ACRA has affirmed ESG-AA, level ESG-2 (ESG-B on the scale valid until March 25, 2024) to Sberbank (hereinafter, Sberbank, or the Bank), which corresponds to a very high assessment in the field of the environment, social responsibility, and governance.
According to the Methodology for Assigning ESG Ratings, a very high ESG assessment means that the Bank pays increased attention to environmental, social responsibility, and governance matters.
Sberbank has policies, procedures and measurable performance indicators in the field of managing key industry ESG risks, a high level of compliance with best practices, as well as the presence in the structure of the portfolio of loans provided by the Bank for the purpose of implementing green, adaptation and social projects.
Sberbank is Russia’s largest bank and a leading global financial institution. Sberbank’s total assets amounted to RUB 46.3 tln as of the end of 2023.
key assessment factors
Sberbank’s core area of activity is lending to legal entities and mortgage lending (67% and 32% of the Bank’s total portfolio of assets1 assessed by the Agency). As of March 31, 2024, the share of mortgage loans issued to obtain housing with energy efficiency classes from A to AA++ was 5.11% of the Bank’s total portfolio assessed by ACRA (legal entities, mortgages, car loans), or 16% of the total mortgage portfolio, while the share of car loans provided to individuals was 1% of the total portfolio assessed by the Agency.
Loans provided to companies that belong to industries with a high, medium, low, and very low level of environmental risks account for 30.47%, 22.40%, 39.69%, and 7.36% of the portfolio, respectively. A 0.07% share is loans to companies included (according to the Agency’s methodology) on the exclusion list (very high level of risks). Loans classified by the Bank as green and adaptation loans account for 2.11% of the corporate loan portfolio assessed by the Agency.
The bulk of the loan portfolio analyzed by the Agency is made up of corporate loans issued to companies that belong to sectors with medium social risk, according to the Methodology for Assigning ESG Ratings and Appendix 22 thereto (47.58% as of March 31, 2024). 29.33% of the portfolio assessed by the Agency is loans to companies from sectors with high social risk, while sectors with low and very low social risk account for 21.68% and 1.34%, respectively. A 0.07% share is loans to companies included (according to the Agency’s methodology) on the exclusion list (very high level of risks).
Loans classified by the Bank as social account for 0.26% of the assessed corporate loan portfolio. The share of ESG loans with special ESG covenants is 10.73% of the assessed corporate loan portfolio.
Sberbank has a high level of environmental risk management. The Bank received the highest score for most of the relevant risks. All risks analyzed within the block are taken into account in top-level and internal regulatory documents, and the Bank regularly takes measures aimed at minimizing them. In addition, the Bank provided the Agency with documents containing key performance indicators (KPIs) used to assess the effectiveness of environmental risk management measures.
In particular, in 2023 the Bank approved its 2026 Climate Strategy, which regulates risks related to climate change, as well as the Code of Corporate Social Responsibility in Procurement, which regulates the risk management of the lack of consideration of environmental factors in the formation of the supply chain. An area of improvement for the Bank is the development of official KPIs for the risk Irrational Water Resource Management.
The elaboration of issues of integrating the environmental agenda into the business processes of Sberbank is at a very high level — according to the Methodology for Assigning ESG Ratings and Appendix 2 thereto, 95% of the factors included in the analysis correspond to the best global practices. Sberbank continuously assesses ESG risks and pays special attention to managing the climate agenda. For this purpose, the Bank has approved the following internal regulatory documents: Methodology for Calculating Direct and Indirect Greenhouse Gas Emissions Expressed in CO₂ Equivalent, from the Activities of Sberbank (Scope 1, 2 and 3), Standard for Accounting and Quantitative Assessment of Emissions for Companies of Sber Group, ESG Risk Management Policy, and Risk and Capital Management Strategy. The Bank also offsets its carbon footprint through the purchase of green energy and the redemption of green certificates.
Sberbank has developed loan products in the green, adaptation, social and ESG lending categories, and has a Green Bond Framework that regulates the process for assessing and selecting green projects. The Bank has put together and published the Responsible Financing Policy, which, among other things, includes approaches to managing ESG risks as part of the corporate lending and investment processes, as well as an exclusion list of activities that the Bank is obliged to not finance.
Sberbank cooperates with AIRI (Artificial Intelligence Research Institute) on developing an open library for reducing carbon dioxide emissions when training neural networks. The only environmental protection practice that was absent at the Bank as of the rating analysis was an environmental management system certification (ISO 14001).
ACRA applied positive modifiers in the Environment block for:
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The Bank’s experience of issuing green bonds;
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Implementation of the green office program;
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Participation in the Principles for Responsible Banking (PRB) of the United Nations Environment Program Finance Initiative (UNEP FI);
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The presence of public environmental goals that were set out in the 2023 Annual Report;
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The Bank conducting scenario analysis to assess the impact of climate factors on its activities at different time horizons and under different climate change scenarios;
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Refusal to use plastic cards, expansion of the range of online services, general greening of operating activities;
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The Bank’s organization and participation in public events to support the environmental protection agenda (Clean Games, BoomBattle, Tribute to the Volga on Volga Day, etc.);
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The Bank making it possible for employees to recycle/ safely dispose of waste, including everyday waste such as batteries, paper and cardboard, plastic, etc.
The Bank received the highest score for all relevant social risks — all policies, procedures and actions ensure high quality management of these risks and their minimization. In addition, for all the risks analyzed in this block, the Bank provided the Agency with measurable performance indicators, most of which are disclosed in the 2023 Annual Report.
The Bank does not allow any kind of discrimination and violations of labor laws when hiring personnel within the framework of labor practices, and does not resort to unethical labor practices. The Code of Corporate Ethics and Business Conduct, Personnel Policy for Remuneration and Qualification Requirements for key Employees, Diversity and Inclusiveness Policy, and the Policy in the Field of Social and Environmental Responsibility, Corporate Governance and Sustainable Development regulate these risk factors.
Sberbank also has a Compliance Hotline that employees of the Bank or any third parties may contact should they have any issues regarding prevention of corruption, conflicts of interest, unlawful use of insider information and market manipulation, as well as if the Code of Corporate Ethics and Business Conduct is violated in the indicated areas.
Most of the best social responsibility practices observed at credit institutions are applied by the Bank: according to the Methodology for Assigning ESG Ratings and Appendix 2 thereto, 95% of factors match the best ESG practices.
Sberbank has developed detailed internal regulations on human rights and business ethics that include, among others, non-discrimination provisions.
The Bank has a Corporate Ombudsman Service, keeps records of the number of staff complaints, and tracks statistics on their processing and settlement in reporting periods. In its annual reports, Sberbank discloses the gender distribution of employees. The Bank conducts training sessions for employees, including managers and top managers involved in sustainable development and ESG projects; it pays special attention to training employees and the public on a pro bono basis (on ESG topics and financial literacy). The Bank has developed policies and procedures for identifying and managing social risks in lending operations, as well as industry guidelines.
The Bank aims to create favorable labor conditions: the voluntary medical insurance program is available to all employees from the first day of employment, there is an extensive parenting support program (in particular, the Bank provides parents with financial support in case of the birth or adoption of a child); support measures are provided to employees on parental leave, and an employment service for people with disabilities is available on a special website of the Bank.
Sberbank offers special preferential products for vulnerable and special categories of clients (mortgages for military personnel, deposits for orphans, children without parental care, World War 2 veterans, etc.). The Bank ensures access of low-mobility and disabled customers to its financial services: 43,000 of the Bank’s ATMs (98% of the network) have an audio aid function for visually impaired people.
ACRA applied positive modifiers in the Social Responsibility block for:
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The Bank’s significant contribution to the development of the social sphere in its regions of presence;
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Presence of a strong and verified responsible supply chain;
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Training coverage of the Bank’s employees is 100% of the average headcount;
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The Bank has completed the assessment of the projects financed by the Bank for compliance with the social project taxonomy.
The Bank received high scores for the share of independent members in the Supervisory Board (57%), work experience of the Supervisory Board members (all of them have experience in the banking and/or IT industry), information disclosure (non-financial reports compiled in accordance with international standards are published annually), and management strategy. The Agency assigned a moderately high score for the Supervisory Board’s membership (the average length of a member’s term on the Supervisory Board is six years), and a moderate score for the concentration of shareholding.
The Agency also applied positive modifiers to the Bank’s corporate governance quality assessment for:
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The Bank’s non-financial report is compiled in compliance with international or national non-financial reporting standards;
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ESG factors are integrated into the credit analysis of borrowers and financed projects;
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Presence of reports on compliance with the Corporate Governance Code.
The Bank received the highest score for all the relevant corporate governance risks. The current regulatory document in the field of anti-corruption is Sberbank Group’s Anti-Corruption Policy, which is disclosed in the Compliance section on the Bank’s official website.
In the Agency’s opinion, the Bank pays increased attention to personal data protection and information security, follows service digitalization trends, and monitors the business reputation of its managers and shareholders. The Bank has detailed regulations on money laundering risks, strategy risks, and risks associated with compiling and auditing financial reports. The Bank received the highest scores for all of these risks: the Agency was presented with the Bank’s key top-level documents, internal policies, a description of activities and measurable performance indicators, some of which were disclosed in the 2023 Annual Report.
In ACRA’s opinion, Sberbank’s level of compliance with the best international practices in corporate governance is very high. 95% of the factors in this block meet the best ESG practices as per the Methodology for Assigning ESG Ratings and Appendix 2 thereto.
Among the best corporate governance practices adopted by Sberbank, the Agency notes the presence of a Code of Corporate Ethics and Business Conduct, and the Dividend Policy. The Bank has an Audit Committee, Corporate Secretary, Compliance Department, Risk Management Service, and a Strategic Planning and Sustainable Development Committee. The Bank assesses corporate governance risks and discloses them in its annual reports. Sberbank also has a hotline for minority shareholders. Presence of a non-executive director in the Remuneration Committee has a constraining effect on the corporate governance quality assessment.
1 The Bank’s portfolio was assessed based on information on the industry structure of the portfolio of loans, according to IFRS reporting, as of March 31, 2024, issued to legal entities (including small and medium-sized companies) (the sum of the gross book value for commercial and project lending to legal entities), as well as data on the balance of loan debt on mortgage and car loans issued to individuals as of the same date.
2 https://www.acra-ratings.ru/upload/iblock/meth/20240322_ESG%20Methodology_Appendix_Financial.pdf
key assumptions
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Data indicated by Sberbank in ACRA’s questionnaire is reliable.
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As part of the assessment of environmental and social risks in the asset portfolio, the Agency reviewed over 90% of the industry structure of the corporate loan portfolio using the IFRS statements as of March 31, 2024.
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Risk levels for 11.81% of the Bank’s corporate loan portfolio were assigned based on the approaches outlined in Appendix 1 to Supplement 2 of the Methodology for Assigning ESG Ratings, but with certain analytical adjustments.
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The share of green and adaptation projects in the Bank’s loan portfolio is 2.11% of the total corporate loan portfolio reviewed by ACRA as of March 31, 2024.
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The share of social projects in the Bank’s loan portfolio is 0.26% of the total corporate loan portfolio reviewed by ACRA.
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Since data on the energy efficiency classes of residential houses is not contained in Sberbank’s mortgage portfolio, the share of energy efficiency houses was estimated by the Bank using the publicly available data for Q1 2024 on the entire Russian market (based on data disclosed by DOM.RF and the Bank of Russia).
RATING components
Final ESG rating: ESG-AA.
Final level: ESG-2.
ESG rating determination: very high assessment in the field of environment, social responsibility and governance. Increased attention is paid to the environment, social responsibility and governance matters.
E assessment: ESG-2.
S assessment: ESG-2.
G assessment: ESG-1.
additional information
The ESG rating has been assigned in accordance with the Methodology for Assigning ESG Ratings and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The ESG rating of Sberbank was published by ACRA for the first time on July 3, 2023. The ESG rating is expected to be revised within one year from the publication date of this press release.
The ESG rating was assigned based on data provided by Sberbank, information from publicly available sources, and ACRA’s databases.
The ESG rating is solicited and Sberbank participated its assignment.
In assigning the ESG rating, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodology.
No conflicts of interest were discovered in the course of the assessment process.
The assigned ESG rating is not a credit rating.
