ProCredit Holding AG & Co. KGaA: ProCredit group further expands sustainability profile in 2022 with key initiatives

ProCredit group further expands sustainability profile in 2022 with key initiatives

• Publication of the Impact Report Package for the 2022 financial year
• Own CO₂ emissions (scope 1 and scope 2) reduced by 44% since 2018
• Goal achieved with 20% portfolio share of green loans; new medium-term target is 25%
• Joined United Nations Global Compact (UNGC) for sustainable and responsible corporate governance
• Joined Net-Zero Banking Alliance (NZBA) and committed to set future short- and long-term emissions reductions using the Net-Zero Standard of the Science Based Targets initiative (SBTi)
• Implemented comprehensive Plastic Strategy; member of Finance Leadership Group on Plastics
• Continued to be a reliable partner for SMEs in Ukraine

Frankfurt am Main, 23 March 2023 - The ProCredit group, which is mainly active in South Eastern and Eastern Europe, evaluates its activities not only in terms of client needs and profitability, but also in terms of the impact these activities could have on society and the environment. The group is committed to continuously reporting on key ESG results and initiatives in line with Global Reporting Initiative (GRI) standards. In addition to observing these standards and supporting the UN Sustainable Development Goals (SDGs), other voluntary initiatives such as the UN Global Compact, the Principles for Responsible Banking (UNEP-FI) and the Partnership for Carbon Accounting Financials (PCAF) were also taken into account when preparing the Impact Report Package for 2022. In its report package, the ProCredit group reports on significant milestones in the implementation of its comprehensive sustainability strategy.

In 2022, the ProCredit group made significant achievements in the implementation of its sustainability strategy. The company's own CO₂ emissions (scope 1 and scope 2) were reduced by a total of 44% between 2018 and 2022. In terms of the portfolio share of green loans, the medium-term target of 20% was achieved during the past year. These loans were used for the following: 49.8% for energy efficiency projects, 32.5% for renewable energy investments, and 17.7% for environmentally friendly measures. The financed renewable energy projects in operation led to a reduction in greenhouse gases equivalents (GHG emissions) totalling 144.7 kilotonnes in 2022. After adjusting for the Ukrainian portfolio, the share of defaulted loans in 2022 remained steady at a level of 2.4%. This result underlines the quality of the ProCredit group's holistic approach to credit risk, which includes a comprehensive ESG assessment.

With its high standards and integrated approach to sustainability, the ProCredit group stands out from its competitors. This approach is apparent in, among other areas, the group’s strict ecological and ethical requirements when selecting service providers, suppliers and other business partners. Equally high standards are likewise applied when assessing the environmental and social risk of loans to small and medium enterprises (SMEs).

In 2022, the ProCredit group joined the UN’s Net-Zero Banking Alliance (NZBA), reaffirming its commitment to a climate-friendly future and to its net-zero emissions target. Members of the NZBA have committed, among other things, to bringing their operations to net-zero emissions by 2050. This is in line with the ambitious goals of the Paris Climate Agreement. In addition, as part of the Business Ambition for 1.5°C and the UNFCCC Race to Zero campaign, the ProCredit group has committed to setting its future short- and long-term emissions reductions using the Net-Zero Standard of the Science Based Targets initiative (SBTi). Another milestone last year was joining the voluntary UN Global Compact initiative, which is considered the world's largest and most important initiative for sustainable and responsible corporate governance.

Further progress was also made during the year in the fight against plastic pollution. For example, the ProCredit group's Plastic Strategy, introduced in 2020, was fully implemented in 2022. The group's commitment to combating plastic pollution is also reflected in its membership in the Finance Leadership Group on Plastic.

The ProCredit group's own employees are a central component of its sustainability strategy. Particularly against the background of the massive challenges posed in recent years by the COVID-19 pandemic and the Russian war of aggression against Ukraine, the health and safety of the ProCredit group’s staff are of the highest priority. In this context, the premises of the ProCredit Academy provided safe accommodation for numerous colleagues from Ukraine together with their families. Likewise, individual support and further training for employees is an important aspect of sustainable corporate management. During the reporting period, around 494,000 hours of training were provided to staff; this corresponds to approximately 17 days per employee and represents a significant increase compared with the previous year. The focus this year is particularly on diversity and inclusion by promoting an international perspective and strengthening the shared values within the ProCredit group.

The successes of the sustainability strategy in 2022 are also attributable to a range of initiatives. The share of e-cars and plug-in hybrids in the company's own vehicle fleet was further expanded to 52.4%. In addition, 272 publicly accessible e-charging stations are now in operation; these are easy to find using an app that was developed by ProCredit and is available in every app store. The group’s own photovoltaic systems produced a total of 428 MWh in 2022, an increase of 11% compared to the previous year. Moreover, the ProCredit group has maintained its 100% recycling rate for paper waste and electronic waste. In addition, 39% of the ProCredit group's suppliers are now classified as sustainable suppliers. Furthermore, a group-wide guideline on optimising credit decisions was implemented in 2022 in response to allegations of forced labour in connection with the production of solar panels in China’s Xinjiang region. Already in 2021, ProCredit decided to stop financing projects involving such equipment in view of the internationally criticised treatment of the Uyghur Muslim minority by the People's Republic of China.

"Since its foundation, the ProCredit group’s mission has been to make a sustainable and positive impact on the economies and societies where we operate," emphasises Hubert Spechtenhauser, Chair of the Management Board of ProCredit General Partner AG. "Our sixth Group Impact Report and the numerous initiatives listed therein underscore how sustainability is a fundamental part of the ProCredit group’s business model. Continuing to finance green investments and energy projects in support of the SME sector is thus a matter of great importance to us."

Given the ProCredit group's geographic focus on South Eastern and Eastern European markets, including Ukraine, the 2022 financial year was increasingly dominated by the ongoing Russian war of aggression against Ukraine. Looking back on the past year and the current situation in Ukraine, Management Board Chair Hubert Spechtenhauser continues: "We continue to look at developments in Ukraine with concern, but also with optimism. Of course, the safety and well-being of our employees in Ukraine has always been our top priority. Despite the shock and emotional impact of the Russian invasion, our colleagues in Ukraine were able to maintain operations without interruption and to help the country protect its sovereignty. Looking forward, we want to remain a reliable partner for our SME clients in Ukraine and, hopefully soon, support them in rebuilding and expanding their business."

The Impact Report Package 2022 consists of two parts. The Impact Report itself provides a detailed overview of ProCredit Holding's sustainability strategy as well as its sustainability performance, initiatives and goals for the future. The Impact Report is supplemented by a data sheet that aims to continually improve reporting quality and enhance its comparability. The Impact Report Package 2022 of the ProCredit group, as well as the Annual Report 2022, is available as of today on the ProCredit Holding website in the Investor Relations section at https://www.procredit-holding.com/investor-relations/reports-and-publications/.

Contact

Andrea Kaufmann, Group Communications, ProCredit Holding, Tel.: +49 69 951 437 138,

E-mail: Andrea.Kaufmann@procredit-group.com

About ProCredit Holding AG & Co. KGaA

ProCredit Holding AG & Co. KGaA, based in Frankfurt am Main, Germany, is the parent company of the development-oriented ProCredit group, which consists of commercial banks for small and medium enterprises (SMEs). In addition to its operational focus on South Eastern and Eastern Europe, the ProCredit group is also active in South America and Germany. The company’s shares are traded on the Prime Standard segment of the Frankfurt Stock Exchange. The chor shareholders of ProCredit Holding AG & Co. KGaA include the strategic investors Zeitinger Invest and ProCredit Staff Invest (the investment vehicle for ProCredit staff), the Dutch DOEN Participaties BV, KfW and IFC (part of the World Bank Group). As the group’s superordinated company according to the German Banking Act, ProCredit Holding AG & Co. KGaA is supervised on a consolidated level by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and the German Bundesbank. For additional information, visit: www.procredit-holding.com.