MARCO CONCEPTUAL

Corporate Social Responsibility in the Bank is defined as a responsible dialogue with all stakeholders including institutional and individual clients, shareholders, partners and employees performed on partner terms. What is equally important, ecology and environmental protection are more than just slogans for BOŚ S.A. Funding of ecological projects is an element of Bank’s core operations. Pro-ecological investments performed by Bank’s clients contributed to reducing of CO2 emissions by over 2.3 mln tons per year and of sulfur dioxide by over 480 thousand tons per year. Renewable energy sources credited by the Bank may annually produce 1.3 mln megawatt hours of electricity.

Like in the preceding years, in 2013 all CSR initiatives of BOŚ S.A. were performed by the Fundacja Banku Ochrony Środowiska (Foundation of Bank Ochrony Środowiska). It coordinated a series of CSR projects focusing on key target groups: schools, teachers, local self-governments, people interested in ecology and employees of BOŚ S.A.

Ecological mission of the Bank

In accordance with the articles of association, “the mission of the Bank is to support activities serving the development of environmental protection, development of the market of services and products related to ecology and the promotion and creation of pro-ecological attitudes and initiatives for the protection of the natural environment”. An increase in the share in the market funding environmental projects is one of the strategic directions adopted by BOŚ S.A.

The mission, strategy and objectives of the Bank have been consistently achieved during its business operations, in particular through provision of specialized banking services dedicated to environmental protection and water management. The Bank staff supported by environmental engineering specialists is the core of the activities.

BOŚ S.A. is involved in the funding of pro-ecological initiatives in various aspects of environmental protection. The scope of its tasks is determined by needs arising both from legislation that imposes implementing of investment and technological solutions that comply with determined legal standards and from growing social awareness. A series of projects supported by the Bank substantially exceed the traditional banking operations. Developed solutions combine comprehensive client service with education on benefits resulting from the use of environment-friendly devices and installations. This reflects strong synergy between the building of Bank’s value and market position and corporate social responsibility.

Key pillars of CSR

Bank’s operations with respect to corporate social responsibility are supported by three pillars:

• Bank and its pro-ecological approach to business. both in Retail and Corporate Public Finance Function;

• eko-Polska portal combining CSR with promotion of pro-ecological attitudes;

• BOŚ Foundation that coordinates a series of projects focusing on key target groups: schools, teachers, local self-governments, people interested in ecology and a healthy life style and employees of BOŚ S.A.

ecological initiatives, providing the financial lever for regional programs that support key initiatives regarding environment protection and sustainable growth.

Since 1998 BOŚ S.A. has prepared annual Report on Ecology presenting its pro-ecological business and non-business initiatives. The report plays an important role in improving ecological awareness of the nation. Also, the Bank has developed its Environmental Policy.

We present our CSR achievements and learn from others through Cooperation with Responsible Business Forum. Five initiatives of the Bank and BOŚ Foundation of 2013 will be included in the Forum’s Report. The recognized good practices include:

- „eko-Polska.pl” combining CSR of the Bank with promotion of pro-ecological attitudes;

- „uMOCnij swój biznes” combining pro-ecological activities with education and direct business advantages;

- „2 złote dla Zwierzaka” promoting environmental protection;

- „Szkolne Smaki – Szkoły dobrego żywienia”, a cycle of conferences devoted to healthy diets; - „POMAGAM CAŁY ROK”, a regular individual charity plan;

• the Bank is a member of Koalicja na rzecz Odpowiedzialnego Biznesu;

• during an audit performed by PWC, we checked our CSR ratios based on international standards, such as GRI.

Signing the Banking and Environment UN Declaration

In 1994, Bank Ochrony Środowiska S.A. as one of the 14 Polish banks, signed the UN Declaration Banking and Environment obliging it to support investments in line with eco-development principles. The declaration is an official support for eco-banking. Its signatories undertake to consider ecological risk in granting loans. to promote new ecological services and banking products and combine their statutory operations with environmental protection. They declared: “We want to integrate environmental protection issues with internal operations in a manner ensuring sustainable development” and “We support preventive approach to environmental management with the purpose to predict and avoid potential sources of environmental degradation”. The assumptions have been consistently implemented by BOŚ S.A.

Environmental policy

The environmental policy, consistently pursued since the incorporation of the Bank in 2011, is formally expressed in a resolution of the Management Board. According to the resolution: “Bank Ochrony Środowiska, being fully aware of the importance of CSR and sustainable development, focuses on the well-being of its clients and natural environment.” Tasks included in the Environmental Policy include both those related to the operation of the Bank as a business institution, e.g.

• compliance with the valid environmental law and adjusting internal regulations accordingly;

• limiting the consumption of natural resources through rational use of water, electricity, heat and fuels; • rational waste management through limiting its production. selective collection and

recycling/neutralization;

• purchasing materials and devices considering their environmental impact as one of crucial parameters; and those aimed at ecological education of Bank’s employees and counterparties, e.g.

• promoting pro-ecological behavior among employees of the Bank and Capital Group and improving their awareness and attitudes;

• promoting the idea of environmental protection among clients, both through pro-ecological banking offer. promotion and marketing;

• promoting sustainable development among business partners and counterparties.

The contents of the Environmental Policy are communicated to each employee of the Bank and published on the Bank’s website.

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BANK

Proecological offer

The Bank’s products aimed at funding of pro-ecological initiatives include both commercial, market-based ones and preferential loans granted in cooperation with institutions that, similarly to the Bank, get

involved in supporting of environmental investments. Most pro-ecological products, in particular those offered in cooperation with other financial institutions under national or regional support systems, use incentive programs to promote pollution-eliminating activities. This is the case of cooperation with National and Provincial Environmental Protection and Water Management Funds, Bank Gospodarstwa Krajowego and foreign financial institutions, including the European Investment Bank (EIB) and the Council of Europe Development Bank (CEB) and KfW Bankengruppe. Thanks to initiatives undertaken in the Bank. based on contracts signed with these institutions. a series of dedicated products has been developed. supporting activities compliant with the national and regional ecological policy priorities. Our pro-ecological offer is to encourage potential clients, promote pro-ecological attitudes and investments resulting in improved environmental conditions. Therefore, preferential loans are of key importance. Their characteristics include: capital subsidies paid from the donor’s fund upon investment completion and thus reducing the debt or interest rates below the market level, arising from donor’s financial involvement. Thus, in cooperation with the National Environmental Protection and Water Management Fund, BOŚ S.A. offers subsidized loans to purchase and assembly solar thermal collectors. energy saving and passive housing. Loans granted in cooperation with the Fund are intended for investments compliant with the regional eco-policy. Therefore, loan terms are different for each province in terms of funding forms available, investment scope, maximum loan amount and its share in the total investment costs, length of the loan term and interest. Each Provincial Fund determines the entities qualifying for such a loan.

Loans dedicated to environmental initiatives are included in contracts concluded between BOŚ S.A. and foreign financial institutions. Involvement of foreign funds allows obtaining an advantageous funding structure with a margin and commission reduced compared to the standard offer. with reduced requirements regarding own contribution and extended grace period regarding principal payment. Other eco-initiatives, not included in the preferential funding, are financed with commercial loans, which we attempt to adjust to their specifics in the best possible manner. Therefore, our offer includes: Kredyt z Dobrą Energią – for renewable energy sources. EkoMontaż – for purchase and assembly of devices and products used for environmental protection, Kredyt EkoOszczędny – for investment aimed at savings, e.g. of electricity, heat, water, raw materials used in production. with an option to repay from savings generated by the completed investment, and Ekologiczny Kredyt Hipoteczny – with a reduced margin for buildings and apartments equipped with renewable energy sources, heat reclamation systems or with a low energy consumption certificate.

Loans used for environmental and water management investments combine business objectives of BOŚ S.A. with its mission. and clearly demonstrate its role in the environmental protection funding system in Poland.

Bank’s involvement in JESSICA Initiative (revitalization of degraded urban areas) is also of significant importance for local communities. We effectively win investors who build new shopping centers, hospitals and leisure facilities. Combining business objectives with the social aspects included in JESSICA Initiative results in a series of positive changes, among others new employment opportunities, improvement of local infrastructure, and development of micro-regions.

The education and benefits in one - programs and products with ‘eco’ element SAMOspłacający się Dom

The largest marketing initiative carried out in 2013 was 'SAMOspłacający się dom’ (‘SELF-paying mortgage’) project promoting photovoltaic mini systems and possibilities to finance real estate from

broadcast by Polsat News and Polsat Biznes), radio promotion (10 news programs in Polish Radio PR 1) and PR activities. Information about the project were publishes on news websites such as rp.pl. parkiet.com and ekonomia24.pl. A dedicated website has also been created. Further, the idea was promoted during our presence at International Trade Fair for Environmental Protection POLEKO 2013.

BOŚ EKOsystem

At the end of 2013, Bank Ochrony Środowiska S.A. finalized work on a new product promoting small environment-friendly installations, even though the Act on Renewable Energy Sources was not effective yet. BOŚ EKOsystem product developed by our experts is a comprehensive solution combining aspects of selecting relevant installations, their assembly, maintenance and funding. The solution allows reducing heating and hot water bills in households. Compared to costs generated by coal, natural gas, propane- butane or heating oil fueled installations, the resulting savings may reach several thousand PLN per year. Most importantly, when developing BOŚ EKOsystem, we went far beyond the traditional banking area. The solution focuses on full satisfaction of clients’ needs as it offers a complete product. The funding is just an element of the offer.

“2 zł dla Zwierzaka”

In the second half of the year, the second edition of “2 zł dla Zwierzaka” took place. Under this initiative, BOŚ S.A. pays a donation to a special fund aimed at protection of endangered species living in Poland on each deposit founded and maintained for at least a month. The species to be supported was selected during the national voting campaign carried out at www.zwierzaki.bosbank.pl and www.ekolokaty.bosbank.pl. Internauts could vote for seals, lynx, moose and deer.

In the first edition, the support went to Biebrzański Park Narodowy, in the second, to seals kept in Hel by Gdańsk University Development Foundation. The Bank has spent several thousand PLN to support endangered species. The supporting activities included promotion in Internet and in Bank’s outlets. The purpose of the action was (apart from encouraging clients to select a banking product) to increase their awareness of Polish endangered animal species and active involvement in their protection. Both purposes stem from the double advantage idea pursued by BOŚ S.A. and expressed by the slogan “Advantage for you and for the world you live in”.

uMOCnij swój biznes

‘uMOCnij’ is a unique proposal promoting ecological approach to business and reducing cyclical business costs. For example, our clients, businesses interested in reducing their electricity bills, may get a special financial bonus for installing a reactive power compensation system that supports rational use of electricity. Further, the Bank may fund the purchase of such system (the offer of compensation for PLN 1) if the client opens a business account and buys a range of products in BOŚ S.A.

Events and publications Fairs and conferences

As for corporate banking, marketing activities included: participation in trade shows and conferences supporting the Bank’s image as a leader in financing green projects (including Green Power. Forum Budownictwa Energooszczędnego i Pasywnego - Budma 2013. Forum Przemysłu Energetyki Słonecznej w Toruniu. Forum Gospodarki Niskoemisyjnej. Envicon. Power Ring. Polski Kongres Energii Odnawialnej. XVII Konferencja - Kompleksowa gospodarka odpadami).

Since 1992, we have participated in POLEKO, International Trade Fair for Environmental Protection. the largest ecological fairs in Central and Eastern Europe. Each year, over 20.00 people visit the fairs. including environmental protection and waste management specialists from Poland and abroad.

During the fairs, BOŚ S.A. presents its pro-ecological products, and our employees act as experts and lecturers during conferences and workshops.

During POLEKO 2013, as in previous years, the Bank received the ACANTHUS AUREUS 2013 award for a stand best-suited to its marketing strategy.

A cycle of articles, advices and interviews with our experts published in muratordom.pl professional news was also aimed at enhancing the Bank’s position on the environmental initiative funding market. Their key objective was to promote and develop pro-ecological attitudes and environmental initiatives.

Key assumptions of Report on Ecology

For over 15 years. BOŚ S.A. has prepared Report on Ecology. On the one hand, it has been a response to recommendation of UN “Banking and Environment” Declaration, and on the other hand, a paper useful both for internal purpose and promotion.

The report is a concise summary of annual eco-business activities of the Bank referred to the entire country and the national system of environmental protection funding. Further, it presents non-business activities performed by BOŚ S.A. and its employees.

The Report indicates the importance of ecology as one of the key strategic directions adopted by the Bank. In the section devoted to banking products, preferential and commercial loan granting principles for eco-initiatives are presented. The core part of the report discusses activities performed by the Bank over the last year with presentation of its segment structure, key funding areas, ecological results of completed investments funded with bank loans.

CLIENTS AND EMPLOYEES

In accordance with its mission and the resulting motto: “Beneficially for you and the world you live in”, we promote pro-ecological attitudes beginning from the first contact with each client. Our new website (opened in 2014. prepared in 2013), presenting our clients with benefits achievable through new green solutions, supports this approach. The philosophy is further reflected in our marketing and sales activities. The ”Ja + EKO” stamp put on our advertisement materials reminds users of both benefits of environment-friendly initiatives and our specialization. Further, we not only encourage but help to understand actual benefits arising from eco-friendly products and attitudes. Initiatives of BOŚ Foundation in and eko-Polska portal operated by the Bank and addressed both to our clients and employees contribute to this idea.

Financial education

Bank Ochrony Środowiska got involved in ‘Bankowcy dla Edukacji Finansowej Młodzieży BAKCYL’ project prepared by Warsaw Banking Institute. It is an example of socially responsible cooperation of the entire banking sector, aimed at improving the level of understanding of finance among young Poles.

Under BAKCYL program, bank employees are acting as volunteer trainers teaching young people practical principles of banking to enable them to make informed decisions about their finance and future economic standing. In 2013 programs and education materials were prepared for four practical finance lessons for kids aged 13-16. In cooperation with 11 partner banks, a team of 40 volunteers was built including five from BOŚ S.A., prepared to carry out school lessons. Twenty five pilot lessons were carried out in 23 grades for 553 pupils. Volunteers, teachers and pupils highly appreciated the lessons. According to 85% of pupils, they learned many new things and the average mark given to the volunteers was 5.26 (in the scale from 1 to 6).

• 44 full-time courses, mostly open (free of charge) performed in cooperation with student associations (DM BOŚ experts supported student initiative. such as Konferencja Akademia Analizy Technicznej. Akademia Młodego Inwestora. Student na Giełdzie. Focus on Forex). Warsaw Stock Exchange and under the program Inwestuj świadomie - Akcjonariat Obywatelski organized by the Ministry of Treasury. We participated in annual Wallstreet and Profesjonalny Inwestor conferences organized by Individual Investors' Association;

• about 240 webinars addressed both to clients of DM BOŚ and other parties interested in stock exchange. Foreign exchange, investing and pension funds (IKE/IZE).

Further. DM runs open investment blogs that enjoy substantial popularity among investors and a publicly available website bossa.pl/edukacja with a number of educational publications and recordings of courses on investing.

Client satisfaction survey and complaint handling

In 2013, client satisfaction survey was carried out in relation to implementation of a new type of branch. A ‘Secret Client’ survey was carried out in all retail outlets and corporate centers.

In 2013. the complaint handling time was substantially reduced. Timely complaint handling was the crucial satisfaction factor included in client surveys. A new IT tool was implemented to support the process. which allowed clear improvement of data quality and process parameter reporting. at the same time providing independence from third-party suppliers (this was in-house implementation).

Service quality and standards

Since 2011 we have been regularly working on client service quality. At the end of 2013, Retail Client Service Quality Standards were modified and Corporate Market Sales Standards introduced, including the specifics of relations with the corporate clients.

Protecting human health and natural environment

We offer our employees with comprehensive support, including not only basic working conditions but also performance of social projects and initiatives.

All employees of the Bank are included in the employee healthcare program. Further, those who declare their joining a health insurance program are additionally insured.

Employees of BOŚ S.A. may use group accident insurance and sports offers on preferred terms. Our experts visiting clients and administrative staff moving among bank’s offices have been using electric cars since March 2011. BOŚ S.A. was the first corporation in Poland to buy two Mitsubishi iMiev models with electric engines. The cars are environment-friendly and produce no CO2 and NOX emissions. They are a part of the Bank’s fleet with the average daily mileage of 200 km.

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PORTAL EKO-POLSKA