Banque Cantonale Vaudoise : BCV 2021 Sustainability Report

2021 Sustainability Report

Contents

A holistic approach	2	Socially responsible investing (SRI)	50
Who we are	4	Proprietary investments	52
About this report	5	Managing our clients' assets	52
Our main contributions to the Sustainable
Development Goals in 2021	6	Responsible lending	62
		Our lending philosophy	64
CSR at BCV	8	Mortgage loans	65
The dimensions of corporate social responsibility	10	Lending to local businesses	66
Our mission	11	Trade Finance	69
The evolving Swiss and international context	12
Stakeholder expectations	14	Being a benchmark employer	72
Sustainable Development Goals	16	Our employer philosophy	74
Dialogue with stakeholders and transparency	17	Focus on training	74
Our CSR ambitions and strategy	18	Diversity and equal opportunity	77
CSR governance and organizational structures at BCV	19	Work-life balance	79
		Working conditions	81
A positive, long-term economic impact	22
Long-term value creation, solidity, and financial		Corporate citizenship	86
performance	24	Playing an active role in the community	88
Contributing to Vaud's economic development	25	Direct environmental impact	91
Promoting innovation and sustainability in Vaud	28	Responsible, local sourcing	98
Ethics and corporate governance	30	GRI index	100
Living our values	32
Corporate governance	33
Due diligence and tax compliance	34
Data protection	36
Security practices	37
Climate-related risk	38
Responsible selling	40
Meeting our customers' needs	42
Close ties with our customers	44
The products and services customers need	45
Our special focus on service quality	48

1. holistic approach

Eftychia Fischer

and Pascal Kiener

At BCV, we take a holistic approach to corporate social responsibility (CSR) because we know that fulfilling our role in fostering sustainable development requires action on several fronts. To successfully address the environmental challenges before us, we must also factor economic and social considerations into our thinking. Together, these three dimensions of sustainability form the cornerstone of a cohesive, inclusive, and resilient society.

In 2021, we took concrete steps in each of the areas where we can make a positive impact. To further shrink our environmental footprint, we continued improving our buildings' energy efficiency and set the target of cutting greenhouse gas emissions from our operations by 35% from 2019 levels by 2030.

This target - which represents a voluntary commitment by our Bank - is in line with the Vaud

Cantonal Government's Climate Plan and the Swiss Federal Government's Energy Strategy 2050. Since 2019, we have also offset our remaining CO₂ emissions by financing carbon reduction and sequestration projects. Thanks to these efforts, we are certified CO₂ Neutral by Swiss Climate.

BCV's central role in the local economy was further underscored during the Covid-19 pandemic. That role comes with an important responsibility: half of the Canton's people and SMEs bank with us, and seven out of ten pension funds in Vaud count on our services. Last year, we continued to fully meet our customers' banking needs while

applying the necessary protective measures. To help local SMEs make it through the crisis, we gave them the option of deferring two principal repayments on their loans. This measure, which we had already taken in 2020, left these companies with additional cash to see them through the pandemic.

Our commitment to sustainability also extends to our products and services. We're helping finance the energy transition by offering preferential terms on mortgage loans for energy-efficient properties and renovations. In 2021, we introduced a zero-interest rate on these loans for the first 12 months for

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our personal banking customers. These customers also pay less for a CECB®Plus energy-efficiency audit through our partnership with Romande Energie. For our corporate clients, we've teamed up with SuisseEnergie's PEIK program for energy audits; our client firms are thus supported in their energy transition and can obtain a capital goods loan with zero interest for the first six months.

As the trend toward socially responsible investing gains momentum, we have incorporated environmental, social, and governance (ESG) criteria into our asset management processes. In addition, we offer investment solutions where a portion of the assets are invested in companies whose products and services address specific environmental and social issues, such as renewable energy and waste and water management. These investments proved highly popular in 2021, totaling CHF 255m in assets under management at end-December - an increase of more than 150% in the space of 12 months.

Also last year, we further developed our partnership with Swiss SRI specialist Ethos Foundation. For the funds covered under this partnership, Ethos carries out ESG analyses, exercises voting rights, and maintains dialogue with the companies in the funds, while BCV Asset Management runs financial analyses and manages the investment port- folios. To take just one example, the Ethos II - Ethos Swiss Sustainable Equities fund, which is managed by BCV, more than doubled its assets under management in 2021 to CHF 365m by year-end. And in line with Swiss Bank-

Here in Vaud, BCV has always been more than just a bank. We are an active member of the local community. As the pandemic wore on and many cultural, social, and sports events and associations in our home region faced another year of financial hardship, we maintained our backing for over 650 activities, organizations, and charities.

We also entered into a partnership with 42 Lausanne, a new school of computer programming in Vaud. 42 Lausanne provides opportunities for people who may not feel suited to a more traditional academic track, while giving our Canton a pool of skilled IT professionals to meet the growing demand within our region's economy.

We became a partner of the Enterprise for Society Center (E4S), which promotes the transition toward a more resilient, sustainable, and inclusive economy. Through this initiative - launched in 2021 by the University of Lausanne's Faculty of Business and Economics (HEC), the Institute for Management Development (IMD), and EPFL (Swiss Federal Institute of Technology in Lausanne) - we will help shape thinking about the path toward a sustainable economy.

As the number one provider of banking jobs in Vaud, we are committed to fostering a more inclusive society. In 2021, we hired an external consulting firm to conduct a pay analysis, which found that BCV's compensation meets Swiss federal requirements on gender- equal pay. We were also awarded the Fair-ON-Pay+ certification, which recognizes our equal pay practices over the long term. This certification reflects the steps we have taken over the years to promote diversity. We have taken various measures to advance women's careers and aim to have 25% of our senior leadership positions held by women by 2030.

By meeting our environmental, economic, and social responsibilities in these ways, we are doing our part to achieve the targets set out in the United Nations' 2030 Sustainable Development Goals (SDGs). And we don't intend to let up. As Vaud's leading bank, we will continue to work holistically to help build a sustainable future for our Canton.

ers Association recommendations, we now incorporate ESG preferences into the investment advisory process for our personal banking clients.

Eftychia Fischer	Pascal Kiener
Chair of the Board	CEO
of Directors

2021 Sustainability Report

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