Global Compact – COP 2006/2007 As the first private Portuguese bank to adopt The Global Compact’s 10 responsibilitydriven principles, Banco Espírito Santo stated the importance of Social Responsibility in its business practices. Accordingly, BES started to incorporate the philosophy of the Global Compact. An example: in 2004 we developed the “Principles for Suppliers of BES Relationship”, that announces the principles of conduct for their suppliers, developed in accordance with the principles of Global Compact. As a further measure for the construction of a more harmonious society, Banco Espírito Santo has lent its support to the “Zero Poverty” campaign, thus committing itself to the United Nation’s Millennium Development Goals. The “Zero Poverty” campaign was part of the Global Call to Action Against Poverty, an international movement coordinated by the United Nations which aimed to mobilize the civil society into eliminating poverty and achieving the UN’s Millennium Development Goals. In 2007 BES promoted a one month event (which will be held for three years) with the main Portuguese weekly newspaper, Expresso, which aims the promotion of Sustainable Development through the Portuguese society. The pinnacle moment was a conference made by Mr Koffi Annan "The great challenges of Humanity for XXI century" that had the presence of the most important Portuguese decision makers. The opening speech was made by Mr Ricardo Salgado (Banco Espírito Santo CEO) that stressed the commitment of BES with the Global Compact principles and also the need of a wider commitment from the Portuguese society. Due to the compromises made and evidence shown in relation to the Sustainable development and mainly environmental concern, BES is the only Portuguese Bank to be part of FTSE4GOOD index. This is a result of the effort shown by all BES employees and management in order to be more accountable in relation to the Global Compact Principles, specifically the Environmental aspects. Within the scope of the Global Principles and since the last COP, the main achievements and developments made are described afterwards. Human Rights (Principles 1and 2) In this respect we point out that BES shows unconditional respect for the United Nations Universal Declaration of Human Rights and for the requirements of the International Labour Organisation in Portugal and all Countries where BES has operations, namely Angola and Brazil. The Bank’s Human Rights Policy is revealed through the commitments assumed towards the Global Compact principles. As regards the Portuguese society in general, the Global Compact Principles are already enshrined in the national legislation. The General Inspectorate for Labour and Social Security is the entity responsible for making sure these principles are followed, up to now BES has been in compliance with the legislation and standards mentioned above.
BES published the text of the Universal Declaration of Human Rights in the staff area of its intranet, with the aim of disseminating and showing its support to Human Rights. Labour Standards (Principles 3, 4, 5 and 6) BES has always followed a policy of freedom of association and effective recognition of the right to collective bargaining as mentioned on page 39 of BES 2006 Sustainability Report. Among these, we could refer our respect for and support to our employees’ trade union membership, the existence of a trade union secretariat and a Procedure for Information and Consultation, in compliance with a community directive – BES was the first Portuguese bank to implement this procedure and 98% of its employees are trade union members. On a survey performed by UNI Finance Survey on the UN Global Compact principle “Company Commitments on Freedom of Association and Right to Collective Bargaining”, BES was ranked as Average Practice with 20 positive replies on 24. During 2007 BES continued the effort of having more suppliers signing The Principles of Conduct for the Suppliers of BES Group which are based on the 10 Principles of the United Nations’ Global Compact. From 2005 to 2007 there was an increase of 64% of suppliers subscribing these principles. The aim of this document is to raise awareness among its suppliers and invite them to follow some basic rules of human rights and respect for the environment, which are essential if we want to build a society founded on sustainable development. For 2008 the Group is considering the possibility of providing a new training to its suppliers on the supplier’s principles, in order to increase the awareness on Human Rights, Environment and above all the relevance of Suppliers conduct on the supply chain. In respect of complying with these Global Compact Principles and GRI Human Rights Indicators, BES explicitly mentions in page 77 of its 2006 Sustainability Report the policies followed. Environment (Principles 7, 8 and 9) BES launched the Sustainable Future Program with the main Portuguese weekly newspaper Expresso. This Program makes the month of May as the month of sustainability. The main purpose of this initiative is to disseminate the awareness concerning not only sustainable issues in a broader way but mainly concerning Climate Change issues and its impact in society and business. This year were held several conferences concerning Energy and specifically Renewable Energy (ES Research presented the study made about renewable energy in Portugal and Spain), social impacts and Expresso published weekly several articles concerning sustainability. There was an award for best journalism about sustainability, debate in television about this topic, presentation of a research about the state of art of Sustainability in Portugal (private and public sector), press conference about BES compromise with biodiversity and culminated with Kofi Annan's conference "The great challenges of Humanity for XXI century", among others. More detailed information can be accessed in www.bes.pt/Responsabilidade Social/Programa Futuro Sustentável.
As a result of our commitment, in May 2007, BES presented its Biodiversity compromise. It was the first company and also the first in the Portuguese financial sector, engaging and supporting biodiversity conservation in Portugal, taking the lead as the first national Bank to sign the “Commitment Declaration” for Business & Biodiversity (European initiative), promoted by most relevant Portuguese Institutions. This BES’s innovative and pioneer initiative among business in Portugal, frames the guidance prioritized by the Portuguese Presidency of European Union that had place in the second semester of 2007, on Biodiversity protection and preservation. BES participated in the first Portuguese Forestry Investment Fund which aims to: improve and protect forest landscapes including, under fund management, the most extensive forestry area; promote sustainable management of the areas under its administration; involve the civil society in the Portuguese Forestry Patrimony’s management through the subscription of the fund. Banco Espírito Santo is aware that a bank’s main impacts on the environment are linked to the way it participates in environment related projects through its investment banking activities. On the other hand, the Bank is putting more and more effort into the minimisation of its direct environmental impacts. During 2007, BES has established paper saving goals and has invested in internal communication in order to encourage the involvement of all employees. Despite the efforts for dematerialization of processes, the consumption of paper in the Bank’s Central Services has still been rising (in 2006, Central Services consumed 26,6 million sheets of paper for photocopies, which reflects more 62% comparing to 2005). All employees were informed about this reality through an internal communication, which has the goal of promoting the decrease of paper consumption and reflected the reduction objectives between 10% and 15% applicable to the central departments (to see the internal communication go to www.bes.pt/Responsabilidade Social/Ambiente/Consumo Racional). Aligned with the purpose of minimizing resources consumption and waste, in 2007, BES started an assessment concerning efficient consumption in 5 premises: the headquarters building, Oriente building, Carnaxide building and in two branches (one representative of a branch with more than 10 employees and one branch representative with less then 10 employees). The assessment will allow to identify, characterize and measure the efficiency in these buildings and therefore define a strategic plan to implement efficient measures concerning solutions to rationalize the consumption of resources and raw-materials, cost reduction, above all minimize the environmental impact related to BES’s activities. The intervention areas of the assessment are energy and atmospheric emissions, water and effluents, materials, waste, interior air and social aspects such as comfort, environmental promotion or the engagement with its users. This year, BES has been recognized as the Best Portuguese company in climatic protection through the “Climatic Responsibility in Portugal sectorial Index” (see
www.bes.pt/Responsabilidade Social/Ambiente/Alterações Climáticas) which was promoted by Euronatura (www.euronatura.pt). Similarly to previous years, in 2007, in 2007 BES compensated the carbon emissions from it’s Annual Congress. In terms of waste management, BES has not yet defined a systematic policy, but has recycling programmes for used paper and toner and inkjet cartridges. In the course of 2008 will be implemented new measures of waste management. Following the Global Compact Principles, the Bank has also been changing its procedures with regard to the environment. On a commercial point of view BES has also available for clients a significant portfolio of ethical and environmental funds as referred in the 2006 Sustainability Report (pages 33 of 2006 Sustainability Report). Finally, it is worth stressing that BES Group was the first institution in Portugal to adhere to the Equator Principles (pages 34 and 35). In 2006 BES won the Deal of the Year (Euromoney Prize) with a project on Renewable Energies. Anti-Corruption (Principle 10) With regard to the last Global Compact principle, BES has a Code of Conduct for the Employees, which stipulates that they should not accept any kind of offer or benefit liable of compromising their impartiality and loyalty to the Bank. In 2006 the existing code of conduct was revised and regulates matters like: stresses the prohibition to accept any kind or remuneration or commissions, gifts, invitations, favours or similar benefits, communication of non-compliance of clients, shareholders and the market, competing companies, employees, suppliers, public authorities and supervision entities, environment and community. During 2007 this Code of Conduct was translated and implemented, for the first time, in all the international operations of BES. BES has also defined and implemented an Anti-Money Laundering Statement which is available in the website (www.bes.pt). Another document is currently under discussion for approval, an Internal Regulation applicable to BES, which sets out in detail the mechanisms to monitor internal control, to report flaws or deficiencies, to detect non-compliance instances and to correct these situations. This last paper contains a set of rules on the exercise of financial intermediation activities, and in particular on the defence of the market, aiming to avoid practices of misuse of information and market manipulation.
Communication with the Stakeholders
Sustainability Reports In 2006 Banco Espírito Santo issued a Sustainability Report, as it had already done in 2004 and 2005. In 2006 BES Group once again had a pioneering role as the first Portuguese institution in the Portuguese financial sector to publish a Sustainability report following the new methodology suggested by the Global Reporting Initiative (GRI) G3. In 2007 and 2006 BES’s Sustainability report was verified by an external entity.
BES’s last two sustainability reports had a specific section where it informed the readers (clients, the media, shareholders) that it had subscribed to the Global Compact Principles and explained the purpose of these principles. In the 2006 Sustainability Report (pages 72-75), there is a table with the reported indicators and the correspondence with the GRI indicators and the Global Compact principles. 2004 Social Responsibility Report - Page 13 2005 Sustainability Report – Pages 88 and 89 2006 Sustainability Report – Pages 5, 66 and 72 to 75. BES Group’s Principles of Conduct To its suppliers, BES Group has communicated its adhesion to the Global Compact Principles through the set of Principles of Conduct of BES Group. Valor BES In order to share information on the various aspects of company life, BES issues since 2004 a quarterly newsletter dedicated to its shareholders. It was through this newsletter that the Banco Espírito Santo Group divulged the Global Compact Principles to its shareholders. Internet The Global Compact Principles are available at BES Website in: www.bes.pt/Responsabilidade Social/Stakeholders/Fornecedores. In this webpage visitors have access to a broad range of information on this matter and can also access the UN Global Compact site. Intranet BES Group’s intranet – BESWEB -, which is available to all its employees, has in its Social Responsibility page a section dedicated to the Global Compact Principles.