Over the years, CIB has gradually enhanced its commitment to sustainability across its business, integrating environmental, social, and governance (ESG) dimensions into its policies, procedures, operations, and culture
CIB’s journey has been distinguished by its ability to link business growth to its desire to advance the economic, social, and environmental ecosystem in which it operates. This has found expression in embracing sustainability to achieve stakeholder value creation, from employees to clients, regulators, shareholders, the wider community, and the environment. Over the years, CIB has gradually enhanced its commitment to sustainability across its business, integrating environmental, social, and governance (ESG) dimensions into its policies, procedures, operations, and culture.
2021 was a year of achievements for CIB on the sustainability front, introducing a structured approach to embed sustainability across the Bank. Being a founding signatory of the United Nations Environment Program – Finance Initiative (UNEP-FI) Principals for Responsible Banking, CIB continues to act as a domestic and regional influencer in promoting the UNEP-FI this year, and it has worked to integrate all the principles in every aspect of its operations. In 2021, CIB also celebrated its sixth year of GRI Sustainability Reporting and introduction of SASB disclosures, a testament to the Bank’s longstanding commitment to ESG transparency and disclosure.
2021 Key Updates
- New Board Sustainability Committee
- Creation of Sustainable Finance work streams as a strategy implementation tool
Sustainable Finance Strategy
- Integration of Sustainable Finance Strategy in CIB Strategy
- Issuing Egypt’s first corporate green bond
- Founding member of the NZBA, representing Africa in the NZBA Steering Committee
- Co-lead in the Outreach and Recruitment Task Force in NZBA
- Supporting the TCFD, first bank in Egypt and second in the Middle East, and currently implementing it
- Founding signatory of the UNEP-FI Principles for Responsible Banking, representing the MENA region on its Banking Board
- Founding signatory of the UNEP-FI Commitment to Financial Health and Inclusion
- Signatory of the PRI
- Adopting the Equator Principles
- Reporting annually according to GRI since 2015
- Issued 1st report integrating SASB disclosures
- Ranked first in the EGX Sustainability Index
- Included in the FTSE4Good Index
- Included in the Carbon Disclosure Project
- Included in the Bloomberg Gender Equality Index
- Awarded the Egyptian Gender Equity Seal guided by the World Bank Gender Equity Model (GEM)
- First bank in Egypt and MENA Region to Co-Chair the Closing Gender Gap Accelerator supported by the World Economic Forum
Environmental and Social Impact Assessment
- First bank in Egypt to conduct a debit and credit life cycle assessment
- First bank in Egypt to conduct an environmental and social impact assessment on borrowing SMEs
Sustainable Finance Policy
CIB’s Sustainable Finance Policy defines and sets a comprehensive framework that translates the Bank’s ESG commitments into achieving long-term value creation for all stakeholders and instilling a governance framework to monitor proper implementation. It was developed in alignment with national, regional, and international agreements, goals, and standards concerning sustainability (E&S Risk Management, Sustainable Finance, and Operational Footprint). CIB’s Sustainable Finance Policy is applicable to all the Bank’s departments, functions, and lines of business. It provides guidance to all internal stakeholders who are responsible for aligning with the requirements of this policy in their respective areas of responsibility.
Environmental and Social Risk Management System
CIB has had a robust Environmental and Social Risk Management System (ESRM) in place since 2016, which positions the Bank as the leader in sustainable finance in the Egyptian market and the region and provides clients with the necessary tools and products to aid their transition to a more responsibly profitable economic model. CIB’s E&S credit risk policy guide is in line with:
- National Laws and Regulations
- IFC Performance Standards
- EBRD Performance Standards
- Equator Principles (EP)
Streamlining ESG in CIB Culture
Sustainable Finance Academy and Capacity Building
As CIB further cements its position as an industry leader in sustainability education, this year witnessed the inclusion of a Sustainable Finance course in the Analyst Program and SME Academy. The course was delivered to future officers and covered the introduction to sustainable finance, ESG integration in CIB operations and portfolio, and cases related to the ESRM system implemented at CIB.
The Sustainable Finance Academy also provided specialized training modules to 120 officers from the Risk, Business Banking, Corporate Banking, and Global Customer Relations departments covering the integration of ESRM system.
Evolution of Sustainability Strategic Network to the Sustainable Finance Work Streams
2021 witnessed a new milestone in CIB’s sustainability structure update with the introduction of eight work streams of cross-functional teams that represent different departments and are responsible for communicating and helping implement the sustainable finance system building and strategy. The streams are designed to address the four sustainable finance system pillars: risk, revenue generation, ecological footprint, and reputation. They are governed by a charter that stipulated the establishment of the Sustainable Finance System Building and Strategy Steering Committee (SFSS), chaired by the CSO, to communicate progress and challenges to the Management Committee monthly.
The sustainable finance work streams are as follows:
- Risk Management
- Corporate Banking
- Business Banking and Financial Inclusion
- Direct Investment
- Ecological Footprint
- Sustainable Finance Branding and Advocacy
- Sustainable Finance Education
- Sustainable Finance Innovation: ESG Data Digitalization
2021 Framework Highlights
In line with CBE and FRA directives and regulations, CIB has been a forerunner in establishing a governance structure, which was completed in 2021 and evidenced by the establishment of its Sustainability department in 2013, the creation of the Sustainable Finance department in 2020, the appointment of CIB’s first Chief Sustainability Officer (CSO), and the establishment of the Board of Sustainability Committee in its new form in 2021. The year also saw CIB continue its Sustainability System Building with a focus on its framework architecture and memberships.
CIB’s global commitments can be summarized through its KPI monitoring and reporting practices, in adherence with the following standards and frameworks, some of which are set to be implemented during the time of writing:
Net-Zero Banking Alliance (NZBA)
CIB became a founding member of the UN-Convened Net-Zero Banking Alliance (NZBA) in 2021. NZBA brings together an initial cohort of 43 of the world’s biggest banks with a focus on delivering the banking sector’s ambition to align its climate commitments with the Paris Agreement goals with collaboration, rigor, and transparency. With this, CIB is committed to the transition of operational and attributable GHG emissions from its lending and investment portfolios to align with strategies to achieve net-zero by 2050 or sooner.
As a founding signatory of the alliance, CIB was appointed to represent Africa in the NZBA Steering Group, alongside member banks representing diverse geographies and business models. The CEO and Managing Director represents CIB at the principal level, while the CSO holds a representative role. Principal level delegates ensure the strategy is embedded at the heart of organizations, and representative, working-level delegates tackle the commitment’s practicalities.
CIB is also co-leading the Outreach and Recruitment Track, a working group that will handle advocacy and capacity building for alliance members, as well as recruitment of additional active members. CIB will be part of the Sector Track, aiming to gain exposure and knowledge exchange among the track members.
Global and Local Sustainability Advocate
CIB Participation in COP26
As Egypt’s leading private sector bank and a strong advocate of climate change, CIB was the only Egyptian bank present at COP26 in Glasgow and engaged in active discussions on the hot topic of private-public partnerships for climate finance in the region. CIB co-organized a panel discussion in collaboration with the Egyptian Ministry of Planning and Economic Development and the Ministry of Environment, titled “Public-Private Partnerships for Improved Climate Finance in Africa and the Middle East.” The panel was chaired by H.E. Dr. Hala El Said, the Egyptian Minister of Planning and Economic Cooperation. It explored the challenges of financing climate change adaptation in Africa and the Middle East being the most vulnerable areas to the irrefutable impacts of climate change. The panel also explored the tools and policies through which developing countries can access climate finance.
CIB also contributed to another panel titled “Going Green: Developing an International Framework for Innovative Climate Financing”, headed by H.E. Dr. Rania Al-Mashat, the Egyptian Minister of International Cooperation, and H.E. Dr. Yasmine Fouad, the Egyptian Minister of the Environment. The events came as part of the Bank’s continuous endeavors to adopt best practices in sustainability and support Egypt’s Sustainable Development Vision 2030 and global initiatives that accelerate the transition to a green economy.
3rd Annual Forum on Strategies for Transition to Green Economy
CIB participated in Egypt’s third annual forum on Strategies for Transition to Green Economy: Sustainable Finance and Green Investment, as the event’s sustainable finance partner. The forum, which was held on 14 June 2021, aimed to create opportunities and partnerships between participants interested in achieving sustainable development in the country and helping shift toward a green economy to face future climate risks.
Sustainability Reporting Innovations
CIB’s sustainability reporting journey has been transforming and developing at a rapid pace, meeting the urgency and criticality of the subject in today’s world. Since becoming one of the first institutions in Egypt to introduce sustainability reporting in 2015, CIB has gradually enhanced its commitment to sustainability across its business, integrating ESG dimensions into its policies, procedures, operations, and culture. 2021 witnessed a breakthrough in CIB’s reporting through innovative updates to its reports and disclosure strategy. This year, CIB proudly issued its second Principles of Responsible Banking Impact Assessment, covering the entire business portfolio, its first Sustainability Report to include SASB disclosures, and a comprehensive Ecological Footprint Report hat covers the environmental impact of all CIB operations and locations.
2020 Sustainability Report
2021 saw CIB issue its sixth sustainability report, and the first one to include Sustainability Accounting Standards Board (SASB) disclosures, outlining the Bank’s continued progress and achievements in its sustainability efforts. By consistently reviewing and reporting on our practices on a yearly basis, CIB can monitor the effectiveness of its approach and identify areas for improvement. The report’s focus was the Bank’s role in leading Egypt’s transition to a green economy, covering everything from environmental and social highlights to sustainable finance, responsible banking, and ESG and PRB strategy implementation.
Key highlight: Sustainability Accounting Standards Board (SASB) Disclosures
Introduced in 2018, SASB Standards comprise globally applicable standards for 77 industries that enable businesses to identify, manage, and communicate financially material sustainability information to their investors. On an annual basis, companies use an evidence-based approach to report on impacts, risks and opportunities related to their operations and portfolios. The number of companies reporting on the SASB Standards increased 136% y-o-y in 2020 to 279.
By assessing and aligning our ESG practices to SASB disclosures, CIB aims to monitor our key material sustainability issues to identify four specific impacts, namely revenues and costs, assets, liabilities, and/ or the cost of capital. Those issues are closely tied to resource use, business models, and other factors at play in the financial industry and answers investors’ interest along five factors, as per the SASB.
Taking the first steps of addressing those factors, this report reflects CIB practices to address some of the indicators under the five factors at this stage:
- Data security
- Financial inclusion and capacity building
- Incorporation of ESG factors in credit analysis
- Business ethics
- Systematic risk management
Ecological Footprint Report
This year, CIB will broaden its scope in the 2019–2020 report to be the first commercial bank in Africa to report on its ecological footprint. CIB understands that the de-carbonization action plan that it developed and adopted should be based not only on the associated GHG reduction but also account for the land footprint and water footprint reduction to correctly establish the priority actions, desired outcomes, and impacts. We aim to use our newfound knowledge of our ecological impact to better develop more sustainable business scenarios and embed ESG principles into our policies.
An Ecological Footprint Analysis uniquely approaches the issue of sustainability through reference to the overall carrying capacity of the planet. Thus, it can link individual behavior to organizational, regional, and global targets using concepts such as the ‘earth share’—the average, sustainable, bio-productive capacity available per person. The ecological footprint indicator is shown to have several advantages: the single index provides for ease of communication and understanding; a variety of goods, activities, and services can readily be assessed and compared; a link can easily be made between local and global consumption; an assessment of sustainability is possible; the relationship between different impacts can be explored; and values are based on ecological realities rather than arbitrary weighings. The annual footprint accounting report also enables CIB to benchmark performance indicators and evaluate progress over time.
Principles for Responsible Banking (PRB)
The CIB-PRB journey started in 2019, when CIB became a core founding signatory of the United Nations Environment Program – Finance Initiative (UNEP-FI) Principles for Responsible Banking, amongst 130 international banks. The Principles for Responsible Banking are the first ESG principles specifically tailored for the banking sector to encompass social, environmental, and governance practices as part of their day-to-day operations. This year, CIB is celebrating a milestone in its ESG reporting journey, as part of its accountability and pioneering efforts in Sustainable Finance.
The Principles for Responsible Banking define the framework through which banks can ensure their sustainability strategies are aligned with Sustainable Development Goals (SDGs) and the 2015 Paris Climate Agreement. By becoming signatories, banks commit to analyzing the current impact of their portfolios on the economy, society, and environment, setting targets for the most significant impact areas, and publicly reporting on their progress toward the implementation of the six Principles for Responsible Banking and their targets.
In the first year since the signing, CIB worked on all six principles, with a special focus on Principle 1: Alignment, Principle 2: Impact and Target Setting, and Principle 5: Governance and Culture.
Focusing on the impact front, and in alignment with Principle 2: Impact and Target Setting, CIB has followed a staged approach to performing an impact assessment on its portfolio, using the UNEP-FI Portfolio impact analysis tool. In March 2021, CIB performed and published the impact assessment on its Business Banking portfolio as a pilot, then it extended its assessment to two more business lines, namely Corporate and Consumer Banking, with the full comprehensive report to be published in 2Q2022.
Finally, the impact assessment exercise enabled CIB’s lines of business to identify their most significant positive and negative impact areas, capitalizing on positive areas and mitigating the negative ones. Following the Impact Analysis exercise, the respective lines of business proceed with Target Setting in order to ensure that both the Loan and Investment portfolios advance Egypt’s Vision 2030 through aligning the Bank’s targets with those of our national strategy.
Leading with Sustainable Products and Services
Green Finance: The First Corporate Green Bond in Egypt
Despite the challenges brought on by COVID-19, CIB remained resilient and further inclined to advance Sustainable Finance. 2021 was a remarkable year for the Bank, as it issued Egypt’s first green bond worth up to USD 100 million in the form of a private placement with the International Finance Cooperation (IFC). The CIB Green Bond Framework is aligned with the four core components of the Green Bond Principles (GBP) 2018, according to the Second Party Opinion (SPO) verified Vigeo. The bond issuance serves as the latest addition to a suite of environmentally beneficial products to leverage capital market, fixed-income instruments and fund adaptation and mitigation measures. The offering of these climate-friendly securities acknowledges the key role that financial institutions play in economic development and the allocation of financial resources to sustainable economic activities. The proceeds from the bonds will observe UN Sustainable Development Goals (SDGs) numbers 6, 7, 9, 11, and 13, which fall within the materiality of CIB.
The approved green bond pipeline currently includes 10 projects in different industrial sectors for a total of USD 22.6 million, in addition to USD 54 million for CIB’s New Capital headquarters building, recording a total volume of approved projects worth USD 76.6 million. This is in addition to existing projects worth USD 70.4 million, leading to a total pipeline of USD 147 million.
IFC Green Bond Technical Advisory Service
In cooperation with the IFC, CIB launched the IFC Technical Advisory Service in October 2021. The Technical Advisory Service provides CIB with employee capacity building programs covering energy efficiency and renewable energy and introduces the IFC Climate Finance Reporting Tools (CAFI). The capacity building program also extends to clients in priority and high potential sectors. Other services include Sustainable Energy Finance product development, LEAD and EDGE certifications, green building financing, and communication support.
Women’s Economic Empowerment: Women in Business Program
CIB is focused on tailoring its offerings to the needs of women by utilizing data analytics to incorporate a comprehensive gender segmentation across all our products and services. In 2021, lending to women-owned businesses increased by 63% y-o-y, while our female customer base grew by 186%.
CIB also has a special lending program for Women in Business (WIB), a subsidiary of Super Business Loan program but with higher approved limits and lower risk acceptance criteria to support women in business. The program includes:
- Special lending offers
- Additional discounts with partners of the Bank’s non-financial service program
- Free mentorship sessions for our women-led business customers, as exemplified in one of our partners’ 10 free mentorship sessions offer
- Sponsoring events that serve women-led businesses in the banking sector, financial literacy, and business solutions
Measuring Business Impact
From assessment to product enhancements
CIB became the first bank in Egypt and the MENA region to complete the Life Cycle Analysis (LCA) of its cards in 2020. The program was driven by a unique in-depth LCA of CIB credit and debit cards, starting from raw material extraction to transportation, use, manufacturing, and safe disposal. The LCA is a comprehensive cradle-to-grave assessment of both our direct and indirect activities, showcasing the Bank’s environmental impacts, which allows the opportunity to set an environmental management framework for a range of short- to long-term, high-impact procedures.
Measuring Climate Risk: First Bank in Egypt to support the Taskforce for Climate Related Disclosures (TCFD)
CIB is the first bank in Egypt to join the Task Force on Climate-Related Financial Disclosures (TCFD) and is currently in the process of implementation. The TCFD was established in December 2015 by the Financial Stability Board (FSB) to develop recommendations for voluntary climate-related financial disclosures that are consistent, comparable, reliable, clear, and efficient, to provide decision-useful information to investors, lenders, and other stakeholders. The TCFD encourages sustainable investments to build a resilient economy in the face of climate-related uncertainties. TCFD is becoming a mandatory requirement by the FRA, which mandates EGX-listed companies to issue ESG and climate change disclosures.
The year also saw CIB complete the UNEP-FI TCFD Capacity Building Program, launched in February 2021. The program was attended by seven Risk team members who are currently well-equipped to implement the TCFD Action Plan.
Evolving from Carbon to Ecological Footprint
Managing Ecological Footprint
CIB is deeply committed to preserving the environment and ecosystem and to promoting and leading the region and the world in corporate sustainability. The Bank believes that there is an obligation to our communities, investors, customers, and the world at large to operate our business sustainably.
In 2018, CIB was the first Egyptian bank to quantify and publish its GHG emissions. A year later, we concluded measurements of all our 186 branches in our first consolidated carbon footprint report, in comparison to our coverage of 52 branches across only two governorates in 2018. An extensive carbon footprint assessment has been conducted for all branches distributed all over the country.
This year, CIB adopted an integrated environmental reporting as part of its quest to sustainability, by releasing its first Ecological Footprint Report covering 2019–2020. The report is proof of the Bank’s intention to go beyond standard carbon footprint reporting and transition to integrated environmental reporting, evolving from carbon to ecological. CIB’s total carbon emissions associated with operations in Egypt totaled to approximately 51,000 MtCO2e in 2019–2020.
The report serves as a broad and dynamic framework for different types of impact categories. The three key impact categories the report focuses on are land footprint, total amount of land use to provide resources; carbon footprint, total amount of green-house gas emissions (GHGs); and water footprint, total amount of directly and indirectly consumed water, including water pollution impact. This type of analysis and reporting is a more comprehensive approach to sustainability that involves assessing an entity’s overall impact on the environment.
Stemming from our serious commitment to combating climate change and in alignment with SDGs and Egypt Vision 2030, we have decided to update our 2018 reduction targets and set sciencebased targets according to the Well Below 2 Degrees Scenario (WB2DS) to lead the way for our industry peers and supply chains to keep the momentum. Since the WB2DS is widely seen as the accepted limitation of temperature rise, CIB will be committing to achieving the absolute reduction targets by 2025.
CIB has reduced its carbon footprint from 51,000 mtCO2e to 45,901 mtCO2e. Considering the rapid extension of the Bank’s workforce, this represents a 10% reduction in produced Greenhouse Gas (GHG), and CIB has successfully achieved the 2025 WB2D targets in 2020 with a 17.5% reduction on its own operations.
CIB is currently in the process of taking the required measures for the EDGE certificate of excellence in design for greater efficiencies for our new headquarters in the New Capital. The measures focus on four main pillars:
- Lighting: LED lights, lighting occupancy sensors and separate lighting control, and automatic timer
- Domestic water: Flow restrictors and flush control
- Air conditioning: Automatic timers and split unit AC system
- Indoor air quality: Fresh air and air curtain
Listed in Carbon Disclosure Project (CDP)
CIB has furthered its commitment to environmental transparency by becoming the only Egyptian bank to disclose its environmental impact through the CDP, a global non-profit organization that runs the world’s leading environmental disclosure platform. CIB has been disclosing through CDP since 2018. This year, the Bank upgraded its rating and set the benchmark for the regional financial industry in conforming to ESG disclosures, reflecting its integrity and fiduciary duty to its investors and shareholders.