Sustainability has become one of the most pressing topics impacting our society today. This includes environmental aspects, such as climate change and resource scarcity, social aspects, such as human rights, financial inclusion and data privacy, and corporate governance aspects, such as board composition, anti-corruption, and ethical business practices. Collectively, these are commonly referred to as ESG (Environment, Social, and Governance).
QNB Group’s sustainability strategy was developed in consultation with key stakeholder groups – our customers, investors, employees, regulators and government, society and suppliers – taking into account their needs and expectations. Through regular and targeted engagement with stakeholders, we deepen our understanding of their priorities, and where appropriate, align our initiatives with their interests and needs.
The Group stakeholder selection process is guided by a benchmarking exercise against peer banks in the region and beyond. In addition, our primary stakeholders are groups that are directly affected by our business and operations (customers, employees, suppliers), invest in our business (investors), have oversight and influence on our activities (regulators and government), as well as those who are indirectly impacted in the communities we serve (society).
In response to these external demands, and to support QNB’s vision to become one of the leading banks in the Middle East, Africa and South East Asia (MEASEA), QNB has defined a Group-wide sustainability programme. This has been developed in alignment with national and international standards and guidelines, with particular focus on the objectives of the United Nations Sustainable Development Goals (UNSDGs), Global Reporting Initiative (GRI) Standards and the Qatar Stock Exchange (QSE) ‘Guidance on ESG reporting’.
“The ability to understand ESG impacts and manage the related risks and opportunities has become a necessity. We continue to build upon the progress we have already made towards embedding sustainability as a core part of our culture, value proposition, business and operating model to create positive impact for generations to come.”
Mr. Abdulla Mubarak Al-Khalifa Group Chief Executive Officer
At QNB, we define sustainability as the delivery of long-term value in financial, environmental, social and ethical terms, for the benefit of our customers, shareholders, employees and communities. Our sustainability framework consists of three pillars; sustainable finance, sustainable operations and beyond banking. All three pillars contribute to QNB’s goal of ensuring sustainable financial performance, through reducing risks, opening up new business opportunities and strengthening our brand.
Sustainable Finance
Sustainable finance is the integration of ESG criteria into financing activities to deliver profit with purpose. QNB aims to be a leader and role model in delivering sustainable financial performance through our national and international commitments as well as our financial, social, and environmental initiatives. This includes reducing ESG risks throughout our value chain and enabling the transition to a greener and more socially equitable economy and improve access to finance for SMEs and underserved groups.
Sustainable financing can enable significant change and meaningful outcomes to benefit the environment and society. Increasingly, such financing will underpin the transition of industries and businesses towards a lower carbon economy.
QNB is committed to financing and supporting eligible sustainable projects. QNB’s green and social loan portfolio eligibility criteria aligns with 13 of the global goals of the UNSDGs and reflects our investment in green buildings, renewable energy, clean transportation, and pollution prevention.
Environmental and Social Risk Management (ESRM) Framework
The Group is commited to sustainable business practices and we continue to work with our suppliers and clients to identify, assess, manage, and monitor exposure to ESG risks. We have therefore incorporated ESG relevant criteria and metrics into our risk appetite, which is cascaded down to our risk adjusted capital allocation process through the development and application of the ESRM Framework.
Our ESRM clearly articulates exclusions, sectors deemed high risk, prohibited activities, and risk categorisation. It includes our position on extractive industries (e.g., fossil fuels and mining), and our support for RSPO, recognising our influence and ability to support the transition to responsible business practices.
Green, Social and Sustainable Bond (GSSB) Framework
GSSBs provide an opportunity to bolster the sustainable finance ecosystem and allow institutions to tap into capital markets in order to generate funds that supports the transition towards a socially conscious and low-carbon economy. QNB Group developed the GSSB Framework in full alignment with the ICMA Green Bond Principles, Social Bond Principles, and Sustainability Bond Guidelines. As per industry best practice, QNB obtained a Second Party Opinion (SPO), and conducted a pre- issuance review on our eligible portfolio. This enabled QNB to leverage green bonds as a financial instrument and issue our first green bond of USD 600m in 2020.
QNB Finansbank issued its first green bond with the backing of the EBRD. This first green bond issuance, of USD50 million, marks the EBRD’s first investment in a green bond issued by a Turkish bank. QNB Finansbank’s green bond is issued under the Group’s GSSB Framework, which was updated and received a SPO earlier in 2021.
The USD50 million proceeds will be used to finance internationally certified green building projects in the Bank’s portfolio. The Bank’s eligible green portfolio is significantly greater than the issue size, providing scope for future issuances.
There is now increasing demand from investors, customers, regulators, and our own employees for greater transparency of our approach to ESG issues. And we recognise the significant contribution QNB can make to society by adopting business practices to address these, especially through our financing activities.
