Emre Hatem on sustainability | Garanti Bank | Video

World Finance interviews Emre Hatem, Senior Vice President responsible for the Project and Acquisition Finance and the Sustainability Team at Garanti Bank

August 5, 2013

Established in 1946, Garanti Bank is Turkey’s second largest private bank with consolidated assets exceeding $104bn as of March 2013. Discussing their commitment to sustainability is Emre Hatem, Senior Vice President of Project and Acquisition Finance and the Sustainability Team.

World Finance: Garanti Bank’s approach to sustainability is quite unique, what have you outlined as the key areas of focus and how are you managing these areas?

Emre Hatem: Well under our sustainability strategy, we focus on a variety of key points. We can group them at five headlines, which are; customers, human resources, corporate social responsibility, corporate governance, and environment. Just to give some examples regarding customers, we have provided a significant support to women entrepreneurs we have provided $250mn of financing to them, and also regarding the SMEs we are doing periodical meetings with them, which we call Garanti Anatolian meetings, we reached 25,000 up to now. Regarding the environment, we have established a very detailed environmental management system, which is aiming to decrease our energy usage and to reduce our carbon footprint, and we have been awarded as the carbon performance leader in Turkey.

World Finance: Tell us about your training and engagement programs

We are working hard to increase our engagement programs with respect to our external stakeholders

Emre Hatem: Last year we have started a training program, an online training program, that has been delivered to 17,000 people in the bank. We also started a tailor-made training program with respect to environmental and social risk assessment, carbon markets, climate change, that training program has been delivered to various departments of the bank. On the other hand, we are working hard to increase our engagement programs with respect to our external stakeholders. Being a member to UNEP-FI, UN Global Compact, WWF, and Business Counsel for Sustainable Development, we are actively supporting their seminars, conferences and events in Turkey. For example, last year we sponsored a very important training program, an environmental and social risk assessment program in Turkey, and also we have sponsored the first sustainable finance forum in Turkey. We think that those engagement and training programs will play a key role in increasing awareness of our stakeholders.

World Finance: And how are the sustainability drives that you mentioned integrated into the bank’s day-to-day operations?

Our employees have a very positive approach towards sustainability

Emre Hatem: Most importantly, our senior management provides a solid ground in implementation and successful realisation of sustainability related activities. On the other hand, our efficient organisational structure enables an alignment within the bank. Certainly I can say that our employees have a very positive approach towards sustainability. Not only are they very sensitive about those issues, but also they contribute to the projects that they are working in. If you just have the organisational structure, employee commitment, and also senior management support, I think that at the end of the day we will achieve greater results.

World Finance: Garanti also has close links with renewable energy projects in Turkey, tell us about your involvement.

Emre Hatem: As part of our sustainability development policies, we support renewable projects to a great extent. Up to now, we have provided $3bn of financing to renewable energy projects. Once all of them are operational, the annual CO2 emission reduction will be 6mn tonnes, it’s a huge amount of reduction. We especially support wind projects; wind projects not only reduce the CO2 emissions, but also they reduce our country’s current account deficit, that is why they are also contributing from an economic sustainability perspective. Up to now we have financed 35 wind projects, we have provided $1.5bn of financing to them, and our market share in the local market amount to Turkish banks is 50 percent. Our aim is to continue our support to renewable energy projects, with a view of contributing to climate change.

World Finance: Tell us about the environmental and social risk assessments that you undertake in your lending activities

Emre Hatem: Well we established our own environmental and social risk assessment procedures, with the help of an internationally recognised company in 2011. Environmental and social policies in the bank consist of several steps; firstly we start with an exclusion list, this list consists of the projects or the activities that we don’t finance at all.

Secondly what we do is we check whether the project is in line with the ENS policies, and the sectoral principles, these are technical criteria. Then according to the investment amount and the scope of the project, then we make a rating analysis, we need to make sure that all the impacts are properly analysed, all the impacts are reduced to acceptable levels with certain precautions and actions, all the precautions and actions are written in an ESMP, in an action plan, and also we need to make sure that they are monitored closely during the construction and production period by our advisors. With the implementation of this system, we achieved significant progress towards compliance with the principles.

World Finance: Finally, what challenges has Garanti faced in the banking industry and what opportunities have you been able to take advantage of?

Emre Hatem: I will touch on two challenges and two benefits. The first challenge we faced was to increase the awareness of the employees and of the customers, because it’s a long term and a dynamic process. Secondly, convincing the borrowers, the project owners, to apply more stringent environmental standards was a challenge in front of us in a very competitive environment. Coming to the opportunities, by decreasing our energy usage we have benefitted from lower energy bills, that was an economic benefit. And the second opportunity in front of us is the reputational benefit of the bank, by applying such very detailed sustainability policies.

World Finance: Emre, thank you

Emre Hatem: Thank you very much