Environmental and Social Impacts

İşbank is aware of the transformative power of financing. The Bank contributes directly and indirectly to sustainable development and supports the national economy with the different projects it finances.

İşbank's responsible financing approach ensures both the protection of the Bank's reputation in terms of reputation and credit risks, and the support of projects with high feasibility and creating social benefits.

Environmental and Social Risk Management in Lending

Environmental Efficiency

Environmental Indicators

Incorporation of environmental and social impacts into loan evaluation processes is among sustainability priorities of the banking industry. İşbank is one of the first signatories of the Turkey’s Declaration on Sustainable Finance published by Global Compact Turkey, guaranteeing assessment of environmental and social risks in credit processes.

Potential environmental and social risks of new investment projects with a total investment sum of over USD 10 million are evaluated by İşbank with Environmental and Social Risk Evaluation Tool (ERET).

By establishing “customer” and “project” risk categories of such investment loans through this model, a roadmap is created to limit and eliminate possible environmental and social impacts of the investment. Investment projects are evaluated with ERET with respect to 26 different criteria including use of natural resources, solid waste, air, soil and water quality, noise, dust, occupational health and safety, public health and safety, involuntary resettlement and stakeholder engagement, etc.

As a result of the evaluation, projects are classified into four categories by their risk,levels: high (Category A), medium high (Category B+), medium (Category B-), and low (Category C). Investments under evaluation are assessed with reference to national legislation and international best practices such as IFC (International Finance Corporation) Performance Standards, EBRD (European Bank for Reconstruction and Development) Performance Requirements, and Equator Principles, and a Project Environmental and Social Evaluation Certificate is prepared for every individual investment.

In all projects, “Public Engagement Meetings” are organized as a minimum as part of the EIA. Besides,additional stakeholder communication meetings are held and corporate social responsibility efforts are undertaken in all projects financed in accordance with the international standards.

The Bank requires investing companies to make commitments, as exemplified below, in line with assessments specific to projects, in order to eliminate/ mitigate or compensate any environmental and social adverse impacts of such projects it financially supports:

• Forestation to reduce and offset carbon emissions, use of indigenous species suited to the area in these efforts, relocation of trees to spots matching with the project site as closely as possible, and conservation of endemic species,

• Taking measures required to preserve biodiversity in specific and protected areas,

• Prioritizing the purchases of lands through agreements, preparing resettlement plans and/or a plan for restructuring means of living in projects involving forced physical or economic relocation as part of expropriation,

• Developing social responsibility projects which are countervailing for locals within the sphere of influence of the project and aiming to create new income sources, giving priority to locals when meeting labor force and purchasing requirements of the investment,

• Taking into consideration the opinions of employees, locals and other stakeholders on the project as part of investments, and creating a “Stakeholder Engagement Plan” by building internal and external complaint mechanisms to address their inconvenience,

• Taking additional measures in environmental and social management plans with additional studies including Cumulative Impact Analysis, Ecological Impact Assessment, etc.
• Ensuring compliance of the investor with Occupational Health and Safety (OHS) legislation in both its current operations and investment operations, increasing occupational health and safety practices, and developing emergency action plans.

The compliance of these commitments by investing companies is also guaranteed through loan agreements and monitored as part of financing process. Through management of social risks which may be encountered in this scope, social impact is controlled as well.

One of the impacts of financed projects is the cases of forced relocation. In some projects, financial hardships may arise as a result of people’s exposure to forced relocation or relocation of their workplace due to expropriation or consolidation of lands. Among these type of projects, in those which are subject of financing up to international standards, people and groups affected by the project are identified with “Relocation Plan” and plans for “Restructuring Means of Living” .Then plans are implemented to eliminate any adverse effects.


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