NatWest, Akbank, Sign ESG FX Agreement

Turkey’s Akbank has signed an ESG FX agreement with NatWest as it seeks to align its FX business with its broader ESG targets.

Under the terms of the agreement, the two institutions agreed three key performance indicators in a balanced gender distribution across Akbank employees; electricity sourced from renewable resources for the bank’s operations; and no new lending to green field coal-power plants.

If these KPIs are met during the specified test periods, Akbank will qualify for a sustainability-linked rebate, correlated to the volume of FX trades booked with NatWest between now and the end of this financial year. At the same time, the agreement effectively allows Akbank to continue to book FX transactions with NatWest with no change to their daily process.

“We are delighted to have been able to partner with Akbank on aligning their FX trading with ESG KPIs and adopting the concept of ‘sustainability-linked’ to FX, says Fabio Madar, head of currencies at the bank. “For NatWest, this ESG FX agreement represents the first we have signed with a bank and the first we have signed in Turkey, and is another great example of NatWest’s purpose in action, helping our customers to achieve their ESG goals.”

Caroline Haas, head of climate and ESG capital markets, NatWest, adds, “Financial institutions play a crucial role in the transition to sustainable economies, not only by providing sustainable finance but also by leading the way in embedding sustainability across their entire organisation. We’re proud to partner with financial institutions, such as Akbank, as they undertake their sustainability journey, and incorporate products such as ESG-linked FX agreements to encourage behavioural change and contribute towards a more just and sustainable economy.”

In August 2021 Akbank was a counterparty to an ESG repo trade with Deutsche Bank, and

Şebnem Muratoğlu, EVP, treasury, Akbank, says “We continue to lead the Turkish banking sector in the fields of environment, social and governance factors with our initiatives. This treasury agreement, following the first ESG-linked repo agreement in the Central and Eastern Europe, Middle East and Africa regions signed by our bank in October, once again positions sustainability at the centre of our banking approach. We reiterate our commitment not to lend to new coal (thermal) power plant projects, we promise to ensure a balanced gender distribution in our bank’s employees, and we state that we will meet our electricity needs from renewable resources. Our bank’s innovative ESG strategy continues to be shown as an example, not only in the banking sector, but also in the entire private sector.”