Bancolombia S.A. (2022)

Committed to responsible and sustainable financing, Bancolombia has adopted the Equator Principles and the Performance Standards of the International Finance Corporation – IFC, as applied standards for the identification, evaluation and management of environmental and social risks and impacts, implicit in the operations and projects that we finance. Its scope of application is the evaluation concerning the environment and natural resources, climate change, biodiversity, community health and safety, ethnic minorities, human rights and job security.

Bancolombia updated its internal processes and policies on Environmental and Social Risk Assessment to align with the fourth version of the Equator Principles and its entire application framework, approved by the Vice Presidency of Risks in October 2020. The update is based on the evaluation of Climate Change, Biodiversity, Human Rights, Transparency, Corporate and Government Ethics, in the Project financing and in ordinary operations, Corporate Credits, Bridge Loans and Financial Advisory, in the Corporate, Business and SME Banking units, Investment Banking, Leasing operations and receipt of guarantees and dations in payment, at the corporate level and in all the countries where we are present, preventing the risks associated with environmental liabilities in real estate where activities sensitive to environmental impacts.

The criteria, standards, parameters for risk categorization and structuring of environmental and social covenants are defined in each study using the tools generated by the Equator Principles and the Performance Standards, adjusted to the needs of Bancolombia, local regulations, the country, and the region.

For those operations that require it, the Vice Presidency of Risks may present the evaluation of a project or activity to the Bancolombia Environmental Committee, made up of risk, legal, commercial, sustainability, communications and other areas of interest for taking decisions, determine the viability, result, qualification and procedure to be carried out.

Regarding the analysis of socio-environmental risks and in accordance with the update of the Policy, the amount required to carry out the environmental and social risk assessment was reduced for operations over US $ 1,200,000 in the sectors: (i) Tanneries; (ii) Mining; (iii) Slaughterhouses and meat processing plants; (iv) Chemicals and agrochemicals; and (v) Iron and steel. Likewise, the amount was adjusted to US $ 4,200,000 in the sectors: (i) Energy; (ii) Sugar mills; (iii) Oil palm; and (iv) Paper and cardboard. These conditions apply to the operations of Corporate, Business, SME and Investment Banking units as well as to Leasing products.

There are also considered other productive sectors than those mentioned and that also have the potential to present socio-environmental risks and that can affect the payment of credit. These sectors are also subject to environmental authorizations, approvals, licenses and permits from local and national authorities. Some of these sectors are: (i) Brick and clay production; (ii) Transportation and storage of dangerous substances; (iii) Food sector; (iv) Animal feed production plants; (v) Wild animal farms for commercial purposes; (vi) Poultry and pig farming; (vii) Textile plants; (viii) Forestry activities; (ix) Fishing and tuna; and (x) Health sector. For the above sectors, environmental and social risk assessments are carried out at the request of commercial units, attribution entities, credit risk managers, origination managers, legal areas, assets, sustainability, compliance, and customer engagement, as long as the request is reasonably supported.