Economic
sustainability

We are committed to the future and believe that our funding of meaningful projects will help to protect the environment and promote sustainable business. We appreciate our clients' efforts to mitigate environmental impact and support projects that help nature and society.

We have set up the KB Advisory special consulting team at Komerční banka to provide advisory services in the areas of subsidies, energy, renewable resources, circular economy and waste management.

In 2021, we signed agreements on ESG investment loans totalling CZK 21.9 billion. This financing of asset is largely inspired by EU taxonomy. More than three quarters (78%) of these ESG positive loan agreements are beneficial in environmental terms and almost one quarter (22%) of them are beneficial in social terms.

The clients’ projects most often focus on the construction of energy efficient buildings and measures for energy savings in buildings, such as thermal insulation of buildings, heating system replacement, including the installation of heat pumps, and similar measures (49%), wastewater draining systems and treatment plants (10%), and renewable energy sources (8%).

In the social area, most of the projects concerned infrastructure for academic and vocational training (87%, construction, refurbishment, and equipment of schools), infrastructure for the public health system (7%, construction or refurbishment of hospitals and healthcare facilities) and infrastructure for welfare services (5%, homes for seniors, social housing).

Climate change together with associated evidence, like drought, flooding or change in weather pattern, can have an influence on the yields and costs from the investment. Investments and their value may be affected to a great degree. This is also a reason why we consider climate change as a challenge, which we have to be prepared for. It is important to always seek for Innovation that can help us with the fight against climate change. In connection with climate change, we often hear about mitigation and adaptation.

Mitigation is a process where we strive to reduce the cause. In terms of our business, we have several mitigation strategies already in place. We are reducing our own carbon footprint, water and energy use and we scrutinize our processes in order to make them more efficient.

• You can find more about these activities here

Also, through our financing we support the projects that reduce the negative impacts of climate change. For instance, through the investments in technologies that use resources more responsibly, investments that aim to reduce harmful emissions into the air, water or soil or we finance retrofitting municipal CHP plants. 

• You can find more about these activities here

Adaptation is another approach where we aim to adapt to the impact of climate change. Thus, we are talking about changes that we make in order to reduce our vulnerability to the impact of climate change. We finance projects that develop greenery in the cities, improve biodiversity or support agriculture by which they contribute to the adaptation to ongoing change.
 

As its parent company, Société Générale, Komerční banka is aware of the need to look for responsible ways of financing.

When managing clients’ funds, we therefore do not take into account their prosperity only, but also respect for environmental and social principles. Thus, we are knowingly helping to minimize the negative impacts on the environment and society.

Equator Principles: In the financing of large infrastructural and industrial projects the entire SG Group follows  Equator Principles, a set of voluntary guidelines of financial sector for assessing the environmental and social risks of major projects based on the World Bank’s international standards.

Global Partnerships: The SG Group is one of the founders of UNEP-FI - United Nations Environmental Programme Financial Initiative, a programme of global partnerships between the UNEP and the financial sector.

Implementing the Sustainable Development Goals: In 2019, the SG Group was a founding signatory of the Principles for Responsible Banking, committing to strategically align its business with the Sustainable Development Goals set by the United Nations and the Paris Agreement on Climate Change.

Memorandum for Sustainable Finance

In 2021, we signed the CBA Memorandum for SustainableFinance in which we and other banks reaffirmed our commitment to creating a business environment conducive to sustainable and socially responsible development of the Czech Republic.

Commission on Sustainable Finance

In 2021, the member banks of the CBA established the Commission for Sustainable Finance, whose chairman was elected Hana Kovářová, director for brand strategy and communication at KB. This commission will long-term address the question of how banks can make a concrete contribution to creating conditions for the sustainable development of the Czech Republic.

In 2019, the SG Group adopted its Climate Strategy as part of contributing to the fight against the climate change. In the strategy, the SG Group commits to refrain from providing new financial products and services to companies that have majority of their revenue linked to the coal sector (coal extraction and transport, coal trading, and coal use for electricity and heat generation). 

In line with its goal of contributing to the fight against climate change, Komerční banka decided to reduce its exposure to the coal and thermal coal sectors. Moreover, we proactively support clients’ projects for the transition to greener and renewable energy sources. We are committed to progressively reduce to zero our exposure to the thermal coal sector by 2030. From 2022, Komerční banka will stop providing new active financial products and services to any corporate client connected, if only partly, with the coal or thermal power sector that has not communicated a clear plan to discontinue all coal-related activities by 2030 at the latest.

The SDGs, or Sustainable Development Goals were adopted in 2015 by all UN member states and serve as guidance to ensure prosperity and peace for all, build partnerships, provide a dignified life without poverty and inequality, or protect the environment. 

We selected those goals that we believe are most important to us and our stakeholders and that can have a truly positive impact on the society in which we do business.

If you want to find out more about SDGs and their implementation into our business, read the Sustainability Report. 

The objectives and requirements arising from the voluntary commitments are included in the Environmental and Social General Principles which are applicable across the SG Group. The general principles are complete with sectoral policies setting out the Group’s detailed environmental and social rules and standards for funding business activities and projects in these sectors:

• Thermal coal sector policy (PDF, 209 kB)
• Thermal power policy (PDF, 253 kB)
• Defence & security policy (PDF, 788 kB)
• Civil nuclear power policy (PDF, 98 kB)
• Dams & Hydropower sector policy (PDF, 273 kB)
• Industrial agriculture and forestry sector policy (PDF, 390 kB)
• Oil & Gas sector policy (PDF, 238 kB)
• Mining policy (PDF, 247 kB)
• Shipping sector policy (PDF, 304 kB)

The bank refrains from financing the activities that are not in line with its social or ethical standards (e.g., coal extraction and burning, manufacturing of certain types of weapons or export of arms and military equipment to controversial countries or war zones, or to countries with an increased risk of illegal arms trade) or the companies that fail to comply with environmental regulations.

A system for E&S risk management in corporate sector financing

At the beginning of 2020, Komerční banka put in place a system for screening and managing environmental, climate change and social risks of corporate clients, primarily companies operating in sensitive sectors. KB’s environmental expert conducts the assessments of the clients identified as high-risk clients. The objective of the system is to ensure that the clients’ businesses satisfy the requirements of environmental, labour and social regulations and that there is no increased reputational and related credit risk associated with the client/transaction.

In compliance with Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (SFDR), Komerční banka discloses specific information on the integration of sustainability risks and on the consideration of adverse sustainability impacts.

Through the publication of the following statements, we do not only enhance the transparency of our policy but also provide information on the manner in which we consider impacts on sustainability factors.

Statement on Human Rights: Société Générale Group (SG Group), including KB, is committed to respect for and promotion of human rights. Since these are one of the foundations of its Environmental and Social (“E&S”) Risk Management System and also constitute a sustainability factor, KB has issued a statement on human rights. KB supports respect for human rights and also addresses specific issues concerning the financial sector.

Statement on protection of biodiversity: Aware of the increasing pace of biodiversity loss worldwide, KB is committed to respect for and preservation of biodiversity and has issued a statement on protection of biodiversity. SG Group strives to comply with the legal and regulatory provisions of the territories in which it operates regarding the protection of species, habitats and ecosystems, and expects similar compliance from its suppliers and clients. 

Statement on climate change: Since climate issues are a key area of focus of SG Group’s governance and strategy, both in terms of its management and governance focus and its strategy. Since SG Group is committed to align its activities with the goals of the Paris Climate Agreement, KB has issued a statement on climate change. 

Following documents related to SFDR describe the approach of Komerční banka to the integration of sustainability risks and adverse sustainability impacts:

• SFDR Financial Market Participant - Asset Management 2022
• SFDR Financial Market Participant - Asset Management 2021
• SFDR Financial Advisor - Investment advisory provided to the clients by KB
• SFDR Financial Advisor - Investment advisory provided to Amundi Czech Republic IS
• SFDR Financial Advisor - Investment advisory provided to Komerční pojišťovna products

Note: The documents attached are free translations and reflect to the maximum extent the Société Générale group policy. In case of any inconsistency between these documents and the documents published and updated on the Société Générale website, the original of the text published on the Société Générale website shall prevail.

1. In our business, we follow the principles of ethics and laws and regulations; we approach our trade partners and customers with respect. In case of any violation of these rules, it is possible to report a Whistleblowing alert, i.e. blow the whistle. We guarantee the whistle-blower complete anonymity and confidentiality. For submitting a Whistleblowing, you may use the following e-mail address whistleblowing@kb.cz. We will send our response to the e-mail address from which the alert was received.

2. We will send our reply to an email address, from which we received the initial notification.

3. We follow our internal steering documents that rely on applicable and effective laws and regulations, the relevant acts of the European Union and the United Nations, and the SG group code of conduct (SG Code of Conduct).
   Société Générale Group Code of Conduct (PDF, 912 kB)
   Société Générale Group Tax Code of Conduct (PDF, 207 kB)
4. We take into account other companies’ rules of ethics and internal documents (if in the public domain and unless they are contrary to laws and regulations and the SG Code of Conduct), and we expect the same from our trade partners and customers.
   Société Générale Group Code of Conduct (PDF, 912 kB)
5. We do not support or tolerate fraudulent conduct, corruption, anti-competitive practices, discrimination, and harassment in any form. We fully respect the SG Group’s code governing the fight against corruption and influence peddling.
   Société Générale Anti-Corruption and Influence Peddling Code (PDF, 248 kB)
6. We do not accept or provide any unusual advantages of any kind.
7. We prevent and prohibit potential conflicts of interests between personal activities and the job position.
8. We are doing our best to prevent abuse of our services for any purposes of money laundering, terrorism financing, and trading in arms, ammunition and other products and technologies that are classified as military materiel.
9. Our conduct is apolitical and non-partisan; we do not support any action or initiative with an exclusively or predominantly political goal.
10. In our commercial activities we respect the right to competition and competition law, being convinced that solely fair competition and transparent market can freely develop society as such.
11. We care for the quality of the natural and social environment; under the SG Group’s rules we are scaling down the provision of financial products to areas having a potentially negative impact.