Sustainable business

Sustainable financing (Sustainability-Linked Loans) groups together different financing instruments whose characteristics and economic conditions vary according to whether or not the corporate borrower meets sustainability objectives, understanding sustainability in all its dimensions: environmental, social and governance.

This type of financing aims to support and encourage corporates to achieve objectives related to their behaviour and/or performance that ultimately improve their sustainability profile.

Guided by ethical and responsible behaviour criteria, Bankinter Group companies strive to establish a relationship of trust and shared value with all their stakeholders: customers, shareholders and investors, employees, regulators, supervisors, and society in general.

To this end, Bankinter has set up a management system—progressively, globally and transversally integrated into the management of the Group—which seeks continuous improvement of performance in matters of sustainability, both from financial and environmental perspectives.

The Bankinter Group's sustainability policy is approved by Bankinter's board of directors on the recommendation of the sustainability and appointments committee, is geared towards contributing to the Sustainable Development Goals of the United Nations 2030 Agenda, and assumes the commitments set out in international protocols and standards.

The Group also fulfils the commitments it has undertaken within the framework of various international initiatives, including the United Nations Global Compact Guiding Principles, the Equator Principles, the Principles for Responsible Banking, the United Nations Environment Programme Finance Initiative, and the Net-Zero Banking Alliance.

The Group's commitment to sustainability is materialised in multi-year sustainability plans established with the objective of developing responsible management of the three ESG (environmental, social and governance) dimensions and generating a positive impact.

For all these reasons, Bankinter has developed its own Sustainability-Linked Financing Guide as one of the parameters to consider.

The growing concern for sustainability, the increase in demand for financing environmentally friendly activities and the need to mitigate the risk of greenwashing has prompted financial institutions to define their own classification procedures and criteria as a basis for identifying financing products and services that meet sustainable characteristics.

These classification procedures and criteria serve as essential tools for evaluating and promoting practices that generate a positive impact on the environment and society in general.

In this context and in accordance with the existing regulations on this matter, Bankinter Group has developed these Sustainable Financing Classification Criteria (SFCC), which regulate the procedure and criteria that a financing product or service must fulfil in order to qualify and be labelled as sustainable. The Group has also implemented the applicable governance framework.

The SFCC are based on the European Taxonomy and on official and sectoral principles and guidelines of international scope, such as the Green Loan Principles issued by the LMA and the LSTA, the Green Bond Principles issued by ICMA, the Sustainability-Linked Loan Principles issued by the LMA and the LSTA and the Sustainability-Linked Bond Principles issued by ICMA.

The SFCC are dynamic in nature and will be reviewed and expanded regularly to modify or add new activities and/or criteria that enable compliance with the European Taxonomy and the rest of the international principles and guidelines that may be of mandatory or voluntary application. The SFCC apply to all Bankinter Group financing products and services (corporate loans, project financing, consumer asset financing, export financing, etc.), and to all Group areas and units, regardless of their geography. They will also serve as a basis for defining the sustainable financing classification criteria that will be approved in all other Group companies that offer products or provide financing services. In certain cases, these may contain unique features due to the legal nature or regulations of the Group company in question. With the approval of the CCFS, Bankinter has also created the Sustainable Labelling Unit (SLU), and the SLU regulation and the Sustainability-Linked Financing Guide have been approved.

In carrying out their activities, Bankinter Group companies do not only pursue their own purposes. They also strive to create shared value with their strategic stakeholders: customers, shareholders and investors, employees, regulators, supervisors, suppliers and society in general. They do this by implementing ethical and responsible behaviour guidelines, aimed at establishing a stable relationship of trust and making Bankinter a sustainability benchmark in the sector.

To this end, Bankinter has set up a management system—globally and transversally integrated into the management of the Group—which seeks continuous improvement of performance in matters of sustainability, both from financial and environmental perspectives.

Bankinter Group's sustainability policy is geared towards contributing to the Sustainable Development Goals of the United Nations 2030 Agenda and assumes the commitments set out in international protocols and standards.

Bankinter Group also fulfils the commitments it has undertaken within the framework of various international initiatives, including the United Nations Global Compact Guiding Principles, the Equator Principles, the Principles for Responsible Banking, the United Nations Environment Programme Finance Initiative, and the Net-Zero Banking Alliance.

The Group's commitment to sustainability is materialised in multi-year sustainability plans established with the objective of developing responsible management of the three ESG dimensions and generating a positive impact.

Bankinter is keenly aware of the global challenge of protecting the environment and fighting climate change, which is why its sustainability strategy includes guidelines and programmes aimed at minimising direct environmental impacts, caused directly by its own operational activities and indirectly, mainly by its financial activity.

In order to support the objectives of the Paris Agreement on climate change, Bankinter is a member of the sectoral initiative of the United Nations Environment Programme – Finance Initiative (UNEP FI) and the Principles for Responsible Banking. This is a framework established to carry out a sustainable banking business in line with the SDGs and the 2030 Agenda. In addition, in 2021 the bank joined the Net Zero Banking Alliance, whose main objective is emissions neutrality in 2050 and the establishment of intermediate decarbonisation objectives by 2030. In line with all the commitments acquired when joining the Net Zero Banking Alliance and with regulatory requirements, Bankinter has developed a roadmap for the decarbonisation of its entire corporate financing portfolio.

In the absence of a complete regulatory framework that regulates sustainable financing, the SFCC create a classification system that is based on the European Taxonomy and the international standards defined in the Green Loan Principles issued by the LMA and the LSTA, the Green Bond Principles issued by ICMA, the Sustainability-Linked Loan Principles issued by the LMA and the LSTA and the Sustainability-Linked Bond Principles issued by ICMA. These SFCC are intended to be a dynamic system. They may therefore be amended as the implementing legislation develops.

The SFCC uses two classification criteria to consider an operation as potentially sustainable based on the destination of the funds: the taxonomic criterion and Bankinter's internal sustainable criterion. There is also a third classification that is not related to the destination of the funds but to the customer's sustainable performance: the criterion for categorising financing as sustainability-linked.

• Taxonomic criterion.

  Financing aligned with the European taxonomy always consists of financing products with a specific purpose whose funds are allocated to activities and projects that meet the regulatory requirements defined in the European taxonomy.

• Bankinter's internal sustainable criterion.

  Sustainable financing based on Bankinter's own approach is based on a methodology that allows operations to be classified as sustainable according to the destination of the financed activity. The internal sustainable criterion is met when operations have a specific purpose and their funds are allocated to activities and projects that meet the taxonomy's technical criteria of substantial contribution as well as the criteria included in other sectoral standards or voluntary market frameworks such as the Green Investment Principles or the Green Bond Principles.

  Common standards of the taxonomic criterion and Bankinter's internal sustainability criterion. These SFCC include the technical documents, certifications and evidence accepted by Bankinter as proof of compliance with the technical criteria for the selection of substantial contribution, the DNSH, the MSS (Managed Security Services) and the criteria set out in the international standards mentioned above.

• Criterion for categorising financing as sustainability-linked.

  Sustainability-linked financing is characterised by the fact that its sustainable status depends on customers' performance and whether or not they achieve certain predefined objectives related to their sustainable behaviour in all ESG (environmental, social and governance) dimensions). Funds of this type of financing are designed to be used for general corporate purposes, so the specific use of the funds is not the determining factor for their sustainable categorisation. Contingent facilities, such as lines of credit, guarantees and documentary credits, may also be categorised as sustainability-linked financing.

  These instruments must comply with the guidelines of the Sustainability-Linked Loan Principles issued by the LMA (Loan Market Association) and the LSTA (Loan Syndications and Trading Association) and the Sustainability-Linked Bond Principles issued by ICMA (International Capital Market Association), and their price should vary depending on whether the customer achieves predefined sustainability objectives.

  Details of the structuring of this type of sustainability-linked financing are set out in the relevant technical standards contained in the Sustainability-Linked Financing Guide.

All operations marked with a “Taxonomic Label”, “Green Label” or “SLL Label” are subject to an evaluation process in accordance with the standards provided for in these SFCC and the implementing documents.

Bankinter's governance framework consists of a dual organisational structure that serves to analyse, supervise and approve the sustainable environment.

• The products committee is responsible for approving the SFCC and their implementing documents, as well as new products that Bankinter considers eligible as sustainable at any given time, in accordance with the applicable regulatory environment and market practices.
• The Sustainable Labelling Unit (SLU), made up of a multidisciplinary team, is responsible among other functions for approving sustainable labels for Bankinter's non-standard operations and the subsidiaries identified in the SLU regulation. Bankinter's branch in Portugal will have its own sustainable labelling unit.

The SFCC will be reviewed and updated on a regular basis to reflect the changes in the applicable regulations, the market's sustainability criteria and Bankinter Group's own activities. Modifications to the SFCC will be approved by the product committee on the recommendation of the Sustainable Labelling Unit or the product committee itself or of one of its members. You can check the complete document here.