GRI 102-1 / 102-5 Banco Nacional de Costa Rica The headquarters are located between 2nd and 4th Streets, 1st and 3rd Avenues, San José, Costa Rica. The bank has operations in the seven provinces of Costa Rica.

For enquiries about this report, please contact: Directorate of Social Responsibility of Banco Nacional Telehone: (506) 2212-2000 Silvia Chaves Herra, Director / [email protected] Margarita Murillo Vargas, Executive / [email protected] www.bncr.fi.cr

2 INDEX

Introduction 4 Director Notes 5 Operation of the Board of Directors 10 Ethics management at Banco Nacional 12 Risk analysis from the three dimensions of sustainability 15 Building Sustainability at BN 16 Structure of Banco Nacional 25 Bank for All - Social Dimension 28 The Force of Progress: Our collaborators 29 Transforming Communities Program 36 Volunteer Program 48 Inclusion, Education and Financial Freedom Program 51 Financial Freedom Program for Employees 57 Green Bank - Environmental Dimension 61 Sustainable products and services 63 Aligned processes 67 BN Eco-Efficiency Culture 70 Productive Bank - Economic Dimension 79 People Development Banking 80 Business Banking 82 Suppliers 95 Information on Trusts 98 GRI Index 102

3 Introduction

he 2017 Sustainability Report The three dimensions are grounded on a base of Banco Nacional comprises called Ethical and Sustainable Bank - the basis of the period from January 1st to the sustainability strategy. December 31st, 2017. T With the presentation of this report, Banco Nacional The publication of this report will take place makes its commitments public and expects that, annually. year after year, its clients, collaborators and other strategic partners follow up on this evolution and It is based on the GRI (Global Reporting Initiative) participate in the construction of progress with a methodology and constitutes a first effort vision of sustainability. to present a referenced, essential category document; However, for not having an applied materiality process or indicators that allow comparability, this document is presented as a “zero report”. The goal is to develop, starting in 2018, the First GRI Sustainability Report of Banco Nacional.

This document includes the operations of Banco Nacional de Costa Rica, Centroamérica, the organization profile, and the three dimensions of sustainability based on ethical and sustainable principles, which the organization has called as follows:

1. Bank for All – social dimension 2.Green Bank – environmental dimension 3. Productive Bank – economic dimension

4 We are protagonists of the economy revolutionizing processes Ms. Ana Isabel Solano, Chairwoman of the Board of Directors

oing business in a responsible make it possible to demonstrate the results of manner is not an alternative, it the entire team of collaborators, maintaining an is the way organizations have to environment of trust and respect that prevails generate benefits that reach the throughout the organization, reflected in both D whole society. horizontal and vertical collaboration.

Banco Nacional maintains its indicators to the The promotion of an innovation culture makes fullest and complies with all the regulations set Banco Nacional the protagonist of processes out by law, without losing sight of the accelerated that are revolutionizing the economy and society, changes in the industry and keeping intact the from migration to secure digital banking to the value of trust. The General Board of Directors has inclusion of the elderly or indigenous populations, the highest responsibility to make the decisions or people with some disability as well. Innovation to ensure that Banco Nacional promotes the also modifies entrepreneurship and gives women, development of Costa Rica, and the best way to young people and communities the opportunity do it is to understand that sustainability is not to generate businesses where the differentiating only a promise, but the way in which relationships factor is the path to success. with different stakeholders are handled, in a win- win equation. In order to be effective, sustainability needs empowered people and, from the Presidency From a leadership with openness to listening and, of the General Board, I can affirm, based on the above all, innovation as the only way to stay relevant, results presented in this report, that the entire the General Board of Directors has absolute clarity Banco Nacional conglomerate has overcome and assurance that the sustainability strategy of this challenge and, even so, there will be an Banco Nacional is working and has the commitment opportunity to improve. of the highest decision making body, not only for its execution, but for the entire conglomerate to assume its responsibility to streamline processes and to improve, even more, the business results.

Innovation, ethics and efficiency will always be the path to follow; likewise, inclusion must demonstrate that Banco Nacional is a bank for all. For this, it is necessary to permanently review the personnel management, with merit-oriented performance measurement mechanisms, where the effort is acknowledged and, above all, to

5 Growing with a view towards sustainability Mr. Juan Carlos Corrales, General Manager

ustainability is a key element to These five objectives frame the strategy of strengthen the development and growth and development of the bank, based well-being of the country; without on the commitment to serve our stakeholders, it, Costa Rica cannot keep its with a modern vision, adjusted to current times, S wealth and cannot evolve. with a work that seeks to significantly boost our profitability, offering a superior service to the At Banco Nacional, we have this premise clear client, at a price aligned with the market, with and, based on it, we have decided to support organizational health and exemplary financial the construction of a more successful, more sturdiness. These commitments are based on productive, more fair and more responsible being clear that compliance with ethics is the only society. To address this goal, from the Board of solid basis on which the bank can conduct healthy Directors and the General Management, we have business. defined ourselves as a pre-eminent bank, which stands out for offering the services and products The strategy of sustainability of Banco Nacional that meet the financial needs of our clients with de Costa Rica derives from the fifth strategic excellence, but with a different vision, a vision objective. This is not exclusive to one area; On more committed to the planet and, above all, to the contrary, it is the commitment of all areas of people. the organization. With the strategy presented in this 2017 Sustainability Report, we want to make In order to trace this financial and sustainable path even more public the commitment that reveals a in an integral way, we have defined five strategic new way of doing business and raises concrete objectives that are intertwined in an indivisible programs to improve, in a more effective and way: efficient way, our support for the development of the country. 1. Change the business mix (products and segments). As General Manager of Banco Nacional, I present 2. Promote productivity and efficiency. this report as a legacy, an effort based on much analysis and consultation in order to properly 3. Improve the customer experience through respond to the expectations of those inside digital leadership. and outside our organization. It is with great 4. Operate as an integrated conglomerate. satisfaction that I present the steps that have been 5. Grow with a sense of social responsibility. taken; and with great hope, the steps that will be taken through the objectives and programs outlined; and above all, I proudly deliver a Banco Nacional that is working so that we can all progress together.

6 Our sustainability strategy

ver more than 10 years ago, Banco From these dimensions, the programs developed I invite you to enjoy this report and hope you Nacional started its path towards by the Social Responsibility Department were will join us in strengthening this new stage of sustainability; a path that does strengthened. Each one has objectives, goals and sustainability for Banco Nacional. not end, since it is continually indicators established for the 2017-2021 period, O challenged and transformed. but with annual reviews. We have worked with social responsibility as a This GRI 2017 Sustainability Report is a “GRI zero process that leads us to sustainability. Along the report” which, on the one hand, presents the new way, we have adapted to the different speeds strategy developed from the study of materiality that the context has allowed and, despite this, and, on the other hand, reports on the main since we started, we have not stopped dealing achievements of the programs we carried out in with this issue. the 2017 period. By 2018, the strategy will be more complete and, of course, we have started During 2017, we engaged for the first time in the with the measurement of the relevant indicators, task of deepening the materiality that should guide in order to publish the results in 2019. the actions of our programs. Thanks to the support of the Business Alliance for Development (AED) This process would have not been achieved and the work of our colleagues, we developed an without the support of the senior management. exhaustive analysis of materiality. Once we had The Board of Directors, the General Management the results, we consulted with our stakeholders. and the governing body of Banco Nacional Conglomerate, have inserted sustainability at the This analysis showed that the ongoing programs heart of the business. It is also worth noting that it were not unrelated to this materiality. We could also would be absolutely impossible to move forward determine that, although we have worked on the without the valuable contribution of our staff, who issues exposed, it is still necessary to strengthen have left their mark through the environmental our commitment and better communicate what committees, their participation in volunteering, we do and the results we get. and their financial advice.

Thus, we were able to define 38 material issues It is the BN People who, to a large extent, that society is demanding from us. Based on make this process sustainable and are therefore these issues, we established a premise: to be transforming and improving the contribution that an ethical and sustainable bank. On this, seven Banco Nacional gives to the Costa Rican society. commitments were established and grouped into We cannot forget the invaluable support of our three dimensions: Productive Bank, Green Bank clients, strategic partners, communities and other and Bank for All. stakeholders that are also accomplices of our achievements.

7 Banco Nacional, 104 years serving Costa Rica

anco Nacional de Costa Rica Dates of creation of the subsidiaries of Banco BN Corredora de Seguros: started operations (BNCR), founded 104 years ago, is a Nacional: in October 2009, authorized by the General state-owned autonomous financial Insurance Superintendence (SUGESE), under institution, with legal status and BN VALORES: was established as a corporation license number SC-09-102. B administrative independence. in 1998 and is a wholly owned subsidiary of Banco Nacional. It is a founding partner and concessionaire of the National Stock Exchange, It was created by Executive Decree N° 16 of for more than 40 years. October 9, 1914. It is subject to the law in matters of Government, in accordance with articles 188 BN FONDOS: was founded on April 29, 1998 and 189 of the Constitution. Its legal and relevant to administer investment funds registered with role as a commercial bank is defined by the the General Superintendence of Securities Organic Law of the National Banking System No. (SUGEVAL). It was authorized by the National 1644, of September 26, 1953. Council of Supervision of the Financial System in session 61-99, held on December 17, 1998 Banco Nacional (BN) was created at the beginning of the First World War. Faced with the threat BN VITAL: in 1993 Banco Nacional de Costa Rica of a contraction in exports in the country, the launches a “trust” for voluntary pension, called government began to stimulate domestic demand BN VITAL. In 1998, it was established as BN by placing money in the hands of Costa Rican Vital Operadora de Pensiones Complementarias families, but the issue of currency was in the hands Sociedad Anónima. of private banks. Therefore, the then president of the Republic, Alfredo González Flores, decided to create the first state-owned bank, under the name of Banco Internacional de Costa Rica. In 1936, by decree, Banco Internacional, which had three departments: Issuer, Commercial and Mortgage was transformed and it was then that the institution changed its name to Banco Nacional Web pages of the National Bank and its subsidiaries: de Costa Rica. Banco Nacional: www.bncr.fi.cr Currently, Banco Nacional has four subsidiaries: BN BN Values: www.bnvalores.com/app/index.html Valores, BN Fondos, BN Vital and BN Corredora BN Funds: www.bnfondos.com de Seguros. BN Vital: www.bnvital.com/BNVital/Default.aspx BN Insurance brokers: www.bncr.fi.cr/CorredoraSeguros/Paginas/default.aspx

8 Ethical and Sustainable Bank

9 Operation of the Board of Directors

ccording to the provisions of The presidency of the Board of Directors does not the Organic Law of the National hold any executive position within Banco Nacional Banking System (Law # 1644), each de Costa Rica conglomerate. To ensure order and of the state commercial banks clarity, the Code of Conduct and Ethics of BNCR A and, therefore, Banco Nacional, Conglomerate also includes specific regulations operate under the direction of a board of directors, on the handling of possible conflicts of interest made up of seven members appointed by the in the Board of Directors. Government Cabinet. The appointment period of this Board of Directors is eight years. The General Board of Directors is responsible for approving the purpose, values ​​and mission The support committees of the General Board statements, strategies, policies and objectives of Directors, in which members of this highest related to the economic, environmental and hierarchical body participate, are the following: social impacts of the organization, according to the corresponding proposal submitted by the Management. • Corporate Audit Committee. • Corporate Compliance Committee. The structure of the Board of Directors is as • Compensation, Nomination and Governance follows: Committee of the BNCR Conglomerate. • Corporate Risk Committee. Chairwoman: Ana Isabel Solano Brenes • Information Technology Committee. Deputy Chairman: Víctor Hugo Carranza Salazar Secretary: Luis Pal Hegedüs Director: Jeannette Ruiz Delgado The Board of Directors is governed by several Director: Jorge Méndez Zamora documents, but a very important one is the Director: Corporate Governance Code, which guides the Olman Briceño Fallas actions of the Board of Directors and its committees. Director: Ana Cecilia Rodríguez Quesada Article 38 regulates the policies of Corporate Governance and Conflicts of Interest. Likewise, the Organic Law of the National Banking System, in its Article 32, indicates how it should proceed in case a party attending the General Board of Directors sessions has a personal interest in any procedure or any of their partners or relatives within the third degree of consanguinity or affinity.

10 Corporate Governance Structure General Board of Directors (Shareholders’ Meeting)

Internal External Support Subsidiary Boards General audit audit committees of Directors Management BN

Representation in the General External Internal Board of Directors of BICSA Audit Audits

Corporate committees Managers Offices Audit committee BN Fondos Nomination and Compensation committee BN Vital Risk committee BN Valores Compliance committee BN Corredora de Seguros

The annual reports on Corporate Governance and the committees, as well as the Corporate Governance Code, are available in the Transparency Web site, on the Banco Nacional’s website: www.bncr.fi.cr/transparencia/Paginas/GobiernoCorporativo.aspx 11 Ethics Management at Banco Nacional

ccording to article 13 of the Article 14 of the Corporate Governance Code and Third: The Human Resources areas of Banco Corporate Governance Code, section 1.4 of the Code of Conduct and Ethics of Nacional Conglomerate are responsible for: the Financial Conglomerate of Banco Nacional describe who is responsible for the Banco Nacional de Costa Rica is implementation and maintenance of the Code of a. Include the Code in the induction processes A committed to both the sustainable Conduct and Ethics. In order to keep an updated of those who enter the Conglomerate. development and the well-being of the country code and respond effectively to situations that and its collaborators, by applying the highest arise in the organization, the following process b. Disclose and train the staff of Banco Nacional ethical and behavioral standards in each of its was established: Conglomerate regarding the content of the Code activities. To achieve this goal, it has a Code of Conduct and Ethics, which aims to facilitate First: The Corporate Compliance Committee will c. Define and implement the control mechanisms, formal communication of the expected behaviors be responsible for the periodic review and update sanction and monitoring of employees’ behavior. that its employees must show in accordance of the Code, in coordination with the Human with the organizational values, ethical principles, Resources area. Fourth: The headquarters of the Conglomerate are corporate strategic plan and the laws under responsible for ensuring that its personnel comply which the financial conglomerate is governed. Second: The General Board of Directors and with the provisions of the Code. In addition, they Another purpose of the Code of Conduct and the boards of directors of the subsidiaries are should serve as a means of communication with Ethics is to define the guidelines on the expected responsible for approving the Code and instructing the Human Resources areas and collaborate with relationship with each of the publics of interest the general managers for its application. them in the hearing of sensitive aspects of ethics (employees, managers, suppliers, customers, and conduct. community, government and regulatory entities, among others), as well as their commitment to the environment.

The Code of Conduct and Ethics is mandatory for members of the management and administration bodies of the Financial Conglomerate of Banco Nacional de Costa Rica; namely, members of boards of directors, directors of subsidiary boards of directors, external advisers, senior management, external members of committees and collaborators (the employees of the Financial Conglomerate of Banco Nacional de Costa Rica have the obligation to know and comply with the Code and to facilitate its implementation, including the communication of any infringement they become aware of).

12 Ethical principles of Banco Nacional de Costa Rica

espect for the dignity of the person Correct use of powers and authorization and the rights that are inherent to faculties: the executives and collaborators to The Code of Conduct may be consulted in: them. whom Banco Nacional Conglomerate grants www.bncr.fi.cr/transparencia/Paginas/ powers or authorization and approval faculties, Gente-BN.aspx R Respect for the equality of people as well as access to the systems, must exercise and their diversity. There must be a respectful their functions respecting the current regulations, This document was updated and approved by and equitable behavior in which there is no room without incurring abuses of authority and trust. the meeting of the General Board of Directors, for discriminatory attitudes. held on December 4, 2017, session # 12,205. Loyalty: the staff must be loyal to the institution, Compliance with legality: it requires its staff bosses, workmates, as well as to the ethical to assume, without exception, the obligation to principles enshrined in the Code of Conduct. In observe the legislation applicable to the activities this sense, they must report facts and situations and operations of Banco Nacional Conglomerate. that may lead to a conflict of interests that affect Professional objectivity: Decisions must be made those of the institution. and straight actions carried out without accepting the influence of third parties and avoiding all kinds of situations that lead to a conflict of interest or may question the integrity of Banco Nacional Conglomerate or its personnel.

Righteousness: each collaborator must act with integrity and honesty, both in the exercise of their position, and in the use of the resources of the institution entrusted to them.

Duty of responsibility: the heads and all employees of Banco Nacional Conglomerate must exercise their duties and responsibilities in such a manner that they do not expose the institution to unnecessary risks that materialize in financial losses, as a result of the omission of current policies or procedures or fraudulent behaviors.

13 National Transparency Network

anco Nacional (BN) became the Thanks to this commitment, a transparency site first bank of the National Banking was created on the website www.bncr.fi.cr, Confirmed cases of corruption: In 2017, 14 System to join the Institutional which shows a rendering of accounts reflected cases of corruption were presented. In these Transparency Network, an initiative in documents such as audit reports of the cases, a due disciplinary procedure is applied, in B promoted by the Government of General Management and Deputy Management accordance with the provisions of the Collective Costa Rica, specifically by the Ombudsman of offices; operational and procurement plans; list Bargaining Agreement. The process includes Costa Rica. Being part of this network strengthens of suppliers, board minutes and information on the temporary suspension of the person(s) the accountability of public institutions and salary scales, among others. This information is involved, while the administrative procedure is guarantees the human and constitutional right available to the public. executed and the final sanction is determined. of access to information. It is possible to access the transparency site of Banco Nacional in the following link:

www.bncr.fi.cr/BNCR/Transparencia/Intro. aspx

MISION VISION Improve the quality of life of the greatest Be the best bank in the country possible number of people, by offering VI in customer service. excellence financial services that S N IO encourage the sustainable creation of IO N wealth. S I

M

STRATEGIC

GUIDELINES

G • Change the business mix in the

U

customer and product segments.

I

D

S • Boost productivity and efficiency.

E

E

L • Improve the customer experience

U

I

N

L

E

VALUES A through digital leadership.

S V

Integrity, creativity, perseverance, team- • Operate as an integrated conglomerate. work, quality in service. • Increase the impact on development and social responsibility. • Organizational health.

14 Risk analysis from the three dimensions of sustainability

uring 2017, the Directorate of 4. Non-compliance with international standards It was determined that the risk of not taking Social Responsibility, together with on human rights. measures to reduce pollution within its control the Operational Risk Department, of influence (handling of recyclable waste, worked on a “Mapping of the 5. Failure to comply with laws and regulations consumption of paper, ink, water and electricity) is D sustainability risks of Banco regarding competition. applicable to all the dependencies of BNCR, so it Nacional Conglomerate”, with a focus on the was included as part of the control activities as of social and environmental fields, since the economic 6. Absence of adequate and efficient systems August 2017; that is, it is already being evaluated dimension has fully identified the risks. of support and advice to consumers (after-sales in all the dependencies of BNCR. service). The General Deputy Management of Risk and Risk analysis for sustainability: 7. Lack of instruction to consumers regarding Credit issued a note to all collaborators on three the proper use of the financial products they new control activities, where clarifications are 1. ISO 26,000 was used as the main input. purchase. made on the two mentioned sustainability risks. 2. Verification to indicate which of these identified risks could be covered in the 8. Breach of legal guidelines related to the To date, the conformation phase of the sustainability Institutional Risks Matrix of the BNCR. environment. risk portfolio is approximately 95% completed. On the other hand, the Social Responsibility 3. It was determined that a total of 10 risks 9. Suppliers that carry out practices that attempt Department is in charge of advising each of were not typified in said matrix. against sustainability (technologies, processes, the units identified in the management of each relationships with their employees and BN clients). risk. The decision was made by the team (Social Responsibility Directorate and Operational Risk In total, 10 sustainability risks are grouped, 10. Ignore measures to reduce pollution within Directorate) to begin the full evaluation of the with the objective of managing them from the their control of influence (handling of recyclable portfolio as of 2018. operational areas of Banco Nacional: waste, consumption of paper, ink, water and electricity). The analysis and management of sustainability 1. Inefficient or inadequate use of resources risks applies to the whole conglomerate. from a sustainability perspective. The Operational Risk Department built a portfolio of sustainability risks based on the 10 2. Practices that do not promote fair risks previously identified. As a next step, the opportunities for minority groups (persons Social Responsibility Directorate identified and with disabilities, women, racial groups, ethnic provided the conceptual framework, rules, laws or groups, etc.) to hold positions at all levels of the guidelines that support the risk, the dependencies organization. from where it should be evaluated and the control The National Bank’s Economic Risk Report can measure that will be implemented for its correct be found at: 3. Lack of interaction spaces with stakeholders. control and mitigation, the above for each of the www.bncr.fi.cr/BNCR/Transparencia/ 10 identified risks. InformeAnualRiesgo.aspx

15 Building Sustainability at BN

Goal: anco Nacional has undergone to be the preeminent bank in a maturation process in its Costa Rica, by strengthening its critical role in the development sustainability strategy. Since and welfare of the country, with a 2008, it ventured to try to significant boost to profitability, incorporate a three-dimensional and offering superior customer B service at a price aligned with the s vision (social, environmental and economic), but e market and with exemplary v organizational health and it was not until 2016 that this goal was achieved. ti As of that moment, several changes have been financial robustness. c 1 Change the business mix generated which, in short, have contributed to e j (products and segments) the organization’s growth in this field. b 2 Boost productivity and efficiency.

o 3 Improve the customer experience The greatest achievement has been to incorporate through digital leadership.

c 4 the issue of social responsibility as the fifth strategic i Operate as an integrated

conglomerate.

pillar, linked, in turn to incentives for employees, g

incorporated into the social responsibility key. e Grow with a sense of

t social responsibility.

a

r t S

Indicators model: “sustainability key”: they BN Sustainability Policy: are sustainability indicators measured in each National Bank Conglomerate is committed dependency of BNCR to economic, social and environmental development, adopting the best sustainability practices in its strategy, value chain and immediate environment, in accordance with the country initiatives (approved in session of Board of Directors # Sustainability strategy: 12.190, of September 11, 2017). Management model (goals and indicators).

Ethical and sustainable banking: (Green Bank – Productive Bank – Bank for All)

untos somos progreso 16 Stakeholders

ased on a process of analyzing categories and groups of stakeholders with their experiences and results in whom it works its vision of business sustainability. social responsibility as well as the internal and external processes, The stakeholders of the bank are as follows: B Banco Nacional defined the

Large, medium and small corporations and Fund Union and personnel institutions. Preferential Suppliers associations Allies Media customers (individuals). Occasional personnel Mass customers. Development bank Permanent personnel. Public companies Written media, radio, (FINADE) Private companies television. IMAS (FIDEIMAS) NGOs. BID, BCIE, KFW.

Customers Employees

Concerned parties

Communities Governing Competition entities Immediate community, SUGEF, SUGESE, State banks, surrounding populations SUGEVAL, SUPEN, private banks, and public opinion. Central Bank. and cooperatives. Suppliers Government Strategic, critical, Central government, basic and replaceble. Legislature and Ministries.

17 Materiality process at Banco Nacional

tarting in 2017 and thanks to organization, as well as those that significantly From this analysis, 38 material issues emerged, the support of the Business influence the decisions of its stakeholders. grouped into seven commitments. The process Alliance for Development (AED), contemplated the following steps: Banco Nacional developed a In the specific case of Banco Nacional de Costa S materiality exercise that included Rica (BNCR), a materiality process was developed a thorough analysis and consultation with its based on the indications of the Global Reporting stakeholders. The materiality analysis seeks that Initiative and the internationally recognized companies focus on the matters that highlight the experiences. ethical, environmental and social impacts of the

Diagnosis: Materiality analysis 3 Material issues Inputs Consultation Sustainability Organization’s strategy and validation of context stakeholders

1. Review of ISO 26000, 1. Conglomerate’s Strategy. 1. Participation of stake- GRI, Robeco Sam & SASB. holders. 2. Sustainability Model. 2. Review of the Sustain- 2. Focal groups with ability topic for Banking 3. Value Chain Mapping. stakeholders.

3. Review of Peers’ 4. Identification of Stake- Sustainability Reports holders.

Initial list of important topics Final list of topics

18 Validation with stakeholders

In order to validate the materiality analysis of • 45% are collaborators of the conglomerate Based on the results of the materiality study, Banco Nacional and with a view to integrating companies (23% work for BNCR and 22% work emerged the BN Sustainability Strategy, which the results into the sustainability model of the will be developed in 2018. A first progress is the for other companies of the conglomerate). organization, consultations were held with one noted in this report and which details the stakeholders, especially those that are significantly • 19% are customers dimensions in which the organization will work on, affected by the activities, products and services • 11% are suppliers namely: Bank for All, Green Bank and Productive of the organization or whose actions can be • 16% are communities that have social Bank. expected to affect the ability of the organization investments made by BNCR to successfully carry out its strategies and achieve This process allowed the establishment of the its objectives. • 7% are company allies 2018-2021 Strategic Sustainability Plan. The • 2% of the respondents to stakeholders´ three dimensions will be addressed on the basis These groups were consulted through an electronic enquiries work for regulatory institutions of the of ethical and sustainable banking; for each one survey, which was applied in person in a series of them, responsibilities were defined adding to economic sector to which BNCR belongs. of focus group sessions. 106 people who have a total of seven commitments. the following relationships with Banco Nacional participated in the process:

Bank for All Green Bank Productive Bank

19 3 material issues A committed bank 2018-2021 Sustainability Strategic Plan

Green Bank Productive Bank Bank for All

Eco-efficiency: Sustainable growth: Collaborators: 1 Incorporation in 100% of the 3 Guarantee it. 6 Achieve a balance between conglomerate and efficient work and personal life. environmental services. Customers: 4 Improve their experience. Education, financial Sustainable products inclusion and social and services 7 2 Supply chain: investment: Development of eco-friendly Add good practices. products, services and Promote banking and social processes. investment.

Ethical and sustainable bank

20 Both the dimensions and the commitments are totally linked to the defined material issues.

21 Materiality process at Banco Nacional

In regards to the result of materiality, the focus of the three dimensions and the seven sustainability commitments assumed by Banco Nacional, the Strategic Sustainability Plan and its programs will be focused on the following segments:

er Eld ly ple and c eo hi p ld r g e n n u o

bora s pop olla tor ou ul C s en at ig io d n n I

BN Sustainability

en in led p m po ab eop o ve is le w r D t d y n a c

o n n

e

d i

m

t

i o

o

n W

22 Materiality process at Banco Nacional

The 2018 Strategic Plan of Sustainability defined actions, objectives and goals whose first progresses will be reported in 2019 (with the Sustainability Report 2018), on the following basis:

Ethical and sustainable bank Green Bank Productive Bank Bank for All

1. Eco efficiency: incorporate it 3. Sustainable growth: guarantee it 6. Collaborators: balance between Committed 2. Green products: development 4. Customers: improve their work and personal life Corporate governance bank and/or promotion of eco-friendly experience 7. Encourage Financial Education products 5. Supply chain: guarantee it and Inclusion

Facilitate knowledge of institutio- Manage activities in search of Align the strategic suppliers of our Progress in terms of accessibility: nal ethics and anticorruption carbon neutrality, energy consump- value chain with the principles of provision of user’s manuals and policies to all stakeholders. tion, waste management, fuel corporate sustainability, and tutorials for use in electronic channels consumption, paper consumption incorporate sustainability criteria in and more accessible for people with and water consumption. the processes of purchasing goods disabilities, adaptation of offices to the and services at the institutional level. population in indigenous territories. Mitigate and / or strengthen risk Advise and promote the develop- Know the expectations of the Provide financial education to 15,000 management in terms of sustai- ment and placement of (new and different audiences of interest of the people, including at least: 500 indige- Material nability, both operational and existing) green financial products Bank to integrate them in the nous people, 500 women in poverty issues high-impact credit operations. and services. strategic decision making. condition, 10,000 young people and children. 2018 Centralize in the DRS the annual Determine the current situation of the Promote the sustainable development planning on sustainability, BNCR Conglomerate regarding of communities, from a responsible including the actions that are various topics such as: financial approach that integrates the social, carried out in the SAs solutions for women, investment for environmental and economic matters. development, fair competition, produc- tivity and efficiency, support for SMEs and entrepreneurship, among others.

The foregoing does not mean that the material issues defined are not already being worked on at BNCR, but that they should be deepened further and that they should be made more visible to stakeholders.

This report does not yet show the results of the materiality; however, it shows general results that will be the comparative basis for the GRI Report # 1 of Banco Nacional, since, as of 2018, the sustainability programs as well as the business unit approaches will address these strategic priorities.

23 Materiality process at Banco Nacional

BancoGreen VerdeBank BancoProductive Productivo Bank BancoBank para for TodosAll

Ecoeficiencia:Eco-efficiency: CrecimientoSustainable growth:sostenible: Colaboradores:Collaborators: 1 IncorporarIncorporate las eco-efficiency acciones de 3 GarantizarGuarantee la the solidez financial nanciera strength del of 6 EquilibrioBalance between Vida Laboral work yand Vida ecoeficienciaactions in 100% en ofel the100% de conglomeradothe National Bank Banco conglomerate. Nacional Personal.personal life. lasconglomerate's oficinas del conglomerado.offices. conglomerado.

ProductosGreen products: verdes: Clientes:Customers: EducaciónEducation ande inclusión financial 2 SerBe leaders líderes inen the el desarrollo de 4 MejorarImprove lathe experiencia customer experiencedel cliente enin 7 financiera:inclusion: productosdevelopment eco-amigables. of eco-friendly elthe trato treat y andatención, attention, aprovechando taking BrindarProvide solucionesfinancial solutions financieras products. losadvantage medios ofdigitales. digital media. alavailable alcance to de all, todos, empowering potencializandothe development el of desarrollo CadenaSupply chain: de decommunities. las comunidades. 5 abastecimiento:Guarantee the integration of good Garantizarpractices in la the integración conglomerate’s de buenas practicasvalue chain. a la cadena de valor del conglomerado.

Objetivo:Objective: Objetivo:Objective: Objetivo:Objective: ConvertirConvert the al conglomeradoBNCR conglomerate into MantenerMaintain the el liderazgoconglomerate's del leader- MejorarImprove lathe calidad quality de of vida life fordel as BNCRa neutral en carbon un Carbono one. Neutral. conglomeradoship in the financial en el sector.sector mayormany people número as posible possible. de financiero. personas.

24 Structure of Banco Nacional

25 Geographical distribution

anco Nacional has a network of 175 offices and more than 400 ATMs distributed throughout the country. Moreover, there are B 1,200 commercial establishments affiliated to the BN Services system, which 2 can provide more than 200 payment options with public and private companies; this system 1 also offers the possibility of withdrawing 3 4 cash and paying cards and loan operations.

Banco Nacional has a 49% stake in Banco Internacional de Costa Rica Limited (BICSA), an entity domiciled in the Republic of Panama. It owns 100% of the shares of BN Valores (Stock Exchange), BN Vital (Operator of Pension Funds), BN SAFI 10 6 (Investment Funds) and BN Corredora de Seguros.

The operations of Banco Nacional are distributed 11 throughout Costa Rica; thanks to the increasingly accurate response, the advancement of technology Geographical distribution and the dynamics of the bank itself, this structure is 7 in a process of rearrangement. However, at a general 1 Commercial Area of Liberia: 19 offices 7 Commercial Area of Pérez Zeledón: 15 offices level, the distribution of the offices is as follows: 2 Commercial Area of Ciudad Quesada: 15 offices Commercial Area of Puntarenas: 13 offices 3 Commercial Area of Alajuela: 12 offices Eastern Commercial Area: 27 offices 4 Commercial Area of Heredia: 14 offices 10 Central Commercial Area: 1 office Commercial Area of Limón: 12 offices 11 Western Commercial Area: 20 offices 6 Commercial Area of Cartago: 20 offices

26 SERVICES PRODUCTS BN Internet Banking BN Credit Savings Services and BN Corporate Internet Banking BN Programmed Savings BN Mobile BN Connectivity products BN Business Mobile BN Custody offered by BN PAR Programmed Payments BN Education BN Integrated Custody Services BN Earn More Banco Nacional Night Mailbox BN Mortgage Safety boxes BN Solution Letters of credit BN Vehicled Banco Nacional has a list of sustainable products and services (green) that are CDP Term matching Purchase of balances detailed in the Green Bank section of this Check certification Crecifondo report. Term deposit certificates Current account International banking check Classic electronic account Cashier checks Electronic salary account Collections Smart account Electronic commerce Dinerfondo BN Derivatives Trust ATM Deposits Fondepósito Digital signature At sight investment International guarantees At sight agreed investment Intercoin Redifondo Payment of pensions of the USA Government Self-issue insurance Preparation, transport and delivery of remittances at the customer's home Superfund Receipt in check deposit from banks domiciled abroad Superfund Plus Remittances abroad Credi Card BN PAS Service (Automatic Wage Payment) Unification of debts Deposit collection service at the customer's home PayPal account withdrawal service Quick Pass Service SWIFT Service Transfer Check ATM transfers International transfers SINPE Transfers 27 Closed bag

The force of progress: our collaborators

anco Nacional has a work team consisting of 5,439 employees, distributed in the different Description of the work team activities that are carried out: B finance, banking, investment Banco Nacional funds, pension funds and insurance broker. 99% Distribution of collaborators by sex, year 2017 of the employees are covered by the collective bargaining agreement and 66% of the top Sex Number of employees executives hired come from the local community. During 2017, 259 new employees were hired. Men 2.918 Women 2.521 Total 5.439

Banco Nacional Work team distributed by type of position, year 2017 Type of position Total Active Staff Technical 2.853 Administrative 1.310 Professional 800 Professional headquarters 473 Asesores 3 Total 5.439

29 The force of progress: our collaborators

Banco Nacional - Chart Distribution of collaborators by type of scale, year 2017

Banco Nacional Distribution of collaborators by type of scale, year 2017 Type of scale Active personal quantity Senior Management 5 Administrative 1.713 Executive 479 Superior auditing 2 Trust system 3 Technical 3.237 Total 5.439

30 The force of progress: our collaborators

Corporations Corporations Number of collaborators, year 2017 Number of collaborators by sex, year 2017 Corporations Number of employees Sociedad anónima Men Women BN Corredora de Seguros S.A. 89 BN Corredora de Seguros S.A. 42 47 BN Fondos 36 BN Fondos 36 40 BN Vital 164 BN Vital 75 89 BN Valores 68 BN Valores 36 32

Banco Nacional Inclusion of people with disabilities in the work team, year 2017 Inclusion of people with Type of disability Amount of people disabilities in the work team Auditiva 2 At Banco Nacional, 30 people with disabilities are Cognitive 1 currently working, representing 0.5% of the total Degenerative illness 1 payroll. Motor 15 Sensitive / wrist bursitis 1 Sensitive / right arm 1 Sensitive / Reynaud’s phenomenon 1 Sensitive / Diabetic leg neuropathy 1 Visual 7 Total 30

31 Training and development

Banco Nacional has a training plan. Below are the results of its implementation during 2017:

•Number of executed •Events 522 events 46 Executed Specialties in specialties progress •6 events •9 events •Amount of trained 49.254 66 •Participations •39 participations •77 participations people •5.232 training hours •3.912 training hours

•Total of training •Training hours 144.691 hours 1.843,5

BN Corredora de Seguros Training report 2017 Department Executed hours In 2017, BN Corredora de Seguros developed a formal training plan for its employees. The results General Management 75 are the following: Operations Directorate 139 Commercial Director 315 Financial Administrative Unit 307 Risk and Internal Control Unit 221 Compliance Office 91 Internal Audit 564 Total hours 1.712

32 The force of progress: our collaborators

See the website www.bncr.fi.cr/transparencia/ BN Fondos BN Vital Paginas/Gente-BN.aspx to see updated information on salary scales, breakdown of payroll Within its training and development programs, BN At BN Vital, collaborators receive programs and and performance evaluation. Fondos has promoted activities that contribute courses of skills management and continuous to the professional growth and the development training that promote employability and help of skills and competences, in order to provide its them manage the end of their professional careers collaborators with professional knowledge and through technical training received throughout projection, both internally and externally. For this the year. The operator has a technical training period, 110 people were trained and 17 training plan that shows that employees attend these activities were developed. trainings. Training of a normative nature applies to all staff.

BN Valores

For 2017, BN Valores developed a training plan for its employees, which was 100% met. The annual average of training hours per employee and the topics covered are detailed below.

BN Valores - Tabla Average annual training hours by sex, año 2017 Sex Number of hours Female 21,74 Male 15,22

A total of 68 employees were trained.

33 The force of progress: data on working conditions

Social benefits Maternity leave Base salary and remuneration of women against men Regardless of the type of contract that the During the 2017 period, Banco Nacional reports collaborator has with Banco Nacional, they all that 105 women took their maternity leave. Of this There is no difference between the base salaries receive the following social benefits: group only 3 left the institution after the leave. of men and women. These are defined by category, both concerning base salary plus bonuses and At BN Fondos, 100% of the people who have market salary (single salary). • Work insurance been subject to a prolonged leave or disability • Health insurance have resumed their functions in the organization, which is why there is no exit statistics for these Cases of discrimination and • Sick leaves reasons. • Labor capitalization fund corrective actions taken At BN Valores, the rate of reincorporation • Family allowances During the period, no cases of discrimination after leave or disability is 100% and the rate of based on age, sex, ethnicity, social status, religion, • Christmas bonus resignation of employees after leave or disability appearance, economic condition occurred. • School salary is 0%. • Guarantee and retirement fund At BN Vital, it has been reported that during this • Contribution by the employer to period, 3 people took maternity leaves. severance pay to the association • Payment of article 26 for holidays Performance evaluation

The individual performance of 100% of the active staff of BN is evaluated. The evaluation consists of an attitudinal measurement, a group evaluation (BN management) and a measurement of individual objectives.

34 The force of progress: data on working conditions

Occupational health and Jobs with an incidence or a Job % safety high risk of disease Cashier 21.31% Platform 13.28% Banco Nacional has an Occupational Health According to the records of visits of the Medical Customer service 3.51% Commission made up of two representatives of Service at Banco Nacional, these are the jobs with Credit link 3.20% the union and two members of the Administration a higher incidence of consultations with respect Computing technician 2.84% (the company doctor and an Occupational Health to the totality: BN services executive 2.76% professional). Specialized auditor 2.70% BN Corredora de Seguros has an Emergency Small business executive 2.51% Brigade made up of eight employees, representing Treasurer 2.38% 8. 99% of the total staff. The other positions represent a percentage lower than 2% each, until reaching a total of 100% BN Fondos has an Occupational Health and Safety Committee made up of four members, two representatives of the employer and two representatives of the employees.

BN Valores has an Emergency Brigade.

BN Vital has an Occupational Health Commission made up of two representatives of the employees and two representatives of the employer.

All committees are registered before the Occupational Health Council, a dependency of the Ministry of Labor and Social Security.

35 Transforming Communities Program

ransforming Communities is The source of the project is very important, since to build infrastructure, repair streets or invest in a sustainability program that when the community enters the program through any need that the community has. seeks to support productive BN managers, from which they can benefit, these projects and community projects have a higher level of support than As a result of the incursion into the business T enterprises, which arises from those that enter through DINADECO (National world, it is necessary that associations achieve Banco Nacional’s commitment Directorate of Community Development) a balance between the social and the economic. to the development of the communities where it or directly from a community development When developing a company, it is important to operates. association. However, in spite of the fact that in allocate a part of the profits to the maintenance 2017 a large number of projects entered through and growth of the company, but, at the same time, Making use of social tools, such as structured routes other than BN managers, 92% had the full it must continue investing in the development dialogues between the different opinion- support of the managers and their work teams. of communities. As entrepreneurs, they must generating actors and the community’s living compete in difficult markets, where they require the forces, it seeks to encourage the development Development associations are non-profit support of alliances and commercial strategies that of productive projects that can move the family organizations created to work for a common allow them to strengthen and reach the necessary and local economies of the communities. From goal: the well-being and development of a balance to fulfill their primary objective; that is, an analysis of various proposals received by community. Traditionally, they have worked with to invest in the development of communities. community development associations, office pure mysticism, but in the last years a change managers and communities, BN seeks to transform has occurred, namely a desire to generate their the development associations into entrepreneurs own resources, through the development of a with a communal administration and boost business that gives them a greater margin of through them, the socio-economic growth of the action. This evolution has not been easy, because communities, making them more competitive. they have had to change the mentality of the This program has a national geographic scope and community members, reinventing themselves as aims to support the development associations a group, seeking technical advice and financial created under Law 3859. The thematic axes that it support, and sacrificing in many cases, time of covers are: business, education (especially science their personal and family life to dedicate it to the and technology), environment, sports and culture. community.

The development of productive projects depends However, those who make up the boards of on several factors, among which standout the development associations have been able to source, the theme of the project, the number of take advantage of the resources that each area people to benefit, as well as its profitability and possesses, as well as the capacities and skills of the ability to promote new sources of employment members that make up the association. Despite and productive chains in the community. the commitment they have, they all experience the same difficulties and the main limitation they In this process, the agencies or offices of the face is the lack of economic resources with which bank that are close to the initiative are involved. 36 Transforming Communities Program

Transforming Communities Program Work scheme Work focus Financial education Entrepreneurship Financial inclusion Environmental management Financial deepening Encadenamientos

Segments Women in poverty conditions Indigenous population Young people People with disabilities

Transforming Communities Program Table of completed projects, year 2017 Number of executed projects

Within the framework of this Puntarenas 4 The investment in projects in program, during 2017, 12 Alajuela 2 2017 was ₡245.000.000 productive projects were carried out in the following areas of the Guanacaste 2 Impacted families: 591 country: Limón 2 Impacted people: 92.592 San José 1 Cartago 1 Heredia 0

37 Transforming Communities Program Detail of completed projects

1. Integral Development Association of La Palmera de San Carlos Purchase of equipment for the strengthening of the limestone Project industry.

Purchase of heavy machinery to increase productivity and Project description: improve the efficiency of calcium carbonate extraction.

Linked BNCR Office Dock Linked Manager Erick Ureña Chavarría Province Alajuela Seed capital ₡20.000.000 Impacted people 3.000 Benefited families 16 Jobs generated 18

2. Integral Development Association of Río Claro de Pavones Indigenous Handicrafts Market and Communal Encounters Project (restaurant). Construction of the handicraft market for the sale of indigenous Project description: products of the Ngobe group. The original market was a small ranch that was destroyed by Hurricane Otto.

Linked BNCR Office Laurel Linked Manager Kenneth Mesén Peraza Province Puntarenas Seed capital ₡26.000.000 Impacted people 1.450 Benefited families 60 Jobs generated 10

38 Transforming Communities Program Detail of completed projects

3. Integral Development Association of Santa Eulalia of Athens Conditioning of the facilities and equipment of the typical Project Olaya Restaurant.

Project description: Remodeling of the association’s facilities to transform them into the Olaya typical food restaurant.

Linked BNCR Office Linked Manager Juan Carlos Calderón Víquez Province Alajuela Seed capital ₡21.000.000 Impacted people 28.000 Benefited families 40 Jobs generated 10

4. Construction of the House of Culture and Calypso of Cahuita

Project Construction of the House of Culture and Calypso of Cahuita.

Construction of the first phase for the House of Culture and Project description: Cayipso, for the teaching of dance and music.

Linked BNCR Office Bribri Linked Manager Lorena Rojas Walker Province Limón Seed capital ₡27.000.000 Impacted people 8.000 Benefited families 5 Jobs generated 5

39 Transforming Communities Program Detail of completed projects 5. Association of Specific Development for Apiarian Production of Sabalito Laboratory for the insemination and production of genetically Project improved queen bees.

Construction and equiping of the complementary phase of Project description: the queen bee insemination laboratory.

Linked BNCR Office Sabalito Linked Manager German Mora Solís Province Puntarenas Seed capital ₡17.300.000 Impacted people 1.200 Benefited families 60 Jobs generated 5

40 Transforming Communities Program Detail of completed projects

6. Integral Development Association of Roosevelt Limón

Project Tourism in Limón Boulevard.

Transform the boulevard in Limón downtown to promote local Project description: tourism, culture and typical environments of the Caribbean.

Linked BNCR Office Limón Linked Manager Roy Vásquez Lizano Province Limón Seed capital ₡25.000.000 Impacted people 15.000 Benefited families 10 Jobs generated 5

7. Specific Association for the Development of Arts and Culture of Coto Brus

Project Music School Equipment.

Project description: Equipment of the first phase of the San Vito Music Center.

Linked BNCR Office Ciudad Neily Linked Manager Martín Hernández Méndez Province Puntarenas Seed capital ₡21.000.000 Impacted people 14.000 Benefited families 90 Jobs generated 3

41 Transforming Communities Program Detail of completed projects

8. Integral Development Association of Arado Santa Cruz

Project Mountain Bike Tour in the Diría National Park.

Purchase of equipment required to offer the services of a Project description: mountain bike tour.

Linked BNCR Office Santa Cruz Linked Manager Jose Luis Fonseca Morera Province Guanacaste Seed capital ₡16.730.000 Impacted people 6.000 Benefited families 120 Jobs generated 8

42 Transforming Communities Program Detail of completed projects

9. Integral Development Association of Mollejones

Project Mountain Bike Tour.

Purchase the equipment and warehouse construction required Project description: to offer the services of a mountain bike tour.

Linked BNCR Office Turrialba Linked Manager Marco Víquez Valverde Province Cartago Seed capital ₡18.730.000 Impacted people 542 Benefited families 60 Jobs generated 10

43 Transforming Communities Program Detail of completed projects

10. Integral Development Association of San Jerónimo

Project San Jerónimo Community Rural Tourism.

Construction of an office for tourism reception and luggage Project description: storage. II access to Chirripó.

Linked BNCR Office Pérez Zeledón Linked Manager Alberto Chaves Moraga Province San José Seed capital ₡21.000.000 Impacted people 400 Benefited families 60 Jobs generated 4

11. Integral Development Association of El Coco

Project “Amor de Temporada” Tourism Project.

Community rural tourism based on the rescue of values and traditions of Guanacaste, mainly reflecting the idiosyncrasy Project description: of Playas del Coco. The name of the project comes from the famous song “Amor de Temporada”, by Héctor Zúñiga.

Linked BNCR Office El Coco Linked Manager Silvia Alvarado Monge Province Guanacaste Seed capital ₡21.000.000 Impacted people 15.000 Benefited families 70 Jobs generated 35

44 Transforming Communities Program Detail of completed projects

12. Integral Development Association of La Palma

Project La Palma Aqueduct.

Improvements to the aqueduct of the community system of Project description: Campo de Agua Buena (Osa) to improve the quality of the water provided and add homes to the supply network.

Linked BNCR Office Puerto Jiménez Linked Manager José Miguel Pasos Province Puntarenas Seed capital ₡10.240.000 Impacted people 5.000 Benefited families 53 Jobs generated 20

45 Transforming Communities Program Storm Nate Emergency

Communities that were supported for the restoration of the aqueducts destroyed by Storm Nate Banco Nacional provided support Development Association Amount Development Association Amount through its respective integral development associations to 23 1. Palmichal de Acosta ₡16.530.000 5. Llano Grande de Cartago communities that had to restore their 2. Pavones de Golfito ₡37.890.000 6. Santa María de Dota aqueducts after the storm Nate. Out 3. San Buenaventura ₡25.710.000 7. Higuito del Guarco of the 23 communities, 4 required 60% of the budget allocated by the Bank 4. Bajo Caliente ₡39.870.000 8. La Luchita and 19 the remaining 40%. Below is a 9. San Isidro del Guarco breakdown of the communities that 10. Rodeo San Marcos were supported. 11. Alto San Juan de Tarrazú 12. Llano Bonito de LC 13. Santa Rosa de Oreamuno 14. Tablón del Guarco 15. Corralillos de Carrillo 16. Artola de Carrillo 17. La Palma de Puriscal 18. Tufares de Puriscal 19. Delicias de Turrubares 20. San Luis de Turrubares 21. San Francisco de Turrubares 22. Palmital de Montes de Oro 23. Santa Elena de Monteverde Total ₡120.000.000 Total ₡80.000.000 60% of the requested budget 40% of the requested budget

46 Transforming Communities Program Other activities with the communities

Community Server Forum In order to make an approach on the transformation associations (integral and specific) that have of a development association into an SME and been carrying out productive projects within the promote this management within the public framework of the Community Entrepreneurship opinion as a possible topic in the national political Program of Banco Nacional. This had a face-to- agenda, with a view to strengthening the solidarity face and virtual modality. economies in the country, the Community Server Forum took place on October 24 at the Tryp Sabana Hotel. This forum consisted of a discussion with the representation of nine development Community Server Forum Table of participants, year 2017 Participating organizations Participants Development associations invited as panelists to the forum 18 Federations of development associations 26 Associations participating in the program in 2017 18 Associations participating in the program in 2016 6 Associations that may be participating in the program in 2018 30 BN managers promoting projects in their communities 15 Special guests of the government 20 (IMAS, Casa Presidencial, MEIC, Ministry of Labor, DINADECO) Press 8 Special guests of Banco Nacional 10 (Board of Directors, General Management) Social Responsibility Team / Advertising / Institutional Relations 10 Moderators Forum 2 Total participants 163

47 Volunteer program

48 Volunteer program

anco Nacional has a solid volunteer program that seeks to contribute to the social and economic development of the B segments of interest, through the direct involvement of BN People in the implementation of collaborative activities and knowledge transfer associated to the foci of Banco Nacional’s Sustainability Model, thus supporting the country’s progress.

This program has the following strategic segments and foci of interest:

Work foci of the Volunteer Program Financial education Financial inclusion Empowerment and social support Entrepreneurship Strengthening of companies Environmental education

Segments Women in poverty conditions Children Indigenous population Young people People with disabilities Business segments

49 Volunteer program

Results obtained During this period, 50,967 volunteer hours were achieved Target hours: 47.400 with the different segments defined. Hours invested: 50.967 Volunteer program Breakdown of hours by segment, year 2017 Focus Voluntary hours Environmental management 19.407 Goal exceeded Social support 18.145 Financial education 6.360 Environmental education 4.963 107.5% Entrepreneurship 2.092 6.000 collaborators Total 50.967 hours

50 Inclusion, Education and Financial Freedom Program

he Inclusion, Education and them to improve their decision-making for life. In order to reach more vulnerable populations in Financial Freedom Program terms of debt, such as young professionals, public emerges as an institutional 4- Promote financial education as a fundamental employees, people from rural areas, women response to the need to axis that allows to increase the protection of living in poverty and extreme poverty conditions, T increase the empowerment consumer rights and the levels of financial inclusion work alliances were established during the 2017 of our customers and financial capabilities in the country. period, which allowed Banco Nacional to increase in the population, so that they understand the scope of the program. the benefits, costs and risks associated with 5-Generate an institutional culture of care and financial products and services, such as loans, protection of our customers´ finances, empowering savings, means of payment, among others. This our collaborators to become financial advisers. Inclusion, Education and Financial program is based on local, regional and global Freedom Program: more than 17.000 trends in inclusion and financial education and uses identification as a methodological basis. beneficiaries during 2017. Through face-to-face and virtual training, participants are expected to understand their emotional relationship with money, so that this may lead to preventive and palliative actions regarding irresponsible consumption habits or lack of healthy saving habits.

Program Objective:

1- Increase the level of financial knowledge in people, through the dissemination of preventive and corrective educational information.

2- Promote, through financial education, the empowerment of users and consumers of financial products and services.

3- Provide families with relevant information about the necessary financial tools that allow

51 Alliances for the implementation of the Inclusion, Education and Financial Freedom Program

Institution Action performed Beneficiaries National Institute for Women Training on entrepreneurship given to entrepreneur women in Northern area of the country: (INAMU) rural areas. counties of Guatuso, Los Chiles, Upala, Santa Cruz, Liberia and Training on family financial freedom given to women in poverty Ciudad Quesada. or social risk conditions.

Ministry of Economy, Industry and Training given to public employees on the responsible use of San José Commerce (MEIC) financial instruments and smart consumption.

Claro Company Training given to young people in their last year of studies Pérez Zeledón: and about to enter the labor market, on the responsible use of Technical High schools: financial products, savings, smart consumption and emotional CTP General Viejo relationships with money. CTP de Pejibaye Schools: School of San Pedro School of Platanares School of Santa Rosa School of Santa Elena

Omar Dengo Foundation BN labora. Business training given to all technical high schools All the country: of the country, as part of the curriculum of the different technical 10,000 young people careers.

Labora Event: The initiatives developed by young people in the field of entrepreneurship were rewarded.

Current operations center Registered schools: 224

High schools with companies registered in the Operations Center: 560

Users of the Operations Center (teachers): 1706

Users of the Operations Center (students): 7047

Virtual course on Occupational Health and Safety 140 students

52 Alliances for the implementation of the Inclusion, Education and Financial Freedom Program

Institution Action performed Beneficiaries Omar Dengo Foundation Course of Corporate Social Responsibility. Aimed at educators 80 participants and people in general who want to know about the subject, with emphasis on the environmental component, and application of the knowledge in the institution where they work.

Course: Marketing and sales plan. A practical approach on 80 persons how to prepare a plan for the company or personal business. Mainly aimed at educators.

Course: Business plan. Aimed at technical education teachers 80 persons and to all those people who need to learn about how to prepare a business plan.

Basic Accounting course for service companies. Aimed at 80 persons people without accounting knowledge interested in knowing about this field.

Ministry of Public Education (MEP) Training in schools and high schools on topics such as savings, responsible finances and smart consumption.

National Commission for Training given to indigenous populations on the use of financial Indigenous Affairs (CONAI) technological tools that improve the quality of life of populations.

Superintendence of Connected Homes Program. Training for the use of technology Telecommunications (SUTEL) to improve the entire financial transaction.

53 Inclusion, Education and Financial Freedom Program Other Activities Social Responsibility program Financial Education Fair: Accessible America Fair on the UPE site In 2017, the fourth edition of the Accessible America www.upe.ac.cr/cursos/curso/%2095 In 2017, Banco Nacional participated in the Eighth Fair was held, organized by the Information Financial Education Fair, which seeks to bring Technology Division of the United Nations, which the population closer to issues of saving and seeks to expose global and regional trends in responsible consumption of financial products. the inclusion of different products and services through information technologies. This year, For this year the fair had two phases. The first Banco Nacional participated with a stand where one was a training through the virtual classroom it showed its progress in terms of inclusion for of the Ministry of Education to schools in rural vulnerable populations. areas; and the second phase was carried out in the Post Office Boulevard in Costa Rica, where The Accessible America Fair was held at the San direct training actions were carried out for José Palacio Hotel, on November 21, 22 and 23, pedestrians, with the support of volunteers from 2017. Banco Nacional.

54 Inclusion, Education and Financial Freedom Program Other Activities Meeting of Student Leaders Responsible marketing From designer to businessman workshop In 2017, the first youth meeting for the textile During this period, Banco Nacional participated A responsible marketing workshop was held for the creative industry of Costa Rica was held, with in the eighth edition of the National Meeting of employees of the Banco Nacional Conglomerate the attendance of 40 young people from all Student Leaders. Out of the total participants, 135 responsible for issuing and developing advertising over the country, who are currently developing students came from day technical high schools and marketing strategies. This workshop was in entrepreneurial projects based on the design and joined the activity on December 4 and 5; while charge of the Director of the Economic Dimension industry. Banco Nacional, together with the Yo other 94 students came from night technical high of AED, María Fernanda Pérez, and addressed Emprendedor Foundation, held workshops on schools and joined the activity on December 7 issues such as human rights, information security business management, marketing and finance, and 8 at the facilities of the Escuela Social Juan and fair advertising practices. There was an so that these young people can develop their XXIII. approximate participation of 30 employees companies in the best way possible. of corporations, Advertising Management, The initiative was developed to strengthen the Institutional Relations Management, Marketing leadership and entrepreneurship capacities of the and Innovation Management and Social students of the country’s technical high schools Responsibility Management. and to encourage their social responsibility to generate entrepreneurial initiatives that positively impact their personal development, educational community and environment.

55 Inclusion, Education and Financial Freedom Program Other Activities ATM machine in the Cabécar language In 2017, one of the most important projects on inclusion became a reality. For the first time in Costa Rica, there is an ATM in the indigenous language. This cashier will benefit a population of more than 7,000 cabécares from the Alto Chirripó area, in Turrialba, who are customers of Banco Nacional, because through their accounts in the institution they receive the aid of IMAS and FONABE. This cashier facilitates the efforts of the beneficiary population, since about 87% of them speak their native language only.

56 Financial Freedom Program for Employees

his program seeks that the Financial Freedom Program for Employees employees of Banco Nacional be Training carried out in the year 2017 a model of financial health, so that they can become advisors Commercial areas Date Amount of people T and counselors for their relatives, friends and customers. Alajuela August 8th 22 Cartago August 9th 15 Central August 17th 40 Ciudad Quesada September 4th 15 September 5th 15 East (Main Office) August 17th 35 Liberia August 23rd 15 August 24th 15 Limón September 12th 15 September 13th 15 West September 11th 20 Pérez Zeledón September 19th 15 Puntarenas September 26 20 Heredia August 21st 15 Total 272

57 Sponsorships - Social responsibility

Business Roundtable, BN Diagnosis Sponsorship of EXPOTEC 2017 Sponsorship: Productive Links: the situation for the SME Sponsorship executed by Asociación Oratorios Salesianos don Bosco (Don Bosco Salesian Oratory Event held in conjunction with PROCOMER, ICRC chaining program and forum Association). The fair focused on promoting skills and AZOFRAS. for the presentation of gaps: for students to have spaces that can strengthen business ideas, so that they can become We invited a number of tractors companies (buyers), This sponsorship was executed by the Chamber companies that boost the country’s economy and customers of the bank, exporters or with an of Industries of Costa Rica. Its objective was to their needs in the social, environmental, business exporter profile, and, on the part of PROCOMER, diagnose the situation regarding the capabilities and community fields. In general, it is a process a group of potential suppliers. In total, 10 tractor of SMEs in the metallurgy sector, to be part of the that starts from the beginning of the school year, companies and 76 suppliers participated. The value chain of medium and large companies, with whose main participants are the young students business round lasted for more than seven hours the aim of identifying the gaps between supply of CEDES Don Bosco who have represented and a total of 175 business appointments were and demand, as a limitation to specify a productive Costa Rica in various international science and generated. According to the satisfaction survey chain. In addition, on Monday, November 20, technology competitions, in the United States, carried out by PROCOMER, the activity had an 2017, a forum was held to present the results, Brazil and Mexico, winning scholarships from study “excellent” score, with a total of 92 points out attended by about 20 people, including invited and patents for their projects. The participation of 100. The total cost of this activity was covered companies, officials of the ICRC and BN. One of BN in the EXPOTEC sponsorship goes hand in by Banco Nacional and amounted to the sum of of the most valuable conclusions of the forum hand with one of our strategic objectives: “Grow ₡8,279,500. An additional and intangible benefit is that there are certain soft needs of SMEs that with a sense of social responsibility” and, at the of the event was the exhibition of the BN brand, would allow them to close gaps with demand; same time, complies with the sustainability model the use of the image in the invitations and web however, to close those gaps they need financial approved by the Board of Directors in article 4, pages of the institutions, a stand and back panel support. This event also allowed the bank an session No 12,061, held on February 15, 2016, with the presence of a business executive to image exposure, since it was the only sponsor. which involves the “young” target segment and answer questions of the participants. ₡5,000,000 sponsorship. the financial education and entrepreneurship programs. In addition, Banco Nacional obtained brand and image exposure in all activities related to the sponsorship and a space to provide a speech during the opening ceremony. The total cost of this sponsorship was ₡2,900,000.

58 Sponsorships - Social responsibility

Sponsorship Workshops EXPOJOVEM 2017 Sponsorship: to generate productive Sponsorship executed through the Fundación opportunities for women and Omar Dengo (Omar Dengo Foundation). The Social Responsibility Directorate considered education for children: important to support the initiative presented by Executed by Fundación DEHVI (DEHVI the Omar Dengo Foundation, to participate as a Foundation), its general objective was to provide sponsor and strategic partner of the ExpoJovEm workshops that strengthen the soft skills and fair. This was held on November 27, 28 and 29, techniques of unemployed women who belong 2017 in Parque La Libertad, to show the creative to priority communities and are in a situation of and entrepreneurial potential of young people social vulnerability, which will culminate with the trained in professional technical education and development of a line of products with cause, provide real options for the creation of SMEs promoted by DEHVI plus negotiated points made up of young people, through the value- of sale, to assure an income and a return that added centers or business incubators located supports children. It included a process of selection in strategic areas of the country. This initiative of women who had to meet a socioeconomic goes hand in hand with one of the segments and aptitude profile to participate in the eight that Banco Nacional contemplates within its training workshops to develop a productive sustainability model, namely the business entrepreneurship-type project. The workshops segment. Additionally, activities of this nature are concluded on December 8, 2017. They have been justified according to the reference frameworks held in communities of Pavas and Desamparados, used to form the sustainability model, such as the with great success. The closing ceremony of the Sustainable Development Goals and the National workshops was held in the General Auditorium of Development Plan, among others. In addition BN, on Monday, December 18, 2017, where the to the economic contribution, the Bank had a Director of Social Responsibility had a space to space at the opening and closing of the event, address the participants and reaffirm the interest and delivered a prize to the first absolute place of the Bank in supporting this type of activities. of the projects, presence of brand, image, use of Sponsorship cost ₡15.000.000. the logo in promotional products and banners. A stand was also set up and BN officials participated as judges in the selection and classification of the projects, as well as attending consultations of the attendees during the event. Total cost of sponsorship ₡15.000.000.

59 Sponsorships - Social responsibility

The investment in sponsorships for the 2017 period was as follows:

1. Sponsorship: Móvil Lazos, Clínica Bíblica a. Amount: ₡16.000.000 b. Nature: Health c. Place of execution: San José - Heredia

2. Sponsorship: Facade lighting of the Children’s Museum a. Amount: ₡6.000.000 b. Nature: Cultural c. Place of execution: San José

3. Sponsorship: 24 hours of innovation a. Amount: $5.000 b. Nature: Innovation c. Place of execution: San José

4. Sponsorship: Humberto Vargas a. Amount: ₡5.000.000 b. Nature: Art – Culture c. Place of execution: San José

5. Sponsorship: National Olympic Committee a. Amount: $12.000 (annual, for 6 years, ended in December 2017) b. Nature: Sport c. Place of execution: San José

6. Sponsorship: III International Congress of Communication Innova-COM 2017 a. Amount: ₡3.000.000 b. Nature: Innovation c. Place of execution: San José

60 61 Environmental strategy of Banco Nacional

n order for the commitments and changes During this period, specific actions were taken BN Environmental Policy: The Banco Nacional to be permanent and sustainable over in our way of acquiring goods and services, Conglomerate reduces the environmental time, the effort and participation of all the relationship with our suppliers and the impact caused by its course of business and is the members of an organization and of involvement of our collaborators in this institutional committed to the Carbon Neutrality country goal, I all the people related to the same, is commitment. Below is a detail of what has been by rendering accounts of its actions, participating necessary. Aware that this requires a process that done during this period in environmental matters. in sustainable development projects and allows a cultural change, during 2017, emphasis incorporating environmentally friendly products was placed on strengthening the processes and services into its financial offer. initiated in previous years, involving 100% of the institution and strategic suppliers.

EcoEfficiency Sustainable Procedures EcoEfficiency Green purchases BN Culture Products • Institutional consumption • I • Procedures • reen card alined with the • Commitment of promotion • ero paper • irin and bids enironmental each office and manaement each collaborator • comarchamo • Consumption • esponsible indicators supplier • reen Ss Carbon neutrality PGAI coloical blue fla proram

Strategic allies

62 Sustainable products and services

t institutional level, Banco Nacional The card is for international use and can be Nacional called “Fondo para la Biodiversidad works sustainable products and requested at any Banco Nacional office. Sostenible” (Fund for Sustainable Biodiversity), services, under two scenarios: which will be used to plant and maintain trees in In 2017, more than ₡124 million was contributed to protected forest areas. The value of this marchamo A initiatives related to environmental sustainability. is U.S $ 12.00 and can be purchased at any branch of the Bank or at BN Internet Personal. • Created for an environmentally friendly As at the end of 2017, there is an accumulated purpose. cut of 2,393 ecological marchamos placed and • An environmentally friendly process. $ 23,641.66 has been paid in commissions for initiatives related to environmental sustainability. Among BN’s sustainable products and services stand out:

1) Green cards

Sustainable Biodiversity Fund credit and debit card.

The Green Servibanca Card and the Green Credit Card have affinity with FONAFIFO and are offered to the Bank’s customers as a means of payment to protect the sustainable biodiversity in Costa Rica.

Every time a customer makes a purchase in a store using this card, 10% of the net commission 2) Ecological Marchamo (circulation permit) that the bank receives is paid in full to a trust The Ecological Marchamo was created due to the administered by Banco Nacional, called the need to mitigate the CO2 consumption that the “Sustainable Biodiversity Fund”, which will be vehicles produce during a year, thus helping to used to plant and maintain trees in protected preserve the planet and mitigate the effects of forest areas. global warming.

The funds raised by the Ecological Marchamo are deposited in a trust administered by Banco 63 Sustainable products and services

3) Green SMEs Credit for SMEs that want to make environmentally friendly investments. Among the sectors to finance are: industry, commerce, services, tourism and agriculture. Through this financing, the following is achieved:

• Support sustainability in the development of SMEs. • Encourage the environmentally-friendly growth. • Promote the prevention, control and mitigation of negative effects on the environment.

Among the fundable investments the following stand out:

• Energy efficiency. • Generation of renewable energies. • Prevention and control technologies. • Replacement of chemical products with organic ones. • Water treatment. • Ecotourism. • Emissions reducing technology. • Waste management.

In 2017, 377 operations were placed, corresponding to ₡10,366.5 million.

64 Sustainable products and services

4) Environmentally-friendly housing 5) Ecotechnology 6) Electric vehicles Credit for home purchase, purchase of lot and Consumption credit with preferential rate to Credit with preferential rate for the purchase of construction, or home building involving materials invest in clean technologies (solar panels and electric vehicles. BNCR also participates in the of low environmental impact or efficiency related heaters, wind turbines, water, gas and energy Efficient Vehicle Acquisition Program (PAVE, aspects, such as environmentally friendly design, savers, thermal insulators, etc.), which aim to Spanish initials), which aims to replace vehicles solar panels, and smart water saving taps, among reduce the consumption of electrical energy from of more than 15 years old by efficient vehicles. others. This credit also applies to renovations and non-renewable sources. This PAVE list includes hybrid or electric vehicles, has special conditions. as well as combustion cars considered eco- efficient. The added value provided by BNCR to the financing of PAVE vehicles is a differentiated processing and formalization fee of 2.50%.

65 Sustainable products and services

7) Green insurance 8) Dematerialized Investments Sostainables Purchases

An insurance is a contract through which the Through this service, Banco Nacional does not print Just in Time (JIT) insurer is obliged, through the collection of a the customers´ investments on security paper. The premium, to compensate, within the agreed limits, cost of this printing is added to the rate, for the The institutional purchases of Banco Nacional seek the damage produced to the insured when a loss customer benefit. These are very safe investments to be more aligned with sustainable products. To occurs on the risks covered by said insurance. that are made either in a service platform (if the advance in this matter, the institution has worked client comes to an office and only takes a printed on the following actions: Among the benefits of the green insurance the sheet representing their investment, with the following stand out: advantage that in case of loss, the customer does • Review with the DGIC (General Directorate not lose their investment, or on the Internet, such of Infrastructure and Purchases) of the main • Reduction of the impact on the environment. as short-term investments (sight or agreed rate JIT (Just in Time) articles to make changes for • Insurance subscription digitally. investment) or longer-term investments (Internet more friendly products. Examples: paper from • Reduced costs by making fewer impressions. investments, Gane Más (Earn More), Sustainable certified plantations, cloth bags, products such • Easy subscription. Savings Certificate or Scheduled Savings). as biodegradable hand soap, etc. • Differentiated conditions. • Hiring and bidding

Two aspects of sustainability were included in all bids:

• Non-discrimination and equality policy. • Environmental management plan.

Additionally, 22 suppliers were trained and certified in environmental issues.

Banco Nacional uses the Green State Purchasing Manual: https://www.hacienda.go.cr/comprared/ manual_compras_verdes.pdf

66 Zero Paper Process

he ultimate goal of this process Process timeline: 2019 is to minimize the need for • New diagnosis paper consumption in the BNCR • High use of electronic documentation. 2008 – 2016 Conglomerate to reduce our impact • A Zero Paper Bank. T on the environment and increase • Commitment to reduce the environmental administrative and operational efficiency. The impact and the implementation of concrete Currently, work is being done on the design objective of the process is: actions. and strengthening of a document management

• Determine the paper consumption required program for electronic document management. for the operation of the BNCR Conglomerate. 2017 With the combination of paper with digitized and • Diagnosis of the current situation. electronic documents, BNCR increases the use • Determine the main gaps to close in order to • Zero Paper Strategy. achieve the systematic reduction of paper use. of technology applications, such as the digital • The GGC-018-17 guideline was issued and a file, sharepoint, digitalization of documents, and • Establish an action plan with the main study of procedures was carried out in all areas to reduction of the volume of printers in the bank, guidelines and actions that allow the reduction determine the strategy and action plan for Zero among others. in paper consumption. Paper. • It was stated in the strategy that all process The implementation of the Zero Paper initiative Another important action is to constantly monitor is based on the closing of gaps in the following managers must verify and improve the processes the dependencies of greater consumption and four areas: towards Zero Paper. provide them with the tools to reduce the use of • Implementation of the strategy. paper. Likewise, we work on a data repository and • Update of procedures. the implementation of the use of digital signature • Change in culture and habits. Processes and Organizational in all the bank’s signatories.

procedures culture 2018 • Only 50% of the paper used in 2017 will be Documentary used. Technology management • Migration to technology. • Change in culture and habits.

67 Zero Paper Process

Benefits

• The SGCR reviewed and modified procedures related to the credit process, achieving a monthly reduction of 3,640 reams in the branch network.

• A more productive bank.

• More efficient processes and services: quick and easy access to information, improvement of quality and speed of service by reducing response times and improving tracking of information, data and procedures.

• Greater control and security of information.

• Reduction of space and storage needs.

• Contribution to sustainable development with the optimal use of resources: paper savings, reduction in the emission from waste, decrease in the consumption of natural resources used in the manufacture of paper, decrease in energy consumption used to print, photocopy, etc.

68 Carbon neutrality process

For the achievement of carbon neutrality by The offices verified were the following: With the inventory of Greenhouse Effect Gases 2021, the organization must have a number of (GHG), all the evaluated dependencies aligned procedures aligned in order to comply with the Commercial Zone Location their processes towards carbon neutrality in 2017. national standard Inte B5: Carbon Neutrality. For Alajuela Alajuela At the end of the year, the GHG inventory was this reason, the review of internal procedures Cartago Cartago updated for the entire Conglomerate. was initiated, as well as actions in the offices to Central Headquarters align the process towards the achievement of Ciudad Quesada Ciudad Quesada this goal. In 2017, the first 20 verifications and Este San Pedro measurements of greenhouse gases were made in the offices of the Banco Nacional Conglomerate. Heredia Heredia Guanacaste Liberia Limón Limón Oeste Santa Ana Pérez Zeledón San Isidro del General Ciudad Neily Uvita Puntarenas Puntarenas Support offices La Uruca complex Alternate Operations Center Corporations CIAMESA building BN Valores BN Vital BN Fondos BN Corredora

69 BN Eco-Efficiency Culture

s indicated in the introduction 1. The creation of an environmental committee 4. Materials were developed as tips for the to this section, Banco Nacional, in each office was encouraged to assume the best management of resources, which served beyond specific and isolated direction of environmental actions planned in as the basis for the preparation of PowerPoint actions, believes in the importance each one of them. presentations and videos and are available to A of generating and consolidating all offices to support awareness and training a culture of care for the environment, which is 2. Four training sessions were developed processes. These tips were also sent to all an intrinsic element of its actions and, therefore, with the managers or representatives of the collaborators through the WhatsApp “Gente sustained in time. For this reason, during this environmental committees of each office. BN”. period, the institution not only was concerned in lowering its consumption, but decided to 3. A site where all the offices can consult their invest in actions that facilitate the awareness and consumption of water, electricity, fuel, ink and 5. The “Mundito” character continued to be commitment of its employees with this issue. paper was created in the Bank’s Web site. This used. This has the task of guiding, educating and site is updated on monthly basis by a person in motivating collaborators in environmental issues. Below is a breakdown of the actions carried out: charge of this function.

70 BN Eco-Efficiency Culture

Development of a Comprehensive Environmental Management Tool

Aware that cultural changes do not occur The team of this company was divided by sectors, Environmental Management Program (PGAI of “overnight”, and that processes are required to provide this support to each of the offices MINAE) and was endorsed by the Directorate of to make people understand the importance of registered in the Ecological Blue Flag program, Environmental Quality Management (DIGECA) the issue while gaining knowledge to implement which allowed 101 offices to present their final and by the Ecological Blue Flag Program, was and report actions, a consulting firm was hired report to obtain this award. developed. during this period in coordination with the Social Responsibility Department of Banco Nacional, Moreover, with the purpose of facilitating and The purpose of this tool is to systematize the eco- for training, monitoring and supporting all standardizing the instruments of environmental efficiency data and sustainability indicators of environmental committees, through face-to- management reporting, the Comprehensive each office, to achieve the self-management of the face sessions, telephone and email follow-up. Environmental Management Tool, which information and, consequently, the environmental compiles the information of the Blue Flag results from the office. Ecological Program (PBAE) and the Institutional

71 BN Eco-Efficiency Culture

In order to facilitate the use of this tool, in addition Communication strategy Results of the application of to the continuous monitoring through the environmental practices different media, a face-to-face training session was To reinforce the process, a communication conducted for the members of the environmental strategy dedicated exclusively to this topic was The Banco Nacional Conglomerate is made up of committees, emphasizing on the Ecological Blue developed, which will be implemented during 175 buildings, including all the agencies, support Flag Program and the Environmental Institutional 2018. offices and the four corporations. To achieve an Management Program, as well as on the form of eco-efficiency culture, it is necessary to carry out presenting indicators. This entire process, which began in 2017 and will a process of awareness-raising, action-culture continue in 2018, facilitated the implementation and measurement of both progress and results. Each of these sessions was replicated in of environmental actions in the offices, The data presented below is the product of a each commercial zone and more than 100 generating greater and better involvement of the work culture and measurement of environmental representatives of the offices were trained within collaborators in the field, as well as an increase indicators. this framework. Seeking to reinforce and facilitate in awareness of the importance of caring for the the process, a guide was prepared and sent to environment. all those in charge of the committees, which was useful to fill the tool. At the end of the year, the offices have more knowledge on environmental issues, recycling programs in operation, consumption records, work alliances at the local level for the development of actions in favor of the environment, and offices generating changes in the places where they operate.

72 BN Eco-Efficiency Culture

Water consumption results

Water consumption Consumption of water per capita

Year Water m3 Cost in colones CR Year m3 per capita Cost in colones CR 2016 145.970,5 ₡207.201.889,0 2016 25 ₡207.201.889,0 2017 131.813,0 ₡228.295.865,0 2017 22 ₡228.295.865,0 Difference: 14.157 m3 saved and ₡21.093.975,16 in excess The saving was 14.157 m3 although there was an increase in (due to rate adjustment) the total invoice with respect to the previous year due to the increase in price per m3 of almost ₡312,5.

The saving in water in m3 equals:

• 707,850 20-liter water jugs per year, equivalent to providing 2,385.7 liters of water per year to each of the 5,934 collaborators of the conglomerate.

• 18,871 750-liter storage tanks per year.

• 5.6 Olympic swimming pools per year.

• 14,157,000 liters saved per year.

Results of energy consumption

Energy consumption Consumption of energy per capita Year Energy kWh Cost in colones CR Year Energy kWh Cost in colones CR 2016 28.898.127 ₡3.391.711.068 2016 4.890 ₡573.893 2017 27.496.372 ₡2.911.194.671 2017 4.634 ₡490.595 Difference: 1.401.755 kWh and ₡480.516.397 saved The saving in consumption was 1.401.755 kWh, with a decrease in colones of ₡480.516.397, taking into consideration that the average kilowatt dropped 11 colones.

73 BN Eco-Efficiency Culture

The saving in kilowatt hours equals:

• The monthly electrical supply to 6,392 homes consisting of an average family of four members.

• The consumption of all households of employees of the BN conglomerate plus 458 additional families.

• 8 tons of CO2 avoided per year, equivalent to saving 78 trees and representing 5.2% of the trees planted in the Centennial Forest (with a total of 1,500 trees in two years).

Results of recoverable waste Collection of recoverable and electronic waste Year In Kg Offices 2016 40.000 15 offices that reported data 2017 187.040 17 offices that reported data Difference: 147.040 kg collected and treated properly.

Equivalences:

• In Costa Rica, it is estimated that 1.5 kg of waste is disposed per person, per day. In the case of the BN Conglomerate, this equals 8,901 kg per day, whose annual negative impact would be 1,780,200 kg sent to the respective dumps. Through the recycling program, 187,040 kg of recyclable and electronic material have been recovered and sent to an appropriate final disposal process, which is equivalent to 10.5 of the total waste generated annually.

• 1 ton of CO2 equivalent was avoided.

74 BN Eco-Efficiency Culture

Results of diesel and gasoline consumption – Banco Nacional fleet Consumption of diesel and gasoline –BN fleet Year Liters Cost in colones CR 2016 19.801 liters of diesel ₡8.627.061 24.784 liters of gasoline ₡12.877.205 2017 27.916 liters of diesel ₡13.048.765 22.572 liters of gasoline ₡13.553.556

Difference in consumption of total fuel (gasoline and diesel together) 2016 vs. 2017: increase in 5.903 litros, equivalent to ₡5.098.055.

The breakdown is as follows:

• Regarding the consumption of gasoline, there was a decrease of 2,212 liters compared to 2016; however, due to the increase in price, an excess of ₡ 676,350 was paid compared to 2016.

• Regarding the consumption of diesel, there was an increase of 8,115 liters with respect to 2016, equivalent to ₡4,421,704.

In CO2 equivalent, the increase represents:

• 17 tons of CO2 impacting the environment.

The results obtained from the CO2 review were evaluated and it was verified that the increases are due to the increase of tours and offsites of auditors, maintenance technicians of ATMS and the increase in the emergency offsites due to the storm Nate at the end of 2017.

75 BN Eco-Efficiency Culture

Results of paper consumption

Paper consumption Consumption of paper per capita Year Reams Cost in colones CR Year Reams per capita Cost in colones CR 2016 49.904 ₡97.818.027 2016 8,44 ₡16.551 2017 41.628 ₡77.841.413,44 2017 7 ₡13.117 Difference: saving in reams 6.718 and in cost ₡17.044.045,19

329 trees are being saved per year, equivalent to 22% of the trees planted in the BN Centennial Forest (1500 trees).

Results of ink consumption

Ink consumption Consumption of ink per capita Year Amount of ink cartridges Cost in colones CR Year Ink per capita Cost in colones CR 2016 13.079 ₡61,277,286 2016 2.21 ₡10.368,41 2017 12.641 ₡47,808,600.34 2017 2.13 ₡8.056,72 Difference: saving of 437.4 in ink cartridges and ₡13.468.686,06 in cost.

The saving in inks equals:

• Providing 109 educational centers with four units of ink.

• Being able to print 140,000 pages approximately.

The general saving in consumption is: ₡511.029.128 76 Environmental Projects Applied

Telecommuting promotion BN Cletas - Standard for Air conditioning projects Climate comfort concept analysis. In 2017, the different offices were urged to bicycle racks implement a telecommuting scheme in order to The bicycle racks that are placed in the Bank’s • Study of the current situation of air conditioning reduce costs related to the transfer of employees offices will be standardized in order to regulate at Banco Nacional. to the facilities. their design and materials. In the Central Offices, 47 spaces were adapted in the basement and 7 • Plan of Action, consisting of: Open spaces schemes spaces in the La Uruca complex. The spaces can be used mainly by collaborators and contractors; 1) Change in the comfort model. Currently, Banco Nacional has open office spaces, however, they can also be accessible to customers. which allow a series of environmental and social 2) Inclusion of active and passive mechanisms benefits. The existing open spaces are: Central for air conditioning. Offices (Audit and a Technology section) and Uruca (Infrastructure and Purchases). With the BN Ambientados 3) Projection of the air conditioning plan with the general strategy of Banco Nacional. open spaces system, the physical space has been BN Ambientados is an initiative implemented optimized contributing to the improvement of during 2017 in ten of the Bank’s buildings. This 4) It starts with a pilot plan for the Los Chiles personal and work relations among collaborators initiative consists in the establishment of a office, as detailed below: and their processes. collection center that receives recyclable waste twice a month, not only from employees and their a. The first stage ended in July 2017: it consisted of In regards to environmental matters, there is families, but from the members of the communities a change in the dress code for all staff. Employees greater air circulation and, therefore, the use of where they operate as well. were given a shirt made up of a lightweight fabric, air conditioning has been reduced. The windows with a design that allows the entry of air and favors of the building and the existing vents are being the thermal sensation in the body; windows were taken advantage of, resulting in a reduction of polarized; an insulating paint was applied to the artificial lighting, and a recycling point has been roof of the agency; a radiant barrier was placed in consolidated. In addition, the telecommuting the ceiling; umbrellas and 14 fans were installed; scheme has been encouraged. Moreover, each and trees were planted in the back and sides of floor has been adapted according to Law 7600 to the office. make them more inclusive and traditional lighting is being changed to the LED format. b. The second stage started in February 2018: it consisted of the change of furniture to benefit the renewal of air in the building, a mechanical equipment for the injection of fresh air and extraction of internal air from the office was installed, the floor plans were readjusted

77 Environmental Projects Applied

(elimination of dividing walls of some offices) Remodeling of the health and an internal green decoration was installed services of the Central to oxygenate the office. Office building With the first air conditioning stage for the Los Chiles office, the following achievements were 100% of the sanitary facilities (21 units) and urinals obtained: were changed in the 19 floors of the Central Office building. a) Reduction of 67.2% in the use of air conditioning with respect to installed capacity. It Participation in the Festival went from 30.5 tons of air conditioning to 10.00 of La Luz (Light festival) tons. In these 10 tons that are still being used, the air conditioning of the computer room is included, which cannot be turned off due to the Banco Nacional participated in the Festival de La characteristic of the equipment. Luz with a float made of 100% recyclable materials, contributed by employees of the institution, who b) With respect to the electricity bill, analyzing managed to collect 120,000 bottles, of which the period before implementing the project (first 54,000 were used in the float, reaffirming their half of 2017) versus the period after the project commitment and involvement with the care of the (second half of 2017) there is a reduction of environment. After the activity, 100% of the float 13.47% of the total electricity consumption. It is was recycled. The rest of the bottles collected estimated that this will increase as soon as the that were not used in the float followed a normal second stage of air conditioning is implemented. recycling process.

Energy consumption before and after air conditioning

Before air conditioning 5.954,50 After air conditioning 5.152,44 Reduction in the electric bill 13.47%

78

Committed with the economic progress

anco Nacional de Costa Rica is one of the most successful banks in the region, its results and permanence over time are clear evidence of this. Below are some results of the economic performance; however, the detail of the audited financial statements, budget reports and the monthly accounting report can be found in the Transparency Portal: B https://www.bncr.fi.cr/EstadosFinancieros/Paginas/default.aspx

People Development Banking

Direction of Alternate Recruitment and • 8,066 policies placed. Channels Miscellaneous Services • Alliance with the insurance companies Sagicor Directorate and Adisa to cover areas such as serious diseases, During the year 2017, 198,000 new clients affiliated health, unemployment, traveler, among others. to digital channels, promoting the financial literacy Achievements in recruitment: Remittance service: and a better quality of life of people, by offering • Increase of 40% in requests of SFA accounts • Increase by 61.38%. them the possibility of carrying out their banking (Simplified File Account) transactions from the comfort of a cell phone or • Agreed sum of $ 2.9 million. • Growth of ₡10.40 million in balances in the • Strategies are being worked on to increase a computer 24/7. Likewise, 578 new affiliations accounts. to BN Services were achieved, thus expanding the sending of remittances to the main countries • Growth of ₡10,455 million colones in influenced by an immigration effect. the presence of Banco Nacional throughout the purchases with debit cards. country. • Acquisition commission for ₡887 million Achievements in Programmed Savings: colones. • Increase by 15%. • Net growth of ₡4,080 million colones. Achievements in investments: • 108,198 contracts placed. • 100% compliance with investments • Cumulative commission of ₡1,231 million • Balance of ₡933,681.20 million colones. colones. • Growth of 6,377 customers. • 11,594 additional investments.

Achievements in Self-Expedient Insurance: • Growth of 203% 80 People Development Banking

Segments • Registration of 1,406 clients in 44 face-to- face courses and 7 virtual training courses. 1. Achievements in the preferential massive • Around 5,000 customers who took the offer segment of Business Support Services.

1.1 Achievements in the Massive Unit 4. Women segment • Growth of ₡437,000 million in balance in • Growth of ₡326 billion colones on balance Massive customers. with women customers (it is not additional to the • Growth in the placement of ₡124 million ones described above). in equity credits (homes and vehicles) and ₡50 • Growth in the placement of ₡24 billion billion in consumer loans. colones in loans for production. • Placing of 108,000 new products. • Growth in the placement of 63 billion colones • Banking of 31,000 new customers at the base in equity credit. of the pyramid. • Placement of 133,000 new products.

1.2 Achievements in the Preferred Unit • Growth of ₡63 billion colones on balance in Preferred customers. • Growth in the placement of almost ₡5 billion in equity credits and consumer loans. • Placement of 68,000 new products.

2. Medium Segment • Growth of ₡143 billion colones on balance with small and medium enterprise customers. • Growth in the placement of ₡44 billion colones in loans for production.

3. Micro and Small segment • Growth of ₡232 billion colones on balance with micro and small enterprise customers. • Growth in the placement of ₡43 billion colones in loans for production. • Placement of 63 billion colones in the campaign with funds from the Banking System for Development.

81 Business Banking

uring 2017, Corporate Banking financed 30 projects, mainly for the generation of energy from renewable sources and public works. The total amount Dof financing reached₡ 668,049,408,027, benefiting around 3,937,284 people and generating 4,315 jobs.

DIRECTORATE GENERAL OF CORPORATE AND INSTITUTIONAL BANKING Sustainable financed projects, December 2017

Original amount in Benefited Jobs # Customer Description colones population generated CONTRATO DE FIDEICOMISO UNO Construction and start-up of the 1 75.000.000.000 500.000 800 PH REVENTAZON hydroelectric project (PH Reventazón) ₡

Construction and start-up of the 2 FIDEICOMISO P.H.TORO 3 85.038.000.000 393.000 125 hydroelectric project (PH Toro III) ₡

Construction and start-up of the 3 HIDROTARCOLES S.A. 66.613.100.000 50.000 75 hydroelectric project (PH Capulín) ₡

CONSORCIO EOLICO CHIRIPA Construction and start-up of the 4 62.928.120.000 65.000 180 SOCIEDAD ANONIMA wind project (PE Chiripa) ₡

COOPERATIVA DE ELECTRIFICACION Construction and start-up of the 5 7.942.837.128 80.000 75 RURAL DE SAN CARLOS R L hydroelectric project (PH La Esperanza) ₡

COOPERATIVA DE ELECTRIFICACION Construction and start-up of the 6 24.821.366.025 331.600 200 RURAL DE SAN CARLOS R L hydroelectric project (PH Platanar) ₡

COOPERATIVA DE ELECTRIFICACION Construction of two substations and completion of the assembly 7 7.557.154.800 80.000 75 RURAL DE SAN CARLOS R L of the 69KV distribution line, Pital Pier and Pital Toro III ₡

Construction of the northern 8 CONSEJO NACIONAL DE VIALIDAD 31.010.524.000 21.714 115 section of the ring road ₡

INSTITUTO COSTARRICENSE DE Improvement of existing electricity networks, promoting an 9 extension of the useful life and quality. Construction of new ₡35.000.000.000 414.500 240 ELECTRICIDAD transmission and distribution lines CONSORCIO NACIONAL DE EMPRESAS DE Construction and start-up of the hydroelectric 10 13.105.681.261 80.000 75 ELECTRIFICACION DE C.R. RL project (PH Sigifredo and San Lorenzo) ₡

Construction of the new Social Sciences 11 FIDEICOMISO UCR / BCR DOS MIL ONCE 18.971.473.028 800 75 building of the UCR ₡

82 Business Banking

Original amount in Benefited Jobs # Customer Description colones population generated Construction and start-up of the 12 FIDEICOMISO P H LOS NEGROS II 22.676.800.000 257.000 150 hydroelectric project (PH Los Negros II) ₡

COMPAÑIA NACIONAL DE Construction and start-up of the 13 7.282.977.464 23.000 170 FUERZA Y LUZ S.A. hydroelectric project (PH Balsa Inferior) ₡

COMPAÑIA NACIONAL DE Reconstruction and remodeling of the 14 4.902.940.157 50.000 170 FUERZA Y LUZ S.A. hydroelectric project (PH Ventanas) ₡

COMPAÑIA NACIONAL DE Construction and start-up of 15 12.559.222.536 35.000 135 FUERZA Y LUZ S.A. the PE Valle Central ₡

COMPAÑIA NACIONAL DE Construction and start-up of 16 3.220.105.600 50.000 170 FUERZA Y LUZ S.A. the Coronado substation ₡

Construction and start-up of the 17 FILA DE MOGOTE D C R S.R.L. 21.368.915.560 30.000 110 wind project (PE Fila de Mogote) ₡

Construction and start-up of the 18 TILA WIND CORPORATION S.A. 17.279.721.600 30.000 110 wind project (PE Tilawind) ₡

COOPERATIVA DE ELECTRIFICACION Construction and start-up of the 19 4.964.273.205 280.000 100 RURAL DE GUANACASTE R L hydroelectric project (PH Bijagua) ₡

COOPERATIVA DE ELECTRIFICACION Construction and start-up of the 20 23.200.000.000 120.000 95 RURAL DE GUANACASTE R L wind project (PE El Cacao) ₡

Construction and start-up of the 21 AEROENERGIA S.A. 14.266.541.800 26.000 170 wind project (PE Vientos del Este) ₡

Development of technologies 22 FIDEICOMISO ICE-RANGE/BCR 16.441.747.646 257.000 110 (networks, radiofrequencies, etc.) ₡

EMPRESA DE SERVICIOS PUBLICOS Reconstruction and start-up of the 23 6.478.376.532 8.000 65 DE HEREDIA S.A. hydroelectric project (PH Tacares) ₡

COOPERATIVA DE ELECTRIFICACION Construction and start-up of the 24 11.338.400.000 68.000 130 RURAL LOS SANTOS R L wind project (PE Los Santos) ₡

83 Business Banking

Original amount in Benefited Jobs # Customer Description colones population generated INSTITUTO COSTARRICENSE DE 25 Wastewater treatment of San José 42.519.000.000 414.500 120 ACUEDUCTOS Y ALCANTARILLADOS ₡

Purchase of subordinated debt for 26 GRUPO ECOENERGIA VL S.A. 5.107.949.200 30.000 110 construction and start-up of PE Chiripa ₡

FIDEICOMISO INMOBILIARIO ASAMBLEA Construction of the new building of 27 18.660.365.044 170 170 LEGISLATIVA BCR 2011 the Legislative Assembly ₡

JUNTA ADMINISTRATIVA DEL SERVICIO 28 Construction of Fiber Optic Network 4.484.112.994 240.000 55 ELECTRICO MUNICIPAL DE CARTAGO ₡

COMITE CANTONAL DE DEPORTES 29 Y RECREACION CANTON Construction of parks in San José ₡2.775.879.473 1.500 110 CENTRAL DE SAN JOSÉ COMITE CANTONAL DE DEPORTES 30 Y RECREACION CANTON Construction of parks in San José ₡533.822.976 500 30 CENTRAL DE SAN JOSÉ

Total ₡668.049.408.027 3.937.284 4.315

84 Micro and Small Enterprise Segment

The main focuses of the micro and small enterprise segment during the year 2017 were:

1) Productive financing 2) Access to family financing 3) Banking 4) Business support services 1) Productive financing

In 2017, 16,020 loans were placed for various productive activities developed by micro and small enterprises.

Table: Placement of loans for production, for the micro and small enterprise segment, 2017 (amounts in millions of colones).

* Includes municipalities, except the Municipality of San José. ** Includes construction, transportation and tourism. Source: Directorate of Planning and Control (SGBDP), with preliminary data from December 2017.

The largest share of loans for production went to service activities (which includes municipalities) and the largest number of loans was directed to the agricultural sector.

85 Micro and Small Enterprise Segment

Graph: Distribution of the amount placed in credit for Graph: Distribution of the number of credits processed for productive activity. productive activity. Micro and small enterprise segment, 2017. Micro and small enterprise segment, 2017.

Source: Directorate of Planning and Control (SGBDP), with preliminary data from December 2017. Source: Directorate of Planning and Control (SGBDP), with preliminary data from December 2017.

The Banco Nacional’s coverage allows financing for micro and small enterprises throughout the entire country.

86 Micro and Small Enterprise Segment

Graph: Distribution of the amount placed Graph: Distribution of the number of credits processed by in credit by commercial area. commercial zone. Micro and small enterprise egment, 2017. Micro and small enterprise segment, 2017.

Source: Directorate of Planning and Control (SGBDP), with preliminary data from December 2017. Source: Directorate of Planning and Control (SGBDP), with preliminary data from December 2017.

87 Micro and Small Enterprise Segment

t the end of 2017, the BN GREEN Table: Summary of placement of loans of programs credited with the SBD SMEs program had 377 outstanding (December 2017, in millions of colones). loans, with a balance of ₡10.366,5 Amillon.

The financing program for people living in poverty who have a micro-sized enterprise and which is executed jointly with the Joint Social Welfare Institute (IMAS, Spanish initials) and its guarantee fund, closed, as at

December 2017, with 1,634 active loans. Source: Credit information base, Banco Nacional. and a balance of ₡1.924,1 millon.

Table: Participation in the SBD (December / 2017, millions of colones). It is important to highlight that as a financial operator of the Banking System for Development (SBD, Spanish initials), Banco Nacional is the leader in the allocation of the resources of the Development Credit Fund (CDF), the Fund for Financing for Development (FOFIDE, Spanish initials) and the National Development Trust (FINADE, Spanish initials) in its different programs, including access to FINADE’s Endorsement and Guarantees Fund. * With data as at November / 2017 according to SUGEF. ** Includes Emergency Program *** Corresponds to the amount guaranteed. Source: Credit information base, Banco Nacional and SUGEF.

26% of the credits with SBD resources placed in 2017 corresponded to companies led by women.

88 Micro and Small Enterprise Segment

Graph: Distribution of the balance placed in programs with Graph: Distribution of the balance of loans of the SBD SBD resources, 2017. by commercial zone, 2017.

Source: Innovation and Marketing Department. Source: Innovation and Marketing Department.

26% of the loans and 20% of the balance in placements of these resources One of the approaches of the micro and small enterprise segment is to correspond to companies led by women. be able to positively influence local development. In 2017, through the BN Municipalities program, 18 local governments were financed with 26 The commercial areas that have a greater balance of credit placed with loans, in an amount of ₡9.870 million. In addition, ₡4,300 million were resources of the Banking for Development System are Liberia, Cartago placed in the Municipality of San José, specifically with the Corporate and Ciudad Quesada. Deputy Manager´s Office.

The balance of financing to municipalities, at the end of 2017, reaches ₡44,509 million in 99 loans for 48 local governments.

89 Micro and Small Enterprise Segment

2) Access to family financing

In addition to loans for production, financing is also provided for the needs of families that are related to micro and small enterprises.

Table Placements of other loans, for the micro and small enterprise segment, 2017 (amounts in millions of colones).

Source: Directorate of Planning and Control (SGBDP), with preliminary data from December, 2017.

This allows to supplement the financial support to productive activities, with an improvement in the quality of life of the people who lead these companies.

90 Micro and Small Enterprise Segment

3) Banking 4) Business support services

In addition to access to financing, Banco Nacional brings an important As part of the offer of attention to micro and small enterprises that are range of solutions to micro and small enterprises that generate greater customers of the Banco Nacional, there are training programs, banking security in the administration of cash, a greater breadth of the market and commercial promotion at local and international level, which in 2017, for the sale of products and services, as well as saving time in banking reached 4,767 participants. management, which implies a positive impact on the quality of life of people. Figure 14. Customers who had access to the offer of business support services Table Linking micro and small enterprises Micro and small enterprise segment, 2017. with other products of Banco Nacional, December 2017.

In 2017, access to training programs for customers was implemented through the virtual platform www.pymenauta.com. In this platform, 1,406 customers registered and 44 face-to-face courses and 7 virtual courses were published; a total of 1,127 customers participated in this type of training.

91 BN Mujer

he female segment was successful in the placement of loans in 2017, achieving the established goal.

During this period, the brand was relaunched, going from Tthe Banca Mujer branding to the new brand: BN Mujer. As part of this positioning, some promotions were made to customers, mainly in terms of deposits, achieving the opening of 650 new savings accounts in two months, with the support of the Contact Center.

Durante este período se hizo un relanzamiento de la marca, pasando del branding de Banca Mujer a la nueva marca BNPositive Mujer. Credit Card

Results of non-financial services Salary account 136 9,68 % TC International MYPIMES VISA 115 8,19 % Programmed Savings 107 7,62 % During 2017, 53 activities of accompaniment services for women were TC Extra financing 93 6,62 % carried out, in which 1,664 customers were managed. This figure does not Commercial Credit 92 6,55 % consider women who attended processes directed by the micro and small Short Term Deposits 79 5,62 % enterprise segment. Additionally, the connection of 2,944 services was Investment Savings 74 5,27 % achieved, for an average link of 2.61 products and services per customer. Services 71 5,05 % Positive Credit Card 71 5,05 % Account SFA Level 2 36 2,56 % In these processes, a total of 1,405 products were linked. The products with BN Superfund 32 2,28 % the most representation are shown in the attached table. The participation Real Estate Developers 32 2,28 % of companies led by women in the placement of credit reached, in a Investment Current Account 26 1,85 % consolidated manner, 29% in the number of cases processed and 27% in BN-Vital-FPO 25 1,78 % the amount formalized. BN Vital-FCL 23 1,64 % Account SFA Level 3 23 1,64 % CRED. Automobiles 21 1,49 % Industries 21 1,49 % TC Prioetaria MC 21 1,49 % TC BN Prizes 20 1,42 % Electronic Account 18 1,28 % 1136 8085

92

1 BN Mujer

Table: Participation of companies led by women in placement of loans for production. Micro and small enterprise segment, 2017 (in colones)

Projects

BID-FOMIN-AED-BNCR Project

The most relevant actions carried out for this project financed by the IDB and BNCR, are described below. Mujeres Líderes 360° (Leader Women 360° Program)

As a result of the execution of the Interinstitutional Agreement, subscribed with the IDB / MIF, called “Business case to support companies led by women”, the second training cohort of women entrepreneurs called Programa Mujeres Líderes 360° was held, with the support of the Tecnológico de Costa Rica, with the participation of 22 businesswomen who strengthened their managerial and business skills during a three- month program.

93 BN Mujer

Big Data Prizes

A pilot plan is started with the Risk Management This year, the program received another distinction to generate a new credit score, obtained from in the framework of the Annual Summit of the the analysis of the Equifax National Score, with Global Banking Alliance, held in London in the purpose of achieving a new model, with November, where this segment was awarded the a determined risk appetite, which allows to prize in the “High Commitment” category, among generate greater financial inclusion of women in 12 banks that were recognized. This award was the institution, generating an impact on the loan received by Ana Isabel Solano, as head of the portfolio for the benefit of the female population. institution, and recognizes the work carried out in terms of attention to the female market over seven years. Internal training

The need to sensitize and train staff in the attention of the women’s market is established. For this, the training of six commercial areas (San Pedro, Santa Ana, Central, Heredia, Alajuela and Cartago) is coordinated to provide a number of tools and techniques to the sales force, which will allow them to serve this market according to their expectations, under a line based on monitoring and follow-up, as demanded by customers. These groups were funded in part by the project and it is expected to have additional internal resources to conclude in 2018 with the regional groups that were missing.

94 Suppliers

Sustainable management with strategic In 2017, Banco Nacional developed actions to strengthen the strategic suppliers, Responsible Suppliers Program suppliers of its value chain, namely:

rom the Infrastructure and Purchases Directorate and the • Conversations with strategic suppliers. Social Responsibility Directorate, since 2008, Banco Nacional • Productive chains. has developed the Responsible Suppliers Program. Thanks to • Responsible providers. this commitment, the Institutional Policy of Suppliers (2014) Fwas established, stating as follows: “Banco Nacional will establish commercial relationships with solid Security and competitive suppliers that comply with their tax and social obligations, and that are committed to the conservation of the environment, for which they will progressively include environmental, social and labor conditions in their acquisition criteria, considering Cleaning the different impacts in the diverse stages of the life cycle of the Maintenance good or service”.

To strengthen this commitment, an indication was also given by the Operations Deputy Manager (2016) which states: “All bids prepared in the Procurement Department, in any of the modalities of Direct Purchases, Public Tenders and Abbreviated Bidding, are incorporated the clauses of Strategic Deliveries Courier Social Responsibility”. on time Suppliers

The Responsible Providers Program seeks as follows:

• Align the strategic suppliers of our value chain with the principles of business sustainability. • Specify, within their administrative contracting processes, the Technological incorporation of social responsibility criteria to maximize their level of Business support support alignment. • Encourage the gradual adoption of the best practices of social responsibility, through a platform of action based on win-win. Construction Marketing and advertising

95 Suppliers

Certification of the strategic suppliers of the BN Conglomerate in the Business Sustainability Training Program

ithin the same program, a certification that established as a goal to reach the certification of 100% of strategic suppliers of the conglomerate in the 2017-2021 period was created. In 2017, a training program was implemented with strategic suppliers, which allowed 10 of them to become certified in business sustainability. This process was developed in conjunction with the Business Alliance for Development (AED, Spanish initials). W 19 suppliers participated: AAP. Constructora S.A., Dunbar Internacional, Ofiexpress, Awat, A.B.M., Guardadocumentos S.A., Novus, Seguridad Delta, Entrust Consultores, Unisys, Morpho, Componentes El Orbe, Domotica, Sistemas Análiticos, Electrotécnica, Evertec, Selime and Mccann Erickson. In the final stage, 10 suppliers were certified.

Strategic Suppliers Program, certified suppliers, year 2017.

Service Supplier Safety Comandos de Seguridad Delta S.A. Domotica S.A. Cleaning Selime Messaging / transaction support Novus Mensajería Sociedad Anónima. Guardadocumentos Sociedad Anónima. Technological support SWAT Consulting Services Componentes El Orbe Entrust Consutores C.A. Unisys Marketing and advertising McCann Erickson

96 Suppliers

Currently, we are working on the implementation of criteria for critical suppliers analysis. The elements that are planned to consider are:

Dimension Criterion to analyze Environmental Ecological Blue Flag Carbon neutrality Social Sexual harassment Child Labor Disability Foreign status Salaries on time Customer service Code of conduct

Benefits of the Responsible Supplier Program

1. Reduction of the complaints received and their possible economic impact, related to their management, especially in the areas of infrastructure and services. 2. Support for business continuity and minimization of associated operational and reputation risk 3. Ensuring the value chain regarding the promotion of sustainable purchases. 4. Reinforcement of the sustainability strategy. 5. Extension of BN’s commitment to its sphere of influence (local labor). 6. Minimization of associated operational and reputation risk.

97 Information on Trusts

98 Prizes and Awards

uring this period, the work • Premio Latinoamérica Verde (Green Latin o Social inclusion and reduction of inequality and social and environmental American Award): award that recognizes the best o Energy commitment of Banco Nacional social and environmental projects in the region o Sustainable finance were recognized and awarded by aligned with the Sustainable Development Goals o Urban management Ddifferent organizations that seek to (SDG, Spanish initials). The categories in which o Solid waste management promote the strengthening of all those members projects can be presented are: o Oceans of society who are being agents of change. In o Responsible production and consumption this framework, Banco Nacional received the o Water following prizes and awards: o Forests and flora o Biodiversity and fauna o Human development

99 Prizes and Awards

• Position 255 of the ranking of 500 winners and BN Corredora de Seguros position 12 in the ranking of sustainable finance. In the periods 2014 and 2015, BN Sociedad • Solidarity Economy Award: through the Corredora de Seguros S.A. won the Ecological contribution of seed capital, the project of the Blue Flag Program, Climate Change. San Luis Monteverde Development Association, one of the awardees, was launched. It also obtained a score of 81.70 in the Institutional Environmental Management Program of MINAE. • Green Bond Award (Prize for the Green Bond Issue): awarded to Banco Nacional by the Climate Bonds organization. First bank in the BN Fondos region with this award. BN Fondos was awarded the Ecological Blue Flag • Great Place to Work awarded to BN Vital in 2013, with one star; in 2014, with three stars; OPC, S.A., by the Central America & Caribbean and since 2015, with five stars and a green star. Institute. First place in the public sector and the only pension operator in Costa Rica to obtain it. Additionally, it has the certification of its Number 16 of the general ranking. Environmental Management System, according to ISO 14001: 2004; its Quality Management • BN Mujer of Banco Nacional received the System, according to ISO 9001: 2008; and it is Highest Engagement Award, in the framework Carbon Neutral since 2014. of the Annual Summit of the Global Banking Alliance for Women held in London. BN Valores

In the 2017 period, BN Valores won the Blue Flag Ecological Climate Change Program, plus two stars.

It also obtained a score higher than 90 in the Institutional Environmental Management Program of MINAE.

100 Alliances

101 GRI Index

102-1 Organization´s name 2 102-5 Property and legal form 102-50 Period of the report 101-1 Principles for the preparation of reports 101-2 Use of GRI Standards for the preparation of sustainability reports 4 101-3 Writing statements related to the use of GRI standards 102-54 Declaration of preparation of the report in accordance with THE standards 102-46 Definition of the contents of the report and the coverage of the topic 102-14 Declaration of senior executives responsible for decision making 5-6 102-20 Executive level responsibility for economic, environmental and social topics 7 102-32 Role of the highest governance bodies in the preparation of sustainability reports 7 102-5 Property and legal form 8 102-22 Composition of the highest governance body and its committees 10 102-25 Conflicts of interest 10 102-18 Governance structure 102-19 Executive responsibility on economic, environmental and social issues 102-22 Composition of the highest governance body and its committees 102-23 President of the highest governing body 11 405-1 Diversity in government bodies and employees 102-24 Nomination and selection of the highest governance body 11,29 102-26 Role of the highest governance body in the selection of purposes, values and strategy 102-33 Communication of ethical concerns 102-34 Nature and total number of ethical concerns 102-16 Values, principles, standards and norms of conduct 102-17 Advisory mechanisms and ethical concerns 14 205-3 Confirmed cases of corruption and measures taken 102-40 List of groups of interest 17 103-1 Explanation of the material topic and its coverage 21 102-2 Activities, brands, products and services 28 102-4 Location of operations 26,27 102-8 Information on employees and other workers 30-32 404-1 Average hours of training per year per employee 33,34 401-2 Benefits for full-time employees that are not given to part-time or temporary employees 35 401-3 Parental permission 35 404-3 Percentage of employees who receive periodic performance evaluations and professional development 35

102 GRI Index

102-35 Remuneration policies 35 102-36 Process to determine compensation 35 405-2 Ratio of basic salary and remuneration of women to men 35 403-1 Representation of workers in formal committees worker - health and security company 36 403-3 Workers with high incidence or high risk of diseases related to their activity 36 413-1 Operations with local community participation, impact evaluations and development programs 37,38 413-1 Operations with local community participation, impact evaluations and development programs 39-58 414-1 New suppliers that have passed selection filters according to social criteria 96 414-2 Negative social impacts in the supply chain and actions taken 96-98 305-1 Direct GHG emissions 70 302-1 Energy consumption within the organization 74 303-1 Extraction by source 74 203-1 Direct economic value generated and distributed 82 203- 2 Significant indirect economic impacts 83-95

103