Ziraat Katılım meticulously analyzes the expectations of its internal and external stakeholders while shaping its business strategies and priorities within the framework of sustainable banking practices.
Alongside commercial success, Ziraat Katılım considers its contributions to the environment and society and its long-term responsibilities among its main priorities.
While supporting economic development through the financial resources it provides and the employment created, Ziraat Katılım aims to increase its position and competitiveness in the sector and generate more shareable value for all its stakeholders through the sustainability practices it implements.
Acting with the awareness that the financial products and services it offers in line with the principles of participation banking have an impact on the environment and society, the Bank attaches importance to the correct and effective management of environmental and social risks in its operations. As a stakeholder in combating the global climate crisis, Ziraat Katılım’s goal is to spread, cultivate, and maintain sustainability throughout the value chain.
Ziraat Katılım’s sustainability strategy is to support investments to ensure sustainable development in line with Türkiye’s national goals, especially its 2053 Net Zero goal and the Green Deal Action Plan.
Ziraat Katılım meticulously analyzes the expectations of its internal and external stakeholders while shaping its business strategies and priorities within the framework of sustainable banking practices. Assessing the short, medium, and long-term impacts of its operations, the Bank adopts a sustainable and value-oriented approach by prioritizing the impact on its stakeholders and the added value it generates.
Alongside commercial success, the Bank considers its contributions to the environment and society and its long-term responsibilities among its main priorities. In this context, it combines its sustainability approach with environmental, social, and governance (ESG) factors and integrates them into its business processes, aiming to achieve tangible progress in its strategic focus areas.
The Bank addresses different dimensions of sustainability through 3 main focus areas under its sustainability strategy.
In line with its Climate Action and Transformation strategy, the Bank aims to fully measure its operational emissions, expand its sustainable financing activities in addition to its mitigation plans, and measure the emissions it finances. In this process, it aims to contribute to a more sustainable future by prioritizing the transformation of carbon-intensive sectors.
With its Social Contribution and Value strategy in focus, the Bank not only stands by its customers but also works to build a strong and inclusive economy and supports social development with a multifaceted approach through projects implemented by understanding the requirements of society.
With its governance strategy in focus, on the other hand, the Bank aims to inform its stakeholders regularly by transparently sharing its economic performance as well as its progress in sustainability issues within the framework of the communication it establishes with them.
Impact of Sustainability Risks and Opportunities on Strategic Decisions
Ziraat Katılım has designed 9 main projects and 28 sub-projects focusing on the Bank’s development and transformation areas within the framework of its Strategic Plan for the 2022-2025 period. The Sustainability and Climate Change Strategy project is one of the 9 main projects within the scope of the Strategic Plan, and Ziraat Katılım has been integrating developments in the focus of sustainability and climate change into the Bank’s business processes since 2022. The Bank follows developments in different topics through sub-projects and actions under the main project and brings its practices closer to best practices in the sector. Ziraat Katılım considers the balance between sustainability-related risks and opportunities in its strategic decisions.
Climate change, biodiversity loss, social problems, and other environmental, social, and governance (ESG) factors pose significant risks to the economy. In its strategic plans, the Bank takes into account development areas and legal regulations to contribute to the sustainability and climate change ecosystem. It also develops and updates its corporate policies and internal regulations to include ESG factors.
The Bank comprehensively assesses sustainability-related risks and opportunities in its strategic decision-making processes and develops approaches to balance these factors. In this process, both short-term operational requirements and long-term sustainability plans are taken into consideration.
Ziraat Katılım focuses on value creation, guided by its principle of generating responsible income for the Bank and its stakeholders, by integrating ESG criteria into the identification of material issues, the execution of related projects, and the development of corresponding plans.
In lending decisions, for investments over USD 20 million, environmental and social risk governance factors are taken into account and integrated into the Bank’s internal regulations in order to observe environmental and social factors, and the process is advanced through trainings to ensure the capacity development of the relevant personnel. Taking environmental and social criteria into account in lending decision-making processes enables the Bank to include sustainability-oriented risks in its core business. Ziraat Katılım is building a structure to contribute to the implementation of environmental legislation and other relevant standards in our country with its environmental and social risk management system based on international standards.In addition, the Bank continues to systematically track and monitor resource consumption and waste data of the Bank’s Headquarter and branch locations and to measure greenhouse gas emissions. Although system improvements in these areas involve additional costs, they have a positive impact on the environment, facilitate compliance with changing regulations, and provide a competitive advantage for the Bank.
Ziraat Katılım considers the sectors it finances, public policies, technological developments, market and investor preferences, and national and international regulations while assessing risks.
Financing Sources Planned to Implement the Sustainability Strategy
Ziraat Katılım’s planned sources of financing for implementing its climate-related strategy are based on a multi-faceted approach covering both its own equity and national and international funding opportunities. In this sense, the Bank aims both to support the transition to a low-carbon structure in its existing operations and to implement new sustainability-themed projects.
Internal resources of the Bank
National Resources (government-sponsored funds and incentives)
International Resources (international funds and loans)
Participation Banking Ecosystem and Partnerships (stakeholder collaborations)
Adaptation to Uncertainties Arising from Sustainability Risks
While observing the status of the economic sectors and sub-activities financed in evaluating risk factors, Ziraat Katılım includes public policies, technological developments, market and investor preferences, and national and international regulations in its planning.
In connection with environmental risks, it has developed internal procedures to incorporate risk factors into its loan processes. The Bank develops an integrated risk management perspective and identifies the financial risks that can arise from these risk types by measuring the impact on the environment and society, as well as the financial analysis of its customers and the projects it finances through the environmental and social risk assessment model it has started to use. In order to obtain more quantitative information in this area, sub-projects are planned to expand the scope of the data collection infrastructure for clients and projects subject to financing. In this context, initiatives that can provide the Bank and the sector with a sound data infrastructure are also under consideration.
Ziraat Katılım integrates the developments it has made with a focus on climate change into its operations. Considering combating the climate change among its high-priority issues, Ziraat Katılım released its Environment and Climate Change Policy in 2023.
Climate-related risks and opportunities foreseen by Ziraat Katılım are detailed on page 76 of the Report. The two main categories of climate-related risks are physical risks and transition risks. Physical risks are mostly related to the current situation, arising directly from environmental factors, and can have acute effects. Transition risks, on the other hand, are risks arising in the process of adapting to sustainability policies and regulatory changes, are generally long-term in nature, and involve economic transition processes.
Impacts of Climate Risks and Opportunities on Business Model and Value Chain
In line with Ziraat Katılım’s sustainability and climate change strategies, seizing climate-related opportunities and effectively managing risks are critical to ensuring the Bank’s long-term financial and social sustainability. The Bank has developed plans to identify the risks arising from climate change and to measure their impact on the business model and value chain. At the point of finalizing the plans and transforming them into action as a result of qualitative and quantitative analyses, the climate risk and strategy project was carried out in 2024 and evaluated by the Bank’s climate risk working group.
In this process, the Bank has initiated qualitative and quantitative studies with transition risks as top priority. First of all, stress tests are conducted for the electricity generation and iron and steel sectors within the Bank’s portfolio in line with the scenarios based on transition risks by using heat maps, and the anticipated opportunities are incorporated into the Bank’s strategy. The Bank, which has conducted a more general assessment of physical risks, has developed a roadmap to manage these risks more concretely in the forthcoming period.
The Bank formulates strategies to manage these risks and opportunities in key areas such as its branches and business centers, financial products, financed projects, and supply chain. In this process, it aims not only to improve its financial performance but also to fulfill its social responsibility by adopting the principles of environmental sustainability.
Ziraat Katılım considers that climate-related risks and opportunities may have an impact on various areas of its business model and value chain. First, transition risks are an important focus for financial products and services; as demand for sustainability-oriented financial products increases, investments in such products will provide the Bank with a competitive advantage. However, market volatility poses a risk factor in this transition process, and the development of sustainability-themed funds and investments may present new opportunities in the Bank’s financial strategy.
Physical risks are particularly pronounced in the Bank’s branches and operational facilities, and natural disasters such as extreme weather events, floods, and forest fires can cause asset losses. Climate-related risks and opportunities also play an important role for the loan portfolio. Physical risks can lead to losses in the value of real properties and other assets; in particular, projects that are vulnerable to natural disasters and investments in areas vulnerable to climate risks can lead to financial losses. In addition, green and sustainable debt instruments offer significant opportunities to provide financing to reduce the carbon footprint. However, increased demand for such projects, along with the development of sustainability-themed investments, may lead to a loss of value for projects and products not sensitive to environmental risks.
In 2024, Ziraat Katılım launched new loan products to support carbon reduction and energy efficiency for retail and commercial customers.
Direct Mitigation and Adaptation Endeavors for Climate Risks
Ziraat Katılım established the Climate Risks Working Group in 2023 to translate its direct mitigation and adaptation endeavors related to climate-related risks into concrete actions.
In 2024, the Bank launched new loan products to support carbon reduction and energy efficiency for retail and commercial customers. In order to identify projects aligned with the Bank’s sustainable finance framework, the Bank started to develop data collection and analysis systems.
In 2024, a heat map of the Bank’s portfolio was prepared to quantify climate-related transition risks, and modeling studies were launched for the electricity generation and iron and steel sectors, which were identified as priority areas within the portfolio.
In addition, inventories causing leakage emissions are included in the greenhouse gas emission inventory in order to measure and analyze operational emissions accurately.
As part of the Bank’s 2025 plans, sub-projects such as calculating portfolio emissions and collecting customers’ climate-related data and including them in the data infrastructure have been included in the agenda. Furthermore, financial and non-financial services that can offer solutions to customers in the transformation of carbon-intensive sectors in 2025 have been designed. In line with these plans, endeavors have been initiated to guide customers and to translate the climate-related risks and opportunities identified into actionable steps.
Ziraat Katılım’s loan and financing products for climate-friendly projects make it easier for customers to invest in projects such as renewable energy, energy efficiency, and sustainable agriculture. The Bank offers assistance to businesses reduce their environmental impact and lower their carbon footprint. The Bank also aims to raise awareness across its supply chain in this regard and contribute to an environmentally responsible way of doing business in the upcoming period by finalizing the preparatory work for a policy encouraging its suppliers to comply with sustainability criteria.
Transition Processes for Combating Climate Change
Ziraat Katılım continues its endeavors to develop a transition plan to support its long-term planning for combating climate change. The Bank’s transition plan aims to align its business models, operational processes, and portfolio structures with climate change. The Bank is developing a portfolio transformation strategy to reduce its risks in carbon-intensive sectors. In this context, new financing products and services are developed by focusing on financing areas such as renewable energy, energy efficiency, and sustainable agriculture.
Plan for Greenhouse Gas Emission Goal
The Bank’s 2025 plans include actions to set science-based targets for greenhouse gas emissions. The actions and sub-projects scheduled by year are shared with and evaluated by the Sustainability Committee. As a result of the assessments, Addressing to the Sustainability Coordination Office and the relevant working groups is performed and the process is regularly monitored by the project sponsor. The Bank plans to elaborate and quantify climate-related goals in line with its proactive governance model.
Scenario Analyses for Climate-Related Transition Risks
In line with the scenario analyses conducted within the scope of climate-related transition risks, the key issues taken into consideration in the Bank vary based on the dynamics of the sector and projected developments.
The main topics and key items addressed in the Bank’s scenario analysis are climate policies, macroeconomic conditions, market supply-demand relationship, technological developments, and energy utilization and diversity.
Internally sourced data and data obtained from external sources are consolidated to serve as input for the models developed, thereby enabling relevant calculations. The prioritized scenarios are evaluated through a literature review in line with the topics mentioned in the risk management, strategy, and sustainability functions. Analyses are carried out based on the heat map created for this purpose and the current status of the loan portfolio, and sectoral and company-based stress tests are applied using the aforementioned data.
Integrated Annual Report of Ziraat Katılım Bank covers the period from January 1, 2024 to December 31, 2024.
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