s strategy. These sessions focused on engaging with clients to enable their green transition efforts and identifying sustainable financing opportunities through publicly available sources, such as company sustainability disclosures.

Since 2022, over 500 employees have participated in dedicated training sessions, totalling over 1,300 hours of training.

In 2023, Eurobank demonstrated significant improvements in key sustainability ratings, including Sustainalytics, MSCI, S&P, CDP, and Moody’s, surpassing its 2022 standings. Specially with respect to Sustainalytics, the Bank achieved the international ESG Regional Top Rated distinction, the ESG Industry Top Rated distinction for the 2nd consecutive year and has been included in the Morningstar Sustainalytics’ 2024 Top-Rated ESG Companies List. These distinctions are a strong demonstration of Eurobank’s commitment to sustainability practices and rank it among the best performing banks globally. This recognition reflects our outstanding performance and management of ESG impacts including Human Capital, Data Protection and Security, Business Ethics, Corporate Governance, Product Governance, and Integration of sustainability criteria into financial activities.

Other Sustainability ratings
Sustainability Ratings and Indices	FY2022	FY2023*
MOODY’S	50	57 ▲
CDP	D	B ▲
ATHEX ESG INDEX	✓	✓
REFINITIV	79	79
FTSE4GOOD	✓	✓
ISS ESG	E:2 / S:2/ G:5 ▲	E:1 / S:2/ G:3 ▲
BLOOMBERG GENDER- EQUALITY INDEX	✓	✓

▲improvement *Sustainability Ratings scores regarding year of reference.

In September 2019 Eurobank signed the Principles for Responsible Banking, affirming its commitment to play an active role in implementing the UN Global Sustainable Development Goals (SDGs), and the Paris Agreement on Climate Change. All actions towards implementing, and fully embedding the Principles for Responsible Banking by 2024, are of great importance, as these Principles define the role and responsibilities of the banking sector in shaping a sustainable future, allowing banks to include sustainability in all their activities and identify areas that need improvement. Transparency and accountability are essential elements, therefore, public reporting of Eurobank’s targets, implementation and progress is an integral step within the context of the Principles. In full compliance with its obligations relating to implementing the Principles, Eurobank has issued its 4th PRB Progress Report as part of the Annual Report 2023 Business and Sustainability Report, for the period from March 2023 to March 2024 (Appendix VI). In its 4th PRB Progress Report, Eurobank discloses the actions undertaken and the progress made towards implementing the 6 Principles during the last 12 months, laying emphasis on the elements regarding impact analysis, target setting, target implementation and monitoring and governance structure, which are also externally assured. Key highlights on the Bank’s 2023 performance and progress towards implementing the Principles include:

Principle 1: Alignment

Eurobank approaches sustainability in a holistic manner, in line with the commitments it has undertaken, the regulatory framework requirements and globally acknowledged best practices. It prioritises the management and mitigation of any underlying economic, environmental and social risks arising as an integral part of developing products and services, while complying with the applicable regulatory framework. Furthermore, Eurobank develops and improves mechanisms to identify, measure and communicate impact, across the full spectrum of its activities, through Group’s Sustainability Strategy that includes two key pillars, the Operational and Financed Impact Strategy.

Principle 2: Impact and Target Setting

Eurobank has defined its strategic commitments and set specific measurable short and long terms targets (described in the Sustainability Strategy section). The commitments and targets were developed taking into account, among others, the significant impact areas identified through the impact analysis conducted in the context of implementing the UNEP FI Principles. This year, Eurobank re-conducted the impact analysis exercise using updated portfolio data for its operations in Greece, in order to evaluate whether the significant impact areas resulting from its activities have shifted. Eurobank’s targets aim to mitigate negative impacts arising from the Bank’s financing activities to its consumer, corporate and business banking clients in the climate stability, circularity and biodiversity areas. Regarding the Bank’s progress, it has achieved the targets of its Financed impact Strategy and has set additional targets for 2024 for its retail, corporate and investment banking activities. As a key step towards its commitment to align its portfolio with climate transition pathways and set net zero targets, the Bank calculates and discloses its financed emissions and is in the process of finalizing the first wave of sectoral financed emissions reduction targets, covering the Bank’s lending portfolios, with the ultimate objective of setting 2030 targets for the carbon intensive sectors of its portfolio and reaching Net Zero by 2050.

Principle 3: Clients and Customers

The Bank has developed an approach to support its clients’ green transition and encourage sustainable practices, consisting of the following elements:

• Guiding frameworks defining the approach and criteria for classifying its financing and investing activities as sustainable.
• Direct financings aiming to finance projects that meet green eligibility criteria, or sustainability linked loans, focusing on leveraging clients’ commitments towards green transition.
• Financing solutions for consumers and small businesses that aim to deliver positive environmental impacts.
• Advice to current and potential clients aiming to support their green transition efforts.
• Asset and wealth management with sustainability criteria.
• Incorporation of climate-related and ESG risks in the client financing evaluation process.

Principle 4: Stakeholders

An integral part of the Bank’s approach to sustainability is to foster strong relationships of trust, cooperation and mutual benefit with all stakeholders affected by its activities directly or indirectly. In this context, the Bank promotes 2-way communication and develops an ongoing dialogue with stakeholders, so as to be able to actively meet the expectations, concerns and issues raised by all its stakeholders. Eurobank conducted for the first time a Double Materiality Analysis assessment, enhancing the engagement with the its stakeholders with topics relevant to the Bank’s sustainability activities and responsible financing products, aligned with the Principles for Responsible Banking. By adopting the new methodology of the European Sustainability Reporting Standards (2023), Eurobank completed the identification, assessment, prioritization, and validation of the positive and negative impacts, as well as the risks and opportunities that the Bank creates or may create on the environment, people, and the economy. In the context of extending its positive impacts, the Bank seeks to participate in companies with strong growth prospects, focusing on extroversion and environmental protection.

Principle 5: Governance and Culture

Eurobank has deployed a sustainability governance structure that addresses regulatory and voluntary requirements/commitments and is responsible for delivering the Sustainability Strategy. The sustainability governance structure has defined the roles and responsibilities in relation to the delivery of the Sustainability Strategy and climate related and environmental risks. Over the past year, the Bank has taken significant steps to enhance its sustainability governance model, and support the roll out of its Sustainability Strategy and the integration of ΕSG risks which include:

• BoD level responsibilities and oversight of the Sustainability Strategy and climate -related/ ESG risks.
• Appointment of Committees dedicated to ESG / climate risks.
• Establishment of the Group Senior Sustainability Officer (GSSO) who is responsible for leading and coordinating the Group’s sustainability initiatives, for both operational and financed impact.
• Integration of climate risk management across the three lines of defence.
• Establishment of dedicated teams within the corporate and retail divisions responsible for overseeing and delivering sustainable financings.
• Automated process established to assess and classify sustainable opportunities.
• Intensive training on sustainable finance and climate risk to Bank personnel.

Principle 6: Transparency and Accountability

The Bank promotes transparency on its sustainability performance by:

• Participating in reputable sustainability rating indices,
• Publicly disclosing progress on PRB commitments that for the second time is being assured by an Independent Assurance Provider.
• Publicly disclosing information according to standards/frameworks (e.g. GRI, commitment to TCFD).
• Publishing a sustainability newsletter on a quarterly basis.

The Bank’s complete progress report against the 6 Principles for Responsible Banking, through the self-assessment template, is presented in Appendix VI.

An integral part of Eurobank’s approach to sustainability is to foster strong relationships of trust, cooperation and mutual benefit with all stakeholders affected by its activities, directly or indirectly. In this context, Eurobank promotes two-way communication and develops ongoing dialogue with stakeholders, to be able to actively meet the expectations, concerns and issues raised by all its stakeholders.

ATHEX A-E6 ATHEX A-G1 ATHEX C-G3 ATHEX C-S8

Eurobank’s Double Materiality Assessment is the process that largely shapes the content of the Annual Report 2023 – Business & Sustainability. In 2023, Eurobank marked the early adoption and implementation of the Double Materiality Assessment, highlighting a critical turning point in its sustainability path. Under the new European Sustainability Reporting Standards (ESRS), Eurobank identified, assessed, prioritised and validated the Environmental, Social and Governance (ESG) impacts arising from its activities and also assessed risks and opportunities that may have material financial influence to Eurobank, throughout its value chain. In this context, Eurobank has adopted a forward-thinking approach by incorporating the concept of Double Materiality into its operational and financed activities.

The methodology was carried out in 4 phases:

 

Understanding the organisation’s context and value chain

Overview of business model: an initial overview was performed on the Bank’s activities and business relationships, as well as the sustainability context in which these occur, drawing upon relevant internal documentation and publicly available material to gain thorough understanding of Eurobank’s products and services, its portfolio, its business relationships and entities and to map these on a value chain diagram that illustrates its upstream and downstream activities, alongside its own operations.

Mapping the value chain: the value chain presents an overview of Eurobank’s activities, resources and stakeholders related to its operation and consists of three main categories of activities: the Upstream side, which includes the provision of products and services that Eurobank uses to produce its own products and services; the Downstream side, that includes the receivers / users of Eurobank’s products and services; and Eurobank’s Own operations. The starting point for the creation of the value chain was to identify Eurobank’s key operations, as well as the key business partners influenced by and influencing those operations and this was done at Group level, i.e. Eurobank Ergasias Services and Holdings S.A.

Identifying impacts, risks and opportunities (IROs)

Overview of stakeholders: a mapping of the Bank’s key stakeholders was performed, through a review of internal documents and available relevant material, to identify the individuals and groups whose interests are affected or could be affected by the Banks’s activities.

Identifying topics: analysis was carried out to identify the ESRS topics and sub-topics, that could potentially be material and therefore should be included in the impact assessment. Key sources for this analysis were Sustainability rating and industry reports such as, SASB and MSCI, previous material topics from Eurobank’s Business & Sustainability Annual Report 2022, findings from UNEP FI Impact Radar analysis, and a thorough benchmarking analysis by considering a pool of national and international banks.

Identifying operational and financed impacts, risks and opportunities (IROs): the impacts generated by the Bank’s products and services, as well as its supply chain and operations, on the economy, environment and society were identified. Similarly, risks and opportunities were identified for the Bank on a number of ESRS topic areas. To develop the pool of IROs to be assessed and prioritised, the Bank considered cross-sectoral, sectoral and bank-specific issues, as well as the results from UNEP FI Impact Radar tool.

All actual and potential positive and negative impacts that the Bank creates through its corporate, business and consumer banking portfolios were identified and mapped against the impact areas and topics of the UNEP FI Impact Radar¹ . Also, risks and opportunities were identified for each potential material topic and were linked to a financial KPI, i.e., turnover, net profit, net assets.

Assessing impacts, risks and opportunities

Questionnaires and Workshops: To prioritise the identified IROs and determine the material topics for inclusion in this Report, Eurobank carefully selected internal and external representatives from its stakeholders groups to assess positive and negative impacts via questionnaires, and conducted workshops with experts from the Bank’s key business units to evaluate the risks and opportunities identified.

Assessment criteria: The significance of positive impacts was assessed by stakeholders, by considering the scale and scope of impacts, whereas the severity of negative impacts was assessed by considering their scale, scope and irremediable character. For the assessment of potential impacts, the likelihood factor was also taken into account. The significance of risks and opportunities was assessed by stakeholders, based on their severity grade and likelihood of occurrence.

Prioritising and validating material topics and IROs

Data analysis: the data collected was analysed and IROs were prioritised according to the assessment score, as this was identified through the questionnaires (Impact Materiality assessment) and workshops (Financial Materiality assessment).

Materiality threshold: a materiality threshold was set to determine which topics are material. In particular, the use of materiality thresholds classifies topics as material in terms of impact materiality, financial materiality or double materiality.

Finalising the material topics list: Eurobank conducted a robust Double Materiality assessment, leveraging impact materiality and financial materiality. The resulting output was reviewed and approved by the ESG Management Committee. Materiality assessment was conducted in accordance with the ESRS standards. Regarding the ESG Risk Identification and ESG Risk Materiality Assessment process, please refer to “ESG in Risk Management” section.

¹The Impact Radar is a compilation of Impact Areas and Topics across the 3 pillars of sustainable development. These are used for the purpose of capturing and managing positive and negative impacts of financial institutions and their clients or investees on people, communities and the environment

Material topics

As per the final stage of the materiality analysis process, the list of topics below was prioritized as material. These formed the basis for determining the contents of this Report, as well as the disclosures of relevant key performance indicators.

Impact materiality

Operational impacts

Financed impacts

 

During the reporting period, Postbank continued to create sustainable long-term value for its stakeholders, guided by its mission, values and ESG strategic vision. The sustainability governance model of the bank was enhanced to be better positioned to meet the growing requirements and expectations of its external and internal stakeholders. A new ESG Management Committee was established, chaired by the Chief Executive Officer and comprising members of the top management of Postbank. The ESG Management Committee succeeded the previous Environmental and Sustainability Committee, with the purpose of integrating Postbank’s ESG strategy into its business model and operations, directing ESG initiatives, and monitoring the achievement of ESG goals and performance targets.

Another important step in 2023 was the establishment of a dedicated ESG Department reporting to the CEO. The responsibilities of the ESG Department include promoting the ESG principles and culture across the bank, monitoring its operational impact and coordinating the ESG strategy implementation.

In view of the importance of climate and ESG risks and sustainability management, Postbank’s decided to establish a new Climate & ESG Risks Department within Risk Division. The main responsibilities of the new unit will be to identify, measure, monitor, control and integrate climate related and ESG risks into the bank risk management policies and procedures, to ensure that the bank effectively manages the relevant risks and complies with supervisory requirements.

In 2023, Postbank actively participated in the Sustainable Finance Working Group at the Association of Banks in Bulgaria. It also became a member of the ESG Committee at the Confederation of Employers and Industrialists in Bulgaria.

In 2023 Postbank implemented a number of measures aimed at reducing its operational footprint in the areas of environmental, employer and social impact. The bank received many prestigious awards in recognition of its efforts. Among others, it received the Distinctive Sign for Significant Achievements in the Field of Gender Equality from the Ministry of Labor and Social Policy and three awards in the “Greenest Companies in Bulgaria” competition. The bank’s corporate social responsibility project “Universe of Opportunities” was distinguished with awards in several different competitions.

Eurobank Cyprus is committed to investing in sustainable development and designing its actions to improve its impact on environmental sustainability, social responsibility and corporate governance. A key strategic objective is to adapt its business and operation in a way that addresses climate change challenges, accommodates social needs within its business model, and safeguards prudent governance for itself and its counterparties, in accordance with supervisory initiatives and following international best practices.

The bank is in close communication with the Eurobank Group to develop its Sustainability Strategy, so as to ensure alignment with the Group, and with the latest regulatory requirements and guidelines around the ESG spectrum.

In line with the UN Sustainable Development Goals and the 2030 Agenda, as well as the Paris Climate Agreement targets, Eurobank Cyprus develops its Sustainability Strategy across 2 distinct levels of impact:

• Financed impact: Impact resulting from its lending and investing activities to specific sectors and clients.
• Operational impact: Impact arising from its operational activities and footprint.

In 2023, Eurobank Cyprus continued its efforts on a number of activities on environmental impact (operational net zero, paperless banking, circular economy), employer impact (diversity and inclusion, wellbeing, innovative environment), social/ business impact (socio-economic effect, transparency, ESG capacity) and financed impact, aiming to support customers and society in their transition efforts towards a more ESG-friendly economic environment. It aims to support its operational impact strategy through a set of actions with measurable targets and KPIs, demonstrating its vision for the coming decade in relation to the environment and its social footprint, while focusing on its people and the ESG impact on the market.

During 2023, Eurobank Cyprus issued its Environmental Policy, implemented and certified an Environmental Management System (ISO 14001) and Eco-Management and Audit Scheme (EMAS), and completed preparing the revised Energy Audits Reports for buildings and vehicles. It is also in the process of applying ISO 14064 (Scope 1 and 2) – Greenhouse gases. Lastly, by upgrading its infrastructure with the implementation of the revolutionary Temenos Project, which aims at fully digitising and improving its services, it contributes to minimising its environmental footprint.

In terms of the financed impact, Eurobank Cyprus undertook several actions in 2023 in the context of the projects initiated in 2022, focusing on developing its Sustainable Finance Framework and ensuring full compliance with the ECB expectations, as stated in the relevant ECB guide on climate-related and environmental risks.

Eurobank Private Bank Luxembourg SA is currently in the progress of developing a comprehensive approach for managing Environmental, Social and Governance (ESG) risks. The Bank aims at outlining implementation strategies and prioritising actions to effectively address ESG, and climate-related and environmental risks, while ensuring compliance with the evolving regulatory requirements and industry best practices. Meanwhile, coordination is in progress to develop an ESG/Operational Impact Strategy (ESG/OIS), in alignment with Group provisions.