VakıfBank, within the framework of its Environmental and Social Impact Management in Lending Policy, has implemented the Environmental and Social Risk Management System (ESMS) as of December 2022. This system has been applied to Project Finance loans of 20 million USD and above, aiming to assess risks and potential impacts in the areas of environmental, social, governance, and occupational health and safety. As of August 2025, the assessment criterion has been revised to include Project Finance loans with an investment amount of 10 million USD and above. With this step, our bank has the opportunity to assess the environmental and social risks of a broader loan portfolio in alignment with international standards, such as IFC Performance Standards (IFC PS), Equator Principles (EP), proactively manage these risks, and increase its assets within the scope of the Communiqué on the Calculation of Banks’ Green Asset Ratio, which was published by the Banking Regulation and Supervision Agency (BRSA) and came into effect as of June 2025.

Within the scope of the Environmental and Social Risk Management System (ESMS) assessment process, the activity related to the requested loan is first checked against the VakıfBank Exclusion List of Non-Financeable Activities* (NFA) annexed to Environmental and Social Impact Management in Lending Policy. A commitment letter is then obtained from the client confirming that they do not operate in any of the sectors listed in the (NFA). If the activity is included in the VakıfBank Exclusion List of Non-Financeable Activities, the loan proposal cannot be made. You can review our Policy Document for the List of Non-Financeable Activities here.

For project loans with an investment amount of 10 million USD or more that are not included in the Unfinanced Activities List (UAL), an environmental and social risk assessment is conducted for the client and the project to be financed, using the Environmental and Social Assessment Tool within the scope of the Environmental and Social Risk Management System (ESMS). Based on the assessment, the project may be categorized into one of four risk classes: A (High), B+ (Medium-High), B− (Medium-Low), or C (Low).

If, as a result of the preliminary assessment, the project subject to the loan is classified as Category A (High) in terms of environmental and social risk, the relevant Branch is informed of the requirement to appoint an External Consultant Firm to conduct a more detailed environmental and social risk assessment in accordance with the Bank’s ESMS standards.

In cases where the appointment of an External Consultant Firm is not required, a list of documents prepared based on the IFC PS and national regulations is sent to the client. After reviewing the documents submitted by the client, a site visit is conducted to assess the environmental and social impacts of the project on location. Following the assessment, projects are categorized into three risk classes: B+ (Medium-High), B- (Medium-Low), and C (Low). An Environmental and Social Action Plan is prepared to mitigate and prevent the identified environmental and social risks. The processes aimed at addressing the improvements and deficiencies foreseen in this plan are periodically monitored by our Bank throughout the loan term. All information and documents related to the project, findings obtained during site visits, the action plan, and site photographs are compiled to form an Environmental and Social Assessment Due Diligence Report.

Activities related to the monitoring of the environmental and social performance of financed projects are carried out regularly throughout the loan period. When deemed necessary, these monitoring activities may extend beyond the investment phase to include the operational phase of the project. Based on the outcomes of these monitoring activities, an Environmental and Social Monitoring Report is prepared. In cases where non-compliance and/or the need for additional mitigation measures are identified during the monitoring process, the client is required to fulfill the obligations agreed upon in the loan agreement. The scope of the monitoring activities is determined and implemented in accordance with the project's assigned environmental and social risk category.

• Category A: Monitored at least once a year by an independent External Consultant in accordance with the environmental and social monitoring program, with site visits conducted when deemed necessary.
• Category B+ and B- : Throughout the loan period, the project is monitored at least once a year by project officers in accordance with the environmental and social monitoring program.
• Category C: Environmental and social monitoring is not required.

Since the implementation of the Environmental and Social Risk Management System (ESMS) under VakıfBank’s Environmental and Social Impact Management in Lending Policy, a total of 70 projects have been subject to environmental and social risk assessments by the Bank.

Table 1: Project Loan Information by Assessment Years

Table 2: Final Score Information by Assessment Years             

The Environmental and Social Risk Management System (ESMS) is effectively implemented not only within the scope of project finance at our Bank but also across various funding processes, including loans obtained from international financial institutions (such as the World Bank, European Investment Bank, Asian Infrastructure Investment Bank), as well as cash management products. Tailored environmental and social risk assessment tools can be developed for each individual project. In this context, you may access further details on the implementation of the ESMS according to different types of financing through the links below.

World Bank Pandemic Support Loan (SADEK)