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Eco-bank

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.

All this is part of our materiality.

Components of the Environmental Management System

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 2013 a diagnosis external audit of the Environmental Management System was conducted in order to close the gaps found through 2014.

Mission Hubs of the Environmental Management System

As a guideline of our actions, at Bancolombia Group we have the following mission hubs:

Corporate Ecoefficiency

At the Group we measure the carbon footprint generated from our operation in Colombia, El Salvador and Panama in order to manage its components and reduce the power consumption. Subsequently, , we are carbon neutral in direct emissions from 2012 and in coordination with Foundation Natura –Colombia-, we carried out restoration processes of ecosystems by planting more than 170,180 trees were planted from 2011 to 2014. These trees planted during the convention captured 9,535 tons of CO2 accumulated 2015.

Likewise, with the economic contribution made to BanCO2 project, we compensated 900 additional tons of CO2.

Analysis of Environmental and Social Risks in Business

As an organization goal, we want to mitigate the indirect environmental and social risks that can be materialized in the projects and activities we fund., continued for the fifth consecutive year, performing the identification, assessment and management risks and implicit environmental and social impacts in the projects we fund, following international standards of Ecuador Principles, Performance Standards IFC and the World Bank. Tailored to the needs of Bancolombia, the country and the region, we have updated the processes, policies and procedures to align compliance with Ecuador Principles III.

Total risk assessments.

Sustainable Businesses

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.

Climate Change Strategy

As a climate change strategy, in our organization we assess the direct consequences in our businesses in order to adopt the corrective measures and we consider the spillover effects and their influence in our operation. ; We define our policy and climate change strategy and realize our first report Carbon Disclosure Project CDP. After three years reporting in this standard, in 2015 we were recognized as the first Colombian company in climate management by CDP with 99 points out of 100 on Disclosure and Band Performance B and got the first place at the level Colombia and third in Latin America in transparency to our climate change strategy. The foregoing allows us to develop opportunities to us and our clients.

Sustainable Businesses

Through our sustainable businesses strategy, at Bancolombia we support our clients in the development of their projects, in which we encourage the use of clean technologies, renewable energies, reduction of waste, emissions, discharges, efficient use of power, clean fuels, among others, to generate a minor impact on environment and the community.

What does our strategy comprise?

At Bancolombia Group we have a Sustainable Business Strategy that comprises several aspects.

What projects are deemed as environmental?

Under the guide of several parameters, at Bancolombia Group we have defined several projects deemed by us as environmental.

What is our sustainable portfolio?

Our product portfolio includes financing products like special credit lines, rediscount credit lines with entities like BANCOLDEX , Findeter, Finagro, fixed income products, equity products, among others. (special credit lines),

The sustainable portfolio includes financing schemes intended to support the investments in productivity and efficiency projects, such as: energy efficiency, renewable energy, reduction of carbon emissions, cleaner production, sustainable buildings and reconversion to more efficient technologies, among others.

What did we finance in 2017?

At Bancolombia Group we continue the structuring of our Sustainable Businesses model which includes financial and technical assistance services to develop projects of our clients that generate social and environmental benefits. For such purpose, we conducted 277 visits-together with some allies or with our internal team- to generate a value offer with technical assistance and innovative solutions with a positive impact on the environment. In 2017 we participated in several sector events with the attendance of 682 clients and many more actions.

Successful cases of financed projects

During year 2017 we financed some sustainable projects in Colombia associated to diverse items.

Our partners in Sustainable Businesses

Sustainable Supply Chain

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.

Information about year 2014.

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.

During 2015, a total of 50 evaluations were performed on the different business proposals submitted, these based on sustainability criteria.

Product or Service Assessed Proposals
Customer Knowledge 2
Security Transport Services 5
Assisting Colombians Abroad 5
Client Reconciliations at Advanced Stages 3
Information Security - Software 3
On-site Services and Support 1
Safes and vaults 1
Telesales and filed sales 2
IT Fair 4
Cloud Services 1
Information Security-Infraestructure 2
Architectural and Engineering Design 6
Redesigning Recreational Areas 4
Statutory Auditing Firm 4
Temporary Manpower 4
Ethic's Hot Line 3

Development of Suppliers in Sustainability

In year 2015:

  • We evaluated 103 suppliers (by means of environmental and social risk assessments, self-evaluations and inspections of civil engineering works), corresponding to 48% of the total amount invoiced in 2015.
  • We carried out on-site visits to all those suppliers with higher risk profiles and drew up action plans for any room for improvement that was detected as a result.
  • We also performed sustainability evaluations on Grupo Bancolombia’s strategic supply chain partners. Scores averaged out at 4.67 out of a maximum of 5, showing an improvement  compared to 2014 when the average score came to 4.23. We also saw an improvement in overall performance in 20 of the cases that had been evaluated previously.
  • Out of the 26 sustainability improvement plans drawn up for our suppliers and strategic partners.
Action plan Percentage
Having a procedure in place for updating the company's legal framework, which should include assessing compliance with current legislation. 54%
Upholding a policy or formal statement governing respect for all those human rights that the company could potentially undermine. 54%
Designing and implementing selection, evaluation and control procedures for the company's suppliers and contractors, that should be based on environmental management criteria, occupational health and safety guidelines as well as good corporate governance practices. 46%
Implementing an Environmental Issue and Impact Checklist, which should include environmental evaluations used to prioritize significant environmental issues. 38%
Having a legally-compliant environmental framework firmly in place. This should include assesing compliance with current environmental legislation. It should also cover any other legal requierements or other rules and regulations, as applicable 38%
  • Room for improvement in the following indicators was detected along our entire supply chain:
Service Received On-Site Visits Evaluations Average Score
  2015 2014 2015 2014 2015 2014
Maintenance 0 8 8 37 4,74 4,08
Good and Services 24 41 76 99 4,55 4,11
Civil Engineering Works 17 3 19 31 3,93 4,14
Total 41 52 103 167 4,41 3,99

Operational Ecoefficiency

Bancolombia Group we direct our actions towards environmental impact reduction, cost structure improvement and overall efficiency. This is why we have adequate separation, recycling and valorization of waste.

For 2016 our performance in the environmental dimension was qualifyied by RobecoSAM in 99th percentile, placing us as the second bank among all of those assessed. For 2015 we were recognizaed as the fourth bank in the world in regards to our environmental strategies.

In 2015, Bancolombia was ranked by RobecoSAM as the fourth largest bank in the world with the best environmental strategies.

Actions to reduce the Environmental Impact

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 2010 and as part of our Vision 20/20, at Bancolombia Group we have established the following consumption reduction goals:

Ecoefficiency Performance

Ecoefficiency Performance 2017

Ecoefficiency Performance 2016

Get to know in further detail our Ecoefficiency performance 2016 by clicking here.

Ecoefficiency Perfomance 2015

Get to know in further detail our Ecoefficiency performance 2015 by clicking here.

Ecoefficiency Perfomance 2014

Get to know in further detail our Ecoefficiency performance 2014 by clicking here.

Environmental management for computer and peripheral equipment

Carbon footprint

Within the Climate Change strategy, at the Group we have measured our carbon footprint in Colombia, El Salvador and Panama, which is associated to the direct and indirect power consumption generated by our operation. This is compensated by means of processes of restoration of ecosystems in coordination with Fundación Natura.

Thus:

  • As a result of our reforestation project we have planted a total of 170,180 trees between 2011 and 2014.
  • As a result of this arrangement with the Natura Foundation, these newly planted trees have been able to capture 9,535 tons of CO2.
  • In 2014 for our operation, we calculated the carbon footprint under the GHG Protocol methodology with three scopes that can be consulted by clicking here.
  • In 2015 Within the Climate Change strategy, at the Group we have measured our carbon footprint in Colombia, El Salvador and Panama, which is associated to the direct and indirect power consumption generated by our operation. This is compensated by means of processes of restoration of ecosystems in coordination with Fundación Natura Colombia, where we have been carbon neutral in terms of direct emissions since 2012.

Report of greenhouse gas emissions verification

Bancolombia has requested Deloitte the verification of the Inventory of Greenhouse Gases of the Group Company (Bancolombia, Banistmo, Banco Agricola and Banco Agromercantil) corresponding to the period from January to December of the year 2017. See Verification

Examples of Savings and Income

These are some saving actions that we have developed at Bancolombia Group:

Climate Change Strategy

At Bancolombia Group we know that the Climate Change poses risks and opportunities that might have strategic and financial effects on our businesses and that of our clients’, as well as the sustainable development of the communities where we are present. Thus, we define the Policy and the strategy of Climate Change and we prepared the second report to the Carbon Disclosure Project.

We obtained the following CDP (Carbon Disclosure Project) results:

2016 results (More information)

  • Performance Band A-.
  • We improved our performance which let us be placed worldwide in the leadership band in transparency regarding our climate change strategy.

2015 results (More information)

  • 99/100 in Disclosure and Performance Band B.
  • We continue Leader institution in the region with regard to transparency in our Climate Change strategy.

2014 results (More information)

  • 85/100 in Disclosure and Performance Band B.
  • The only bank and organization in Colombia included in the CDLI (Climate Disclosure Leadership Index for Latin America).
  • Leader institution in the region with regard to transparency in our Climate Change strategy.

Objectives

In connection to the Climate Change strategy, we have defined the following objectives:

  • Ensure the update and follow up of the ecoefficiency strategy that we have defined in order to guarantee continuous improvements on the direct impact generated over the financial activity.
  • Develop policies, measures and actions that limit the growth of greenhouse gas emissions without committing the sustainable development of our Group and our Stakeholders.
  • Identify, encourage and support the financing and implementation of adaptation and mitigation measures to the Climate Change, including climate variability impacts, in particular in those populations, productive activities and ecosystems that are vulnerable.
  • Serve as a guiding instrument for the mitigation and adaptation activities related to Climate Change in the countries where we are present.
  • Foster, through our Universal Banking, the development and use of financial solutions to face the challenges posed by the Climate Change.

Scope

Our Climate Change strategy covers, without exception, all the financial companies that form Bancolombia Group, as well as the development of their activities, business and operations, both, locally and internationally, in the following stages:

Stage 1: Continuity is given to the actions initiated in Colombia since year 2008 that includes the adaptation strategy to Climate Change.

Stage 2: Actions proposed as from year 2014 are implemented in the region (Central America) and in our Supply Chain.

Stage 3: Actions proposed since year 2014 are implemented by getting involved with our clients.

Support and cooperation entities

The main players defined for the cooperation and technical support of our Climate Change strategy are:

  • WWF.
  • Natura Foundation. Colciencias - Departamento Administrativo de Ciencias, Tecnología e Innovación (Science, Technology and Innovation Division)
  • Ministry of Environment and Sustainable Development
  • Bancolombia Foundation
  • ANDI – Asociación Nacional de Industriales (National Association of Industrialists)
  • ACOPI – Asociación Colombiana de Pequeñas y Medianas Industrias (Small and Medium Size Industry Association)
  • DNP – Departamento Nacional de Planeación (National Planning Division)
  • IDEAM- Instituto de Hidrología, Meteorología y Estudios Ambientales de Colombia (Institute of Hydrology, Meterology and Environmental Studies)
  • UNGRD - Unidad Nacional para la Gestión de Riesgos de Desastres (National Unit for Disaster Risk Management)
  • APC - Agencia Presidencial de Cooperación (Presidential Agency for Cooperation).
  • CDP - Carbon Disclosure Project
  • FINDETER- Financiera del Desarrollo Territorial S.A. (Financial Company for Territorial Development)
  • BANCOLDEX – Banco Empresarial y de Comercio Exterior de Colombia (Business and Foreign Trade Bank)
  • FINAGRO – Fondo para el Financiamiento del Sector Agropecuario (Fund for the Agriculture Sector Financing)

Definition of Climate Change Risk

The assessment and appraisal of risks generated by the Climate Change in our organization and the financial implications entailed thereof are identified according to the following items:

Direct risks: Associated to business continuity.

Indirect risks: These are assessed in three specific areas:

Placements: Sectors financed in higher proportion and their related risks are analyzed.

Own and third party managed resources: The investments made by the organization are analyzed, including their sectors/industry.

Collections: The risks that might affect the liquidity due to the damages arisen for our clients due the Climate Change are analyzed.

Other risks analyzed: Physical risks, image or reputation, legal or regulatory and lawsuit risks.

Climate Change Internal Strategy

As part of our Climate Change Internal Strategy, at Bancolombia Group we perform the management and identification of risks for the segments. Thus, we include the significant environmental and social aspects in the specialized documents of the 9 sectors and 96 subsectors defined by the Segment of Corporate Banking Management in order for our commercial force to identify such risks aligned with the local trends and evaluations made by the Ministry of Environment of Colombia and of other countries conducted by IFC.

Our emissions reduction targets

In Bancolombia we have decided to take action to reduce our impact on climate change and help to achieve the goal of avoiding an increase above 2°C in average temperature.

In order to do our part we have adhered to the Science Based Targets initiative, where we have committed to define greenhouse gas emission reduction targets that are in line with currently available climate scenarios in order to avoid an increase in global temperature above two degrees Celsius.

We have taken a first step by defining reduction targets for our direct and indirect (Scope 1 and 2) GHG emissions by 2020, 2030 and 2050 at a corporate level, including our global operations where we have operational control (Colombia, Panama, El Salvador and Guatemala). Said Scope 1 and 2 emissions correspond to approximately 90% of our total Greenhouse Gas Emissions.

Our scope 2 emissions are currently excluded from the definition of our Science Based Target, since a unified methodology is currently being developed so that financial institutions can develop emissions reduction targets associated with their lending and investment activities, which are the most significant for our industry.

Our first challenge, to reduce our Scope 1+2 emissions by 10% below 2010 levels in 2020 was achieved in 2017. For this reason we have assumed our new challenge: to reduce our Scope 1+2 emissions by 24% below 2017 levels in 2030, this will move us closer to our final goal of reducing our 2010 GHG levels by 55% in 2050.

For further information regarding our science based targets click here 

Examples of Savings and Income

During 2015

Energy efficiency projects at branches:

According to such follow-up, In 2015, we replaced the air conditioning equipment at one of the  Bank´s premises, where based on the need for new equipment, we set out to improve OUR energy efficiency at branch office level. Thus the Itagui branch office was overhauled with new energy efficient technology saving a total of 1250 kWh per month for a 17.6% decrease in the amount of electricity used compared to the same period the previous year; this for a total investment of COP 61,190,127. Furthermore, we explored the possibility of installing solar film to lower the thermal load of our branch offices, thus allowing us to reduce our use of air conditioning equipment while at the same time making it more efficient. So far we have installed solar films in branch offices such as Piedecuesta Santander obtaining savings of COP 7,224.836 with a total investment of COP 9,971,425. This has allowed us to improve the energy performance of this particular branch office by up to 19.5% or 1696 kWh per month.


We also focused on the maintenance performed on our air conditioning equipment at branch office level with the aim of obtaining a greater degree of energy efficiency. At our Punto Clave office we saved a total of 10,664 kWh in just 5 months, this equal to COP 5,489,186. Several of our branch offices have been built based on sustainable construction criteria, including our Carvajal branch in Bogotá which has reduced its water and energy consumption by 46% and 56% respectively, compared to other branch offices of the same size and characteristics. Also at the end of 2015 we inaugurated our first branch office with solar panels in the Mall Viva Palmas Shopping Center in Medellin. These premises are able to generate the entire amount of energy required during times of substantial radiation.

During 2014

Energy efficiency projects at branches:

To achieve an effective process of control and management, at the Group we have staff dedicated to follow-up the consumption and expense associated to the eco-efficiency indicators along with the Interdisciplinary Monthly Committee.

According to such follow-up, throughout this year we have changed the fluorescent lighting to LED type lighting in white light panels at Los Molinos Branch, which generated savings for 1100 KWh /month and an investment cost of 4,646,400 COP, which is supplemented with the change of the UPS by a modular one, with savings of 14% of the electric power versus the same period of last year.

Likewise, we carry out reviews of over dimensioning of equipment in branches and identified at Leasing El Poblado branch the need to change from a 30KVA UPS –operating at 30%- for a lower capacity one that was in the Sede Centro 2 building. The expenses for the assembly amounted to 1,648,000 COP, and the return on investment was 4 months and savings in consumption where 17,280 kWh/year.

Analysis of Environmental and Social Risks in Financing

See ARAS Report 2017 Attached.

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 that can be consulted by clicking here.


For further information, click here to see our Policy of Analysis for Social and Environmental Risks.

Target Sectors

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.

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:

  • Chemicals and agrochemicals
  • Transportation and storage of hazardous substances
  • Animal slaughter plants
  • Animal Food Plants
  • Palm oil
  • Sugar cane plantations
  • Wild animals farms

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.

Analysis performed throughout 2015

In 2015, we evaluated 164 investment operations through the environmental and social risk assessment process, distributed among Bancolombia business units. It is shown below, a general balance of environmental and social activities, followed by a unit business balance:

Project Finance evaluated in 2015

Analysis performed throughout 2014

We evaluated 145 investment projects distributed among business units -49 to the bank and 96 to Leasing, from which 32 correspond to amounts above 10 MM USD and from these, 20 finance projects exceed US10 million, as it might be observed:

Total Risk Assessments

Finance-projects evaluated throughout 2014

Number of projects evaluated per year

Inclusive Bank

Find more information about our social dimension.

Commitments and Adhesions

At Bancolombia Group we have a series of Commitements and Adhesions to a set of international principles of sustainability.