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Sustainability Model

At Bancolombia Group we have defined the Sustainability Model that includes our policies of purchases, human rights, climate change, financing, investment, relationships with stakeholders and our social and environmental goals.

Our Model

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We are the most sustainable bank in the world

With a score of 87 out of 100, we were ratified as the most sustainable bank in the world in the Dow Jones Global Sustainability Index, a global indicator that measures the sustainable performance of companies in economic, social and environmental matters. Since 1999, this measurement is a benchmark for foreign investors that include the management of sustainability as one of its criteria for decision making.

On this occasion, more than 3,500 companies from around the world were invited to participate, of which 201 were banks, 133 were evaluated and only 27 entered the index.

In this way, we show our commitment to work for a community with a prosperous economy, a healthy environment and an inclusive society.

Sustainability Policies

As part of our corporate strategy, in Bancolombia we apply several Sustainability Policies:

Policies Indicator DJSI
Sustainable purchasing Supply chain
Human rights Labor practices and HHRR on business
Climate change Climate change strategy
Controversial issues on financing and investment Controversial issues on business
Responsible investmen Sustainable businesses
Stakeholders relationships Stakeholders relationship

Dialogue with our stakeholders

To think about others and being sensitive towards their needs is the basis to transcend our service, thus creating different ways of relating with them through which we generate value and strengthen trust through a permanent conversation and dialogue.


Through face-to-face spaces, mass media and interpersonal relationships, we interact with each group of interest and become aware of their interests and priorities. Further, we share with our different stakeholders the most relevant actions taken as to social and environmental management and how we consolidate a sustainable development as from our daily actions.

If you have any question about this, you can mail us to sostenibilidad@bancolombia.com.co.

Stakeholders Information
Mass media Press Site
Clients and others 2018
All our stakeholders Annual management reports

For Bancolombia Group it is very important to know the expectations that stakeholders have about our management; their priorities and needs to offer them long-term value. In our organization we not only care about getting results, but particularly in how we generate this shared value, how we grow hand in hand with our shareholders, investors, employees, customers and suppliers; of how we are profitable, always understanding our social role. The interactions we do with every stakeholder, are conducted through classroom spaces, media and interpersonal relations, which has enabled us to further strengthen relations based on trust.

We also have a virtual site where our stakeholders can enter by clicking here. On this site we explain what each of our relevant topics consist of and open a permanent dialogue.

In 2017 we developed the dialogue process that we carried out with employees, customers and suppliers, in accordance with the Global Reporting Initiative (GRI) standard. This allowed us to communicate progress on issues relevant to our stakeholders and report on our performance in the economic, environmental and social fields. According to our stakeholders relationship policy, the dialogues take place every two years, for this reason in 2019 a new dialogue will be held.

Dialogue with stakeholders

Enter here to know the results of the dialogue with our stakeholders. You can find:

  • Methodology
  • Scope and objectives
  • Dialogue results
  • General key findings
  • Conclusions

Materiality matrix

As a result of the dialogue with our stakeholders, upon which the sustainability annual report was designed, at Bancolombia Group we created our Materiality Matrix.

Further information in this regard

Materiality

We have established our corporate sustainability targets to support our business strategy and our sustainability management commitments:

In 2017 we conducted a process of dialogue and consultation with our relationship groups, particularly with employees, customers and suppliers, in accordance with the Global Reporting Initiative standard and the new strategic vision of the organization, in which the following material topics were defined: Superior customer experience, Innovation, Humanistic culture and high performance, Profitable growth and sustainability, and Operational and technological excellence; this in order to better understand the issues that are relevant to them and to publicize our performance in the economic, environmental and social fields.

According to the consultations carried out in 2017, the three most important topics for our relationship groups were: Humanistic Culture and High Performance, Operational and technological excellence and Profitable growth and sustainability.

Employees, customers and suppliers, would like to have spaces for knowledge transfer, co-creation and greater involvement in the design of the bank's products and services. They also expressed interest in learning more about the strategies we are developing in each material issue.

In accordance with our stakeholder policy the next consultation will be held in 2019.

Alignment of material issues with ODS

 

Impact Measurenment and Valuation

To valuate externalities, we mapped our materiality and it’s specific topics with the sustainable development goals (SDG) as seen at our web site (see attached IMPACT MEASURENMENT AND VALUATION). Our environmental and social material issues (sustainable businesses, climate change, ecoefficiency, ESRA, human rights and innovative talent management) were assessed positively or negatively and classified within the Megaforces and SDG. To show quantitative data, in order to evaluate positive and negative impacts and, based on these, make strategic decisions and replicate them at a regional level, we analyse one strategic business line and two key projects.

Strategic business: The business line is the “Línea Verde Bancolombia”; to estimate the social and environmental benefits we use the Results Chain method for the metric approach (see attached file). The results are summarized in:

  • 24 benefits generated by the different kind of projects, were identified as follows: 11 environmental, 2 social and 11 economic.
  • The recollection of available indicators was carried out in order to do the evaluation. Input information was found for 13 of the identified benefits.

It is expected that the financed projects generate environmental and social benefits for COP 26.797 Million: for EACH PESO (COP 1) invested in discounting the interest rate, COP 12 would be obtained in environmental and social benefits (relation 1:12).
The PDF of the complete estimation is in Spanish, you would find executive summaries attached in English.

Key projects: On the other hand, the 2 projects analyzed and their results were:

Las Letras van por Colombia is an initiative of the Fundación Bancolombia; the first approximation to an economic valuation and calculation of the social return of this project, result in benefits like:

  • Economic: Higher wages and access to the labor market.
  • Social: facilitate decision-making in the face of social investments and strengthening of the communication strategy based on transparency criteria that contributes to the maximum generation of social value.

Quantitative studies have not been carried out in the country, which is why in this case the transfer of benefits of estimates was applied and done in developed countries (United States and England), adjusting it in cases that are possible with the information available at the national level.
The Total Added Value by Las Letras van por Colombia in 2016 – 2017 is COP $ 23,945 Millions. So, the social return (SROI) of this program is equivalent to 14.2 pesos for each peso invested, which ratifies its social convenience because of its contribution to the creation of social value (relation 1:14).

The SROI of the Teatro Digital (Digital Theater) project, results in benefits like:

  • Economic: Savings in households due to a decrease in expenditure on cultural consumption.
  • Environmental: Emissions reductions for trips to the Theater that are avoided.
  • Social: i) Use of free time ii) Improvement of self-esteem, social cohesion and civic and cultural values iii) Improvement of the physical and mental health of adults iv) Learning and better school performance.

The calculations and estimations were made based on the information provided by Bancolombia for each case, secondary sources consulted, scientific articles or official reports of projects with related topics.
The applied method for the quantification of the economic added value is based on the components of cultural value, the corresponding benefits and co-benefits (see attached file, pag 6). The economic benefit is quantified through the savings (avoided costs) users perceive, which corresponds to a direct effect on their welfare, as it corresponds to an increase in the consumer surplus associated with the possibility of increasing the consumption of cultural goods and services without affecting their income or purchasing power to meet other needs (see attached file, pag 8). Then, the added value by the offer of cultural goods and services is equivalent to: (Added value cultural events = Symbolic Value + Social Value + Economic Value) = COP $ 2,950 Millions. The results show the important contribution that is made to the creation of social value, through the democratization of culture: relation 1:2.4.

See the report in the library.

Finally: Grupo Bancolombia has been advancing since 2017 in the economic valuation and calculation of the social return of some of its social projects, and we hope this year to work to get to have an Impact Measurement Evaluation System immersed in the business, that is permanently evaluated, in a way that allows us to evaluate and actively manage each of the main externalities related to our operation and its impact on society (value), and thus achieve: 1) Make better informed and more responsible decisions, 2) Manage our risks more accurately and proactively and 3) Improve transparency by presenting our stakeholders with more comprehensive and informed information in facts.

More information

Sustainable Finance

At Bancolombia we have a commitment to incorporate the Environmental, Social and Corporate Governance (ESG) variables into our business strategy, this includes our due diligence, engagement, knowledge of our clients and creation of products aimed at financing sustainable solutions. This commitment covers our activities in segments such as Corporate Banking, Personal Banking, SME Banking, Investment Banking, Asset Management, Private Banking and other business units.

For more information about what we consider a Sustainable Business in Bancolombia, see the Sustainable Businesses section in: https://www.grupobancolombia.com/wps/portal/about-us/corporate-information/sustainability/ecobank.

1. Operating Segments

1.1 Personal and Business Banking

This segment provides individual and corporate banking products and services to individuals, companies and national and local governments. The business strategy seeks to meet the financial needs of customers and is originated on advisory, based on personalized attention, a friendly and close attitude and the creation of added value, to ensure quality in the service and promote business growth and the development of the countries where we operate.

To offer specialized services to individuals, small and medium-sized enterprises (SMEs) the sales force to individuals classifies their target customers as: Personal, Private, Entrepreneurs, Foreign Residents and SMEs. On the part of the Corporate and Government sales force, it focuses and specializes in companies with more than COP 20,000 in revenues from nine economic sectors: agriculture, trade, manufacturing and materials, media, financial services, non-financial services, construction, government and natural resources.

This segment is responsible for the management of operations for Bancolombia´s own credit portfolio, liquidity and distribution of treasury products and services to its customers in Colombia.

1.2 Fiduciary Services

This segment provides trust and asset management services to customers. The main products offered include money market accounts, investment and pension funds, private equity funds, trust payments, custody services and corporate trust funds.

1.3 Stockbroker

Provides brokerage, investment advisory and private banking services to individuals and institutions through Valores Bancolombia S.A. Stockbroker. In addition to that, it sells and distributes participatory securities, futures, currencies, fixed income securities, investment funds and structured investment products.

1.4 Asset Management

In order to offer customers a new value proposition and better investment solutions, in 2012 the Asset Management Business Unit was created for the Grupo Bancolombia. In this way, we consolidate the synergy between Valores Bancolombia and Fiduciaria Bancolombia, combining experience and professionalism in the portfolio administration.

At Asset Management, we base our actions on customer focus, specialization and process efficiency; principles that guide us to propose various investment alternatives that respond to the trust placed by more than 1,000,000 customers to manage an amount in excess of COP $ 33.2 Trillion in investments in the capital market.

2. ESG Integration in Corporate and Investment Banking

Our Corporate Banking business units include International Banking, Investment Banking, Business Banking and SME Banking.

2.1 Due Diligence / Customer Knowledge:

2.1.1 Due Diligence Process.

The Grupo Bancolombia has adopted and implemented a Risk Management System for Money Laundering and Terrorism Financing (SARLAFT), which complies with the regulations of the financial sector ("Organic Statute of the Financial System" or "OSFS"), other issued instructions by the Financial Superintendence of Colombia, as well as the FATF1 recommendations and the best international standards.

The policies, controls and procedures of Bancolombia have been designed and implemented under a risk-based approach and are based on due diligence that seeks to prevent the use of our entity by criminal elements. This includes among other things; improved knowledge of our customers and their operations; Customer Segmentation, products, channels and jurisdictions and transaction monitoring, resulting when applicable, in the suspicious transactions notification to the corresponding authorities. The conduct procedures and rules related to the implementation of all control mechanisms and instruments.

SARLAFT are included in the SARLAFT Manual and in the Ethics Code approved by our Board of Directors and mandatory for all Bancolombia employees.

2.1.2 Environmental and Social Risk Analysis in Financing

In addition to promoting sustainability in the businesses it finances, Grupo Bancolombia has adhered to the Equator Principles of the World Bank; It is part of the United Nations Environment Program - UNEP-FI, of the Dow Jones Sustainability Index, has an alliance with World Wildlife Fund - WWF and actively participates in the Green Protocol of the National government; is committed to the principles of environmental and social sustainability and does so by applying the standards defined by the "International Financial Corporation - IFC", or others that are applicable to it.

2.2 ESG Customer Engagement:

More information here.

2.3 Exclusions:

As part of our corporate vision, Grupo Bancolombia does not finance companies or projects related to the production, marketing or use of the products, substances and activities included in our exclusion list:

https://www.grupobancolombia.com/wps/wcm/connect/727d5533-d2ee-4f7d-bd3e-32be0b17c90a/list+of+exclusion.pdf?MOD=AJPERES&CVID=laJFzhz

2.4 ESG Products

2.4.1 Green/ESG Credit Lines

  • Bancolombia Green Credit Line:

In response to the global environmental challenges they face these days, Bancolombia launched in 2014 the "Green Line", a specific credit line to finance different types of initiatives that contributed to the improvement and sustainability of the environment. To promote these projects, the rate of the green line is preferential vs. a commercial portfolio or a financial lease. And the terms are wider.

This line presents expert technical assistance in the identification of the client's projects, as well as advice to review the possibility of applying for tax benefits.

The Bancolombia Green Line classifies projects into 5 categories:

  • Agroverde:

It is a credit line aimed at customers who are part of the productive chain of agriculture: producers, processors, marketers and support services for agricultural production, which require financing for investment projects, which generate positive impacts on the environment.

  • Agro Lines:

Financial solutions that seek to accompany the liquidity needs of our agricultural producers’ customers according to their productive activity, and that have environmental and social benefits. They have terms, grace periods, depreciation plan and adjusted payment plan to each productive activity.

  • Hass Avocado
  • Poultry farming
  • Cocoa
  • Coffee
  • Sugar Cane
  • Cattle raising
  • Tahiti lemon
  • Sustainable builder credit line:

The Sustainable Builder credit is a loan to finance sustainable building projects with preferential rates for our customers in the construction segment. Its purpose is to promote real estate construction with sustainability standards and aware of their environmental responsibility in the country.

The project must have some certification scheme in sustainability. (LEED, EDGE, CASA, BREEM, COREL, or any other that is valid in Colombia).

  • Sustainable builder Leasing line:

Sustainable construction projects by leasing, for customers that do not belong to the construction segment. Projects must have a sustainability certification (LEED, EDGE, CASA or other).

  • special development bank credit lines:

They are commercial credit lines for companies where Bancolombia, through leasing or credit operations, acts as a financial intermediary for some second-tier banks, such as FINAGRO, BANCOLDEX and FINDETER, granting our clients development credits under very favorable financial conditions and that they are focused on sustainability issues. The lines in force during the year 2018 are:

  • Findeter:

Offset rate credit line of sustainable infrastructure

Water and basic sanitation offset rate credit line

Renewable Energies and Environmental Impact Special Line.

  • Bancoldex:

Energy efficiency for hotels and hospitals

Sustainable Development and Energy Efficiency

  • High Impact Entrepreneurship:

The entrepreneur is supported on the following fronts or fundamental pillars:

Finance the entrepreneur: credit card, checking account, and overdraft. It has a differential credit study.

2. Bancolombia Ventures: risk capital fund of Bancolombia, where investments are made in startups that are related to the bank's investment thesis.

3. Connect the entrepreneur.

4. Strengthen the entrepreneur.

What is considered a high impact entrepreneur:

Innovative business model: that the entrepreneur meets the needs of their customers better than other market players, and this is reflected in more sales, more users or more traction.

Scalable business model (preferably technology-based ventures or startups).

Team of founders or entrepreneur: that has an interdisciplinary team with an execution capacity.

Minimum 6 months of recurring sales and maximum 6 years of operation.

2.4.2 ESG Financing figures

  • Green/ESG Credit Lines

2.4.3 Green/ESG Fixed Income Products

  • Green Bonds

Green bonds are debt securities that are issued to generate capital specifically to support projects with environmental and / or social benefits in: renewable energy, energy efficiency, sustainable waste management, sustainable construction, clean transportation, affordable housing, social infrastructure, job creation, affordable basic infrastructure, among others. Therefore, in addition to assess the standard financial features, investors also evaluate the specific environmental and social objective of the projects that it is intended to support.

In the Grupo Bancolombia we have two types of products related to green bonds:

Bancolombia (own issuance): Since 2016, Bancolombia made its first green bonds issuance for an amount of COP 300,000 million, becoming the first Colombian Private Bank to carry out this type of issuances. In 2018 the second issuance was carried out for a value of 350,000MM COP. The Green Bonds have become a debt tool for resources' draw-off with a specific purpose in accordance with the bank's liquidity policies.

Green bond issuance structuring for customers: Bancolombia has developed the required internal capacity to support our clients in their own green bonds’ issuance, offering advice on bonds' structuring and managing in the capital market. During 2018, Bancolombia accompanied the first green bonds issuance from a Colombian private company worth 140,000MM COP for renewable energies.

Eligibility criteria for the use of resources:

Sustainable Construction: A sustainable construction is one that is in sync with the site, makes use of energy, water and materials in an efficient way and provides comfort and health to its users. All this is achieved thanks to a self-aware design process of the climate and the ecology of the surroundings where the building is built. Applies to investments in sustainable buildings that have an environmental certification within the following: (i) Leadership in Energy and Environmental Design (LEED) certificate as defined by the US Green Building Council; (ii) IFC's Excellence in Design for Greater Efficiencies (EDGE) certificate; (iii) "BRE" Environmental Assessment Method (BREEAM) certificate as defined by the Building Research Establishment; and (iv) CASA Colombia (formalized in CONPES 3919 "National Policy of Sustainable Buildings").

Renewable Energies: Construction, operation and maintenance of power generation plants obtained from renewable sources such as solar and wind power up to 20MW.

Energy efficiency: any project that reduces the consumption of energy and/or fuel used per unit of finished product. Electricity and thermal efficiency projects are applicable.

Cleaner production: Cleaner production means any project that optimizes industrial processes by reducing waste, emissions and maximizing the output of products through better use of materials, recycling, avoiding the creation of solid waste, making more efficient water use or reducing waste, generating less pollution through gas emission or noise, or any other industrial process that implements measures that result in material benefits for the environment. Examples: Biofuels, Water recirculation and treatment system (plants), Irrigation system, Waste compactors, Boilers with clean fuels, Solar water heaters, Efficient Sanitary equipment and taps, Assets related to rainwater capture, treatment and reuse of water, Assets related to the efficient use of raw materials, recycling and reuse of waste, Compost systems, Boilers operated with renewable fuel - husk or biomass.

2.4.4 Emission Figures for green/ESG fixed income products

  • Green/ESG Fixed Income Products

2.4.5 Green / Sustainable Infrastructure Financing

  • Credit for sustainable infrastructure

We currently have structured financing through credit and financial leasing operations, for infrastructure projects with positive environmental and social impacts.

The financing of Green Infrastructure includes the financing of solar farms in non-interconnected areas, small hydroelectric plants, and energy efficiency projects in public lighting.

2.4.6 Green / Sustainable Infrastructure Financing figures

Sustainable Infrastructure

3.0 ESG Integration in Personal Banking

Our business units of Personal Banking include, Personal banking and SUFI.

3.1 Due Diligence / Customer Knowledge:

The Grupo Bancolombia has adopted and implemented a Risk Management System for Money Laundering and Terrorism Financing (SARLAFT), which complies with the regulations of the financial sector ("Organic Statute of the Financial System" or "OSFS"), other issued instructions by the Financial Superintendence of Colombia, as well as the FATF1 recommendations and the best international standards.

The policies, controls and procedures of Bancolombia have been designed and implemented under a risk-based approach and are based on due diligence that seeks to prevent the use of our entity by criminal elements. This includes among other things; improved knowledge of our customers and their operations; Customer Segmentation, products, channels and jurisdictions and transaction monitoring, resulting when applicable, in the suspicious transactions notification to the corresponding authorities. The conduct procedures and rules related to the implementation of all control mechanisms and instruments.

SARLAFT are included in the SARLAFT Manual and in the Ethics Code approved by our Board of Directors and mandatory for all Bancolombia employees.

3.2 ESG Customer Engagement:

More information here.

3.3 Exclusions:

As part of our corporate vision, Grupo Bancolombia does not finance companies or projects related to the production, marketing or use of the products, substances and activities included in our exclusion list:

https://www.grupobancolombia.com/wps/wcm/connect/727d5533-d2ee-4f7d-bd3e-32be0b17c90a/list+of+exclusion.pdf?MOD=AJPERES&CVID=laJFzhz

3.4 ESG Products

3.4.1 Green/ESG credit products

  • Affordable Housing Credit Line:

Bancolombia supports in an important way the national government in its housing policies. Today, Bancolombia has around 21% of its housing loans portfolio (credit and leasing) in operations where our clients have benefited from government housing programs. In these programs we provide accompaniment to both the family and the builder, so they can understand the total operation of the programs, proposing improvements that could facilitate the process. Without a doubt, these programs have granted access to different groups of the population to articulated instruments such as the National Guarantee Fund in the case of VIPs.

  • Sustainable Housing Credit:

Sustainable housing credit is a new concept that is seeking to create a new society where housing projects are coherent with the environment; This concept will develop a new behavior of the users, where the nature and the efficient use of the resources will be the guidelines.

Since 2016 we have launched a loan with a special rate to promote the purchase of housing projects that have been built with sustainability criteria and whose financing was made by Bancolombia, the client receives 65 basic discount points during the first 7 years, we seek to provide this benefit to more than 1400 homes. Sustainability criteria can be demonstrated through certifications such as EDGE or LEED, or meet criteria such as: sustainable location, use of materials, water savings and use of renewable energy.

The projects that have the benefit of sustainable housing are prioritized in Bancolombia's web portal, marked with a symbol that represents sustainable constructions, for more information, see:

https://www.grupobancolombia.com/wps/portal/personas/necesidades/casa/proyectos-de-vivienda-nueva-financiados

  • Sustainable Mobility Credit:

We will finance projects associated with the acquisition of cargo or passenger transport vehicles, and/or mass transport systems that are powered by electric power, hybrid systems or dedicated to natural gas GNV. It also applies to the purchase of motorcycles and electric bicycles, which will be used in companies subject to green line financing.

3.4.2 Green/ESG credit figures

  • Green/ESG Credit Lines

4.0 ESG Integration in Asset Management / Wealth Management

In Bancolombia we have an Asset Management and Wealth Management business unit, with teams specialized in generating solutions for investment management.

From Bancolombia, as a signatory of the PRI (Principles for Responsible Investment) since 2014, we have a commitment to integrate the ASG variables in our investment decisions, this commitment includes, among other businesses, Asset Management and Wealth Management.

More information in:

https://assetmanagement.grupobancolombia.com/wps/portal/asset-management/about-us https://valores.grupobancolombia.com/wps/portal/valores-bancolombia/about-us

4.1 Responsible Investment Policy:

From EL GRUPO BANCOLOMBIA we manage important financial resources for the portfolio of our own position, as well as for the portfolios of third parties that are managed through delegated administration contracts, or through Collective Investment Funds. Through our financial activity we can invest directly in companies and other types of investment vehicles that are eligible for portfolios, and we also advise our customers on their investment decisions. The creation of the this policy arises because as an organization we are aware that the Environmental, Social and Corporate Governance (ESG) variables are fundamental for the successful development of business activities, as they guarantee a better generation of value for our stakeholders. More information in:

https://www.grupobancolombia.com/wps/wcm/connect/0087e82f-0e04-44f5-954f-0cf443f4c94b/ResponsibleInvestmentPolicy.pdf?MOD=AJPERES&CVID=l3ZavkT

4.2 ESG Products

4.2.1 ESG Investment products

  • ESG Delegated Portfolio

The strategies that have an ESG specific emphasis, seek that through the incorporation of the sustainability factors to the investment process and the selection of the assets with the best ESG ratings relative to their industries, they will be able to generate long-term competitive returns for our clients, respecting the risk parameters established for each investment objective, trying to exceed the profitability of their reference portfolios.

The offer of ESG delegated portfolios will be made available through global diversified investment strategies, which allow investment in fixed income and variable income assets, both in local currency and in foreign currency, in the income generation investment objectives, capital appreciation and aggressive capital appreciation.

This innovative investment product is offered to our customers from Bancolombia Asset Management and Wealth Management Bancolombia.

4.2.2 ESG Asset Under Management ASG figures:

  • ESG Investment Products for Asset Management

  • ESG Investment Products for Wealth Management

Human rights

”Promote, Respect and Repair”

RESPECT FOR HUMAN RIGHTS PRESENT IN EVERYTHING WE DO AND THEREFORE WE ARE COMMITED TO:

  • The Universal Declaration Of Human Rights Of The United Nations
  • The International Covenant On Civil And Political Rights
  • The International Covenant On Economic, Social And Cultural Rights
  • The United Nations Convention On The Rights Of Child
  • The Declaration Of The International Labor Organization On Fundamental Principles And Rights At Work
  • The International Labour Organization International Tripartite Declaration Concernig Multinational Enterprises And Social Policy
  • The Organization For Cooperation And The Guidelines For Multinational Enterpriseses Economical Development (OCDE)
  • Equator Principles
  • El CEO Wáter Mandate
  • Principles For Responsable Investment
  • Bussines for Peace

For Grupo Bancolombia, respecting human rights is an integral part of responsible and sustainable business behavior, and for this reason it constantly works to align its strategies and policies, and has always been working with our employees, customers, vendors and society, always holding as our fundamental principle that the bond with the people with whom we interact should always preserve the value of human dignity as its central focus. Thus, it follows, we do not in any way endorse any kind of discrimination with regard to color, gender, race, language, religion, economic or social condition, political or philosophical opinion, national or social origin, or of any other nature; as such discrimination might violate one's inalienable right to equal treatment and opportunities in the different activities that people practice in the organization.

Since 2013, we have publicly declared our commitment to "protection, respect and reparation of human rights" in all activities and relationships with third parties associated with them, as well as with all the relationship groups and in all the geographical areas where we operate. We recognize human rights as the fundamental axis of our business actions, aligning responsible and sustainable policies and strategies.

Marco Ruggie and the Guiding Principles on Business and Human Rights endorsed by the UN Human Rights Council wereThe framework of action that we incorporated into the organization was. Additionally, we articulate them with other voluntary commitments that we acquire as Principles of Ecuador, Business for Peace, Mandate for water, Carbon Disclosure Project that address contexts, climate protection, fight against corruption and water resource management and peacebuilding.

To have further deatil, please click de following issues:

Human Rights and Business 

Due diligence process

With the purpose of preventing and mitigating the negative impacts that could result from the violation of human rights, the Grupo Bancolombia has been working on the definition of strategies to cover its own operations, those derived from them, and those of its stakeholders  with impact on the Group. The Human Rights Compliance Assessment (HRCA_quick check) has been completed every year, a tool designed by the Human Rights & Business program of the Danish Institute for Human Rights, whose latest review was conducted in March 2018; this allows, through a self-assessment, to identify possible events and where they might occur.

However, in order to have a Risk Management System in Human Rights based on the same methodologies applied by the company for the other types of risk, it has begun with the design of a new model, whose main inputs are the result of the HRCA and the framework of good practices given by the ISO:26000 "Guide on Social Responsibility"; this model was approved by the Risk Technical Committee, considering the elements that Grupo Bancolombia takes into account for risk management. In this first approach to the implementation of the new model, a Map of Inherent Risks was obtained, which is in permanent update considering that the action plans evolve according to the internal and external environment.

In the measurement methodology, the rating of the risks is given by expert criteria, according to the impact it could generate if the event materializes and the probability of it occurring, on a scale of 1 to 5. As the respective controls become associated, the residual risk assessments will be defined. In 2018, a new risk matrix was obtained, which is called the residual risk matrix and its respective heat map, which shows the risks to be prioritized, their categorization and controls to be implemented.

Evaluation

We have managed to advance the diagnosis to 100% of the operations in Colombia, Panama, El Salvador and Guatemala, thanks to the completion of the HRCA_quick check self-assessment and the first approach to the implementation of the new risk model, according to which the percentage of operational sites where inherent risks were identified higher than tolerable is 53% (8 out of 15).  

Risk issues identified as moderate include conditions in employment and work as days greater than 48 hours per week; acts of harassment, abuse or threat; Occupational health and safety risk management; employment practices within the supply chain; and the financing of projects and investments in companies that do not respect human rights. And the risk identified as high is about occupational safety and health in Vendors and third parties.

The percentage of sites that have controls and action plans executed or in progress, on risks above the tolerable level, is 100%.

When the controls are applied and the risk matrix is generated. two risks are at the moderate level: Risk R9 (for example, there is no proper management of occupational safety and health risks in processes and facilities, for suppliers and third parties, by omission or fraud, That could expose in the bank to the possible answers, fines and answers) and risk R13 (Finance projects or invest in companies that do not comply with legal standards in social issues, human rights, negligence, failure to do due diligence o Because the other 13 risks are at the low level.

With respect to the risk to which we are exposed to investing in companies that violate human rights, we were the first company in Colombia to embrace the PRI and we established a Responsible Investment Policy by means of which we have committed to include the Sustainability Requirements (including Human Rights) in every investment made by the bank, aimed at controlling and mitigating this risk. Additional due diligence should be performed when investing in the more controversial sectors.

For the risk of financing projects that may have a greater incidence in the violation of the human rights of the communities located in their area of influence, of the society in general, the employees of the company that run the project or its chain of supply, we analyze 94 subsectors financed in Grupo Bancolombia to identify which ones have a higher risk to violate the human rights.

We design the controls necessary to reduce such risks. In this way, we keep the policies, procedures and documentation updated: we have reaffirmed our commitment to voluntarily adopt the Equator Principles e that we joined in 2008 and, therefore, we commit ourselves to upholding Environmental Management Policy when financing such projects.

We have, an Exclusion List of assets and activities that will not be financed and the Manifest of Respect for the Human Rights in the contracts with -customers, and a Controversial Issues Policy in financing identifying all those sectors and subsectors posing the highest risk of human right violations, assessing the Environmental and Social Risks of the project to be financed and refuse to provide funding if violations are detected or where proper due diligence has not been performed from the Human Rights standpoint, identifying the most controversial sectors to be financed and defining minimum requirements for funding projects or activities in 5 sectors with the greatest exposure to human rights violations, and upholding a Respect for Human Rights manifesto to be signed by the legal representatives of the companies whose projects are to be financed in sectors flagged by our Environmental and Social Risk Policy as well as that governing Controversial Financing Issues.

Also, we defined the financing conditions in five sectors deemed as critical or controversial: mining, energy, oil & gas, agricultural industry and infrastructure works.

The impact on human rights The results of the financing of projects that have a greater risk of usefulness are analyzed through due diligence, it is about the evaluation of Environmental and Social Risks that, in 2018, was applied on 130 projects, of which 9 is conceptualized with Non-favorability Environmental and social; Of these, we detail those that we find to be vulnerable to human rights:

 

Number of projects Not Funded for violating Human Rights

These are 2 of those cases:

Case 1: In Cauca´s department in the rural sector, the mining activity of gold and metals precious open sky, which was not financed due to not have a social management plan, evidence of proper management of solid waste and lack of an Occupational Health and Safety Management System, where the human rights of workers were affected and exposed to a possible accident or occupational disease.
Case 2: In Antioquia´s department, mining activity is developed underground gold, which was not financed due to not having evidence enough of the appropriate Environmental Management Plan that can generate a significant environmental impact, does not have a Management Plan defined and not even with a Health and Safety Management System in the work, the human rights of workers were affected and exposed to a possible accident or occupational disease.

We do not have public remediation actions because there have been any case:

 

Respectful Supply Chain of Human Rights 

Since 2009 we have been working with our suppliers and strategic partners to continuously improve our mutual performance from the environmental, social and ethical standpoints.

Since 2015 we have been added sustainability clause agreements with our suppliers and service providers, covering respect for human rights, compliance with all environmental, legal, occupational health and safety, corporate social responsibility, climate change and corporate governance rules and regulations. During 2016 and 2017 we continue with the inclusion of clauses on respect for Human rights in all new contracts and renewals with suppliers and contractors, as well as in service orders.

We continue with the implementation of the new methodology to measure the performance in sustainability of our supply chain, through the tool "Measure what's Important" of Sistema B that allows them to measure their economic, social, environmental and corporate governance performance, to identify opportunities for improvement and we can accompany them in the implementation of best practices; in addition to the opportunities they represent for our partners in reducing risks and understanding their positive impacts on society, our organization obtains a very clear mapping of the sustainability performance of our supply chain and the impact we are having on society through this relationship group.

Also, we have a Suppliers Development Model to conduct audits for assessing the social and environmental risks that incorporate Human Rights criteria. Additionally, we have clauses that consider the respect and encouragement of HHRR in the contracts with our suppliers and contractors, who are governed by our Code of Ethics, evaluated by the guidelines of our Sustainable Procurement Policy and our HHRR Policy.

During 2018, 43 visits were made to suppliers in the supply chain, obtaining the average of ratings per visit in 94.68, which means that they are at a good level for Bancolombia, 15 action plans were generated, none correspond to human rights, with validity maximum compliance on December 31, 2019. In the 34 strategic allies, the evaluation of human rights was carried out 100% by the tool measures what is important. We also have a code of ethics that applies to suppliers and an ethics help line for reporting any violation of human rights, unethical or illegal practices or other infringements that are not accepted by us.

Human rights and our employees 

We have implemented an independent Ethics Line intended to make possible for different groups to report any type of breach of the codes of conduct, ethics, and good governance, including potential violation of human rights.

Cases reported are subject to investigation and, according to the findings, an action plan is executed according to the reports received by the employees through the ethics line and the coexistence committee. In 2018, zero (0) cases of effective violation of human rights were reported.

Events of discrimination and corrective measures adopted. 406.1.

Thanks to the work carried out by an interdisciplinary team and our benchmarking efforts in terms of best worldwide practices, we were able to define the concepts relating to Diversity and Inclusion that the Bancolombia Group must uphold, as stipulated in the corresponding Diversity and Inclusion policy based on the following three mainstays:

  • Respect for diversity and inclusion.
  • Reasonable adjustments to ensure inclusion.
  • And encouraging multiculturalism.

At Bancolombia Group we base all our actions on Human Rights and the sound treatment to our employees. Therefore, we have developed the following strategies:

  • Wellbeing programs.
  • Talent Innovative Management.
  • "Bancolombia for Everyone".
  • Implementation of career plans.
  • Collective Agreements.

For further details click here.

Respect for economic rights

At Bancolombia Group our priority is to respect, in all our actions and alliances, the economic rights, as follows:

  • Corporate Governance Model: We have a set of practices of transparency, ethics, corporate governance, internal control and risks that allow us ensuring a Good Corporate Governance Model, that generates trust to all our stakeholders and that guarantees the sustainability of businesses in all the countries where we are present according to our Code of Ethics that since year 2013 considers explicitly the respect for Human Rights as an action guideline.

In the same line, in March, 2014 we became the first company in Colombia to subscribe the Principles of Responsible Investment of the United Nations, by having a Responsible Investment Policy, since as institutional investors we have the duty to focus our action toward the generation of value in the long term to our beneficiaries and be consistent with the economic rights. In such trust function, we estimate that the environmental, social and corporate governance issues might affect the yield of investment portfolios and recognize that the application of said policy helps us to act accordingly to the broadest purposes of the society.

  • Zero Fraud Tolerance: This policy is focused to the immediate action in the event of fraud, unlawful practices and asset laundering, which implies to investigate and report any fraud behavior or related with wrongful action from our collaborators, strategic allies and suppliers. This policy does not have any distinction as to the amount since the simple fact of having a fraud conduct carries the highest seriousness to our organization.

Promotion and Respect for Communities’ Rights 

At Bancolombia Group we understand that our commitment with human rights goes beyond our economic role to be agents of social development, concerned to generate capacities and transformations in the long term, as well as a positive impact in the communities by supporting in an overall manner the life cycle of the people as of their early childhood until they become autonomous and capable to manage their own development.

  • Social inclusion.
  • We make dreams come true.
  • Working for peace.
  • Contributing to culture.

For further details click here.

Respect and promotion of the Right to Enjoy a Healthy Environment 

At Bancolombia Group we are aware of the right of every human being to enjoy a healthy environment. Thus, we work to generate a balance between the quality of the environment and the living standards in order to become more sustainable through time. With such purpose, we have created the Environmental Management System, an Environmental Management Policy and the Corporate Ecoefficiency Program that allow us to identify the direct and indirect impacts of our activity on the environment to promote the prevention, mitigation, correction and compensation thereof.

Likewise, in our organization:

  • We frame our action in the respect for the legal environmental framework.
  • We participate in the Environmental Committee of ANDI (Colombian National Association of Entrepreneurs), which allow us to be updated in regulations and contribute to create new environmental standards.
  • We have an Environmental Committee that gathers every month to discuss legal technical issues, both of Colombia and of other jurisdictions where we are present.
  • We monitor the legal environmental requirements applicable to our activities, our clients and suppliers, through the interdisciplinary team of experts, both internal and external, as to legal environmental matters; such experts, by analyzing said requirements, their implications and commitments undertaken voluntarily, generate action plans and controls necessary to ensure their compliance.
  • We have a Climate Change Policy and a Climate Change Strategy the purpose of which is to assess the direct consequences of such phenomenon in our business to take the corrective measures, consider how the indirect effect might influence our operation and develop opportunities for us and for our clients.

Controversial Issues

Loans to Responsible Companies

In year 2008 we adhered to the Principles of Ecuador and the Global Compact. Since then, we have delved into the financing under social and environmental criteria pursuant to our Environmental Management Policy and the Social and Environmental Risk Assessment Policy.

Since 2013, we implemented a Policy of Controversial Issues in Financing; the policy is intended to define the activities that are not financed by its high environmental and social impact and the financing and investment conditions in economic sectors with a high environmental and social impact. We have a list of exclusion which describes the activities and the assets not financed by us. 

The coverage is 100% of Grupo Bancolombia activities.

During the evaluation process for environmental and social risks during 2017, 223 operations were evaluated in sectors defined as critical for their high environmental and social impact; 189 of that operations were approved because there are favorable or favorable conditioned, thus 34 were rejected. 

List of Exclusion

As part of our entrepreneurial perspective, at Bancolombia Group we do not finance companies or projects related to the production, commercialization or use of the products, substances and activities included in our list of exclusion.

Financing social and environmental sensitive industries

During 2014 we defined and applied a methodology to identify which one of the subsectors financed by us is the most controversial according to its environmental impact, risk of violation of HHRR, exposition to mega forces and damages due to climate change, thus obtaining the following five subsectors:

  • Energy
  • Oil & gas
  • Mining
  • Infrastructure
  • Agricultural industry

Subsequently, at the Group we designed a document with the previous results together with the analysis about the social and environmental risks.  It was shared with the involved areas for their due management. Likewise, to finance such sectors we defined the minimum requirements that should be met in connection to the environmental and social issues, and with regard to the human being.

In 2017

Here in below, two cases related to 2017 controversial issues are shown:

In 2016

Here in below, two cases related to 2016 controversial issues are shown:

In 2015

Here in below, two cases related to 2015 controversial issues are shown:

In 2014

Here in below, two cases related to 2014 controversial issues are shown:

Impact and social innovation

Through our Foundation we aim to eliminate the gap between rural and urban areas, making the countryside an innovative and attractive territory for its people, a driver for our countries’ sustainable development through pertinent quality education, promotion of associativity, productivity and formalization of rural entrepreneurs, and transferring our knowledge in favor of their growth. To achieve this, we focus on 3 main strategic lines: Education, Rural Development, and Cooperation; all supported by our corporate volunteer program and connected with different business units at the Bank that focus on student loans, investment management in Education, financial inclusion and bankization, financial education, and services for rural and urban entrepreneurs. Our Foundation works hand in hand with business units so that the bank becomes a strategic partner of the community, in the long-term.

Business KPIs and Social KPIs.

Priorities.

Emerging Risks

Due to Emerging Risks are topics of public interest and global concern, Grupo Bancolombia has been working on identification and management processes for the risks, as well as the effects that these could lead to the organization and our interest groups: shareholders, costumers, regulators, suppliers and users, seeking thereby for the best administration and management strategies, proving once again that we are a responsible, reliable and sustainable bank.

That is why we offer to the public this page for consultation, hoping that it will be useful for the intended purposes.

Emerging Risks 2018 

Emerging Risks 2017 

Emerging Risks 2016 

For more information

Currently, some organizations and interest groups issue information about the principal Emerging Risks in according to global trends and different bussines activities. Some of these reports can be review in next links:

http://www.agcs.allianz.com/insights/white-papers-and-case-studies/allianz-risk-barometer-2018/
https://www.weforum.org/reports/the-global-risks-report-2018
http://www.ey.com/Publication/vwLUAssets/EY-viewpoints-top-and-emerging-risks/$FILE/EY-viewpoints-top-and-emerging-risks.pdf
http://www.swissre.com/library/expertise-publication/
https://www.protiviti.com/US-en/insights/protiviti-top-risks-survey
 

Target

Here we present measuring progress of strategic goals according to the three material issues selected as the most relevant for our relationship groups.

Ethical Bank

At Bancolombia Group we have an economic dimension  oriented towards become an increasingly sustainable organization.

Ecobank

Our organization contains several aspects that make up the environmental dimension.