The path to becoming carbon neutral – Marketeer

In the last decade of working to achieve SDG agenda commitments, sustainability strategy is gaining an imperative nature on the agenda of organizations, as CGD assumes its role as a sustainable funder in supporting clients seeking equitable, inclusive and sustainable achievement. Gradual transition to more sustainable, low-carbon business models.

Since 1876, CGD’s goal has been to contribute to a better society, providing banking products and services aimed at improving the well-being of families and developing the business sector.

In recent years, sustainability has gained particular importance in the Portuguese business fabric, presenting itself as a factor in transforming companies’ business models.

As an engine of economic growth and aware of its role as an agent of change, CGD pursues sustainability challenges, constantly strengthening the integration of ESG (environmental, social and governance) criteria in its decision-making process and in its processes, measures and developed initiatives.

Strategic approach

CGD’s Strategic Plan for the years 2021-2024 was developed under the slogan “Building the Future” and is based on six pillars of transformation, highlighting “Sustainability and Social Impact”, an action path through which CGD sets the ambition to drive initiatives with impact in key areas of society, specifically Through sustainable investment and the adoption of ethical and effective government models that promote the inclusion, well-being and development of all stakeholders.

The pursuit of this axis is embodied through the Sustainability Strategy 2021-2024, in which we define the five strategic axes that are compatible with the needs and expectations of the bank and its stakeholders.

Sustainable investment

The publication of the Action Plan for Financing Sustainable Growth by the European Commission reinforced a doctrine long recognized by the Commission on Sustainable Development: that the financial sector now plays a key role in the transition to a carbon-neutral economy through its financing activities.

At CGD, we actively invest in sectors that contribute to sustainable development, through specific campaigns and in marketing our environmental and social financing lines to our clients and our own companies. The guiding principles set out in the Sustainable Finance and Energy Transition Policy, coupled with the specialized training of our staff on ESG topics, allow us to provide personalized support in providing tangible solutions that provide the necessary resources for our clients’ transition.

Also in the investment dimension, CGD, through its asset management company, has expanded the scope of ESG certification to include all asset classes under management, highlighting the total amount of €5.9 billion in equity investment funds and pension funds open under Management, which enhances social and/or environmental characteristics.

Today CGD is a reference brand in sustainable finance, influencing the market in adopting innovative and sustainable practices. Since 2021, three sustainable debt issuances have been implemented for a total value of €1.3 billion. By allocating eligible assets in light of the Sustainable Finance Framework1, the Bank2 estimates the associated impact, i.e. avoided CO2 emissions and other indicators (supporting 5,746 companies in economically disadvantaged areas; financing 470 electric cars; financing 6,742 energy-efficient homes, among others).

Managing climate and environmental risks

Caixa currently identifies, assesses and manages risks of an environmental, social and climate nature, with the aim of mitigating exposure to these risks through its credit portfolio. The Sectoral Exclusion and Limitations Principles also specify activities that are excluded or restricted under certain terms of the credit policy, namely companies and projects that use rare natural resources, the exploration or extraction of which may create a negative environmental impact.

In the process of calculating the annual carbon footprint of Scope 1 (direct emissions from fuel consumption), Scope 2 (indirect emissions from electricity production) and Scope 3 (value chain emissions), CGD concluded that the emissions generated by its financing account for approximately 99.7 percent of total emissions.

In this way, and in line with the commitment made to carbon neutrality, Caixa has defined its Transition Plan to Carbon Neutrality, which presents intermediate pathways to reduce CO2 emissions compatible with the goal of limiting the maximum temperature increase to 1.5°C by 2100. , compared to pre-industrial levels. This path will depend directly on the alignment and performance of our clients, which is why it is necessary to develop tailored sector approaches to promote the parallel transformation of both parties, in particular through tools such as the Environmental, Social and Governance (ESG) rating model.

This innovative model, which allows companies’ performance in the field of environmental, social and corporate governance to be evaluated through 15 indicators, aims to complement financial rating information, which constitutes an important tool for more robust risk management and a competitiveness factor, taking into account that reducing prices for companies with the best performance ( “Good” and “Strong” ratings. By making an ESG rating available to your clients, we provide a tool to see where they are and where they are headed.

The value of people and society

At CGD, social responsibility is an integral part of our identity, playing an active role in developing a culture underpinned by the principles of diversity, equality and inclusion, which ensures not only the creation of value and well-being for its employees, but also an effective response to the main challenges faced by society, such as unequal opportunities and social exclusion. Digital and financial.

The Caixa Social Program promotes best practices in responding to the challenges of Portuguese society, addressing issues such as poverty, social inclusion, job creation, financial and digital literacy and education. In terms of education, the Caixa Mais Mundo Awards, over five editions, have made it possible to support 930 students with a total investment of 1,020 million euros, creating opportunities for more students, especially the most financially vulnerable social groups, to continue their studies in higher education. As a public capital bank, investing in the community and supporting the social sector is deeply rooted in CGD’s social responsibility strategy. Since 2019, the Caixa Social Awards have made it possible to reward 136 national initiatives undertaken by third sector entities, through a donation of €2.7 million.

Therefore, CGD is not just a bank, but a partner dedicated to each client’s journey in transitioning to a more sustainable economy, in Portugal and in the different geographies in which it operates.

With personal support, trust and financial security, we are ready to help and lead change towards a greener, more inclusive future.

1 For more information, see https://www.cgd.pt/English/Investor-Relations/Debt-Issuances/Prospectus/Documents/CGD-SustainableFinanceFramework.pdf

2 For more information, see the CGD Allocation and Impact report.

3 For more information see https://www.cgd.pt/Sustentabilidade/Desempenho/Documents/DOC_NET-ZERO-2050.pdf

This article is part of the special section “Sustainability and Social Responsibility,” published in the December issue (No. 329) of Marketeer.

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