KBC Group N.V. (2025)

The Equator Principles are formally embedded in KBC’s internal credit policies and credit risk procedures. They are integrated into credit risk assessment methodologies, approval processes, and monitoring requirements, ensuring that environmental and social considerations are structurally incorporated alongside financial credit risk criteria. Ongoing monitoring of EP transactions, including compliance with agreed covenants and action plans, is also embedded within the risk management framework.

The EP reviewers or the Independent Technical Advisors (TA) are independently engaged and are mandated to perform independent environmental and social risk assessments for all in-scope transactions. These TA’s are appropriately staffed with subject matter experts possessing environmental and social risk expertise. They confirm scope eligibility, propose EP categories (A, B or C), define due diligence requirements, and provide recommendations on risk mitigation and covenant setting.

Roles and responsibilities across the three lines of involvement are clearly defined. Business lines remain responsible for the origination of transactions, the initial identification of EP applicability, and the collection of relevant client information. TA provide independent second-line oversight through the assessment of environmental and social risks and ensure alignment with the Equator Principles requirements. Senior management and credit committees are responsible for decision-making and approval, explicitly taking into account EP categorisation, identified environmental and social risks, and proposed mitigation measures as part of the overall credit risk assessment.

In 2025, KBC carried out an Independent Review in alignment with the applicable Equator Principles guidance. KBC’s internal procedures and a representative sample of Project Finance and Project-Related Corporate Loans transactions, that had closed and were under active Equator Principles review, were assessed by KBC’s Internal Audit Department over the defined review period. The review was supported by the use of the relevant Equator Principles review criteria and focused on the design and implementation of the Equator Principles.

The review resulted in a limited number of minor recommendations, primarily to further strengthen the implementation process, which will be addressed through the relevant remediation and follow-up actions within KBC’s continuous improvement process. A further Independent Review of Equator Principles implementation will be conducted within the applicable review cycle.