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We are one of the most sustainable banks in the world
In our organization we are committed to improving people's lives through the construction of a thriving economy, a healthy environment and providing social well-being. We propose to contribute to the development of the territories where we operate, articulating actors and sectors with a range of products and services so that our customers and partners are increasingly sustainable and have a positive impact on their communities.
Once again, we were invited to participate in the Dow Jones
Sustainability Index’s evaluation. The DJSI has been in the market for more than 20 years, and we joined it in 2012. In 2021, we obtained a score of 87 out of 100, ranking fifth globally and first in emerging markets, and MILA, which ratifies us as the most sustainable bank globally and reaffirms our commitment to work for sustainability. We were also recognized with a silver medal in the ranking conducted by
S&P Global for the 2021 Sustainability Yearbook, which highlights the companies with the best sustainability practices.
Sustainability Policies
As part of our corporate strategy, in Bancolombia we apply several Sustainability Policies:
Dialogue with our stakeholders
Organizations have a great challenge in how they relate to their stakeholders and involve them on relevant issues to guide corporate strategies and ensure a sustainable future for all.
At Bancolombia we ensure that the relationship with our employees, clients, suppliers, shareholders, investors, autorithies, mass media and communities, allows us ti understand their interests and expectations
Today we have different communication channels for our stakeholders, and specifically a web site where we explain what each of our material issues consist of and where each stakeholder can feedback us to carry out joint work.
If you have any question about this, you can mail us to sostenibilidad@bancolombia.com.co.
For Bancolombia Group it is very important to know the expectations that stakeholders have about our management; their priorities and needs to offer them long-term value. In our organization we not only care about getting results, but particularly in how we generate this shared value, how we grow hand in hand with our shareholders, investors, employees, customers and suppliers; of how we are profitable, always understanding our social role. The interactions we do with every stakeholder, are conducted through classroom spaces, media and interpersonal relations, which has enabled us to further strengthen relations based on trust.
We also have a virtual site where our stakeholders can enter by clicking here. On this site we explain what each of our relevant topics consist of and open a permanent dialogue.
In 2017 we developed the dialogue process that we carried out with employees, customers and suppliers, in accordance with the Global Reporting Initiative (GRI) standard. This allowed us to communicate progress on issues relevant to our stakeholders and report on our performance in the economic, environmental and social fields. According to our stakeholders relationship policy, the dialogues take place every two years, for this reason in 2019 a new dialogue will be held.
Dialogue with stakeholders
Enter here to know the results of the dialogue with our stakeholders. You can find:
- Methodology
- Scope and objectives
- Dialogue results
- General key findings
- Conclusions
Materiality matrix
As a result of the dialogue with our stakeholders, upon which the sustainability annual report was designed, at Bancolombia Group we created our Materiality Matrix.
Further information in this regard
Materiality
We have established our corporate sustainability targets to support our business strategy and our sustainability management commitments
In 2021 we aligned materiality consulting with corporate reputation measurement, which is carried out every year in the countries we are present.
In 2020 we present the new material issues that are part of our corporate purpose that seeks to promote the sustainable economic development to achieve the wellness of everyone. To achieve this purpose we define four material targets with enabling fronts each one:
1. Grow while maintaining our financial strength
- Performance
- Governance
- Products and services
2. Achieve the loyalty and preference of our clients
3. Develop culture and talent for competitiveness
4. Well-being for EVERYONE
Citizenchip: We promote financial inclusión, We strengthen the competitiveness of the productive framework, We build more sustainable cities and communities
Impact valuation Grupo Bancolombia
The VAS (Value Added Statement to Society ) allows us to value the impacts derived from our operations (or monetization of our externalities, which might be either negative and cause costs to society or positive and generate benefits to society) which are not reflected in current KPIs. We want to go further in our progress report, and disclosure our real impact while we work to generate well-being and promote a sustainable development.
For more information about Bancolombia´s value added to society and the measurenments we have done click here.
Sustainable Finance
At Bancolombia, we have understood that as a financial institution we are a key player in an environment
that is constantly changing and facing important environmental, social and economic challenges. We have committed to
incorporate ESG (Environment, Social and Governance) variables into our corporate strategy, therefore we defined our
purpose as promoting sustainable economic development to achieve the wellbeing of all and set the
goal to destine $500 trillion COP before 2030 through credit and other financial services to do so. We have thus
chosen three action fronts in which we believe that we can fulfill said purpose and measure our results:
- • Strengthen the competitiveness of the productive fabric in the countries where we are present
- • Build sustainable cities and communities
- • Encourage financial inclusion
This commitment comprises our activities in all of our business segments: Corporate and SMEs banking,
Personal banking, Government and Institutions banking, Investment Banking, Brokerage, Asset Management, Private
Banking, among others, and includes processes of due diligence, engagement, knowledge of clients and finance through
innovative products for sustainable solutions.
In addition, we have a specific business unit for sustainable financing that incorporates aspects such as:
- • Specialized technical visits to clients with our commercial team: accompanied by internal
technical experts or allies of our organization, we carry out visits and identify opportunities for sustainable
and efficient projects for our clients.
- • Identification of the new environmental regulation: we are updated of the environmental
legislation that can apply to the operations of our clients and develop articles and specialized training so
they can comply with such regulation successfully.
- • Analysis of environmental and social risks: we perform environmental and social risk analysis
in projects that required it according to our policies. Once identified the requirements that our customers must
meet, we accompany them with our financial products, so they comply with them.
- • Training and courses for our commercial team: virtual training courses for the identification
of sustainable projects and in person training activities for all our commercial team, allow them to identify
sustainable and resources management opportunities for our clients.
- • We participate in fairs and academic events: we participate in fairs and sustainability
events with our sustainable business strategy, sharing with our clients and stakeholder’s technical knowledge
and providing advice for the identification of sustainable projects.
- • Innovation and development of sustainable financial services: day by day, we are evaluating
the financing mechanisms of projects through multilateral funds, we seek international cooperation alliances for
our customers, we evaluate and propose special lines with development banks and own resources, we make technical
cooperation alliances seeking to create sustainable financial products.
1. Operating Segments
1.1 Personal and Business Banking
Our business strategy seeks to satisfy the financial needs of customers and is based on precise
advisory, on personalized attention, a close, easy, pleasant, reliable and timely attitude, and the
generation of added value to the client, to guarantee the quality of service and promote business
growth and the development of the countries where we are present.
These segments are responsible for managing Grupo Bancolombia’s operations with its own portfolio,
liquidity and distribution of treasury products and services to its customers in Colombia.
1.2 Fiduciary Services
This segment provides trust and asset management services to customers. The main products offered
include money market accounts, investment and pension funds, private equity funds, trust payments,
custody services and corporate trust funds.
1.3 Stockbroker
Bancolombia provides brokerage, investment advisory and private banking services to individuals and
institutions through Valores Bancolombia S.A. Comisionista de Bolsa. In addition to that, it sells
and distributes participatory securities, futures, currencies, fixed income securities, investment
funds and structured investment products.
1.4 Asset Management
Bancolombia's Asset Management business unit was created in 2012 to offer a new value proposition and
better investment solutions to customers, by establishing a synergy between Valores Bancolombia and
Fiduciaria Bancolombia which combined the experience and professionalism in portfolios management.
This business unit generates solutions for the management of mutual investment funds and individually
mandated Delegated Portfolios, helping over one million clients to achieve their investment goals by
managing over COP 40.3 trillion of assets in the capital market in 2020.
2. ESG Integration in Corporate and Investment Banking
Our Corporate Banking business unit includes International Banking,
Investment Banking, Corporate Banking, SMEs banking, and Government and Institutional banking.
2.1 Due Diligence / Customer Knowledge:
2.1.1 Due Diligence Process.
Grupo Bancolombia has adopted and implemented a Risk Management System for Money Laundering and
Terrorism Financing (SARLAFT), which complies with the regulations of the financial sector ("Organic
Statute of the Financial System" or "OSFS"), other issued instructions by the Financial
Superintendence of Colombia, as well as the FATF1 recommendations and the best international
standards.
The policies, controls and procedures of Bancolombia have been designed and implemented under a
risk-based approach and are based on due diligence that seeks to prevent the use of our entity by
criminal elements. This includes among other things: improved knowledge of our customers and their
operations, customer segmentation, products, channels and jurisdictions and transaction monitoring,
resulting when applicable, in the suspicious transactions notification to the corresponding
authorities. The conduct procedures and rules related to the implementation of all control
mechanisms and SARLAFT instruments are included in the SARLAFT Manual and in the Ethics Code
approved by our Board of Directors and they are mandatory for all Bancolombia employees.
2.1.2 Environmental and Social Risk Analysis in
Financing
In addition to promoting sustainability in the businesses it finances, Grupo Bancolombia has adhered
to the Equator Principles of the World Bank, it is part of the United Nations Environment Program -
UNEP-FI, of the Responsible Banking Principles, of the Business Ambition for 1.5°C initiative, of
the Dow Jones Sustainability Index, has an alliance with World Wildlife Fund - WWF and actively
participates in the Green Protocol of the Colombian national government. It has also committed to
the principles of environmental and social sustainability and does so by applying the standards
defined by the "International Financial Corporation - IFC", or others that are applicable to it.
2.2 ESG Customer Engagement:
We interact and share with our clients ESG knowledge and practices through different mechanisms,
generating a differentiated experience.
- Knowledge Transfer: Media Engagement
Our clients can find valuable knowledge, best practices guidelines and trend analysis to
incorporate ESG criteria into their daily activities on the following websites:
 
On 2021 we share with our customers 35 articles and podcasts about ESG topics reaching 25.371
of them.
- Direct ESG involvement
We directly support our clients in the incorporation of ESG practices in their businesses
strategies and operations by conducting one on one site visits, massive participation
events, advisory for projects with technology and consulting firms and other different
services.
In 2021, we impacted approximately 13,800 clients, with content on topics such as sustainable
financing, trends and benefits of sustainability, cleaner production, energy efficiency,
renewable energies, sustainable building and livestock, and responsible investment, through
the participation in more than 20 events in most of the Colombian territory and the
implementation of 205 technical visits to clients.
We implemented expert advisory initiatives for our clients with national and international
partners in the areas of livestock and sustainable building, impacting 150 and 55 clients,
respectively.
Engagement Metrics
As a result of our work, in 2021 we impacted 41.506 clients from our Corporate and Investment Banking
segments that represent 10.05% of all corporate clients.
For more information on the published ESG content and generated impacts follow the link:
2.3 Exclusions:
As part of our corporate vision, Grupo Bancolombia does not finance companies or projects related to
the production, marketing or use of the products, substances and activities included in our
exclusion list:
2.4 ESG Products
2.4.1 Green/ESG Credit Lines
Bancolombia Green Credit Line
As a response to the global environmental challenges, in 2014 we launched the
“Sustainable Credit Line”, a specific credit line oriented towards supporting our
clients on their investments in adoption of technologies or projects that generate a
positive environmental impact by optimizing the use of resources (reduced water,
energy or fuel consumption or reduced generation of waste). In order to incentivize
these types of projects this line has preferential rates and repayment periods
compared to traditional credit or leasing options.
Through the Sustainable Line, we finance projects associated with energy efficiency,
renewable energies, circular economy, cleaner production, sustainable bluiding,
livestock and sustainable mobility for our customers from the Independent to the
Corporate segment, through credit or under the Leasing modality. In addition, we
provide unrestricted financing (no need of use of proceeds) to clients certified as
B Corporations and internally classified as sustainable.
Features of the sustainable credit line:
• Beneficiaries: Public and private sector customers, from
independent businesses to corporates.
• Term: Up to 36 months for working capital; up to 84 months with
a grace period of up to 2 years for energy efficiency, cleaner production,
sustainable transport and cattle raising; Renewable energy projects up to 180
months; sustainable building up to 120 months.
• Maximum amount per operation: depending on the environmental or
social impact.
• Indexing: IBR
Follow the link to learn more about projects financed in 2021:
Sustainability linked credit line
Understanding the needs of our clients, we launched the sustainability linked credit
line, which allows us to offer long-term financing to our clients and promote their
commitment to contribute to sustainable development through an improvement in the
credit rate if the meet, within an established period, one or more environmental
and/or social goals agreed at the beginning of the facility.
This line of credit complies with ICMA's principles of sustainability linked
financing and bonds.
Agrosostenible
Special credit line that merges benefits from the Sustainable Credit Line and Finagro
financing (Agrofacil) aimed at customers who are part of the agricultural production
chain: producers, processors, traders and support services for agricultural
production, which require financing for investment projects that generate positive
impacts on the environment.
Agro Lines
Financial solutions that seek to accompany the cash flow needs of our agricultural
clients according to their productive activity, and that have environmental and
social benefits. They have terms, grace periods, depreciation plans, and payments
plans customized according to each productive activity.
- • Hass Avocado
- • Poultry farming
- • Cocoa
- • Coffee
- • Sugar Cane
- • Cattle raising
- • Tahiti lime
- • Oil Palm
Special development bank credit lines
These are commercial credit lines for companies where
Bancolombia, through leasing or credit operations, acts as a financial intermediary
for some second-tier banks, such as FINAGRO, BANCOLDEX and FINDETER, granting our
clients development credits under very favorable financial conditions and that are
focused on sustainability issues.
Renting Colombia
Through Renting Colombia, we finance vehicles powered by electric, hybrid and natural
gas engines. In addition, we have an integral Information System called CENTURY,
that allows improvements in vehicle fleet management and clients´ logistics
operations generating savings in fuel use of up to 20% by driving optimization.
Sustainable Financing in other regions
Panamá:
Likewise,
for our operations in Panama with Banistmo we have developed a sustainable products
portfolio which includes sustainable construction, renewable energy, and private
sustainable funds.
El Salvador:
At Banco Agrícola in El Salvador, we have a leasing line called Cupo Verde, which is
a special credit line that has a quota of 40 Million dollars, and a differential
rate, for projects of Energy Efficiency, Renewable Energy, and Cleaner
Production.
Main Features:
- Energy Efficiency: Max 1 million USD per transaction and max term 60 months.
- Renewable Energy: Max 5 million USD per transaction and max term 120 months.
- Cleaner production: Max 150.000 USD per transaction and max term 60 months.
We also have the "Mujer Futuro" credit line, which is aimed at businesses led by
women. Its objective is to facilitate preferential conditions to support and
encourage the growth of these companies.
Corporate and Investment Banking ESG Financing figures
2.4.2 Green/ESG Fixed Income Products
Green Bonds
Since 2016 we have been implementing our sustainable funding strategy.
To date we have had made four green and sustainable bonds issuances for a total amount of 1.8
trillion pesos in Colombia and a gender bond issuance in Banistmo for $ 0 million USD.
Green, sustainable and gender bonds are debt securities that are issued to generate capital
specifically to support projects with environmental and / or social benefits in: renewable energy,
energy efficiency, sustainable waste management, sustainable construction, clean transportation,
affordable housing, social infrastructure, job creation, affordable basic infrastructure, gender
equality, among others. For these issuances, investors not only assess the standard financial
features but also the specific environmental and social objectives of the projects intended to be
financed.
These issuances have been made in the secondary and primary markets, with international buyers such
as IFC and the Inter-American Development Bank (IADB). In accordance with the Green &
Sustainable Bond Principles standard, the status of the four issuances in Colombia as of December
31, 2021, is presented below. Banistmo’s gender issuance status is also presented.
Fourth issuance figures
On September 16, 2021, Bancolombia issued a second
sustainable bond for a market value of COP 600,000 million in the Colombian market.
Seventy percent of the proceeds correspond to green projects focused on renewable
energy, sustainable building, and circular economy. The remaining 30% corresponds to
social projects focused on social housing, social infrastructure, and women's
empowerment. 100% of the resources have been allocated and disbursed.
- • COP 600 billion disbursed.
- • 175 projects in 16 regions in
Colombia
- • 10 green projects and 165
social projects
- • Average amount per fCILITY: COP
3,560 million.
- • Average term per operation: 7.5
years.
- • SDGs impacted with this issuance: SDG 1: End of Poverty, SDG 3:
Health and Well-being, SDG 5: Gender Equality, SDG 7: Affordable and Clean
Energy, SDG 8: Decent Work and Economic Growth, SDG 9: Industry, Innovation and
Infrastructure, SDG 10: Reduction of Inequalities, SDG 11: Sustainable Cities
and Communities, SDG 12: Responsible Production and Consumption, and SDG 13:
Climate Action.
Third issuance: Sustainable bond
On 19th July 2019 Bancolombia issued its first
sustainable bond for COP 657 billion, which is the third issuance it has done with
sustainability criteria. This bond was issued in the secondary market and acquired
completely by the IDB. 63% of resources were compromised to green projects on
renewable energy, sustainable building and cleaner production. The other 37%
corresponds to social projects focused on social housing and sanitation. 100% of
resources from the bond have been assigned and disbursed.
Third issuance figures:
- • COP 657 billion disbursed.
- • 26 projects in 8 regions in
Colombia
- • 18 green projects and 8 social
projects
- • Average amount per project: COP
25 billion
- • Average term per transaction: 7
years
- • SDGs impacted with this issuance:
SDG 11 Sustainable cities and communities; SDG 9 Industry, Innovation and
Infrastructure; SDG 7 Affordable and Clean Energy; SDG 6 Clean Water and
Sanitation; SDG 4 Quality Education; SDG 3 Health and Wellbeing.
Second issuance: Green Bond
On 18th July 2018 Bancolombia made its second issuance
of a green bond for COP 350 billion. This issuance was made in the primary market
and was over demanded by 2.8 times. 90% of projects financed through this issuance
correspond to sustainable building projects and the other 10% to renewable energy
projects. 100% of the resources have been assigned and disbursed.
Second issuance figures:
- • COP 300 billion disbursed
- • 8 projects in 6 regions and 8
municipalities in Colombia
- • Average amount per project: COP
37.5 billion.
- • Average term per transaction:
6.5 years.
- • Impact of projects financed by the
green bond: 230 GWh of renewable energy generated annually, 34.7 MW of renewable
installed capacity, 66,600 tons of CO2 emissions avoided per year and 69,000 m2
of sustainable building.
First issuance: Green Bond
In 2016 Bancolombia made its first issuance of green bonds for COP 300 billion,
making it the first Colombian private bank to make this type of issuance.
From this issuance, 60% of projects are small scale run-of-river hydropower plants
without dams and with installed capacities of 20MW or less. The remaining 40% are
LEED certified sustainable building projects.
First issuance figures:
- • COP 350 billion disbursed.
- • 9 projects in 3 provinces and 7 municipalities in Colombia
- • Average amount per project: COP 44.8 billion
- • Average term per transaction: 9 years.
- • Impact of projects financed by the green bond: 265 GWh of
renewable energy generated annually, 40.9 MW of renewable installed capacity,
76,000 tons of CO2 emissions avoided per year and 385,000 m2 of sustainable
building.
Gender bond issuance in Banistmo
As a part of its growth strategy and its commitment to
long term sustainability, Banistmo is adopting a holistic approach to gender equity
promotion, adopting internal policies and integrating it as part of its
operations.
To support its growth strategy in the medium term in the segment of SMEs lead by
women and to support the Impulsa program, Banistmo issue its first social bond in
2019 with an integral approach (100% of resources) on increasing the resources
available for SMEs lead by women. This bond was issued privately with a term of up
to 5 years.
This issuance seeks to contribute to Sustainable Development Goals number 5 Gender
Equality, 8 Decent work and economic growth, 9 Industry Innovation and
Infrastructure and, 10 Reduced Inequalities.
Green bond issuance structuring for clients
Bancolombia has developed the required internal capacity
to support our clients in their own green, social and sustainable bonds’ issuance
with the offering of advice on bond structuring and managing. During 2021,
Bancolombia supported three sustainable issuances, two green and one social, worth
COP 960 billion for renewable energy projects, energy efficiency and education
accessibility.
Issuance figures for green/ESG fixed
income products
2.4.3 Green / Sustainable Infrastructure Financing
Credit for sustainable infrastructure
We currently have
structured financing through credit and financial leasing operations for infrastructure projects
with positive environmental and social impacts.
The financing of Sustainable Infrastructure includes the financing of solar farms in
non-interconnected areas, small hydroelectric plants, and energy efficiency projects in public
lighting.
Green / Sustainable Infrastructure Financing figures
3. ESG Integration in Personal Banking
Our business units of Personal Banking include, Personal banking and SUFI
3.1 Due Diligence / Customer Knowledge:
Grupo Bancolombia has adopted and implemented a Risk Management System for Money Laundering and
Terrorism Financing (SARLAFT), which complies with the regulations of the financial sector ("Organic
Statute of the Financial System" or "OSFS"), other issued instructions by the Financial
Superintendence of Colombia, as well as the FATF1 recommendations and the best international
standards.
The policies, controls and procedures of Bancolombia have been designed and implemented under a
risk-based approach and are based on due diligence that seeks to prevent the use of our entity by
criminal elements. This includes among other things: improved knowledge of our customers and their
operations, customer segmentation, products, channels and jurisdictions and transaction monitoring,
resulting when applicable, in the suspicious transactions notification to the corresponding
authorities. The conduct procedures and rules related to the implementation of all control
mechanisms and SARLAFT instruments are included in the SARLAFT Manual and in the Ethics Code
approved by our Board of Directors and they are mandatory for all Bancolombia employees.
3.2 ESG Customer Engagement:
We interact and share with our customers ESG knowledge and best practices through diverse mechanisms
generating a differential experience.
Social Network Engagement
Via our social networks we get closer to people and generate discussions on ESG and sustainability
topics. With our own or shared content, we bring closer sustainability to people's daily lives,
seeking to generate a positive impact and a change in collective thinking. In total, we managed to
impact a million people through our platforms on Facebook, Twitter, LinkedIn, TikTok and Instagram.
Engagement Metrics
In 2021, we managed to impact 1.0835.364 personal clients equivalent to 7.35% of the total clients in
this segment.
For more information on the published ESG content and the impact generated follow the link.
3.3 Exclusions:
As part of our corporate vision, Grupo Bancolombia does not finance
companies or projects related to the production, marketing or use of the products, substances and
activities included in our exclusion list:
3.4 Green/ESG credit products
Affordable Housing Credit Line
To guarantee that more people access housing and to reduce Colombia’s housing
deficit, Bancolombia has supported Social Interest Housing (Vivienda de interés
social-VIS) projects via financing developed specifically for this segment. In 2020
we disbursed COP 644 billion through these credits.
Sustainable Housing Credit
On 2016 we launched a loan with preferential rates to promote the purchase of housing
projects that have been built with sustainability criteria and whose financing was
made by Bancolombia. The customer gets a 65-basis points discount in the financing
rate during the first 7 years of the loan and then continues with a benefit of 30
basis points for the rest of the life cycle of the obligation. In 2021, 964 clients
(129% more than in 2020) benefited for a total of COP 106 billion disbursed.
Projects that have the benefit of the sustainable housing loan are prioritized on
Bancolombia's offer web portal and are differentiated with a symbol that represents
that they are sustainable buildings, for more information please refer to:
SUFI
Through this strategic business unit for consumer credit
at third-party channels, we provide financing to people for sustainable
micro-mobility products such as bicycles, scooters and electric bikes and
motorcycles, low-consumption appliances and electric, hybrid and gas-dedicated
vehicles.
Sustainable Financing in other regions
Panamá:
- Banistmo Natura Credit Card
The credit card Visa Banistmo Natura is the only credit card in Panamá that
contributes to the Panama’s Canal basin conservation, which is a highly
environmental important area on the country. This card supports environment-friendly
actions carried out by Fundación Natura, as follows:
- Per dollar purchased in stores at a national level and abroad 1 point is
accrued, which may be donated to Fundación Natura or redeemed in more than 40
stores at a national level.
- Clients contribute $1.00, $3.00 and $5.00 USD through recurring charges to their
credit card.
- Clients can obtain a donation certificate for the contributions given to
Fundación Natura which is tax deductible.
- Automatically contributes the entire first year annuity upon card activation on
cardholder’s behalf.
- Permanent discounts in participating stores.
- Banikids
Banikids is a savings account for children that contributes to the sea turtle
conservation
project in the coastal communities of Cambutal and Punta Chame.
Green/ESG credit figures
4. ESG Integration in Asset Management / Wealth Management
In Bancolombia we have an Asset Management and Wealth Management
business unit with teams specialized in the development of solutions for investment
management.
Bancolombia, as a signatory of PRI (Principles for Responsible Investment) since 2014, has the
commitment to integrate ESG criteria in its investment decisions, this commitment includes, among
other businesses, Asset Management and Wealth Management business unit.
More information in:
4.1 Responsible Investment Policy:
In BANCOLOMBIA we manage significant financial resources for our own
investment portfolio, for third parties through delegated management contracts and through
collective investment funds. By our financial activity we can invest directly in companies and other
admissible investment vehicles for those portfolios; we also advise our clients in their own
investment decisions. The creation of this policy comes because as an organization we are aware that
Environmental, Social and Governance variables are fundamental for a successful development of
business activities, since they can guarantee a better generation of value for our
stakeholders.
More information in:
4.2 ESG Investment Products
ESG Delegated Portfolio
Investment strategies that have an ESG emphasis seek the generation of long-term
competitive returns for our clients, respecting the risk parameters established for
each investment objective, trying to exceed the profitability of their reference
portfolios through the incorporation of sustainability factors to the
investment process and the selection of assets with the best ESG ratings relative to
their industries.
ESG delegated portfolios is an innovative investment product offered to our
Bancolombia’ s Asset Management and Wealth Management clients with a global
diversified investment strategy, which allows investments in fixed income and equity
securities, both in local and foreign currency. It is offered under income
generation, capital appreciation and aggressive capital appreciation investment
objectives with and specific ESG score objective.
Renta Sostenible Global Fund and Renta Alta Convicción Fund
Seeking to democratize investments with ESG criteria in
the Colombian market, Valores Bancolombia launched the Renta Sostenible Global and
Renta Alta Convicción Funds, which provide its clients with an investment
alternative with a minimum investment amount of $50,000 Colombian pesos with a high
risk profile whose purpose is capital growth in a long-term horizon. It invests in
fixed income, variable income securities and other investment alternatives, with an
emphasis on the international market and that comply with defined environmental,
social and corporate governance criteria (ESG).
In this way, investments with sustainability criteria are not only available to
companies, but to anyone who wishes to align their objectives with their values.
Other ESG investment products
Emissions trading
Through the signing of the Paris Agreement, in Colombia
a new carbon market is rising. During 2016 the technological platform to transact in
the market for carbon credits was created. Since the Carbon tax implementation on
2017 and possibility of emissions offset, the market is changing its dynamic.
Through our brokerage Valores Bancolombia S.A. - Comisionista de bolsa, we have an
expert team available for advising our customers in transactions on such
market.
ESG Assets Under Management figures:
ESG Investment Products for Asset Management
ESG Investment Products for Wealth Management
ESG Investment Products for the Retail Market
Human rights
Human Rights Bancolombia Group
Our public statement on Human Rights is based on the Universal Declaration of Human Rights endorsed by the UN, the Guiding Principles on Business and Human Rights endorsed by the UN Human Rights Council and is complemented by other voluntary commitments such as: Equator Principles, Principles of Responsible Investment, Business for Peace, Mandate for Water, Coal Disclosure Project that address contexts of climate protection, anti-corruption and water resources management and peacebuilding among others.
Since 2013 we have publicly declared our commitment to the "Respect, Promotion and Reparation of Human Rights". Following the continuous improvement our policy has been updated in accordance with the new social challenges that arise worldwide in human rights. See current HR Policy *.
Throughout these years we have consolidated our responsible and sustainable business behavior through alignment with new strategies and policies for employees, customers, suppliers and society in general. Thus managing to prevent and mitigate adverse impacts on human rights directly related to our operations, Among the most relevant policies we have: Responsible Corporate Investment Policy; Diversity, Equity and Inclusion Policy; Policy to promote healthy coexistence, gender equity; Alignment of labor practices with SDGs and Due Diligence in human rights, among others.
Our fundamental focus remains on preserving the value of human dignity. Therefore, we do not support any kind of discrimination, human trafficking, forced labor, child labor: We support respect for equal pay, freedom of association and collective bargaining, in all our relationship groups.
We have 4 basic pillars in relation to human rights:
1. Human Rights in Business.
2. Human Rights in the Supply Chain.
3. Human Rights with our Employees.
4. Human Rights in Society
Our due diligence process
We conduct a comprehensive human rights due diligence assessment under the Ruggie methodology and the HRCA (Humans and Business Human Rigths Institute Human Rigths). This allows us to identify and prioritize the risks to be managed, making strategic, tactical and operational decisions focused on prevention, mitigation of risks in Human Rights.
The evaluation has scope for employees, customers, suppliers, contractors and communities of influence of the Group at the corporate level, it is carried out with the support of experts from the organization who evaluate the risks according to the areas or processes they lead. This assessment is determined by a list of prioritized risks:
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Risk
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Description of the Risk
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Group of interest associated to the Risk
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R1
Living wage
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Failure to provide a decent salary or paid breaks (vacation, leave, disability and holidays), based on the bank's policies by omission or willful misconduct, which could expose the Bank to possible lawsuits, fines and penalties.
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Employees
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R2
Working hours
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Exceeding the number of weekly working hours (43 H) and not granting active breaks, by default or intentionally, which could expose the bank to possible lawsuits, fines and sanctions. [or I will not grant permits and licenses]. Policies of schedules, licenses, control of absenteeism to see where it materializes. Labor relations and ethics line committees. And overtime monitoring
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Employees
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R3
Forced labor
and child labour
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Hire personnel who do not comply with the requirements of the law and human rights (forced labor and/or child labor or under the minimum age allowed to work) to carry out a job, either by omission or with intent, which could expose the bank to possible lawsuits, fines and penalties; or that discrimination questions are asked in the hiring process
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Employees- Suppliers- Contractors and Third Parties
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R4
salary compensation
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Failure to pay the compensation plans and/or benefits according to the rules due to an error in their calculation or intentionally (based on subjective and irrelevant criteria), which could expose the bank to possible lawsuits, fines and sanctions.
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Employees
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R5
Rights to Collective Bargaining and Freedom of Association
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Not respecting the agreements included in the collective bargaining, for example the right to freedom of association of its workers, due to ignorance or negligence, which could expose the bank to possible lawsuits, fines and sanctions.
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Employees- Suppliers- Contractors and Third Parties
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R6
Right to Non-Discrimination
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Disrespecting the work environment by the employer or co-workers due to possible discord between people due to cultural differences, which could lead to a loss of image or possible lawsuits.
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Employees- Suppliers- Contractors and Third Parties
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R7
Prevent and Mitigate Impacts
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Carry out acts of harassment, abuse or threats, and that the company does not guarantee the means to report them due to ignorance or negligence, which could expose the bank to possible lawsuits, fines and sanctions.
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Employees- Suppliers- Contractors and Third Parties, Clients, Users and the Community in General
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R8
Security and health at work Employees
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Not having the correct management of safety and health risks at work in the processes and facilities, facing employees, by omission or with intent, which could expose the bank to possible lawsuits, fines and sanctions.
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Employees
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R9
Security and health
at work Third parties
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Not having the correct management of occupational health and safety risks in the processes and facilities, in the face of suppliers and third parties, by omission or willful misconduct, which could expose the bank to possible lawsuits, fines and sanctions.
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Suppliers- Contractors and Third Parties
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R10
Respect Human Rights Security Personnel
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Improper use of force by bank security personnel, due to lack of training or malicious intent, which could expose the bank to potential lawsuits, fines, and penalties.
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Employees- Suppliers- Contractors and Third Parties, Clients, Users and the Community in General
|
|
R11
Human rights
in it Design of financial products and services
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Designing and marketing services and products in an erroneous manner, violating human rights -without avoiding negative effects on the life, health or safety of the consumer, and violating copyright-, by omission or with intent, which could expose the bank to possible lawsuits, fines, sanctions and/or loss of image.
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Customers, Users And Community In General
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R12
Legal Requirements in Human Rights in contracting third parties
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Contract suppliers that do not comply with legal regulations on social, environmental or human rights issues, due to negligence, for not doing due diligence or because the supplier hides information, which could expose the bank to possible lawsuits, fines, sanctions and affect the image of the bank.
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Suppliers- Contractors and Third Parties
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R13
Human Rights Risks in Financing
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Financing projects or investing in companies that do not comply with legal regulations on social, environmental or human rights issues, due to negligence, for not doing due diligence or because the company or client hides information, which could expose the bank to possible lawsuits , fines, sanctions and affect the image of the bank.
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Customers, Users And Community In General
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R14
Right to property
and relationship with communities vulnerable
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Buying land that does not comply with legal standards on social, environmental or human rights issues, or benefiting from improper forced relocations, without respecting the property, passage and use rights of local or indigenous people on their lands; this may occur due to negligence, omission or intent, which could expose the bank to possible lawsuits, fines, sanctions and affect the image of the bank.
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Customers, Users And Community In General
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R15
participation in politics and relationships with
government entities
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Collaborators or persons acting on behalf of the company who give, offer or promise, directly or indirectly, contracts, money or any object of value, benefit or financial advantage to a Public Servant, Political Party, political campaign, employee of state-owned companies and/or or with direct or indirect state participation, for the purpose of obtaining or retaining business or any other advantage for the company.
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Employees, Clients, Users and the Community in General
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R16
Right to equality and transparency for clients
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Carry out inappropriate acts or threats in the negotiation of collections to clients due to lack of knowledge or negligence, which could expose the bank to possible lawsuits, fines and sanctions
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Employees at Bancoagricola
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R17
Right to Non-Discrimination in Hiring
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Deficiency in the hiring processes or internal promotion caused by discrimination in political, religious and gender ideologies, which could expose the bank to possible sanctions
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Employees at Bancoagricola
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R18
Respect for labor regulations
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Not respecting the agreements included in the individual work contract due to ignorance or negligence, which could expose the bank to possible lawsuits and sanctions
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Employees at Bancoagricola
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Validation of the controls associated with the risks and the impacted processes is carried out, obtaining a second result: the Residual Risk Matrix, with its respective Heat Map;
Heat Map Inherent Risks 2021
Heat Map Residual Risks 2021
In 2021 we achieved the evaluation of 100% of the operations in Colombia, achieving the following results: in the phase of inherent risks we had 60% of the risks in low and 40% in risks in medium -tolerable. And for the first time we obtained results from the residual risk phase, where 100% of the risks were found at low levels with controls and follow-ups according to the impact and frequency generated.
For our direct operations in Human Rights, the Bancolombia Group, since 2019, has implemented a methodology for the evaluation of human rights risks for the creation and / or modification of products and services. with the aim of proactively identifying the risks that can be generated in these processes, managing them and establishing effective controls for the protection, respect and remediation of human rights.
Human Rights in Business
We are committed to the rights of people who may be affected by a funded project or activity. Therefore, we have a due diligence process through the Environmental and Social Risks assessment that incorporates human rights criteria in the identification, prevention and mitigation of environmental and social risks of the projects and activities that we finance our clients and investors: by 2021 it was applied on 112 operations of which 1 was conceptualized with Favorability Conditioned for having the possibility of violating human rights. especially with the rights of the community.
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Violated Human Rights
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Hotel construction
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Community rights
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1
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Total
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1
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To mitigate these risks, we implement conditions within the contractual clauses that aim to safeguard and protect the human rights of the operations we finance. (see Environmental and Social Risk Analysis Report 2021)
We also promote in our clients strategic collaboration schemes to improve their environmental, social and ethical performance, supporting the incorporation of human rights due diligence in their activities as in their projects, in order to implement them in a more responsible and sustainable way.
In Human Rights from investments, we continue to develop the PRI Responsible Investment policy, where we include sustainability and human rights requirements in each investment made by the organization (see attached Responsible Investment Policy).
Human Rights in the Supply Chain
Since 2009, we have developed strategic collaboration schemes to promote responsible environmental, social and ethical performance of our supply chain, in 2017 we have incorporated into the supplier management strategy, a methodology to measure the sustainability performance of our suppliers that includes the commitment to Protect, Respect and Remedy human rights, to comply with environmental, legal, occupational health and safety standards at work, incorporates a corporate social responsibility and manage the impacts on climate change and corporate governance. Using the B LAB tool "B Impact Assessment", which aims to create and generate shared value for relationship groups. View
This methodology has 5 measurement approaches: Government, Employees, Community, Environment and Other Customers. In terms of Human Rights, the most relevant are:
- - Governance: actions taken by suppliers to improve relationships with their employees, giving them access to financial information and improving the relationship with their customers by seeking feedback, thus obtaining transparency for relationship groups.
- - Employees: Evaluate supplier policies, practices, and certifications related to human rights, compensation, benefits, and education.
- - Community: Evaluates practices with the community, such as generating employment for vulnerable people, for the population of the area of influence, managing barriers to unemployment and joining volunteer schemes.
We have connection mechanisms through the code of ethics and the ethical line, whose objective contemplates the denunciations of any possible violation of human rights, unethical practices, illegal violations, or others that are NOT accepted by the organization. View
Human Rights with our Employees
As a fundamental part of our organization, bancolombia Group employees have different communication mechanisms to report any case of human rights violations, discriminatory behaviors and other incorrect acts or conflicts of interest; in case of findings or possibilities for improvement, the organization will implement action plans:
These mechanisms are:
- - Ethics Committee: made up of the highest executives of the organization, such as corporate vice presidents and managers of the Human Relations area, who are permanently trained in ethical issues to strengthen trust and credibility. This committee is responsible for providing ethics guidelines and programs, monitoring the performance of reporting mechanisms, receiving reports on the evolution of the organization, and making recommendations to improve performance in transparency and integrity.
- - Ethical line: It is the mechanism and means most recognized by relationship groups; where centralizers and qualified investigators ensure that reported cases are investigated and resolved under strict parameters of neutrality and confidentiality.
- - Labor Coexistence Committee: In accordance with the legislation and National Constitution of Colombia in force, this team must be composed of representatives of the workers, freely elected, with a periodicity of 2 years and 2 representatives of the companies, where its main purpose is to know and resolve cases of labor harassment of any kind, always within the framework of confidentiality and impartiality.
In 2021, the mechanism most used by our stakeholders was the ethical line. The coexistence committee is also used by employees, which is formed in accordance with Colombian and Panamanian standards for the investigation of complaints about workplace harassment. See presented one (1) case where related third parties violated Human Rights and remediation measures were immediately implemented. All cases are investigated under strict parameters of neutrality and confidentiality
Also in 2021 we promoted an environment free of violence and discrimination, inside and outside the organization. Therefore, we strengthened the Contigo Line, a channel of attention and psychological counseling specialized in diversity, violence, discrimination and mental health for Employees and sometimes employees of suppliers and relatives of employees We managed to accompany 530 users and 678 cases were attended.
Events of discrimination and corrective measures adopted. GRI 406.1.
| Complaints about discriminatory behaviors or actions that may threaten and/or violate Human Right |
2019 |
2020 |
2021 |
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Total number of cases filed through our formal channels
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291 |
411 |
520 |
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Cases received for consider them substantiated
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291 |
411 |
520 |
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Verified cases in which there was any action threatening Human Rights
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37 |
74 |
135 |
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Cases in which there was no proof of threatening Human Rights
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96 |
166 |
223 |
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Cases still under investigation
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16
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34
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46
|
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Cases faced with an action plan
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75 |
153 |
170 |
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Cases proven to effectively violate any Human Rights directly by action of Bancolombia
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0 |
0 |
0 |
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Proven cases of workplace harassment
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0
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0
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0
|
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Cases in wich related third parties violated human rights and were faced with remedy and reparation
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0
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2
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1
|
|
Number of discrimination incidents
|
0
|
0
|
0
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We have different mechanisms for our stakeholders to report any type of violation of Human Rights, discriminatory behavior and other incorrect acts or conflicts of interest; in case of findings or possibilities of improvement, the organization implements action plans. The mechanism most used by our stakeholders is the ethical line. The committee of Coexistence is also used by employees, which is conformed according to Colombian and Panamanian standards for investigating harassment complaints Labour.
By 2021, one (1) case was filed where related third parties violated Rights Human and immediately remediation measures were implemented. All cases are investigated under strict parameters of neutrality and confidentiality.
To manage these cases within the organization we have a methodology and internal protocols focused on the remediation of cases of vulnerability to risk in HRD.
The remedies in these cases are led by the Human Management area where through these guidelines they are managed promoting the best possible action so that the infractions obtain the expected reparation.
Human Rights in Society
In the Bancolombia Group we understand that our commitment to human rights goes beyond our economic role, we are agents of social and environmental development, concerned with generating capacities and long-term transformations, with a positive impact on communities, supporting the life cycle and improving the quality of life of people.
We are aware of the right of all human beings to enjoy a healthy environment. Therefore, we work to promote balance between the environment and quality of life, to achieve this we implement an Environmental Management System, Environmental Management Policy and a Corporate Eco-efficiency Program that allow us to manage the direct and indirect impacts of our activity on society.
Corporate Governance Model: We have a set of practices of transparency, ethics, corporate governance, internal control and risks that allow us to guarantee a solid Corporate Governance model, which generates trust for all our relationship groups and guarantees the sustainability of business in all the countries in which we are present, in accordance with our Code of Ethics, that since 2013 explicitly contemplates respect for Human Rights as a guideline for action.
Zero tolerance to fraud:
This policy is aimed at immediate action in case of fraud, malpractice and money laundering, which involves investigating and reporting any fraudulent behavior or related to incorrect acts of our collaborators, strategic allies and suppliers. This policy has no distinction of amount, since the mere fact of committing fraudulent conduct is of the greatest gravity for our organization.
We participate in trade union and specific spaces such as the Committees carried out by ANDI (National Association of Entrepreneurs of Colombia), which allows us to be updated in the regulations and contribute to the creation of new socio-environmental standards.
Corporate Citizenship & Philanthropy
The Bancolombia Foundation made a commitment to make the Colombian countryside a prosperous, innovative and sustainable development engine for our country. We made that possible by investing in innovative businesses that contribute to improving the rural areas competitiveness, developing exceptional talent to access and generate opportunities, mobilizing the talent and resources of Grupo Bancolombia to enhance the impact of our programs and projects, connected with different business units at the Bank that focus on student loans, agricultural financing , financial inclusion, bankization and financial education. Always promoting gender equity.
Our Foundation works hand in hand with business units so that the bank becomes a strategic partner of communities, for the long-term.
Business Benefits and Social KPIs.
Priorities.
Type of Philanthropic Activities.
Philanthropic Contributions.
Emerging Risks
The following risks, are the most significant emerging risks could have a long-term impact (at least three years) on Grupo Bancolombia’s business and financial results:
Emerging Risks 2021
The Bank’s ability to attract and retain specialized talent could impact some business objectives.
Category: Societal
Description of Risk: the increasing demand of non-traditional competitors in the labor market, such as Fintech companies and Neobanks; and the flexible work arrangements such as remote work and preference for telecommuting, pose a challenge for the Bank to design schemes that enable the well-being, cohesion and culture of employees to acquire and retain staff on a cost-effective basis with specialized knowledge in a variety of technological information areas, including data science, quantitative resources, information security and other technical areas in order to update the Bank’s business models to develop new products and services.
Potential Business Impact: possibility of losses caused by the impacts of new work practices, nonconformity, dissatisfaction, or lack of sense of belonging given the cost associated to attract and retain talent, as well as the one required to train existing talents.
Also, the lack of specialized workforce to fill positions in various areas could negatively affect the Bank’s ability to deal with future challenges, slow the digital business strategy execution, including development of new products and affect the Bank’s results of operations.
Mitigation Actions:
- High Potential and Specialized Talent: promote the talent mobility according to the strategic priorities to develop and retain them
- Succession plans: seeks to identify high potential talents, critical positions and map all professional employees in order to generate actions tailored to each talent.
- Recruitment strategies: identify specialized profiles that are not necessarily on an active job search that can offer the organization a competitive advantage for the development of critical knowledge
- Employer Branding strategy: the organization efforts have been focused on:
- New Generations: intended for university students
- General Public: provide to the community information about the Bank as employer
- Wellness strategy: improvement of the quality of life of the bank employees though health, labor employment security and welfare programs
- Flexible work arrangements
- Compensation model: system of variable remuneration, based on the creation of added value
ESG risks could affect the Bank’s financial condition and results of operations.
Category: Environmental
Description of Risk: sustainability is gaining importance in society and is increasing focus on topics such as climate change, social inequality, and corporate misconduct, generating rapid changes in market sentiment, in addition, the COVID-19 pandemic has highlighted the importance of good governance practices associated with the evaluation and supervision of non-financial and emerging risks, that is why an inadequate management of environmental, social and/ or corporate governance aspects in the Bank’s activities, could generate an impact on its relationship groups which includes its shareholders, customers, employees, suppliers and society in general.
Potential Business Impact:
Physical: the rise in the frequency and severity of climate events; may impact the value of the Bank’s properties; and/or disrupt the Bank’s operations and other activities through prolonged outages. Such events, may also have an impact on our customers, which could amplify credit risk by diminishing borrowers’ repayment capacity or collateral values
Transition: changes in policies; regulations, technologies and market preferences could impact the bank's financial condition because of changes in the composition of the loan portfolio, and possible impairments in sectors in transition
Social: gaps in equity, diversity and inclusion increases the resentment within societies resulting in both peaceful and non-peaceful demonstrations against institutions that can compromise business continuity
Governance: evaluation and supervision of non-financial and emerging risks, to comprehensively identify, monitor and control their impacts. Mishandling these can affect the company's stability
Mitigation Actions:
Climate Change
- Financing program for the transition to a low carbon economy
- Corporate policy for its loan portfolio related to sectors with high impact on climate
- Identified physical and transition risks in sectors in its loan portfolio and investments
Social
- Quality of life for our employees, suppliers, and customers programs
- Through financial inclusion initiatives, the bank provides free financial services for people to empowered and improve their quality of life
- Fundación Bancolombia provides scholarships for rural youth
Governance
- The Bank has a sustainability division that coordinates and drives the ESG agenda in accordance with our corporate strategy and policies
- The Bank stablished: anti-fraud and anti-corruption policy, integrity and compliance manual and financing of political parties’ policy
- All AUM of the Bank will be invested in strategies driven by ESG criteria by 2025
- Sustainable credit line and funding strategy. We have issued four green or sustainable bonds
Emerging Risks 2020
The following risks, are the most significant emerging risks could have a long-term impact (at least three years) on Grupo Bancolombia’s business and financial results:
Digital misinformation could adversely affect the Bank’s reputation as well as its operational and financial results.
Detailed definition: The increase in digital interconnection has increased the spread and distribution of digital content such as texts, photos, audio and videos, some of which are used with the intent to, among other purposes, commit fraud. Such digital misinformation can affect organizations, such as the Bank, if used to blackmail or defame the Bank’s reputation.
Impact on business: The disseminate of digital misinformation about the Bank could affect the trust of customers and other interest groups in financial services and products offered by the Bank, negatively impact the growth of deposits, third party asset management and credit products which will ultimately affect the Bank’s fees and commissions and thus, its economic performance.
Risk reduction countermeasures: In order to control and mitigate the economical and reputational implications of the digital misinformation risk, the Bank makes effort to improve the risk management process through the development of methodologies to allowing analyse and profile of customer segments and other interest groups which might be affected by misleading, false or inaccurate information. In addition, the Bank providing timely, transparent and easily accessible information to its different interest groups about fees, banking services and the Bank’s overall performance.
Changes in banking laws and regulations in Colombia and in other jurisdictions in which the Bank operates could adversely affect the Bank’s consolidated results.
Detailed definition: The widespread lack of trust in public institutions of a substantial percentage of the population, whether due to lack of representation, corruption or otherwise, and including as a result of the social and economic instability generated by the pandemic, has exacerbated the trend of polarization and distrust in governments.
Impact on business: These factors increase the possibility of violent protest and broader support for leaders who could focus their political agenda on rules that seek to regulate financial institutions and their business practices to a greater extent, including the amounts of fees and commissions that can be charged. If the Bank is prohibited or otherwise limited (including by limits with respect to pricing) from continuing to charge the clients for certain products or services, including specified types of transactions, or from imposing charges for products or services that might be introduced in the future, the Bank’s income level and financial condition could be adversely affected.
Risk reduction countermeasures: As mitigation measures, the Bank closely monitors regulatory initiatives and projects that could have significant impacts on financial sector and their activities. In addition, the Bank coordinates and leads the relationship with authorities, business associations and other interest groups to serve as allies and play an important role in the new regulatory agenda-setting.
Emerging Risks 2019
Grupo Bancolombia has identified the following Emerging Risks as the most representative:
The Bank’s ability to attract and retain specialized talent could impact some digital business objectives.
The current economic landscape requires workforces to exhibit new skills and attributes such as creativity, innovation and flexibility, which are necessary to adapt the Bank’s operations to constant technological advances, and to update the Bank’s digital business models and strategies to develop new products and services. To respond to these trends, many companies, including financial institutions as the Bank, are struggling to engage employees with specialized knowledge in a variety of technological information areas, including data science, quantitative resources, information security and other technical areas, in which it is becoming more difficult to acquire and retain staff on a cost-effective basis.
The Bank’s strategic objectives are linked to their human talent. Specifically, the development of new products, services and digital tools demands that its human talent specialized capabilities to carry out the relevant process, enabling to achieve competitive advantages with respect to its competitors.
While the Bank has implemented strategies to attract and retain experienced and skilled professionals, the lack of specialized workforce to fill positions that require this kind of knowledge in various areas could negatively affect the Bank’s ability to deal with future challenges, slow the digital business strategy execution, including development of new products and affect the Bank’s results of operations.
Mitigating Actions
- High Potential Talent: t is the Talent Planning strategy program, that allows to respond in an effective and planned way to the organization needs. The program’s purpose is to promote the talent mobility according to the strategic priorities and to develop them and retain them with the intention of letting them to achieve their career goals and holding key positions within the organization.
- Through Employer Branding strategy, the organization efforts have been focused on three target audiences:
1. Specialized Talent: It refers to the talent with specialized knowledge attraction strategies, which consist in the participation and sponsorship of specialized events about technology, analytics and artificial intelligence, aiming to gather talents with this type of knowledge and collecting information to hire them to cover vacancies requiring this kind of technical capabilities.
2. New Generations: It is a program intended for university students to participate in the resolution of real challenges regarding strategic knowledge of the organization, such as cybersecurity, consumer behavior, software architecture, analytics and artificial intelligence and digital tendencies as cloud, devops and robotics during a given period, with the purpose of attracting, building up and creating loyalty on specialized talent. In addition, the Bank has implemented and sponsored partnerships with foundations that provide support to young people trough educational programs in technological knowledge areas, to enable their introduction to the labor market. One of these programs was designed exclusively for women and seeks to contribute to the gender gap reduction in technology areas within the organizations.
3. General Public: The purpose of this activity is providing the wider community with information about the Bank as employer, through the communication in social networks of the pillars supporting the employees value proposal. This activity is performed through a weekly publication of organic content relating sustainability, work environment, work climate and new working methods.
- Succession plans for the timely coverage of critical and strategic positions for the organization. The succession strategy seeks to identify high potential talents, critical positions and map all professional employees of the Bank in order to generate actions tailored to each of the talents that the organization has.
- Recruitment strategies: identify new recruitment channels in order to recognize specialized profiles that are not necessarily on an active job search and that can offer the organization a competitive advantage for the development of critical knowledge.
As a result of climate change and evolving consumer trends, the Bank may need to modify its value proposition and credit risk management
Addressing climate change, and learning how certain industries accelerate such change, has become a mainstream discussion topic in the last decade and the focus of increasing attention by various environmental groups and governments in recent years. This focus has influenced, and will continue to influence, how societies approach this issue and has caused, and will likely continue to cause, changes in consumer consumption trends, with an expected shift to products and services offered by companies that offer environmentally sustainable business models.
Social and environmental activists are increasingly targeting different businesses, including financial services companies such as the Bank, with public criticism for their relationships with clients that are engaged in certain sensitive industries, including businesses whose products contribute are or are perceived to contribute to climate change, or whose activities negatively affect or are perceived to negatively affect the environment.
The reputational harm to clients that offer products or services or engage in activities that are perceived to be have harmful effects on the environment or to accelerate climate change may cause their businesses to deteriorate, could potentially reduce their creditworthiness and result in an increase in the Bank’s allowances for loan losses. In order to address this risk, the Bank may need to prioritize the funding of industries whose activities do not present these risks. The commercial, risk and sustainability teams of the Bank take active steps to mitigate these risks and to adapt the Bank’s lending and investment activities to align more closely with evolving concerns regarding climate change and the protection of the environment. However, any resulting shift in patterns of loan origination trend may cause a reduction in the Bank’s loan portfolio as the Bank makes the transition to greater funding to businesses with more sustainable business models. Conversely, if the Bank is unable to shift its loan origination activities in the manner described above, it may become a target of public criticism and suffer reputational harm which in turn may cause certain clients and customers to cease doing business with the Bank, impair the Bank’s ability to attract new clients or expand its relationship with existing ones.
Mitigating Actions
- Defining and implementing financing policies and strategies for clients that are engaged in certain sensitive industries whose products are perceived to contribute to climate change to stimulate these industries transformation towards environmentally sustainable standards.
- Defining the appetite for financing unconventional renewable energies in the markets where the Banks has a presence, to contribute to the energy grids transformation and stimulate the investment in clean energies.
Emerging Risks 2018
Grupo Bancolombia has identified the following Emerging Risks as the most representative:
Information Security Risk and Potential Business Impact
The Bank is subject to information security risk and look at it as an emerging risk of the technological or cybernetic category, given the likelihood of an economic or non-economic loss resulting from an assault on the confidentiality, integrity and availability of the information processed by the Bank. This type of risk may result in unauthorized access to privileged information, attacks on the technological infrastructure with the aim of stealing information, committing fraud or interfering with the regular service by not having the data required to guarantee the operation of the business. Additionally, the interruption of the services affecting our clients or users due to exploitation and materialization of vulnerabilities in the platforms, such as ransomware events.
In Bancolombia information security risk has increased due to the proliferation of new technological trends, the use of the internet and telecommunications components to carry out financial transactions and the increase and sophistication of organized crime activities, hackers, terrorists and other external parties. Despite the information security risk occurring in the world, Bancolombia considers it as an emergent risk because is relative, and is currently changing and being developed by hackers. Actually, Bancolombia is defining new processes, politics and the organizational structure to mitigate the possible impacts of that risk.
As of the date of this report, the Bank has not faced a cyber-attack with a material impact on its sensitive information which negatively affects the business or customers. However, we can’t guarantee that the measures, initiatives and procedures described above will be effective in preventing or mitigating possible future attacks or threats to the technological infrastructure. However, the entire strategy that has been defined to identify and manage this type of risk, allows us to be prepared to respond timely and effectively to any threat which may have a negative impact on the security of information in the cyber environment.
Mitigating Actions
The Bank has implemented a cybersecurity control and management system that is constantly improving and has been designed to identify and protect our sensitive information or critical assets seeking to anticipate, identify and compensate threats, as well as respond and recover capabilities or services that could be affected by a cybersecurity incident. The system includes features such as: perimeter security devices; security mechanisms of endpoint and malicious software, including different controls to protect information such as intrusion prevention systems, data protection platforms, control of internet navigation, controlled access to the network, virtual private networks, encryption, multifactor authentication schemes, systems and security techniques in backup copies; constant monitoring and continuous evaluation of the technological infrastructure through software and hardware updates, penetration tests and ethical piracy that seek to identify and mitigate vulnerabilities proactively; a security operations center 24 hours a day, 7 days a week to detect, analyze, respond, inform and prevent cybersecurity incidents on platforms that support sensitive information, as well as forensic computer services, intelligence and threat search, among others. In addition, the Bank has obtained an insurance policy designed to cover certain damages for itself or third parties as a result of the loss of data derived from these types of attacks.
The information security risk management system in the cyber environment is designed under the model of three lines: a stage of risk identification, executed by the leader of the technological component and security managers from the first line of defense; supervision, monitoring, evaluation and analysis of the potential impact of the risk, executed from the second line (risk areas) and the review of the effectiveness of the controls developed from the third line of defense by the internal audit.
The Bank’s senior management is committed to cybersecurity risk management, through a clear strategy, the allocation of human, technical and financial resources and a clear definition and disclosure of responsibilities regarding security. Also, Senior management has formed a cybersecurity and information Security Committee, responsible for approving and promoting the most important policies, strategies and projects; being informed and making decisions about associated controls, periodically evaluating the strategic and tactical plans of compliance, the review, approval and prioritization of initiatives or decisions as well as the prioritization of the use of the allocated budget. This Committee is formed by seven vice presidents of the following vice presidencies: Bancolombia’s Corporate Services Vice-presidency, Banistmo’s Corporate Services Vice-presidency, BAM’s Corporate Services Vice-presidency, Banco Agrícola’s Corporate Services Vice-presidency, Administrative and Security Services Vice-presidency, Human Resources Vice-presidency (corporate) and the Risk Corporate Vice-Presidency (corporate).
The framework used for managing cyber-security risks is designed under practices of international frameworks and standards issued by the National Institute of Standards and Technology (NIST) in NIST 800-30 and NIST Cybersecurity Framework, by the International Organization for Standardization (ISO) in ISO-27032, as well as the definitions established by the Bank.
Loss of key human talent or inability to attract and retain new talents as a result of work styles and aspirations of the young generations
Our business involves operations that cover a variety of disciplines and demands an integral structure, with specialized knowledge, from top management, administrative positions, and operational areas. Therefore, it is required that the board of directors, the senior management and all our employee workforce have knowledge in those necessary disciplines for our operations. Globalization and interconnection through disruptive technologies have caused changes in the labor market. Younger generations seek workplaces with creativity, flexibility and high remuneration, which could translate into an increasing migration rate of key talents. Additionally, there is a trend of continuous turnover of young people who do not seek a stable work, but develop their profession with learnings and constant challenges.
While we have succeeded in attracting experienced, skilled professionals and our talent turnover level is low, lose any key member of our management team or the failure to attract and retain new talents, could affect our operations because of the cost of train them again to reach the learning curve; plus, this could decelerate the execution of our business strategy, including the development of new products.
The Bank faces the risk of losing a competitive advantage due to human capital leak, especially from critical positions where there are wide gaps of knowledge of current employees with regard to potential candidates. Some critical talent needs are also the most expensive and scarcest to hire. Among the risks we see feasible, it is the difficulty of hiring people with knowledge in systems engineering, analytics and big data.
The bank is grappling with a series of interrelated risks from a rapidly transforming business environment. Addressing the main business challenges involves hiring new talents that are scarce, and retain key talents within the organization in order to ensure the continuity of the Bank’s operation.
Mitigating Actions
Talent Planning Methodology: It allows the bank to identify, develop and locate people in the right position, with the knowledge, aptitudes, attitudes and necessary skills that guarantee high performance and the achievement of business results.
- Succession plans to cover the strategic and critical positions in the organization. The succession strategy seeks to identify high potential talents and critical positions, as well as mapping all professional employees of the Bank in order to generate actions tailored to each of the talents that the organization has.
- Employer Branding Management shows the organization as one of the most attractive companies to work with; we intend to communicate our cultural DNA so that new applicants align with our interests and aspire to work with us. We also develop other unconventional ways to attract talent, such as: company-university partnerships, student seedbeds and disruptive selection processes; this strategies seek to attract young talents with specialized knowledge that are difficult to find through conventional selection processes.
- Recruitment strategies: identify new recruitment channels in order to recognize specialized profiles that are not necessarily on an active job search and can offer the organization a competitive advantage for the development of critical knowledge.
- New ways of working: developing new ways and methodologies of work that allow employees flexibility at work and achieve outstanding results through networking and the use of digital media for communication. Also, empower employees to make quick and effective decisions to promote agility in the development of our processes.
- Competitive salaries: develop salary scale that allows the attraction and retention of specialized talent according to the standards of the labor market. In this way we manage to compete for talent with fair salaries and we managed to retain the most critical employees for the development of our business.
Emerging Risks 2017
In 2017, Grupo Bancolombia has identified the following Emerging Risks as the most representative:
Cyber-security Risk
Grupo Bancolombia is subject to cyber-security risk, which includes the unauthorized access to privileged information, technological assaults on the infrastructure of the Bank with the aim of stealing information, committing fraud or interfering with regular service, and the interruption of the Bank’s services to some of its clients or users due to the exploitation and materialization of these vulnerabilities.
Potential Business Impact and Mitigating Actions
The Bank’s business is highly dependent on the security and efficacy of its infrastructure, computer and data management systems, as well as those of service providers, and others with whom the organization interacts.
The Bank has implemented a cyber-security management and control system in order to establish measures and procedures to anticipate, identify, and offset these threats. Such measures include, among others, the setup of perimeter security devices and its constant monitoring, continued to assess of technological infrastructure seeking to identify vulnerabilities, upgrade implementations, security backups, special 24/7 teams (such as a security operations center) and continuous security tests (including ethical hacking, among others). Furthermore, the Bank is currently negotiating an insurance policy aimed to cover damages that may be suffered by the Bank and third parties as a result of data or economic losses derived from cyber-attacks.
As of the date of the 20F Annual Report, the Bank has not faced a cyber-attack with a material impact on its business or its clients. However, we can give no assurance that such measures, initiatives, and procedures will be effective to prevent or mitigate potential future attacks or threats to our technology infrastructure. Any failure by the Bank to detect or present cyber-security risk in a timely manner could result in a negative impact on the Bank’s results of operations and financial position, or in problems with information, including data related to customers to be lost, compromised, or to be delivered to the Bank’s clients with delays or errors.
Regulatory Compliance
The Bank is in the process of creating a special unit responsible for overseeing and ensuring regulatory compliance in general and, in particular, regulation related to anti-competitive practices, personal data protection, and responsible lending. If this initiative is not successful our reputation, regulatory position and financial condition may be adversely affected and our ability to achieve our strategic objectives may be impaired.
Potential Business Impact and Mitigating Actions
The Bank is subject to laws and regulations related to anti-competitive practices, including the formation of cartels and the abuse of its dominant position. Violation of these laws and regulations may result in significant administrative sanctions imposed by the SIC. The Bank is actually developing a compliance program to prevent and detect such practices. Regardless, the program may not be able to prevent all inappropriate use of personal data or breaches that may result in personal data being exposed.
The Bank may not be able to prevent all risks associated with regulatory compliance or detect all instances of non-compliance with regulations. Any failure by the Bank to detect and prevent the aforementioned practices in a timely manner could damage the Banks reputation and face substantial fines and penalties which could result in a negative impact on the Bank’s results of operations and financial position.
Emerging Risks 2016
The following Emerging Risks was identified by Grupo Bancolombia during 2016:
TECHNOLOGICAL DEPENDENCE
Technological dependence has taken a great interest in Grupo Bancolombia as well as in many other organizations in the world under the concept of emerging risk, considering that this is part of the evolutionary process of an organization to provide better service to its customers. It has been considered as an emerging risk, because every time society demands greater connectivity, services at hand and speed in customer service, making it necessary to meet this need increasingly involve technological processes, but at the same time, prepare for what this implies.
Potential Business Impact and Mitigating Actions
The impact of this risk is given by the provision of the service in terms of availability and access, since the services are mainly provided in a virtual way and supported in technological processes, which, although it does not suspend the operation of the Bank nor jeopardize the information or money from our customers, this can limit the fulfillment of our promise of service.
We have a specialized team of Technology, Security and Business Continuity that day-to-day monitor and prepare to maintain the proper provision of the service to our clients, striving to have the latest technology in our technological infrastructure, seeking with that our customers count with a quality experience while ensuring the security of the information and the money. Likewise, we have a state-of-the-art datacenter, technology integration processes, platform renewal and continuous improvement schemes for our operation.
In consideration of the strategic content and specific knowledge of these plans, we are not able to provide information in this regard. If required, it must be expressly requested under confidentiality conditions that will be dealt with in the organization according to the type of request.
NON-TRADITIONAL COMPETITORS
With new technologies and companies opening their doors to new business niches, financial institutions face new challenges by having non-traditional competitors offering some similar services, under a mantle of flexibility, simplicity and lower costs, and focused on segments or mobile generations that do not require physical branches or paperwork to obtain their financial services.
Potential Business Impact and Mitigating Actions
As potential impacts, we see the eventual loss of clients due to migration to proposals other than traditional banking, on the assumptions of flexibility and agility beyond the support offered by entities subject to the control and supervision of regulatory agencies.
Grupo Bancolombia has a Vice-Presidency of Innovation focused on the generation of products and processes that allow to offer to our customers new solutions, more agile and personalized processes, as well as adjust to the needs of our clients, even generating alliances with these new competitors as means of massification of financial services.
In consideration of the strategic content and knowledge contained in these plans, we are not able to provide information in this regard. If required, it must be expressly requested under confidentiality conditions that will be dealt with in the organization according to the type of request.
State investment in infrastructure – 4G Highways
The development in state infrastructure has always been an activity loaded with risks that goes from the execution to the executioners; for that matter, the state for the roads construction has been advancing till arrived today to what it´s called 4G highways, where the private parties whom aspired to be the executioners, must ensure their technical and economic capacity to do it, obtaining at the end the economic rights of use under concession. Being the financial entities the source of capital for these private parties, all risks has to be considerate from our organizations, including the credit, legal, reputational and environmental risks.
Potential Business Impact and Mitigating Actions
Considering that the state is promoting the massification of the 4G projects, we have to be prepared to assume all the risks of it. Those risks go from the possibility of a contractor default to the environmental impact that the development of the construction could have.
Being a billion Colombian pesos projects, a non-completion of the contractor obligations surely became a matter of concern by our entity, as well the possibility to incur in reputational risks by been financing primary state infrastructure in hands of negligent contractors. Mitigating actions are the following:
- Creation of a Risk Credit Area for Public Projects
We create an area with special knowledge in public work projects with a focus in the 4G. From this area we validate the conditions of each project identifying the braches and opportunities of it.
- Legal Area Trained
We count with a trained legal area in public work projects, which provides support to contracts negotiations and ensure the accomplishment of the parties’ obligations.
- Environmental Analysis
Being a responsible bank we have also an environmental engineer which supported by the expertise of an environmental lawyer, studies the implications and effects of our company participation in the projects, validating and proposing conditions to the work execution.
- Independent Engineer
From our financial role, we demand to these projects to have an “Independent Engineer” participation, which is selected by regarding his reputation and experience. This professional performs a technical audit and reports the progresses of the work as the possible issues related with it, allowing us to anticipate any risk related.
Talent migration
The new technologies by the hand of the globalization have taken the new generations to a labor instability based on the highly pay expected, personal and professional development outside, creativity opportunities, non-traditional work proposals, self-employment initiatives, headhunters chase, and others, taking the people to be short term employ in a company.
Potential Business Impact and Mitigating Actions
The talent migration leads to lost key knowledge and sometimes even to slowdown some process in the organization, given the time and money to spend looking a new person for the job, and sometimes, having to start all over again with all risk related to it. Mitigating actions are the following:
- Lidership Institute
We have interdisciplinary teams leaded only to innovation processes, which even have a special room for it in the organization. In this team each participant not only develops personal skills but also create solutions to our company and clients.
- Innovation Teams
We have interdisciplinary teams leaded only to innovation processes, which even have a special room for it in the organization. In this team each participant not only develops personal skills but also create solutions to our company and clients.
- Variable Remuneration
It´s well known that we are very competitive y salary matters in the labor market, counting also with benefits such as low interest credits, economic aids, health & insurance packages, as others that leads or organization as a reference to stability and security for all our employees.
- Excellence Grants
We offer with excellence grants to our collaborators with outstanding performance and projection y the organization.
- Career Processes
Procuring to give opportunities to our actual collaborators, we have psychologist, HR area and coaching consulting to leverage our talent in house, open our vacancies first to our employees.
For more information
Currently, some organizations and interest groups issue information about the principal Emerging Risks in according to global trends and different bussines activities. Some of these reports can be review in next links:
https://es.weforum.org/reports/the-global-risks-report-2021
https://www.agcs.allianz.com/news-and-insights/news/allianz-risk-barometer-2021.html
https://www.swissre.com/institute/research/sonar/sonar2021.html
Target
Here we present measuring progress of strategic goals according to the three material issues selected as the most relevant for our relationship groups.
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