Uruguayan investment

Since its foundation in 1896, the Banco de la República Oriental del Uruguay has been highlighted because of its commitment in fostering the economic growth and development of Uruguay.

As a commercial and development bank, it faces every day challenges in generating profitability levels in accordance with the fulfilment of its key objective: to honour its social commitment to promote the financial inclusion, investments, production and exports of Uruguay.

The excellent management of the company allowed it to be in the position of the main financial institution of the country, with a market share over 44 percent. Recognised by its soundness, reliability and efficiency, the Banco República has consolidated its social role in recent years, incorporating the concept of sustainability as the main gauge of its performance.

In 2009, the Banco República adhered to the United Nations Global Compact. This initiative of the UN has the objective to ensure that the world’s nations adopt the 10 main principles related to Human Rights, Labour Rights, Environment Protection and the struggle against corruption. This commitment represents for the bank the responsibility to disseminate and locally promote the principles of the Global Compact.  That is why, the bank is presenting proposals to work together with customers and suppliers in order to collaborate and further the awareness about the concept of sustainability in the Uruguayan population, and, at institutional level, in the implementation of a Environmental System that includes the control of indirect impacts generated by the financial activity through the granting of loans and the financing of investments, as well as the direct impact produced from the internal processes of the institutions.

First, the banks channel funds for investment projects with a direct impact on social, economic, and environmental welfare levels. The Banco República has as one of its main objectives the promotion of productive investments, focusing on those presenting economic, social and environmental sustainability conditions. With this guideline, the bank was first in the line in the ranking of financial institutions of the country, becoming the first Uruguayan bank to subscribe the Equator Principles. The inclusion of these principles which constitute a series of requirements to be taken into account to finance projects over $10m, guarantees that the main projects financed by the bank be those managed with social responsibility and integrating the best practices to manage social and environmental risks.

Nevertheless, a sustainability analysis should also be applied to projects of lower amounts, as those of the SME, which are key anchors for the sustainability of Latin American countries. In this regard, in order to evaluate the lower value productive projects, the Banco República considers important features such as: the incorporation of clean technology systems or quality/traceability systems, giving important benefits to those reaching higher standards of development. Likewise, it offers assistance to enterprises to adopt the best eco-efficient practices.

The adoption of the best “eco-efficient” practices in the internal processes of banking companies is a recent process in expansion, which implies the inclusion of ecological considerations in social responsibility policies, such as the energetic consume, the selection of suppliers, the debris handling, the ecology in offices and the internal awareness of the environmental problem.

In 2010 The Banco República approved its Institutional Policy of Energetic Efficiency and Environmental Care, which has as objective to balance the bank’s activity with the multiple aspects included in the Environment pledge. In general, the main guidelines refer to: respect for human health, ensuring the total balance of the bank’s activities with the preservation of physical and mental health of anyone involved, and the effects that those activities generate on the environment, health, and security.

The institutional awareness and program, tries to integrate all levels of the organisation to fulfil the policy, as well to promote the active participation of employees to suggest additional proposals and to implement actions involving all the population in environmental protection.

Energetic efficiency is recognised as an essential requirement for sustainable development. A special effort has been put on the implementation of a program that attempts to acquire technology which can lead to energy and efficiency savings and the further monitoring and control of the results.

The environmental care section includes a set of definitions and actions, such as: the acquisition of products compatible with environmental sustainability and energetic efficiency, the development of processes oriented to the reduction, re-use and recycling of paper and the design of mechanisms minimising the production of debris.

Finally, with the emergence of environmental issues at a global and national level, it is necessary that banks go forward to the creation of green financial products and orientate their business to the promotion of investments with higher environmental value. Furthermore, banks should aim to develop an environmental engineering program allowing to advise and train other companies to identify and reduce environmental risks.

Therefore, the Banco República provides specific assistance with conditions that directly affect companies in processes such as the incorporation of cleaner production mechanisms, as well hiring technical consultancies and advisors. This line also covers financing for the implementation of clean production systems, consultancies in order to detect opportunities, relocation for environmental reasons, compliance with environmental legal provisions and the generation of energetic efficiency projects.

Recently, we entered into an agreement with Sumitomo Mitsui Banking, from Japan, aiming at entering the carbon offsets market, to foster the environmental commitment of Uruguay’s companies with the quantification of emissions. Uruguay is still in a very early stage in regards measuring and calculation of the carbon footprint, therefore this agreement is hugely significant.

Recently, the Banco República and the Union of Exporters of Uruguay (UEU) decided to start working together on the creation of a program to provide support to companies, by means of advisory, financial and business opportunity detection services. The main objective is to help companies progress in incorporating environmental topics in their activities and start to implement procedures and mechanisms for calculation, measurement and later certification of environmental quality.

This year, there is a plan to increase awareness by holding sessions to provide information about the best eco-efficient practices, measurement and certification mechanisms, as well as looking at the change in regulation at a national and international level, and its impact on companies’ competitiveness. Banco República has progressed significantly towards positioning itself as a sustainable bank in regards of financing eco-efficient projects as well as converting some internal processes in the institution towards environmentally friendly practices.

At an institutional level, the bank has the priority to advance the measurement of its emissions, in order to know the exact effects generated from the use of energy or vehicles, thus being able to adopt the most efficient measures. At the same time, we have carried out some improvements to the existing building infrastructure in accordance with a higher environmental protection, together with the construction of new eco-friendly branches.

The bank has also started work on projects to reduce paper consumption and incorporating more recycled paper as well as the replacement of IT equipment with computers that are more environmentally efficient.

The bank’s commitment with sustainability has resulted in the international recognition of Banco República as Sustainable Bank of Uruguay in 2009 and 2010, with this being the first time that a national institution has achieved such recognition.

For more information: (598 2) 1896 -2710; www.portalbrou.com.uy