Environmental management system, ecoefficiency goals and sustainable businesses are aspects that form our environmental dimension, known as Eco-bank in our organization.
Environmental Management System / Environmental Policy
At Bancolombia we work to generate a balance between the environment quality and life quality to be more sustainable through time. Thus, we identify the direct and indirect impacts of our activity and encourage the prevention, mitigation, correction and compensation thereof in order to get a prosperous future enjoyable by next generations.
Materiality
The strategy of our Environmental Management model is directly related with our strategy as Group. For such purpose, we have established a permanent dialogue with our Stakeholders as a tool to create long-term relationships based on trust, to generate pleasant experiences, to ensure a sustainable growth and to become increasingly committed with our Vision.
At Bancolombia Group we have an Environmental Management System aligned with ISO 14001. This includes our Environmental Management Policy, that sets the reference framework, the structures, principles and guidelines to plan, organize, perform, track, control and improve our Environmental Management Integral System. Thus, we favour the achievement of sustainable development goals thanks to the strategic planning made on an annual basis with the active involvement of the areas that form part of the Management System.
Within the above, we also have:
Environmental Legal Matrix: It meets the requirements of the National Government and by MADS, the Regional Environmental Authorities and the commitments of our clients and suppliers.
Environmental Impacts Matrix: It identifies our environmental aspects and impacts and allows us to give priority with regard to the action plans to be started.
During year 2019 a external audit of the Environmental Management System was conducted in order to close the gaps found through 2020.
Mission Hubs of the Environmental Management System
As a guideline of our actions, at Bancolombia Group we have the following mission hubs:
In order to promote the sustainability of our clients, at Bancolombia Group we design ongoing strategies to provide business opportunities that have a positive social and environmental impact, with financing, investment and implementation facilities.
Our allies of the Supply Chain play a fundamental role in the sustainability efforts we make at the Group, because through them we extend our operations oriented to generate economic, social and environmental value.
With the same orientation, we work together in all areas of our organization in the stages of contracting and procurement.
Sustainable Procurement Policy
To promote the sustainability in the country, at Bancolombia Group we implemented our policy of sustainable purchases that includes specific environmental, social, economic and ethical criteria for the selection of products and services.
Since 2018, all our potential suppliers that submit business proposals to our different bidding processes must be evaluated through the B Impact Assessment.
During 2021, a total of 186 potential suppliers have been evaluated on the different bidding process for products and services. This includes 68 companies that have participated in our Request For Proposal (RFP) processes. ).
Development of Suppliers in Sustainability
In year 2021:
Our supply chain is the extended arms of an organization. Thus, we are aware of its relevance to reaching our goals. Organizations can create value and make well-being a top priority for all when we count on suppliers and allies committed to sustainability and focus on a higher purpose.
93% of our purchases are from local suppliers.
Therefore, in Grupo Bancolombia, we have defined different initiatives that allow the integration of responsible and sustainable practices:
We have a Sustainable Purchasing Policy as a critical tool for implementing and developing sustainability in the supply chain process. Thus, we are bound to act responsibly in procuring products and contracting services processes that respect the environment and are manufactured or produced under socially fair conditions.
Since 2009, we have incorporated ESG criteria in the annual evaluation of suppliers and partners. In 2021, 118 suppliers classified as critical underwent the sustainability evaluation, where 47% of our purchases are centralized.
Last year, more than 100 companies conducted a sustainability assessment to select suppliers. Sustainability was considered as part of the selection process.
We supported two suppliers in the development of their Strategic Sustainability Models.
Some of the data obtained from the program in 2021:
Assessed companies generate around 359,772 jobs.
46% of its employees identify as women. 32% hold leadership positions in their organizations.
37% of businesses are diversely owned or led by underrepresented groups such as women, the LGBT population, and racial or ethnic minorities.
37% monitor their greenhouse gases. 24 companies set emission reduction targets. 5 of them have achieved carbon neutrality.
26% address stakeholder and human rights complaints.
69% monitor their water consumption. 53 companies have set reduction targets.
65% have a code of ethics, and 66% monitor and report on their anti-corruption program.
In year 2020:
Linking our supply chain is key to achieving consistency and integration with our strategy. Since 2009, we have been working with our vendors and partners to learn about their impacts on environmental issues (water management, emissions, biodiversity, waste management, among others), governance, the actions they take with their employees and the contribution they make as organizations to society.
During the last five years, 326 of our vendors and allies have been evaluated through the Measure what's important (Mide Lo Importante) tool, a measurement platform in partnership with B Lab. This includes companies that have participated in our Request For Proposal (RFP) processes.
In 2020, 123 vendors and allies successfully completed their measurement, companies that manage 70% of total billing spending from our supply chain, of which 32% obtained a score higher than 80 points, a value defined by B Lab as certified to become a B company, which, although the Bank is not a requirement for the certification process, shows the level of progress in incorporating sustainability into the management carried out by companies. Of our vendors, three are certified as company B.
This tool allows our vendors and allies not only to know their results in terms of sustainability, but also to identify opportunities for improvement based on the information reference that the tool makes available to them. Additionally, it provides us with information to connect them with our Vendor Development Model. In 2021 we will implement actions to strengthen gender equality with this relationship group.
Some of the data obtained from the program in 2020:
The evaluated companies generate about 131,000 jobs, of which about 35% (45,850) are women.
61% of women employed by our vendors (about 28,000) hold leadership positions in their organizations.
25% address stakeholder and human rights claims.
50% keep track of their energy consumption and 31%% monitor their greenhouse gas emissions.
55% keep record of their water consumption.
68% have an ethics code and 62% monitor and report on their anti-corruption program.
During 2020 we carried out together with COMFAMA an exercise that allowed us to compare the principles of self-aware capitalism and B companies, to articulate it with our supply chain.
In year 2019:
In 2017 the average rating was 77.7 points, in 2018 79.3 points and in 2019 an average rating 65.5 points. Due to the decrease in scores, during this last year we have advanced with the creation of action plans as part of continuous improvement with our supply chain, for a total of 108 vendors with proposals for good practices.
Some of the data obtained from the program in 2019
The companies evaluated generate a total of 139,910 jobs, of which around 38% are women.
55% have a code of conduct for their vendors.
68% do not manage or do not know their reduction of greenhouse gases for Scope 1 and 2.
55% have established goals for the environmental impact of their operations and 34% periodically evaluate their compliance.
75% have energy saving strategies in their facilities.
49% monitor and record their water consumption and 24% additionally check compliance with their goals.
In year 2018:
We continued to implement the methodology to measure the sustainability performance of our supply chain, with 82 of our suppliers evaluating their impact through the “Mide lo Importante” program, in partnership with “Sistema B”, B Lab partner in South America.
“Mide lo importante” is now three years old
We have evaluated 177 suppliers.
106 companies have been evaluated three times: 70% have increased their performance score at their third evaluation
In 2016 the average score was 66.3 points; in 2017 was 77.7 points and in 2018 we reached a mean score of 79.3 points.
Operational Ecoefficiency
Bancolombia Group we direct our actions towards environmental impact reduction, cost structure improvement and overall efficiency.
Through our operational ecoefficiency program, which manages the generated direct impact to the environment associated with the consumption of natural resources needed for our operation, we seek to reduce it with the constant implementation of strategies to reduce our water, energy, paper, and business travel consumption and to valorize our waste.
Within our Ecoefficiency strategy we support the management of following actions to reduce the environmental impact of our operations:
Creation of campaigns and projects that generate environmental awareness within the organization: collaborators, suppliers and visitors.
Development of projects and strategies to reduce the consumption of water and power in all our operation sites, together with the Real Estate Management and Fixed Asset Administration Areas.
Creation and support to strategies that reduce the trips by our collaborators in order to decrease our indirect carbon footprint. This is made together with the administrative service areas.
Support to logistic areas to encourage the reduction of paper consumption, printing and other supplies and an adequate disposal of waste generated in our operation sites.
Management of solid waste through separation, recycling and valuation processes with the support of expert companies.
Ecoefficiency Goals
Based upon the consumption generated in 2019 and as part of our Vision 2030, at Bancolombia Group we have established the following consumption reduction goals:
Get to know in further detail our Ecoefficiency performance 2018 y clicking here
Environmental management for computer and peripheral equipment
Carbon Footprint
Managing greenhouse gases is a growing challenge, which requires our commitment and concrete actions to actively contribute to the adaptation, mitigation and offsetting of climate change and move towards a low-carbon economy.
Thus, as from our actions and under the framework of action ratified in our Climate Change Policy, the Grupo Bancolombia has been developing different actions that we describe in this report, of which we highlight our actions in energy efficiency, the purchase of certified energy REC, the self-generation of photovoltaic solar energy, the implementation of the internal carbon tax for travel, among others that allow us to reduce our emissions.
Since 2019 we have signed the Business Ambition for 1.5 ° C Pledge, through which we ratify our commitment to align our decarbonization plans with a 1.5 ° C scenario, incorporating the relevant scopes into our strategy, that is, both direct emissions and the financed issues. For this we have defined a goal of reducing our CO2 emissions Scope 1 + 2 at the corporate level, where we commit to reduce our emissions by 72.8% in 2024 compared to our emissions in 2019. This goal was designed according to current science to respond to this 1.5°C scenario (SBTi - Science Base Target Initiative).
Due to the purchase of certified renewable energy, we calculate our location-based and market-based footprint:
Scope 1+2+3 GHG Emissions
Market based
(TonCO2eq)
Total emissions Grupo Bancolombia
(Tonco2eq)
Our Circular Economy
In the Bancolombia Group, from our direct operation we contribute to move towards a circular economy through the correct use and treatment of waste, strategies to reduce the consumption of inputs, among other eco-efficiency goals.
During 2021 we properly manage 1,575 tons of waste, of these 56% corresponds to waste susceptible to use and we continue to properly manage waste that requires final disposal in landfill or treatment given its hazardous characteristics.
RESIDUOS
2018
2019
2020
2021
Total waste recycled/ reused
1,004.8
1,184.3
2,428.1
888.1
Total waste disposed
1,055.2
1,102.9
588.5
687.1
Waste in landfill
1,048.1
1,090.3
581.5
682.7
Waste incinerated with energy recovery
4.9
12.4
7.0
0.1
Waste incinerated without energy recovery
2.3
0.1
0.1
3.1
Waste otherwise disposed (Safety Cell)
0.0
0.0
0.0
1.1
Waste with unknown disposal method
0
0
0
0
TOTAL WASTE
2,060
2,287
3,017
1,575
% Recycling
49%
52%
80%
56%
Climate Change Strategy
Climate change is considered as one of the largest challenges of the world, having consequences that go beyond the environmental effects. This has raised the global awareness, because in a relatively short period of time, the dynamic has drastically changed: Understanding of the issue by the media and communities has been growing fast and the actions of government and private sector clearly demonstrate that these matters have entered into the global political and economic spheres.
Bancolombia recognizes climate-related risks and opportunities, pose strategic and financial implications for our business and those of our clients and stakeholders. Hence, we ratify our commitment to implement mitigation and adaptation actions in order to face the adverse effects of climate change throughout actions that are articulated in our Climate Change Management Strategy.
Within the climate change strategy, we have identified, managed and financially quantified the climate-related risks. The analysis includes the physical and transition risks both for our direct operation (business continuity) and for the credit operations we carry out. As a methodological basis we have used the guidelines given by the CDP - Carbon Disclosure Project.
Since 2014 we have been reporting, trough CDP, our climate change management strategy. During 2021 we were rating as Performance band B. This result shows our performance in Disclosure, Awareness, Management and Leadership. During this year we continue making progress in strengthening our climate strategy, quantifying the financed emissions and developing strategies to continue our path towards net zero. Our 2021 CDP report reflects the progress in terms of climate scenario analysis and quantification of financed emissions. (Click here for further information).
This result shows that there are still many opportunities to improve and continue implementing the best practices that allow us to have a consolidated climate change strategy and aligned with the requirements of the Paris agreement. During 2019 we conducted our first quantitative analysis of portfolio exposure to climate scenarios, and we continued working on a strategy of transition towards a low carbon economy. In 2020 we started working whit PCAF to quantify our financed emission. We found that 79% of our financed emissions are concentrated in 7% of our lending portfolio. This information allowed us to set the strategy to prioritize clients, sectors, and engagement some clients. We also started working in defining our internal coal-phase out policy, which entered into force since February 2020 setting a coal-phase out: Bancolombia is committed to reduce to zero by 2030 its exposure to thermal and the coal mining sector. At the same time, in order to increase our exposure in renewable energy, Bancolombia set a business ambition of 8.5Bn COP by 2030 in renewable energy projects.
In 2019 Bancolombia updated and ratified its internal climate change policy. Our main objective in this topic is:
Identify and manage the climate-related risks and opportunities that will allow us to develop the necessary actions to align the business strategy with the goals set out in the Paris agreement.
This policy covers up all our operation in the countries where we are present, focusing on the more climate-vulnerable economic sectors; as well as those that their activity generates a major impact in terms of GHG emissions; and on those that might derive bigger opportunities through the implementation of mitigation and adaptation measures.
Click here to check the complete document of our Internal Policy on Climate Change.
SENSITIVE INDUSTRIES TO CLIMATE CHANGE POLICY
Our corporate purpose is to promote sustainable economic development to achieve wellbeing for all. For this reason, with the interest to build and contribute to more sustainable cities and communities, we have defined a strategy to contribute for the development of a low carbon economy in Colombia. To achieve this, we have an ambition to finance more than 40 trillion pesos by 2030 towards the support we will provide to agriculture, livestock, mobility, building, renewable energies, and the most sensitive industries, to help them to achieve their climate change targets.
This policy defines two scenarios:
Transition Scenario: Under this scenario, we seek to advise our cement, energy, oil and gas, steel, transportation and livestock business clients in their transition to a low carbon economy. Specifically, for these industries we propose an engagement strategy aimed at the transformation of their business models, so that we can take part along with them to identify and finance opportunities that contribute to the sustainable transformation of each of these sectors. It is important to consider that in this scenario we are not declaring a lower risk exposure, but a reduction in the financing of specific polluting activities in said industries.
Coal phase-out scenario: Under this scenario we are committed to have zero credit portfolio exposure in coal mining and coal power generation industries by 2030. Except for those operations whose terms were agreed to prior to the enforcement of this policy. Long-term loans will be allowed to finance projects seeking to reduce GHG emissions or environmental impact, with a maximum disbursement date of December 2025 and a maximum maturity date of December 2027. Short-term financing for working capital is also allowed until December 2025.
We are reporting our climate change management and performance for the first time this year in accordance with the recommendations of the TCFD (Task Force on Climate-Related Final Disclosure).
Disclosure is based on four fundamental pillars: Governance, Strategy, Risk Management and Metrics and Objectives. This report also includes the first results of the quantification of our financed emissions using PCAF methodology. (Click here for further information).
FINANCED EMISSIONS AND CLIMATE TARGETS
We understand that as a financial industry our biggest impact on climate change is in our financed emissions. In this sense, complying with our commitments in Science Based Targets Initiative and Net Zero Banking Alliance, our climate targets can be found here.
NON-CONVENTIONAL OIL & GAS FINANCING
In Grupo Bancolombia we currently only finance conventional Oil & Gas practices. We are constantly monitoring the trends in this industry, the strategy of the governments where we operate, the environmental impacts of new Oil and Gas methods, among other aspects.
ADHERENCES AND PROTOCOLS
At Bancolombia Group we have voluntarily adhered to various frameworks that allow us to be aware of and apply best practices in climate change issues, as well as to account for our management.
UN Special Envoy Michael R. Bloomberg has joined forces with BBVA and Bancolombia to launch CFLI Colombia, the first CFLI country pilot in Latin America. These pilots are a private-sector led, country-specific approach to mobilizing climate finance at scale.
CFLI Colombia was launched on April 2022 and is designed to identify and accelerate both financial and policy solutions to move capital into sectors and activities that are critical to achieving a low-carbon and climate resilient economy as well as to helping to reach the NDC ambitions.
In 2021 Bancolombia has joined GFANZ. Its alliance provides a forum for leading financial institutions to accelerate the transition to a net-zero global economy. Members currently include banks, asset managers, asset owners, insurance companies, etc., from across the global financial sector, representing more than $130 trillion in assets under management and advice.
Among more than 450 member institutions, Bancolombia is part of the Principals Group made up of 19 CEOs worldwide.
In 2021 Bancolombia has joined the Net-Zero Asset Managers Initiative, an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner.
We adhered to NZAM compromising to align our investment portfolios with climate neutral scenarios before 2050, being the first Latin American institution in the Alliance.
In 2020 Bancolombia has joined the Net-Zero Banking Alliance (NZBA). This industry-led Alliance, hosted by the United Nations Environment Programme Finance Initiative (UNEP FI) and co-launched by the Financial Services Taskforce (FSTF), is the newest net zero alliance. NZBA brings together an initial cohort of 43 of the world’s leading banks with a focus on delivering the banking sector’s ambition to align its climate commitments with the Paris Agreement goals with collaboration, rigour, and transparency.
PCAF - Partnership for Carbon Accounting Financials (PCAF), is a global framework for financial institutions to measure and disclose greenhouse gas emissions from their loan portfolios and investment products and which aims to create a global carbon accounting standard for financial institutions. Bancolombia signed its accession to PCAF in June 2020.
Analysis of Environmental and Social Risks in Financing
Upon the Analysis of Environmental and Social Risks in financing, at Bancolombia Group:
We prevent and mitigate the indirect environmental and social risks that can be materialized in the projects and activities financed by us to our clients and investors.
We identify business opportunities with positive environmental impact.
We focus on evaluating environmental, social, health and work security aspects in accordance to the regulatory guidelines and international standards that allow us to comply with our commitment of adhesion to the “Principles of Ecuador” International Protocol.
For the Analysis of Social and Environmental risks we have identified special sectors in which the projects are evaluated even when such exceed the amount proposed by the Principles of Ecuador:
Mining (Other mining activities and coal extraction)
Oil and gas (Refinery; Oil and gas exploration and extraction; oil and gas stations and grease)
Power (hydroelectric dams, PCH, thermoelectric stations, transmission lines).
Port and road infrastructure.
Cement, steel, concrete and brick sector.
Tanneries.
Chemicals and agrochemicals
Palm oil
We consider other different economic activities and production sectors that also have environmental and social risks that may affect the payment of financial obligations. Additionally, these activities are subject to authorizations, licenses approvals and environmental permits from local and national authorities. These sectors are:
Transportation and storage of hazardous substances
Animal slaughter plants
Animal Food Plants
Sugar cane plantations
Wild animals farms
Sanitation
Food sector
Poultry and pig farming
Textile plants
Forestry activities
Fishing and tuna
Glass plants
For this sectors may apply the environmental and social risk assessment process at the direct request of commercial leaders, approval bodies and credit risk leaders.
Also, we apply general clauses and specific environmental and social commitments (Covenants) keeping in mind the recommendations submitted by the Equator Principles for the contractual figures focused toward the bank businesses and other business lines.
