In 2023, the Bank Group's emissions decreased (-11.5%, y/y, Scope 1 and 2, over 2022), driven by declines in emissions at the Bank (-12.5%) and SGK (-8.1%).

The Bank has been systematically reducing its energy consumption. For this purpose, the Bank improved the efficiency of its resources and continued: replacement of windows, replacement of lighting with energy-efficient lighting and installation of automatic light controls, replacement of heaters and change of heating method to gas heating, installation of ventilation with recuperation, installation of time switches on electric water heaters, fitting of heating boilers with controls, modernisation of air-conditioning units, insulation of buildings, replacement of thermostatic valves with heads on radiators.

[GRI 302-4] Total energy consumption in 2023 is down 4.6% for the Group compared to 2022, with a reduction of 3.8% for the Bank and an 8.7% decrease for subsidiary companies. There was also a change in consumption of diesel fuel used in company vehicles. Diesel fuel consumption decreased by 35.5%, attributed to the replacement of vehicles powered by diesel fuel in PKO Leasing.

[GRI 302-3] Total energy consumption per employee in 2023 was 7,9 MWh w for the group (compare to 8,6 MWh in 2022). The group purchased electricity, heat, without acquiring process steam and cooling.

The Bank once again determined water consumption. [GRI 303-1] According to estimates, in 2023 water consumption in the Bank was approx. 229.4 mega litres (224.2 mega litres in 2022) and 46.6 mega litres (45.5 mega litres in 2022) in other entities of the Group. The increase in water consumption in the Bank (by 2.3% y/y) is due to the increased presence of employees in the office (up by 1pp), the increase in headcount and the inclusion, for the first time, of calculations from the Bank’s foreign branches in the calculations.

Energy consumption within the organization (in MWh) [GRI 302-1], [GRI 302-4]

None of the Bank's Group entities conducted an energy efficiency audit in 2023. In 2021, in accordance with the requirements of the Act on energy efficiency the Bank conducted an energy efficiency audit. The findings of the audits in previous years were used to identify the areas with the greatest energy-saving potential and to draw up action plans, which are now being successively implemented.

Waste generated by the bank (in tonnes)

The reported emission limits include: (1) in the case of data for the Bank only this entity (100% of emissions) (2) in the case of data for the Group: The Bank and all subsidiaries of the Bank according to operational control (100% of emissions of each of the entities). The reported emissions comprise Scope 1, 2, and 3.

Non-municipal waste produced by the Bank (in tonnes)

* electric and electronic appliances, such as air conditioners, used monitors, refrigerators

The Bank and other group entities comply with the environmental protection regulations for fulfilling their waste management obligations and keeping the required records. In 2023, the Bank had an agreement for the collection of non-municipal waste with the same service provider as previously. The service provider holds ISO 9001:2015 and 14001:2005 certificates. The waste collected from the Bank is handed over by the service provider to other waste management companies, in accordance with the decisions held and the applicable regulations. Moreover, in 2023 the Bank conducted the selective collection of municipal waste in all own locations and a number of rented locations. The increase in bulky waste generated is due to the closure of branches and the relocation of employees to a new location in Warsaw. The increase in the volume of electro-waste generated (ATMs, multi-safes, dispensers) results from the closure of branches and the reclassification of cash branches to non-cash branches.

[GRI 306-2] Hazardous electrical and electronic waste is handed over by the Bank to a specialized company, where it is processed and recycled (100%). Paper bank documentation is collected by a specialist company and shredded.

The Bank also takes waste management measures by selling assets to Bank employees and by making donations in cooperation with the Foundation. The sale of assets is carried out via a specially developed intranet site. In 2023, the Bank sold 938 items of assets.

Paper consumption optimization program

One of the Bank's strategic goals is to simplify and streamline its processes by reducing paper documentation. There were also many processes changes corresponding to a partial transition to remote work, which translated into a significant reduction in the amount of paper consumed by the organisation.

In 2021, the Bank introduced numerous new features to its iPKO and iPKO business online platform banking, which were previously available only through branches or the Contact Center. Concurrently, the banks was engaged in digitalizing branch processes, including employee interactions with clients through phone calls and online meetings (video calls). This initiative also contributed to a reduction in paper consumption.

In 2023, the Bank carried out a series of additional activities aimed at reducing its negative impact on the natural environment. These included repairing electronic and electrical devices instead of disposing, refurbishing furniture, reselling surplus assets instead of disposing, transitioning from paper correspondence to electronic correspondence, eliminating plastic waste (discontinuation of the use of coffee capsules, bottled water, plates, cutlery and cups), encouraging the Bank's customers to resign from paper correspondence and opt for electronic mail.

The Bank continued its Flexidesk project, aimed at creating a new work environment and facilitating rotational and remote work by adapting office space to a flexible working model and providing standard IT equipment. As a result of the project, 181 rotational workstations were created in Cracow in 2023, and the Bank reduced its office space by approximately 2,000 square meters.

The Bank optimized the space of its branches, reducing their total area by over 11,000 square meters (from 339, 000 square meters to 328, 000 square meters).

The Bank carries out environmental education activities. A series of meetings for employees were conducted under the #ESGo! initiative, educating employees on the Bank's carbon footprint.

1. Policy for Financing the Renewable Energy Policy

In 2020, the Bank adopted a new Policy for Renewable Energy Sources, which was then implemented in the entire group. Our motivation for adopting the new policy is to support the natural environment, prevent the global climate change and engage in the transformation of the Polish economy towards zero emissions.

The aim of the policy is to gradually increase the share of financing renewable energy sources by the group’s entities. The policy defines the preferred directions of development of the loan portfolio in the renewable energy segment. It is focused in particular on financing of photovoltaic farms and wind turbine projects (in particular, the projects that have won renewable energy auctions and that guarantee stable cash flows from their operating activities). However, other projects can also receive financing based on individual decisions. The project assessments performed by the bank include the analysis of the following issues: formal documents, transaction parameters, sources of repayment (e.g. a successful renewable energy auction, PPA), as well as the investor’s capital resources and experience.

2. Policy for Financing the Carbon-Intensive Energy Sector

The group adopted and implemented this policy in 2019, introducing updates in 2020. The Policy for Financing the Carbon-Intensive Energy Sector covers the following industries: coal and lignite mining, coal-related sectors (e.g. production of mining machinery, trading in coal and similar products), generation of electricity or heat (with the exception of electricity from renewable sources) and supplementary activities in the power sector (transmission, distribution, cogeneration). The policy is aligned with the European climate policies and the goal of achieving net zero emissions by 2050.

The aim of the policy is to gradually change the structure of the loan portfolio by gradually reducing involvement with clients and transactions based on coal as an energy carrier, while increasing support for zero-emission or low-emission energy sources. The following approach aligns with the European climate policies and market trends, including the need to meet Best Available Techniques (BAT) standards, the provisions of the Winter Package and the Paris Agreement.

The bank finances the transformation of the Polish energy sector, excluding transactions financing investments based on coal unless their aim is to increase efficiency and to adapt to the growing environmental requirements. Transformation areas include not only zero-emission or low-emission energy production sources but also improving energy efficiency for entities with high energy consumption necessary for production processes and modernizing transmissions networks in their production processes.

In the 2020 updated policy, we tightened the application criteria (thus encompassing a broader range of enterprises, including those operating in coal-related industries) and financing conditions:

• In the scope of coal and lignite mining, production of furnaces, combustion chambers, and furnace burners (coal-fired)– we are reducing the exposure (with the exception of coking coal as a critical raw material listed by the EU for the next 3 years);

• In the realm of energy and heat production – we are not financing new coal- or lignite-based sources and gradually reducing the existing commitments;
• We are limiting funding for general purposes and transforming them into ESG financing aimed at improving energy efficiency, changing the energy mix or modernizing transmission networks (coal-based projects can be financed on the condition that the funds are spent on modernization aimed at meeting the environmental requirements; in such cases, there is an obligation to precisely define the purpose of financing and to control the use of funds);
• With respect to coal-related industries (e.g. production of mining machinery, coal trading and coal-based products) – we are gradually reducing our involvement while precisely defining  the purpose of financing and monitoring its use. Financing is permissible for entities with diversified portfolio of customers or products and services (i.e. generating significant revenues from other sources not related to mining) or those transforming their operations.

3. Policy for Financing the Chemistry, Oil & Gas Sector

The policy was adopted and implemented at the group level in 2019. It defines a framework for financing entities operating in the sectors of oil and natural gas extraction, production and distribution of liquid and gaseous fuels, production and trading in chemicals or chemical products, and production and sales of rubber and plastic products.

The objective of the policy is to reduce exposure to operations covered by the EU Single-Use Plastic Directive and a prudent approach to the sectors of oil and gas extraction or production of chemicals, chemical goods and rubber goods. The prudent approach is reflected in, among other things, an assessment of compliance with environmental standards and the impact on the environment and an evaluation of the business model with regard to the concept of sustainable business development. The future shape of this policy may be affected by changes in EU law, e.g. with regard to the approach to the use of natural gas during the period of energy transformation, as well as the growing requirements in the ESG area.

4. Income Property Policy

The Group adopted and implemented Income Property Policy in 2022. The policy sets out the framework for the financing of entities in the commercial real estate market and developers in the residential real estate market and indicates the main objective of working with the best entities in the market, financing assets of the highest quality and in the best locations and limiting the speculative phase. 

The policy sets operational limits for concentrations, including individual asset types and geographies. It also defines recommended boundary parameters for transactions, as well as the structure of clauses and collateral. In assessing the business model and identifying risks, the policy recommends taking into account the concept of business sustainability, including the benefits that the business can bring to both stakeholders, the community and the environment.

5. Public Health Funding Policy

The Group adopted and implemented Public Health Funding Policy in 2020. The policy indicates preferred transaction parameters and introduces good practice/standards for public hospital financing.

Environmental aspect: collection, sorting, storage, transfer, transport and disposal of hospital waste (mainly medical) regulated by law (e.g. Act: on waste, Environmental Law => municipal waste => disposal according to municipal regulations, medical waste => disposal by specialised company (mainly incinerators)).

The Bank aligns its processes for identifying, assessing and controlling ESG risks to comply with current regulations, including the EU Taxonomy. For the purpose of identifying assets in terms of eligibility and compliance with the EU Taxonomy, the Bank introduced principles for the classification rules of sustainability finance in December 2023. These rules will allows for the identification of financing with a positive impact on the environment and social well-being. These initiatives will impact the lending process in future reporting periods.