University of Bern Guest Lecture PDF

University of Bern : «The Role of the BoD: Awareness of and commitment to sustainability and value focus” : Antoinette Hunziker-Ebneter, Chair BEKB and CEO Forma Futura Invest AG Bern, 9 November 2023 I raided a bank And i was director of a bank What values do we embody? 2 Our values Commitment Sust...

University of Bern : «The Role of the BoD: Awareness of and commitment to sustainability and value focus” : Antoinette Hunziker-Ebneter, Chair BEKB and CEO Forma Futura Invest AG Bern, 9 November 2023 I raided a bank And i was director of a bank What values do we embody? 2 Our values Commitment Sustainability We impress our stakeholders with our committed approach. We champion an economy that works for people. We recognise our responsibility in terms of ensuring the sustainable development of our economic region and living environment. Trust We inspire and build trust through our open and transparent way of working and our financial stability. 3 Our vision Unsere Vision Wir begeist ern nachhaltig To sustainablyimpress Gant risch 94 Our service pledge We work side by side with our clients to shape the future with pooled strengths with innovative solutions with entrepreneurial flair So that they can continue to rely on us as the leading financial service provider in the Bern area 5 Our strategic goals Wowing clients with dedicated staff Being a leading financial service provider in sustainability Ensuring sustained business success Maintaining a solid capital base and attractive dividends Steadily improving the Net Promoter Score ISS ESG ‘Prime' rating and sector Top 10 Cumulative free cash flow 2021–25 CHF 450m to CHF 550m Profit 2021–25 CHF 700m to CHF 800m cumulated; Basel III capital adequacy ratio >16%; Dividend payout ratio 50% to 70%; Steadily rising dividends 6 Our strategic focus areas Stepping up client interaction Enhancing efficiency We harness the potential of our 600 professional financial coaches to We optimise our client-centric processes and utilise the opportunities offered increase the number and quality of client interactions. We continue to by digitalisation to enhance efficiency. develop our solutions in line with client needs and thus build long-term relationships. Promoting innovation We promote innovation internally and with partners. We develop complete and forward-looking solutions for our clients using an ecosystem approach. Raising our profile We think and act long-term. In this way, we contribute to sustainable development: for our clients, for our staff, for the region and for the environment. 7 Our strategic focus areas – one of which was modified in autumn 2023 Stepping up client interaction Enhancing efficiency We harness the potential of our 600 professional financial coaches to We optimise our client-centric processes and utilise the opportunities offered increase the number and quality of client interactions. We continue to by digitalisation to enhance efficiency. develop our solutions in line with client needs and thus build long-term relationships. Promoting innovation We promote innovation internally and with partners. We develop complete and forward-looking solutions for our clients using an ecosystem approach. Strengthening corporate social responsibility We systematically think and act as a sustainable bank: for our clients, for our staff, for our shareholders, for our region and for the environment. We therefore position ourselves as a forward-looking and responsible company. 8 Basic principles of the Canton of Bern’s ownership strategy The Canton and BEKB want to maintain an independent, agile bank that operates in all regions of the cantons of Bern and Solothurn, with its decision-making centre in Bern. The services are primarily geared to the market in the canton of Bern. Through clear Corporate Governance principles, BEKB ensures responsible and successful corporate management and sustainable development. It pursues long-term financial goals rather than seeking short-term profit maximisation. BEKB revolves around people and their financial wishes and goals. Through its local and regional roots, committed staff and sustainable service offering, BEKB is a reliable partner for its clients. BEKB takes account of the three dimensions of sustainability (economic, environmental and social) in its services, banking operations, as an employer and in its cultural, social and community engagement. BEKB operates a stable, risk-appropriate and attractive dividend policy. Ensuring a sounder-thanaverage balance sheet structure rather than a (higher) dividend payout is always the priority. 9 Corporate Governance BEKB is committed to responsible, transparent and value-driven corporate governance. The Board of Directors and Executive Board follow the recognised corporate governance rules and pay particular attention to the following principles: 1. The Board of Directors and Executive Board are responsible for the bank’s longterm and sustainable development. In particular, they take account of the three dimensions of sustainability: economic, environmental and social. 2. The Board of Directors and Executive Board apply high ethical standards in their decision-making and actions. They embody the fundamental values of commitment, sustainability and trust. 3. The members of the Board of Directors and Executive Board act in the interests of the bank and its stakeholders. They avoid personal conflicts of interest. In business matters that affect their own interests or those of individuals or organisations close to them, they declare their conflicts of interest in full and without delay and refrain from participating in the relevant discussions. 4. The Board of Directors and Executive Board attach great importance to the segregation of their areas of responsibility and the clear assignment of roles and responsibilities in the bank. 10 Corporate Governance 5. Prudent and forward-looking personnel planning ensures a diverse and competent Board of Directors and Executive Board. 6. The term of office for members of the Board of Directors is limited to twelve years. The maximum age is 70. 7. The members of the Board of Directors receive fixed remuneration for their work. Besides the payments that are made in accordance with the compensation model, no other remuneration or consultancy fees are paid. 8. The highest compensation package of an Executive Board member may not exceed twenty times the lowest total compensation package in the bank. The performance-related component only makes up a limited proportion of the total compensation package and is in line with the corporate culture and the company’s goals in the areas of finance, clients, staff and sustainability. 11 Sustainable approach to investment advisory and asset management Starting position 1,468 securities Exclusion of 120 securities Exclusion of 119 securities Base universe MSCI World x CH General exclusions UN Global Compact banned weapons, fossil fuels ESG risk filter Low scorers on ESG and climate BEKB Investment Universe Stocks world Exclusion of 152 securities Exclusion of 302 securities After sustainability filter: 775 securities Exclusion criteria Controversial business practices Controversial business fields Best in Class Focus on Prime Prime-1 BEKB Sustainability Universe Stocks world Financial criteria After financial criteria: 324 securities Source: Factset, ISS ESG BEKB relies on a combination of an exclusion process and best-in-class approach to check whether companies, debtors and institutions worldwide should be included in the BEKB Sustainability Universe. From the BEKB Sustainability Universe, only securities that meet BEKB’s social, environmental and strict financial criteria are considered in investment advisory and asset management. BEKB Aktien Nachhaltig Global 12 Sustainable approach to lending Exclusion approach Supporting approach Avoiding lending that has a negative impact on sustainability Supporting projects, initiatives and companies that make a positive contribution to sustainable development Economic criteria Environmental criteria Ethical criteria Reducing risk Utilising opportunities Reducing default and reputational risk Client acquisition, development and retention 13 Wie kann der Finanzsektor einen Beitrag leisten? Sustainable financing solutions Betrag CHF 100'000 bis CHF 1.0 Mio. Renovation mortgage CHF 100'000 bis CHF 1.0 Mio. Betrag Amount CHF 100,000 to CHF 1.0 million Amount CHF 20,000 to CHF 100,000 Term 2 – 10 years with fixed and preferential interest rate Term Until expiry of the next tranche of financing and with preferential and fixed interest rate Intended use Energy efficiency renovations and new builds that meet certified energy standards Intended use Projects to preserve and enhance value Certificates Energy efficiency renovations GEAK® certificate with increase of overall energy efficiency by at least two categories Evidence of achievement of Minergie Standard, Minergie-P or Minergie-A Requirement Total financing from BEKB GEAK/Minergie mortgage New builds GEAK® certificate with category A Evidence of Minergie standard Requirement Total financing from BEKB Betrag 100'000 bis CHFmortgage 1.0 Mio. eco CHF renovation Amount CHF 20,000 to CHF 100,000 Term Until expiry of the next tranche of financing and with preferential and fixed interest rate Intended use Renovations to improve energy efficiency Certificates No certificate required Requirement Total financing from BEKB 14 BEKB Community Support Fund (BEKB Förderfonds) The BEKB Community Support Fund started operating on 1 January 2018. Over the last 5 years, the award commission has approved 426 applications and provided CHF 4.9 million in funding for projects in the cantons of Bern and Solothurn. The BEKB Community Support Fund support projects in the following areas Culture and the arts (46%) Education (29%) Health and social affairs (9%) Environment (9%) Sport and leisure (7%) 15 Innovation through partnership Launch of myky The three companies Berner Kantonalbank (BEKB), Energie Wasser Bern (ewb) and Gebäudeversicherung Bern (GVB) jointly launched the myky platform in late 2021. myky links up services to help people make their homes more sustainable and reduce CO2 emissions. 16 Sustainable dividends: 27th increase in a row (from CHF 9.20 to CHF 9.60) 10 Payout ratio since 2018 at least 50% to maximum 70% 2022: 56.1% Continued increase in dividends Dividends have been increasing for decades Increase in 2022 to CHF 9.60 Dividend yield around 4% 9 8 7 6 5 4 3 2 1 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 As at: 31.12.2022 17 BEKB’s sustainability credentials Awards and memberships ISO certifications SQS  Quality management: ISO 9001 since 2002.  Environmental management: ISO 14001 since 2004.  Fair Compensation 2018–2021 ISS ESG  Consistent sustainability rating ‘Prime’ by ISS ESG since 2010.  BEKB is a leader in the sector with above-average performance in the social and environmental sphere. Carbon Disclosure Project (CDP)  BEKB made the climate change ‘A’ list of the Carbon Disclosure Project for the seventh time in a row in 2022.  BEKB has therefore been among the leading financial service providers for thirteen years. WWF Switzerland  According to WWF Switzerland, BEKB is one of the leading banks in the area of sustainability.  In the rating of Swiss retail banks, WWF closely inspected 15 banks in 2020/2021. BEKB was among the leading banks, as in the first rating in 2016/2017. Swiss Sustainable Finance (SSF)  BEKB is a member of Swiss Sustainable Finance SSF. UN Principles for Responsible Investment (PRI)  BEKB has signed the Principles for Responsible Investment. Partnership for Carbon Accounting Financials (PCAF)  BEKB is a member of the Partnership for Carbon Accounting Financials (PCAF). Net-Zero Banking Alliance (NZBA)  BEKB was one of the first Swiss banks to join the UN’s NZBA in February 2022.  It has committed to reaching net zero in its credit and investment portfolio by 2050. 18 Corporate Governance    How important is each area of responsibility? What expertise is needed? What mindset is needed? 19 It’s not committees that lead companies, but people. 20 Where are the biggest levers for sustainability? Levers for sustainability as an individual Housing Food Consumption Voting Mobility 22 Levers for sustainability at Forma Futura Best-in-Class (Top 15%) as the first filter Screening of controversies Company engagement Sharing knowledge Extensive exclusion criteria Voting recommendations for Annual General Meetings Individual case review for critical themes Collaboration with partners: Shareholders for Change, CRIC, WWF. 23 Levers for sustainability as a company A company's design shapes its priorities, the way it engages with its environment and makes decisions, and where it invests and directs its profits. Purpose Finance Networks 1. Purpose 2. Networks 3. Governance 4. Ownership 5. Finance Why does the company exist? How is the company embedded in its environment? How is the company run? What does the ownership structure of the company look like? How does the company obtain financing? Ownership Governance Strategy Organisation Activities The Board of Directors has a decisive lever for implementing sustainability in the company. It is the link between the environment and the company itself. 24 Decisive elements - Awareness of sustainability: Is there a common understanding of sustainability on the board of directors? - Values on the board of directors: What values do the board members embody? Do they share a common set of values? - Motivation of board members: What do the board members want to achieve with their mandate? What are they committed to? - Composition of the board: Which competencies are represented on the board of directors? What different viewpoints do the members represent? - Binding demand for sustainability in the company: How does the board of directors ensure that sustainability is implemented holistically and consistently within the company? What mechanisms are in place to review and ensure this? 25 The role of consciousness Our understanding of sustainability at Forma Futura Environment Society Economy We are embedded in and dependent on the environment. Our goal is to create and maintain the quality of life within planetary boundaries. 28 The transformation to sustainable quality of life requires the simultaneity of four global (r)evolutions Source: Claus Otto Scharmer 29 Thank you for your attention. Antoinette Hunziker-Ebneter CEO and founding partner Main number: +41 44 287 22 87 [email protected] Alle Angaben basieren auf dem derzeitigen Kenntnisstand. Änderungen vorbehalten. Dieses Dokument der Forma Futura Invest AG ist ausschliesslich für den Adressaten bzw. Auftraggeber bestimmt. Es bleibt bis zu einer ausdrücklichen Übertragung von Nutzungsrechten Eigentum der Forma Futura Invest AG. Jede Bearbeitung, Verwertung, Vervielfältigung und/oder gewerbsmässige Verbreitung des Werkes ist nur mit Einverständnis der Forma Futura Invest AG zulässig. Forma Futura Invest AG | Bederstrasse 49 | CH – 8002 Zürich | www.formafutura.com