We always make a comprehensive evaluation of our corporate lending customers. It is important for us to identify the financial risks and also the environmental, social and governance (ESG) risks related to the company’s operations or project to be financed. It is crucial to find potential risk factors in major projects and risky sectors.
We integrate ESG in all our financing decisions and prioritise investments that are sustainable from the perspective of the environment and climate. We observe good stock market, banking and insurance practices and support sustainable development goals.
Sustainable corporate finance solutions
Sustainable corporate finance solutions can be divided into two main categories: green financing and finance related to a company’s sustainability.
Green financing can only be used to finance a certain green business or project. The financed activities' environmental impacts are monitored annually. Green financing can be applied to several financial instruments. We provide green finance solutions based on the criteria of OP Corporate Bank's Green Bond Framework. Financing of sustainable activities can be granted for:
- Renewable Energy
- Energy Efficiency
- Green Buildings
- Pollution Prevention and Control including Sustainable Water Management
- Circular Economy
- Clean Transportation
- Biodiversity Conversation and Environmentally Sustainable Management of Living Natural Resources and Land Use
- Climate Change Adaptation
Finance related to a company’s sustainability means financing for general corporate purposes. The loan terms are tied to the company's general sustainability targets and the company reports annually on set targets. Sustainability-linked finance can be applied to several financial instruments.
ESG analysis
We use an ESG analysis to assess companies and their creditworthiness. This helps us identify risks in customers' business, support strategic business development and offer a sustainable financing solution for the customer's need. When making an ESG analysis of a company and projects, we assess the environmental, social and governance risks that are material for the sector.
In the ESG analysis, we assess the companies, schemes or projects seeking financing. We group them into ESG industry categories, based on their exposure to ESG factors typical of their industry. The ESG industry category assigned to the company determines the level of ESG analysis required for new loan decisions.
For example, under environmental factors, we look at the company's impacts related to GHG emissions, biodiversity, hazardous waste, and circular economy. The analysis of social factors includes occupational safety, data protection, product safety and supply chain sustainability and more.