Sustainable economic initiatives

Banks play a very important role in achieving sustainable development in nations and Mexican bank Banamex is fully aware of this growing trend and the responsibility it entails. The bank supports sustainable development in two main ways. First of all: the intergration of environmental and social criteria in designing products, policies and strategies. Secondly: the pursuit of environmental and socially responsible initiatives that go beyond the provision of financial services.

Banamex, the main subsidiary of Grupo Financiero Banamex, was founded in 1884. It was born, simultaneously, as a commercial bank and a financial agent of the Mexican government. Since then, its history has been closely linked to the evolution of Mexico, playing a key role in the growth and development of the Mexican financial system and the Mexican economy as a whole.

During these 128 years, Banamex has served a massively diverse clientele. The bank has been a pioneer and an innovator since its foundation. Among several of its “firsts”, the firm opened the first branch of a Mexican bank in the US, created the first Mexican savings account (1929), the first consumer credit for Mexicans (1952), the first credit card in Latin America (1968) and the first ATM in the region (1972). It was also a pioneer in establishing the “Universal Banking” model Mexico models itself on.

The group holds a pre∞eminent position in Mexican financial markets (enjoying around a third of the market share in most important segments) and provides consumers, corporations, governments and institutions with a broad range of financial products and services. These include; consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, wealth management, bank insurance and pension funds.
Banamex does business in over 500 locations throughout the country, and provides services to 20m customers. It has 1,700 branches, 4,600 correspondents and 560 other sale outlets; 6,030 ATMs and more than 68,272 point∞of∞sale terminals. The group employs nearly 43,500 people.

A good citizen
Banamex has been a “socially responsible company” or a “good corporate citizen” since it opened in 1884. The bank started to “institutionalise” its socially responsible activities in the 1970s, when the bank decided to create its first foundation, primarily focused in cultural matters. Later, by integrating sustainability into the bank’s business strategy and decision-making processes, Banamex expanded its traditional efforts in social responsibility, to support environmentally responsible projects, innovative technologies and sustainable enterprises.
Sustainable development has been a key block for many businesses for decades. Since the 1990s, Mexico has been at the forefront of world efforts in this field – since the 1992 Rio ‘Earth Summit’ – Banamex has been aware of the importance of such activities. The firm clearly realised the negative effects that the deterioration of the environment could bring, and brought this to the attention of the Mexican business community and economy as a whole.
Banamex believes that collaboration with authorities and other corporate clients is crucial for the success of environmentally responsible initiatives. This attitude was reinforced when Banamex integrated with Citi in 2001. The bank was well prepared to adopt policies like ‘Environmental and Social Risk Management’ (ESRM). Risk management has been one of the major strengths of the bank since its creation. Established in 2003 and updated periodically, the ESRM policy is built on the framework of managing risk first and foremost at the project’s ground∞level. The policy applies to a broad range of financial products in various sectors that meet certain financial thresholds and have a known use of proceeds tied to a specific physical project or asset.
The ESRM policy also gives guidance on additional assessment and mitigation requirements for transactions in “areas of high caution and special focus” that include critical habitat and areas of high conservation value, significant cultural and heritage value, indigenous peoples, and large scale resettlement. This ESRM policy prohibits the financing of transactions involving forced labour, harmful child labour and illegal logging.

Putting it into practice
A handful of recent initiatives show how sustainability is a core pillar at Banamex. A good example is financial inclusion, a top priority for the group. In many Latin American countries, Citi has long been a pioneer in raising awareness on the importance of financial culture and promoting different initiatives. Financial inclusion is a key element to ensuring that Mexico reaches the level of development which it seeks. In 2004, Banamex was the first bank to launch a ‘Financial Education Programme’ in Mexico. This programme has committed more than $10m to projects and is considered a leading example in Mexico.
Furthermore, the bank carried out a complete business alignment in order to achieve social goals. Thus, being a pioneer in the use of non-banking correspondents in underbanked communities and also established a strategic alliance with one of Mexico’s largest retailers to put financial services closer to the people. Today, its distribution network (branches, other sale outlets, correspondents, ATMs and point of sale terminals) gives the financial group presence in more municipalities than any other bank in Mexico.
Furthermore, in October last year, Citi, Banamex and America Movil – one of the largest providers of mobile telephony in Latin America – created Transfer, a company that will offer an opportunity to 236m people on the continent to access financial services through their mobile phones, thus opening the door for financial inclusion to segments of the population that do not have bank accounts at present. Transfer is scheduled to start operations in the first quarter of 2012. Banamex has fostered sustainable development through other initiatives as well. Fomento Ecológico Banamex, the bank’s ecological foundation, was opened in 2000 to support the reforestation of more than twelve thousand acres of rainforest through the planting of more than five million trees at the national parks surrounding Mexico City and in El Triunfo, a natural reserve in southern Chiapas State. The firm also supports the “azoteas verdes” (green roofs) project in Mexico City and projects of conservation of endangered species like marine turtles.
The bank earned the ‘Energy Star’ certification for three corporate buildings, while 164 banking branches are in process of potential certification. The bank has also seen a huge change in the way account statements are sent. More than 2.2m clients have changed from paper account statements to electronic ones and by doing so, besides saving a great amount of paper, they have financed the planting of 300,000 new trees.

Socially sound
Besides the initiatives described above, Banamex also complies with the highest standards of social responsibility through a programme the group calls: ‘social commitment with Mexico’. The bank has been clearly acknowledged as an originator and a leading financial services company in social responsibility within Mexico. A recent survey showed that Banamex’s social and cultural actions are the second most important characteristic that clients recognise.
Through 500 exhibitions, 130 books, 900 folk art masters supported, and 59 historical buildings restored: the ‘Cultural Foundation’ fosters Mexican culture, art and traditions. The ‘Social Foundation’ has contributed to improving the living conditions of the most deprived communities and groups encouraging economic and sustainable development. The natural disasters programme is focused on reconstruction within regions affected by floods, earthquakes and other similar natural events. The ‘Ecological Foundation’ promotes efficient use of scarce natural resources and protection of Mexican ecosystems, through projects encouraging communities participation. The ‘water factories’ programme is focused on reforestation in two major national parks near Mexico City. Financial Education has developed educational strategies that promote responsible financial culture and improvement of economic situations of families, communities, and institutions. More than five million people have been direct beneficiaries of this programme. Finally, the ‘Include-Me Foundation’ promotes an independent adult living system that encourages social inclusion, improving the quality of life and participation of those with mental disabilities.