MAINTAINING A BALANCE OF INTERESTS SUSTAINABILITY REPORT | 2019 2 Contents Statement of Andrey Kostin, VTB for the environment 82 President and Chairman Financing environmental projects 83 of the Management Board 4 Environmental impact management 88 Charitable environmental projects 93 VTB Group in 2019 8 VTB for society 96 Values 9 VTB Group in 2019: key highliths 10 Managing sponsorship and charity projects 97 Credit ratings of VTB Bank 11 A Sporting Country 100 Patriotism and a Country of Traditions 104 A Cultured Country 105 About VTB Group 14 An Educated Country 108 A Country for Business 111 VTB Group – mission and vision 16 A Healthy Country 114 Reliability as a core value 18 Internal control and business ethics 21 CSR management 23 About the Report 116 Contributing to the UN Sustainable Development Goals 27 Scope of the Report 116 Stakeholder engagement 30 Approach to determining material topics 118 VTB for clients 36 Appendices 122 Support for socially important businesses Membership in business associations 122 and cooperation with governmental agencies 40 Abbreviations 124 Promoting small and medium GRI Standards reference table 125 enterprise development 48 Providing socially important retail services 52 Availability and quality of banking services 58 Contact information 130 VTB for employees 64 Personnel management 65 Talent training and development 68 Employee motivation and remuneration 74 Corporate culture and internal communications 76 Occupational health and safety 79 3 Sustainability Report / 2019 Statement of Andrey Kostin, President and Chairman of the Management Board Dear Reader, This integration dramatically improved our manageability During the year, we worked towards strengthening while benefiting clients. Today we offer a full range our position in the SME segment, a field whose I am pleased to share with you the VTB Group’s of standardised services available in any VTB office success is of great importance for the economy, Sustainability Report for 2019. This is an important A major milestone across our network, covering almost the entire especially at the municipal and regional levels. In 2019, document that embraces one of our essential in 2019 was country. In 2019, SMEs accounted for about 34% of corporate every fourth principles, that of responding to national and adopting a new loans. The Bank continued to rank among Russia’s mortgage loan global challenges in keeping with the Sustainable Development The merger saw the Bank continue to operate keeping top three leaders for the volume of loans extended in Russia Development Goals and the interests Strategy in mind the social and economic factors important to this segment. was granted of all stakeholders – clients, partners, employees, for the VTB Group to a wide variety of stakeholders in the regions by VTB shareholders, the public, and the country and countries served by the Bank. VTB seeks In 2019, VTB launched a digital factory and as a whole. to expand its portfolio of projects that create jobs a product factory to promote working with SMEs. and improve lives. Traditionally, the Bank placed This helped us accelerate targeted product The past year was a successful one for VTB. We met great emphasis on developing the real economy: development and expand our remote services, all the objectives we sought to achieve, making a net agriculture, community and transport infrastructures, including non-banking ones such as educational profit of over RUB 200 billion, a record high for VTB. and housing construction. A significant event programmes geared towards entrepreneurs. During the year, we served a total of over 14 million in this context was the construction of the M-11 Neva clients across Russia. (Moscow – Saint Petersburg) motorway completed The innovation-based development of remote banking in 2019, an initiative that saw the active involvement channels is a key driver in meeting the interests A major milestone in 2019 was adopting a new of VTB. The opening of the motorway provided of our clients: 60% of them use VTB Online Development Strategy for the VTB Group, building a powerful stimulus to the economic activity in several and the Bank’s app a lot. on our in-depth analysis of global and industry Russian regions. changes and envisioning a profound transformation Every year we allocate substantial resources to make of our business model. We pursued our key objective The amount of housing-construction funding our information systems efficient, stable, and reliable. of creating by 2022 a highly effective organisation by the VTB Group reached RUB 150 billion in 2019, that has high employee engagement and is attractive accounting for about 20% of Russia’s total. In 2019, VTB’s most popular digital services include My Smart Andrey Kostin to clients and open to change. We estimate that every fourth mortgage loan in Russia was granted City, an app launched in 2019 to bring Moscow’s city President and Chairman in three years’ time, the large-scale efforts we started by VTB, while VTB’s residential loan portfolio grew services and VTB Bank’s services together under one of the Management Board in 2019 will lead us to a profit of over RUB 300 billion by 20%, totalling RUB 1.7 trillion. roof in an easy-to-use format. The Banker named with a ROE of 15%. the app the best technology product of the year. The Bank takes an active part in programmes Another milestone in 2019 was the merger improving housing affordability, including mortgage One of the pillars of the Bank’s sustainable of VTB Bank’s retail and corporate networks effective programmes for families receiving maternity capital, development, one that encompasses January 1, resulting from the largest structural large and military families, and residents of the Far the broad context of social and economic relations, transformation seen in Russia’s banking system to date. Eastern Federal District. is our employees’ professionalism coupled 4 5 Sustainability Report / 2019 with our highly developed corporate culture. A Group-wide process was started in 2019 to develop The Bank continued to donate to major non-profit an Ilya Repin exhibition (over 600,000 attendees Our comfortable work environment, employee a comprehensive approach to green financing organisations that work to preserve Russia’s in Moscow and 300,000 in Saint Petersburg), support programmes, and equal opportunities and to assessing the environmental impact of loan- nature and biodiversity, including the Worldwide and the seventh season of Moscow’s Velobike for professional and personal growth all help supported projects. The main objective was to increase A Group-wide Fund for Nature and the Amur Tiger Centre. bikesharing service (five million bicycle rentals). In 2019, us remain highly attractive as an employer. the effectiveness of VTB’s participation in promoting process was started Donations to environmental projects totalled the Bank spent VTB continued to run World without Tears, the global and national climate agenda. The year’s in 2019 to develop about RUB 143 million. a total of a corporate charitable programme to purchase In 2019, VTB put a large project in place to work major projects included VTB Capital taking part a comprehensive equipment for children’s hospitals. Since with our integrated network’s leadership pool, as a co-organiser in the first placement of Russian approach The VTB Group’s charity and sponsorship activities 16.3 the programme’s launch, more than 100 hospitals involving more than 1,700 participants. The year Railways’ green bonds for a total of EUR 500 million to green financing in 2019 focused on six programmes in place since RUB billion in 52 regions across Russia have received financial also saw the Bank’s principal training programmes as well as VTB Bank financing the construction and to assessing the previous year: on 562 sponsorship support to purchase high-tech equipment. The total updated with components that help shape of solar and wind power facilities in several Russian the environmental and charity projects • A Sporting Country; amount granted stands at RUB 400 million (with more a culture of leadership and efficiency in keeping regions. impact than RUB 75 million provided in 2019). with the highest service standards in interactions of loan-supported • Patriotism and a Country of Traditions; with external and internal clients. The employee The Bank also continued to work on reducing projects VTB is turning 30 in 2020. I am confident that • A Cultural Country; engagement survey we conducted in 2019 showed its environmental impact. This included starting the success we have achieved thus far and our team’s that 83% of our employees fully share the VTB a big project to switch from physical to electronic • An Educated Country; concerted efforts will let the Group maintain Group’s mission, vision, values, and strategic goals. documents, with a view to processing 80% of client and strengthen its position as a leading Russian • A Country for Business; transactions electronically in all 1,500 of our offices financial institution during this anniversary year while As a large employer interested in developing a quality by 2022. • A Healthy Country. living up to the expectations of clients, shareholders, educational system, VTB makes sustained efforts partners, and all other stakeholders and making a new to support Russia’s higher-education system. An important objective VTB pursues in sustainable This approach proved efficient and contributed contribution to solving national and global sustainability In 2019 we entered into eight new educational development is preserving the ecosystem of the Arctic. to implementing the UN Sustainable Development problems. cooperation agreements, bringing the number Since 2014, VTB Bank has acted as the Russian Goals. As part of the comprehensive improvement of our partner schools to 180. One of our educational Executive Agency for the Arctic Council Project of our sponsorship and charity management system partners is St.