The Blue Commitment for Chile Program
The "Blue Commitment for Chile" program was strengthened in 2023. This initiative allows Banco de Chile to reaffirm its commitment to contribute to the care of the environment through the provision of products and services for individuals and SMEs. The program aims to promote electric mobility, encourage the use of clean energy, support SMEs and invest in eco-friendly funds through Banchile Inversiones and BlackRock ESG.
Blue Crew:
- The "Blue Crew" is the corporate volunteer program that invites all bank employees to take an active and leading role in caring for the environment through training programs and spaces for environmental awareness.
- Following the devastating forest fires that affected south-central Chile in early 2023, Banco de Chile partnered with the Reforestemos Foundation on a corporate volunteer work initiative. Its focus was urban tree planting in communities in the regions of Ñuble and Biobío that were impacted by this emergency.
- Thanks to these actions, more than 1,200 trees were planted, which is equivalent to more than 350 tons of CO2.
Credit Card Recycling
- Banco de Chile and the sustainable construction company Green Bricks set up an inclusive space based on PVC obtained through "upcycling" technology. It was developed by Green Bricks to turn credit cards (including their magnetic strip) into construction materials.
- This initiative has given a second life to more than 10 thousand of the bank's unused credit and debit cards, thus preventing them from ending up in a landfill. The construction process involved installing tactile floor tiles and special railings for the visually impaired in the school playgrounds at Escuela Chile-España in Concepción. In addition, benches and smooth pavers were installed to facilitate wheelchair access in that area.
Training of Bank Teams
In 2023, the following training courses were held in collaboration with expert organizations to provide new tools and reinforce knowledge within the organization in the area of sustainability and contributing to caring for the environment:
- Course on Sustainable Finance and ESG
- Recycling Management Course
- Course on new integrated reporting and internal control on ESG data
- Talk on Regulatory Trends and Sustainability
- Seminar on Sustainability and ESG Strategies
- Introduction to the REP Law
Retail and SME Banking
Banco de Chile's Blue Commitment for Chile is reflected in benefits for our customers, such as discounts on the purchase of electric vehicles, solar panels, efficient heating systems and other products that reduce the generation of greenhouse gas emissions. The initiative also includes an investment fund with an environmental focus, insurance and support for SMEs that contribute to the country's sustainable development. With this in mind, the main areas related to this commitment continued to center on fostering environmental awareness and care and the promotion of sustainable product ventures. Some of these products include:
- Commercial and consumer loans with preferential rates
- Leases with preferential rates and discounts with suppliers in partnerships
- Interest-free installments for credit card purchases
- Discounts on credit or debit card purchases at sustainable retailers
- Insurance
- Investments
In addition, as part of the Blue Commitment for Chile program, 7,955 environmentally friendly welcome kits were given to new customers in 2023. The kits contained compostable bags that reduce paper printing by 15 tons. In addition, all new Banco de Chile credit and debit cards for customers were made with 100% recycled material in 2023, which meant a 36% reduction in CO2 emissions and a 75% reduction in water used.
Sustainable Finance
Banco de Chile promotes a culture of sustainability by adopting Environmental, Social and Governance (ESG) principles into the internal policies, mechanisms and processes of its different business units and subsidiaries. As part of this strategy, it is working to continuously improve how it allocates resources and incorporates socio-environmental criteria into risk assessments designed to fund development projects.
In 2023, Banco de Chile issued the first two ESG bonds under the Sustainable Finance Framework (ESG Framework), for US$ 85 million, to promote gender equality (see the Community chapter for more information).
In addition to the above, in the past three years, Banchile Citi has participated in the issuance of 28 international bonds for more US$ 30 billion, including 20 ESG issues made by the Chilean Treasury for more than US$ 23 billion. Additionally, in the local market, the bank advised Enaex on the issuance of a local bond for UF2,500,000. This was the first placement of a bond linked to sustainability in Chile by a corporate issuer.
ESG Risk Measurement Integration
The Wholesale Credit Risk, Retail Credit Risk and Global Risk Control Divisions are responsible for identifying and managing the corporation's main risks, optimizing the risk-return ratio, ensuring operational continuity, and generating a robust corporate culture in this area. Their responsibilities also include the integration of Environmental, Social and Governance (ESG) risks into the business strategy.
The work in this line is based on the credit policies of the respective business segments, especially financing requests that have a greater exposure to environmental and/or social risks, in accordance with Banco de Chile's Sustainability Policy. A variety of information is gathered to assess these risks, including ESG ratings and information provided by the customer or using a questionnaire for gathering information for the analysis of the projects and ensuring the sustainability and corporate reputation of the organization.
Also in 2023, the bank developed and introduced heat maps at the sector and regional levels. These devices will provide a general overview of the portfolio and allow the entity to make progress in identifying and managing the associated risks.
In the same vein, the corporation conducted a series of training sessions on ESG, sustainable finance, regulatory trends, and internal control in order to increase the knowledge base of employees in the areas that require it in compliance with General Rule No. 461 of the Financial Market Commission (CMF).
As part of its commitment to environmental stewardship and in an effort to continuously improve the assessment and management of climate change risks, the bank will develop a taxonomy that identifies the criteria for identifying activities that may be considered environmentally and/or socially sustainable and in compliance with the legal and regulatory requirements that may be established in this regard.
Corporate Banking
During 2023, syndicated financing was structured and implemented for the Red Maule public works concession project, which includes the replacement of three medium complexity hospitals in the Maule Region for the municipalities of Cauquenes, Constitución and Parral.
- The Cauquenes Hospital will have 136 beds and will benefit 59,000 people.
- The Constitución Hospital will have 111 beds and will benefit 57,000 people.
- The Parral Hospital will have 121 beds and will benefit 58,000 people, especially in highly rural areas.
The long-term financing totaled UF7,678,000, and was closed in November 2023. This syndicated financing was structured by Banco de Chile, which committed 100% of the resources required. BancoEstado, Banco Internacional and Banco BICE were subsequently invited to participate. (Banco de Chile now holds 43.4% of the long-term segments.)
In the same vein, Michelin Specialty Materials Recovery Spa (Chile) secured a $2.4 billion blue loan to finance a tire recycling plant for its Michelin subsidiary.
In addition, this year we continued to finance social housing. During 2023, 18 projects were approved under Supreme Decree No. 19 for a total of UF 5,126,129.
SUSTAINABLE FINANCES PRIZE
Banco de Chile was awarded first place in Chile in the ALAS20 Ranking Award in the category of Leading Company in Sustainability. This accolade highlights the institution's efforts to promote sustainability in the financial sector by implementing policies and practices that contribute to climate change mitigation and financial inclusion.
Operational Eco-efficiency
In the context of the Environmental Sustainability Policy, Banco de Chile has established areas of intervention to minimize the effect of its operations in terms of energy and emissions, paper and water consumption, and waste generation and recycling.
- In 2023, 100% of the electricity consumed by the entity came from renewable energies backed by Renewable Energy Certificates (I-RECs): 26.8 GWh from the Mampil hydroelectric plant and 2.9 GWh from the Quillagua solar plant.
- Banco de Chile reduced its carbon impact by 52% between 2019 and 2023 based on the three scopes that companies must measure. When analyzing the sources that are under control (Scope 1 and 2 market method), a 75% decrease was recorded during that period. This was mainly due to the purchase of 100% renewable energy.
- Banco de Chile manages its waste through an inclusive recycling system implemented as part of a triple impact project developed in collaboration with Kyklos, a B corporation dedicated to environmental culture. Thanks to these efforts, 211 tons of material were recovered.
- Since late 2022, new employees have received welcome kits that include a backpack made from recycled PET bottle fabric and a cell phone charger made from wheat fibers in a recyclable box. During 2023, 851 backpacks were handed out, equivalent to 21,275 recycled plastic bottles.
Banco de Chile reduced its paper consumption by 41%, avoiding the purchase of 203 tons of this material. All of the paper used is certified as renewably produced by FSC or PEFC.
In 2023, the bank consumed 259 thousand m3 of water. This amount includes recreation centers. Water consumption was 8% lower than in 2019.
