Sustainable Credit Products range
Sustainable Loans for Companies:
Borrowing entities must comply with Garanti Bank’s Environmental and Social Loan Policy in their activity.
Our sustainable products design derive from the relevant European legislation and the guidelines issued by London Market Association’s Green Loan Principles and Sustainability Linked Loan Principles aimed to set common rules and characteristics for such types of products for all market participants in order to avoid greenwashing. General broad principles to be observed by a financial product to qualify as “sustainable are:
- generates a clear impact on the client's sustainability oriented transformation,
- generates a verifiable social and environmental impact
- are simple in design and execution (plain vanilla)
- relevant in terms of turnover
- equipped with the necessary controls from the Bank’s business units and with clear legitimacy on the part of all stakeholders.
SDGs linked loans
SDGs linked loans are financial solutions offered to GBR customers based on projects that directly contribute to one or more of the UN’s SDGs. These projects can be considered as green, social or sustainable subject to their use-of-proceeds.
ESG linked loans
Sustainability linked loans are financial solutions offered to the Bank’s clients based on the Borrower’s sustainability transformation targets quantified in pre set KPIs to be contractually agreed with the Bank and monitored /reported by an external verifier independent ESG certified auditor)[1].
The use of proceeds is unspecified in this case, yet a significant percentage of the client’s sales should derive from its sustainable activity.
Core components of the two categories of sustainable loans:
| SDG linked (labelled green’/’sustainable’) |
ESG linked | |
|---|---|---|
| Destination Monitoring | Use-of-proceeds | General business performance of the Borrower in relation to predefined ESG KPIs |
| Pricing | up to 5-10 bps incentive applied to average interest | up to 5-10 bps incentive applied to average interest |
| Sustainable impact | Direct impact of proceeds | General impact of the borrower |
| ESG rating needed | N/A | best effort |
| Independent review needed | best effort | yes |
Sustainable Loans for Retail:
Eco Housing Loan
An eco-friendly choice
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