We also improved training of GFNorte analysts, executives and directors. Online, through the updating of e-learning with more examples, exercises and case studies, as well as with more than 3,900 phone calls a year. Likewise, to maintain awareness and strengthen knowledge on the management of social and environmental risks, we improved our newsletter with high environmental risk cases, reorienting the “Know that?” section with issues related to the operation and fundamentals of the SEMS. The “SEMS in brief” newsletter is published monthly and reaches more than 1,800 bank employees.
We are convinced that our Social and Environmental Risk Management System is essential in our consolidation as a sustainable bank. 2016 was a year in which we defined objectives, however, 2017 will present even greater challenges with the system’s expansion to other areas of the bank, formalizing priority processes and the development of tools to increase effectiveness and efficiency of social and environmental risk management in Banorte.
The following table shows an overview of the figures reported by the operation of SEMS:
SOCIAL AND ENVIRONMENTAL RISK MANAGEMENT SYSTEM (LOANS ANALYZED PER RISK TYPE)
13 due diligences were prepared and 233 recommendations were sent based on IFC sectoral guidelines for health, safety and the environment, promoting improvement of the social and environmental performance of loans. Of the total loans assessed by the area of socio-environmental risk, 60.22% was authorized.
THE EQUATOR PRINCIPLES
The Equator Principles, created in 2003 by the Equator Principles Financial Institutions (EPFIS) together with the IFC, represent the most important standard within the financial sector to manage environmental and social impacts and risks.
Banorte was the second Mexican bank to sign these principles and as part of the Social and Environmental Risk Management System, since 2012 we analyze large investment projects and provide specialized consultancy to customers, thereby providing added value and contributing to minimizing social and environmental risks and generated financial risk in projects.
OPERATIONS AND SERVICES COMMITTED TO THE RESPONSIBLE USE OF RESOURCES
Jorge Ruiz Cortazar
“We are aware of natural capital’s importance as a source of resources for our operations.”
Jorge Ruiz Cortazar
At Grupo Financiero Banorte, we are aware of the importance of natural capital as a source of resources for our operations, so we continually promote their responsible use and mitigate potential environmental impacts through projects and efficiency strategies.
ENVIRONMENTAL POLICY (SRS 103)
Grupo Financiero Banorte has a public environmental policy, restructured to align with the international ISO 14000 standard, and meet all its long-term requirements by addressing the following aspects:
To support the policy, GFNorte has a Matrix for the identification, evaluation and classification of environmental impacts to determine which business processes represent relevant actual and potential risks in environmental matters, which are classified according to scale, relevance, scope, frequency and reversibility; and which are reviewed annually.
Energy (SRS 302-1, SRS 302-3, SRS 302-4, SRS 305-5)
Energy applications include gasoline consumption of utilitarian cars of the Insurance and Annuities companies: 1.08 million liters, 56% of the total gasoline consumption of the group. Similarly Afore XXI Banorte and Banorte used 39% of the total fuel consumption, in both subsidiaries we continue to use a fuel monitoring system which has achieved a 2% decrease in use in the Afore XXI Banorte.
The Integral Energy Control System (SICE), one of our major programs for the efficient use of electricity, is now used in all Banorte branches. Since it was launched in 2007 and to the close of 2016, this system had coverage of more than 95% of Banorte branches, achieving a cumulative savings of more than Ps 150 million and a savings of 102 million kWh; avoiding 47,073 tons of CO2 emitted into the atmosphere.
The progress of this program brings us closer to our goal of a 30% reduction in emission intensity per employee by 2020, in alignment with the strategy implemented on a national level.
BRANCHES* IN THE SICE PROGRAM
Since 2016, these benefits are extended to new branches, built with the SICE engineering for the automation of lighting and air conditioners, as well as the use of energy-efficient equipment.
Considering the risks associated with climate change, as from 2015 we have an initiative to install hurricane shutters and provide maintenance of air conditioning in Banorte branches in coastal areas, to prevent premature deterioration due to moisture. At the close of 2016 more than Ps $800,000 were invested in 8 Banorte branches, adding 15 more branches since its implementation in 2015.
In 2016 mobile Banorte units were implemented, equipped with ATMs and customer service areas for the purchase of products and services. These units started operating in 11 municipalities in the states of San Luis Potosí and Puebla and present opportunities in the event of climate change, considering that these could reach communities affected by natural phenomena, in addition, they reduce our Scope 3 emissions. With regard to corporate buildings, Banorte began the relocation of it 6% of its Banking Sector personnel in Monterrey, N.L., to the KOI building which is LEED silver certified for its energy efficiency. This change involves a reduction in the number of Banorte administrative buildings in the northern territory and considerable energy savings, likewise, the centralization of personnel an improvement represents for the institution for the execution of certain environmental initiatives such as reducing the need to travel, and those related to the recovery and recycling of toner and paper.
We are aware of the transition to the use of cleaner fuels and technologies raised in Mexico for the year 2018 by the national program for the sustainable use of energy. For this reason, since 2016 we have been evaluating a portfolio of suppliers of renewable energy with a view to its subsequent acquisition and our alignment to national objectives in the field of energy.
In 2016, we participated in the Earth Hour initiative, organized by the World Wildlife Fund, by turning off non-essential lighting in 7 Banorte buildings, 8 Insurance and Annuities halls, and for the first time in 3 Afore XXI Banorte representative offices. In addition, we encouraged the efficient use of energy and employees participation in Earth Hour through the Banorte and Long Term Savings’ internal communication channels.
PARTICIPATING BANORTE BUILDINGS
PARTICIPATING INSURANCE AND ANNUITIES
PARTICIPATING AFORE XXI OFFICES
Estimated water consumption for 2016 was 668,673 m3, representing an increase of 0.09% from 2015 considering the scope of 99% of the financial group. The water consumed on the premises of the group comes from and is channeled to local networks where we operate.
At GFNorte, we calculate our carbon footprint through a focus of financial control that uses methodologies as the corporate standard accounting and reporting (ECCR) – the Greenhouse Gas Protocol (GHG Protocol) and national guidelines on the use of the potential global warming ingredients, the IPCC’s Fifth Assessment Report (AR5). Our data are backed up every year, since 2012, through verification by an external firm accredited by EMA (Mexican Accreditation Entity).
GFNORTE EMISSIONS SCOPE 1 AND 2
[tons de CO2e]
EMISSION INTENSITY OF CO2e PER EMPLOYEE AND NET INCOME
TONS of CO2e/EMPLOYEES
In 2016 we held 88,650 videoconferences at GFNorte, representing an increase of 139% from 2015. Specifically, in Banorte the increase represents a 149% growth. In addition, an estimated 127,871 kilometers of travel was saved through videoconferences held in leasing and factoring and Banorte Ixe Securities International, which is a savings of more than Ps1.5 million considering the average cost per trip in 2016. In Banorte more than 20 million pesos were invested for the renovation and maintenance of videoconferencing rooms, 103% more than in 2015.
CORPORATE TRAVEL (SRS 305-3,305-4, 305-5)
Kilometers travelled aboard airlines were calculated for employee of Banorte subsidiaries, Afore XXI Banorte, Leasing and Factoring, Banorte- Ixe Securities International and, for the first time, Insurance and Annuities companies, business units that are responsible for 98% of the financial group’s employees, 7% higher than in 2015.
In Banorte, we continue to use the tool included in the SAP module for calculations. In 2016 more than 16.7 million kilometers were registered, 46% more than the previous year, which amounted to 11.5 million kilometers, equivalent to 1,619 tons of CO2 emitted into the atmosphere. To offset this impact, we encourage videoconferencing as well as digital collaboration between employees through the use of web tools for online meetings. To this end, since 2015 employees with laptops have UC Voice equipment available to them, also the Webex service in the sales area of Afore XXI Banorte was activated.
With respect to the employee travel, the “Employee Travel” survey was carried out in 2015 more than 2,000 employees of the Call Center building in Monterrey, N.L., which estimated a total of 80.32 tons of CO2 emissions due to the use of motorized transport.
With regard to Scope 3 emissions, as from 2015 emissions corresponding to recharging refrigerant in Banorte installations are accounted for, with a 75% scope with respect to the total number of employees of the financial group. Refrigerants recharged in 2016 were 851 kg of R-22 gas and 695 kg of organic gas R-410A, which involved the generation of 2,835 ton CO2e. Currently top-ups of R-410a refrigerant, which does not contribute to the reduction of the ozone layer and does not contain CFCs, is 45% of the total number of refills in Banorte, while top-ups of R-22 were reduced by 43%. In addition, in 2015 Banorte stopped purchasing equipment using R22.
The financial group’s paper consumption increased by 2% versus 2015, totaling 1,230 tons. In contrast, based on net profits, paper consumption has decreased by more than 9%, reflecting the results of operational strategies implemented in 2015 and 2016, which encourage the use of digital media and cross-selling.
These strategies include Origina, which has been implemented in customer service centers and promotes the efficient use of paper through multiple contracts and eliminating the file records at branches. In addition, in Savings and Provision Sector, as well as US Sector, reductions in paper consumption per employee of 6% and 7% respectively, were achieved.
RELATION OF PAPER CONSUMED / RECYCLED
Among Banorte initiatives to promote efficient paper use, we continue with the application of our Paperless online course in the induction package for new employees. In 2016, 605 employees (+41% vs 2015) were trained in responsible paper consumption in work activities. In addition, 129 employees with seniority were accredited for the course.
One of the main areas of opportunity is to promote responsible document printing. Since 2015, the Papercut tool is used in corporate buildings; this tool manages paper and toner via printing controls directly from the multifunctional. At end of 2016, the consumption of 0.35 tons of paper (+ 25% YoY) was prevented.
Within the Insurance’s operations, we continued to use the “Mobile adjuster” application, which allows the electronic management of accidents thereby increasing operational efficiency. Through this application, insurance adjusters gather the accident information in digital documents, which are shared with the insured and the providers responsible for follow-up. At the end, documents are downloaded to the Insurance central system, allowing future reference and completely avoiding the use of paper. In 2016, after use at the national level, 9 tons of paper was saved, surpassing the goal established in the developmental stage in 2015.
During 2016, 55,171 physical tokens were migrated to cell phones and 283,534 new cellular tokens were contracted, thus reaching a total of 338,705 users of this modality in 2016.
The campaign to reuse and recycle clients’ tokens continued in 2016, collecting 29,374 physical tokens. Of these, 8,682 devices were reintroduced into banking operations and 20,692 were sent to a warehouse for recycling and recovery of components in 2017, also 5,090 tokens available in the warehouse at the end of 2015 were recycled in 2016. The reduction in the recovery of physical tokens is related to the increase in clients’ adoption of the mobile token.
MUNICIPAL SOLID WASTE (GRI 306-2)
In 2016 we expanded the sampling scope for the estimation of waste generated in Banorte administrative buildings and branches, including the Preferential, Dual, Preferential Dual, and Module customer service centers implemented in 2015. The estimated waste generated this year versus 2015 was a 24% reduction in tons generated per employee. Also, the global estimate indicates a generation of 2,394 tons on a Banorte level.
WASTE RECYCLING (gri 306-2)
In 2016 we recycled more than 479 tons of paper from the program implemented in corporate buildings and dead files, which represents an economic return of more than 1 million pesos. The recycling program benefits more than 5,800 employees in 13 administrative buildings, i.e. 28% of banking sector personnel. Additionally, the Insurance and Annuities companies recycled 22.57 tons of cardboard and white paper, 7% more than in 2015, in the same way, INB recycled 97.67 tons of paper in 2016 and Afore XXI Banorte joined the initiative recycling 1.59 tons of paper.
SUSTAINABLE VALUE CHAIN (gri 103)
The implementation of the SAP ARIBA platform for the management of the financial group’s suppliers of goods and services was launched in 2016. This tool is used for an evaluation methodology of the environmental risk associated with our supply chain in alignment with the second edition of the practical guide to Supply Chain Sustainability of the United Nations Global Compact, which includes diagnosis, planning, monitoring and decision-making. Registering providers in the platform began in 4Q16 and included a questionnaire for new providers with a permanent contract. For 2018 we expect, with the information gathered, to carry out the diagnostic phase using a matrix to classify suppliers considering the possible socio-environmental risks of each sector, company or area of action.
As part of the portfolio of sustainable suppliers, since 2014 we have been collaborating with a solar company that provides benefits to our employees. During the year, Banorte employees who use solar panels in their homes contribute to preventing emitting 3,359 kg of CO2 into the atmosphere, at the same time, these solar panels generate 7,334 kWh of energy.
SUSTAINABILITY MANAGEMENT SYSTEM (gri 103)
The SMS (Sustainability Management System) platform continued in operation for the collection, validation and analysis of environmental performance indicators of the financial group. In 2016 trained users captured 254 data related to environmental indicators.
EXPENSES AND ENVIRONMENTAL INVESTMENTS (gri 103)
The total cost to treat and mitigate emissions in 2016 amounted to Ps 20.19 million for the construction, renovation and maintenance of videoconferencing rooms to reduce emissions generated by corporate travel.
In addition, the total investment for prevention and environmental management was Ps 3.51 million, which includes the purchase of plants and materials for the green roof, maintenance and development of the educational program in 2016. This sum also considers investing in the SMS platform for the management of sustainability indicators and verification of the greenhouse gas emission inventory.
An investment of Ps 11.91 million was made to renew air conditioning equipment and install hurricane shutters in coastal areas.
The green roof of the “Roberto González Barrera” Call Center in Monterrey, N.L. completed its third year of operation promoting the conservation of Mexican species.
In 2016, 2,192 people went through the environmental education program implemented in June 2014, 44% more than in 2015. The educational program’s scope, through an agreement with the Ministry of Public Education (SEP) offered primary school children the opportunity to participate in various workshops which has resulted in the green roof being the only one endorsed by the SEP for school visits.
Globally, the green roof’s educational program has benefited 4,874 people of our various stakeholders, particularly administrative personnel and newly hired executives, relatives of employees, suppliers, primary school and higher institutions, and non-governmental entities.
DONATION FOR THE PROTECTION OF THE BLACK BEAR (gri 103)
Banorte continued its Alliance with the MexiCO2 platform for the contribution of Ps 1 million to Profauna Mexico to finance the protection of black bears in the Sierra Zapaliname, in Coahuila. This donation will take place over 4 years from 2015, through the trust’s help, in which funds donated by employees will be doubled by the Banorte Foundation.
The Profauna project raises awareness about the importance of the species to the public, the prevention and mitigation of possible damage, allowing the coexistence of productive activities carried out by the habitants and the black bear.
During 2016 a culture of organizational change among employees of the Banking Sector and Long Terms Savings was encouraged to promote the implementation of sustainable practices by sending 16 internal postcards for “Taking care of my Planet” and “Meatless Monday” campaigns. Employees were also encouraged to use digital banking through 35 communiqués highlighting the benefits of BxI, mobile Token, Banorte mobile and mobile payment.
In addition, we continued to receive suggestions and initiatives through various channels of communication. In 2016, 340 comments on activities related to sustainability were discussed.
For fourth consecutive year we participated in the GEI Mexico program of the Ministry of Environment and Natural Resources (SEMARNAT). GFNorte was the first private financial institution to obtain GEI2 recognition, which supports our strategy of evaluating, accounting and reporting GHG emissions from the company, as well as implementing the emission mitigation program.