Non-financial information disclosure (SFDR)
In accordance with the provisions of Regulation (EU) 2019/2088 of the European Parliament and the Council of 27 November 2019 on the disclosure of information related to sustainability in the financial services sector, the BCP Group provides the following information on the integration of sustainability risks.
Transparency of sustainability risk policies
BCP Group is committed to promoting a culture of environmental, social and financial responsibility, namely in mitigating climate change and social inequalities, along with its strategic goals for digital and technological innovation.
Sustainability and ESG (Environmental, Social and Governance) factors are increasingly relevant for our customers, our business and society. The sustainability of Earth is one of nowadays major challenges, and urgent action is not only necessary but also imperative in mitigating climate change and social inequalities.
The European and international commitments, particularly the Paris Agreement and the 2030 United Nations Agenda on Sustainable Development, demand transitioning to a sustainable economic development model, in which the involvement and alignment of the financial sector are decisive. This transition is also promoted by the European Commission Action Plan on Sustainable Finance, which defines the European strategy for the financial sector.
We believe that, to transition to a more sustainable world, we – citizens, corporations and institutions – are responsible in promoting behavior changes, individual and collective, in order to implement economic and social development models that instigate prosperity, job creation, people valuing and respect for the biodiversity.
We aim to have a leading and active role in the necessary changes, and in this context we compromise to integrate the ESG factors in our operations, products and services, as well as in our suppliers' value chain, positively influencing the organization value in the long run, contributing to people's and communities' wellbeing and to the preservation of natural resources and the environment.
BCP Group defined the following sustainability related policies and principles:
- Sustainability Policy;
- Environmental Policy;
- Anticorruption and Antibribery Policy;
- Social Impact Policy;
- Human Rights Policy;
- Diversity and Equal Opportunity Policy;
- Tax Policy;
- Sustainability Guidelines for Suppliers;
- Principles of responsible financing: excluded and conditioned projects.
Transparency of adverse sustainability impacts at entity level
BCP Group monitors ang guides its action on the legal and regulatory initiatives related to climate change as a systemic risk for the financial sector, namely:
- The Paris Agreement;
- The 2030 United Nations Agenda on Sustainable Development;
- The UN Global Compact Principles;
- The UN Principles for Responsible Banking;
- The Task Force on Climate Related Disclosures, supported by the Financial Stability Board;
- The Portuguese Government Commitment Letter to Sustainable Finance.
BCP Group is watchful of the changes in prudential and supervision areas, monitoring the development of technical criteria and norms to be widely adopted, aiming to avoid dichotomies between companies and disruptive effects in financing the economy.
BCP Group identifies the risks related to climate change in order to ensure the continuity of the operation in case of natural disaster which interrupts activity, We look to comprehend our portfolio positioning in order to promote and measure its resilience to transitioning to a low carbon economy. Throughout the years we have been financing ecological and energetically efficient projects, including projects to substitute coal energy production for low emission sources and modern energy infrastructures, reduce pollutants emissions and promote energy efficiency, particularly in intensive energy and high emissions industries and, among others, low emissions mobility.
BCP Group integrates the environmental and social risks in its risk analysis processes, integrating policies, standards and procedures in managing them. The environmental risk analysis is part of our processes of customer assessment, credit granting, project finance and discretionary portfolio management.
We recognize that there are activity sectors and projects which are incompatible with the BCP Group commitment on preserving the environment and biodiversity, promoting a sustainable development and climate change mitigation; therefore we incorporate in our decision processes the sectorial financing and investment principles for those industries which are highly exposed to environmental and reputational risks, and we don't finance activities or projects related to:
- Production or trade of illegal products or activities;
- Coal: mining and energy production;
- Prostitution, pornography and related activities;
- Unlicensed trade of wildlife or endangered species.
BCP Group is assessed by the most relevant ESG analysts and indexes, including S&P Dow Jones Indices, Vigeo Eiris, FTSE, MSCI, Sustainalytics, CDP – Carbon Disclosure Project, among others.
These sustainability indexes are a relevant tool in assessing and communicating our performance in economic, environmental and social areas, as well as a mean to identify and promote improvement.
Transparency of remuneration policies in relation to the integration of sustainability risks
BCP's remuneration policy is reassessed yearly by the management board, and aims to let employees, administration and control members know the rules and principles underlying the remuneration management.
In order to this, it integrates a set of good governance rules, which establish dispositions meant to ensure alignment of its leaders and all employees with a sane and prudent management of the organization, that considers the interests of all its stakeholders, without incentivizing risk taking higher than defined by BCP, avoiding to create or contribute to situations of conflict of interests, and through these rules and alignment contribute to the sustainability of the society.
We highlight the following rules:
- The principle that the remuneration policy is meant to promote behavior which ensures value creation in the long run and the sustainability of the results throughout time. In this context, the variable remuneration, both of employees and of the executive board, considers not only the goals' accomplishment but also the means through which they are accomplished, disincentivizing commercial practices misaligned with the customers' interests. Factors like customers' satisfaction, rigorous observance of internal and external regulation and a set of ESG indicators are also considered.
- Employees and members of the executive board with control responsibilities are assessed on the level of execution of their control responsibilities, to ensure their independence from the Bank's business goals, promoting the sustainability of the results.
- The fixed component of the remuneration is the major component of the remuneration general conditions; the variable component is generally more conservative, mitigating its potential to generate risks.
- The employees' remuneration is defined according to job, career and level of accomplishment of the settled goals, promoting a 1:1 ratio between men and women with comparable job, responsibility level and career. The promotion system is based on the individual assessment which includes a behavioral component and a goals' accomplishment component, along with the remuneration position of each employee on the remuneration reference for the job.
- The remuneration policy is therefore structured considering the context and the BCP's results, including mainly a fixed remuneration based on the job and responsibility level as well as on the career of the employee, making a relevant part of the total remuneration and, when so defined, a variable remuneration or incentives linked to the accomplishment of pre-settled goals and to a prudent risk management. In exceptional circumstances, the variable remuneration might not be attributed, namely when such attribution limits the BCP's capability to reinforce its own funds base; its attribution always considers all types of actual and future risks.
- The variable remuneration is subject to defined limits according to its percentage of the fixed remuneration, and for employees in key jobs and for members of the executive board, is composed of cash and BCP shares, with a 5 years deferred payment. In addition, the remuneration policy defines retention rules for the BCP shares of 1 year before they are made available.
- These rules aim to promote that incentives to individual performance are aligned with the long term goals and the sustainability of the Bank, adapted to the risk profile.
- The remuneration policy also includes rules for reduction and reversion of the variable remuneration, to implement whenever justified by the severity of the situation, or in context of significant decrease in BCP's profitability conditions.
Transparency of the integration of sustainability risks
Portfolio management and ESG funds advisory services:
- In selecting and monitoring funds, the BCP Group's portfolio management services analyses in which way the fund management companies and the investment teams integrate the ESG (Environmental, Social and Governance) factors in their investment processes, based on internal assessment criteria and resorting to information made available by the issuers and to international recognized sustainability ratings.
- The assets that make up the funds, and consequently the profitability of investing in them, are subject to various non-financial risks, including environmental, social and governance risks, that might impact on the economic activity in which the funds invest or in the markets' perceptions.
Transparency of the promotion of environmental or social characteristics
in pre‐contractual disclosures
BCP provides portfolio management services which promote environmental and social characteristics, as described in their pre-contractual disclosures.
Transparency of sustainable investments in pre‐contractual disclosures
BCP provides an ESG products advisory service which aims at sustainable investments, as described in their pre-contractual disclosures.