Message from CEO

Since the adoption in 2002 of the bank’s Social and Environmental Management Policy (SEMP), we have advocated highest standards of corporate governance and social responsibility, demonstrated through our triple bottom-line- Planet, People, Profit - vision and mission, which presents the cornerstone of XacBank’s social and environmental strategies. To promote the bank’s triple bottom line and enhance social and environmental awareness, we engage in active dialogue with a wide range of stakeholders, including our customers, shareholders, investors, employees, suppliers and local communities. The bank’s essential practices of environmental and social performance management, initiatives and progress are anchored in our determination to act ethically and responsibly in every aspect of our business.

We organize charitable activities, hold meetings and communicate information to enable communities, schools, customers, businesses and students to learn about XacBank and its social and environmental goals. In order to achieve these goals, we promote initiatives aimed at reducing the environmental impact of our products and business activities, and apply all available instruments and tools to positively influence the behaviour of our customers so that they comply with regulatory requirements.

At the same time, we have taken measures to reduce the environmental impact of our own operations, which included actions aimed at efficient use of water, energy, paper and fuel, and overall decrease of consumption and waste (e.g. initiatives aimed at avoiding printing as regards internal communications and processes, enables us to annually save around 9 tons of paper).

Examples of our environmentally focused philanthropic and volunteer efforts include annual tree planting, both in Ulaanbaatar and provinces, and community cleaning initiatives.

Energy saving and environmentally friendly loan products and services offered by the bank enable consumers to reduce their environmental footprint, and have delivered tangible, lasting effects on the overall communities of the city of Ulaanbaatar. Energy efficient products, which have been supplied to 150,489 households, which is over 81 percent of the residents of Ulaanbaatar’s ger district, reduce fuel (coal, wood) consumption, and thereby expenditure on fuel, by up to 50 percent. This program included a campaign to raise awareness of the health effects of the city’s pollution and consumer actions to help mitigate the impact. In 2014, carbon emissions were reduced by 330,000 tons.

Through our Greenhouse Gas Emission Reduction Loan Program launched in 2013, XacBank and the Global Climate Partnership Fund (GCPF) joined forces to help companies and project developers gain access to low-cost financing for projects that reduce energy use and carbon emissions.

We continue direct philanthropic programs aimed at enhancing financial literacy and contemplated to complement fair marketing of our products and services. As of today, some 38,140 participants across the country, including children, teachers and volunteers, have benefited from these programs.

In our lending policy, we carefully assess and monitor clients’ compliance with the environmental and social legislation and requirements, and manage risks both on the bank’s side and for the wellbeing of customers.

We implement the Smart Campaign’s standards for client protection, including the social mission, where poverty reduction is viewed as one of the social goals.

As a member of GRI and to measure its SEMP implementation in areas such as poverty reduction, eco banking and responsible lending, in 2011 XacBank conducted social and environmental performance audit, with the participation of 16,550 customers in the “Score Card For Micro Customer’s GRI Indicators” survey.

Also, we adopted universal principles and standards for sustainability in our daily management and operations, including the principles of the United Nations Global Compact, Global Reporting Initiative, Equator Principles, IFC Performance Standards and Universal Principles for Social Performance Management, Women’s World Banking Pledges, CITES, MEF Global Business Oath, all of which influence and shape our sustainability strategy and implementations.

XacBank is one of the founders of the Global Alliance for Banking on Values and a member of the Microfinance Center, a grassroots network of 110 members that play an active role in shaping the microfinance industry in the region.

In addition, we have approved a standalone policy on combating corruption as part of our obligations to the Partnering Against Corruption Initiative (PACI).

Our local institutional memberships and affiliations include Mongolian Management Association, Mongolian Bankers Association, Mongolian National Chamber of Commerce and Industry, and Mongolian Green Technology Association, a newly formed association promoting development of environmentally-friendly production and technology.

The bank regularly discloses to the public and stakeholders its social and environmental performance. We acknowledge that more efforts are needed to address Mongolia’s environmental challenges. Thus, to increase transparency of our social performance and identify the bank’s strengths and weaknesses, as well as prioritize areas for improvement, the bank undergoes social rating assessments. In 2014, our second Social Performance Rating, carried out by Planet Rating, was improved from 4 – to 4, which put the bank in the top-15 of 160 rated organizations in the world and the number 1 position in Asia.

Seeking to lead by example and contribute to Mongolia’s sustainable growth and development, the bank pursued its lead role in Mongolia’s Sustainable Finance endeavors. To do this, we, together with other Mongolian banks called to action to support sustained economic growth and development in our country, and adopted Action plans, both at the banking system level and within XacBank, thus reaffirming our commitment to align the core business strategies with social investments.

Our commitment to sustainable finance and corporate responsibility will not change. Efforts will continue as regards new initiatives to enhance XacBank’s engagement and involvement in our communities and Mongolia’s sustainable growth.