Given the new risks and opportunities for our business and clients, we understand the relevance of this issue today. Hence, our Climate Change Management Strategy includes guidelines provided by the CDP (Carbon Disclosure Project), through which we have identified and managed physical and transitional risks for our direct and loan operations.
We continued to measure our progress against our financed issuances and developed strategies toward reaching net zero. The year’s management report shows progress in terms of climate scenario analysis. For CDP, we obtained the B performance rating.
We used PCAF methodologies to quantify the CO2 emissions financed by Bancolombia (79% of these greenhouse gas emissions are concentrated in 7% of our loan portfolio). Additionally, we defined our policy of zero exposure to carbon by 2030. For CDP, we obtained an A- performance rating.
Using the PACTA methodology, we conducted our first quantitative portfolio exposure to emission-intensive analysis in sectors under different long-term climate scenarios. We worked on a transition strategy towards a low-carbon economy for these sectors. For CDP, we obtained the B performance rating.
This is how we execute our strategy
In 2019, we updated our internal climate change policy. Our main objective: To identify and manage the risks and opportunities related to climate change to develop the necessary actions to align the business strategy with the goals established in the Paris agreement.
This policy covers our entire operation in the countries where we do business. This policy focuses on the economic sectors that are most vulnerable to climate change. Likewise, it focuses on sectors that generate a greater impact through greenhouse gas emissions in their activities development and on others that can derive greater opportunities through implementing mitigation and adaptation measures related to this phenomenon. See Climate Change Policy.
Our climate change management and performance consider 4 fundamental pillars per the TCFD (Task Force on Climate-related Financial Disclosures):
Metrics and Goals
Results of quantifying our financed emissions using the PCAF methodology (Partnership for Carbon Accounting Financials). See the results of our financed issues.
We have voluntarily adhered to various frameworks to stay current, apply best practices, and report on our management.
2020 – Net-Zero Banking Alliance
We joined the United Nations Environment Programme Finance Initiative (UNEP FI) as one of 43 banks worldwide committed to the Paris Agreement.
2020 – PCAF
We adhered to this global framework for financial institutions to measure and disclose greenhouse gas emissions from investment product portfolios.
2019 – TCFD
We adhered to the TCFD as part of a voluntary initiative that includes recommendations on making climate risk disclosure more effective.
2019 – Climate Action 100+
We invest to ensure that companies generating the highest GHG emissions act on climate change. We are 450 investors with more than 40tn USD of assets.
2019 - Business ambition 1.5°C
We signed the document in which we commit for 24 months to align our decarbonization plans with a 1.5°C scenario.
2015 - Science Based Targets
The World Resources Institute and WWF–in partnership with the United Nations Global Compact–support companies to set more planet-conscious goals.
We understand the importance of protecting and conserving our country’s ecosystems. Therefore, BanCO2 is an initiative that transforms the lives of families committed to protecting ecosystems.
One of Colombia’s leading payments for environmental services (PES) schemes. This scheme benefits the environment, increases resilience and sustainability, and strengthens peace in the territories, improving the quality of life of those who live there. Additionally, it contributes to reducing social and armed conflict in the different territories and communities.
How is BanCO2 and Bancolombia linked? –Bancarización
Associated rural families have access to mechanisms suitable for payment through Bancolombia with the “Ahorro a la Mano” program, consisting of a savings account managed through any cell phone, with no handling fee to save up to COP 5,000,000. In addition, it offers various benefits, including life and hospitalization insurance. Payment through this product eliminates intermediation and financial costs.
Fiducia Bancolombia & BanCO2
Since its creation, BanCO2 has been considered a scheme with specific resources. Its sources come from mandatory and voluntary compensations from the public and private sectors. In the beginning, Masbosques, as BanCO2 operator, managed the resources through bank accounts. However, since the alliance between Bancolombia & BanCO2, a fiduciary scheme built through an Autonomous Patrimony was implemented, thus, collecting and executing the scheme’s resources. This new mechanism provides financial security and confidence for voluntary or mandatory resource contributors.