United Nations Global Compact Communication on Progress Financial Report 2012 Financial Report 2012 of NRW.BANK Contents 2 Corporate Responsibility 32 Report on Public Corporate Governance 51 Report of the Supervisory Board 52 Management Report 86 Balance Sheet 90 Profit and Loss Account 92 Notes 118 Cash Flow Statement 120 Equity Capital 121 Reproduction of the Auditor’s Report 122 Responsibility Statement 123 Members of the Advisory Board for Housing Promotion 126 Members of the Advisory Board 130 Organisation Chart 132 NRW.BANK at a Glance Financial Report 2012 1 Corporate Responsibility Corporate Responsibility In fulfilling its role as the development bank for the state of North Rhine-Westphalia, NRW.BANK activities, starting from its strategic and business acknowledges its corporate responsibility. The Bank policy decisions to the shaping of its range of understands the concept of corporate responsibility as products and services down to the implementation a transparent, responsible and living process involving of specific financings, its capital market activities its customers, its employees and society at large. In and its offering of consulting services. this context, the Bank believes that the economical, 2. One of the essential cornerstones of the ecological and social dimensions of sustainability are sustainability strategy pursued by NRW.BANK inseparably linked. is transparent and responsible treatment of its owner, customers, employees and its stake- Since 2008, the “Principles of Corporate Responsibility holders at large. NRW.BANK lives up to this at NRW.BANK” have defined the framework for commitment based on its Public Corporate NRW.BANK’s approach to sustainability. Besides basic Governance Code. In addition, NRW.BANK has rules on sustainable behaviour in dealings with defined the core elements of its corporate customers, employees and society, these principles mission in its corporate mission statement. also take into account the special parameters under 3. Rules on compliance and money laundering which NRW.BANK operates, namely its public mission, prevention are integral elements of NRW.BANK’s the “Verständigung II” agreement1 and the house bank business processes. They are designed to help principle. During the past fiscal year, the internal the Bank prevent corruption, bribery and money directive was revised in order to reflect developments laundering. In addition, NRW.BANK has installed that have occured during the past years. The updated binding regulations for the confidential treatment principles came into force in December 2012, when of information, for example company and they were adopted by the Board of Guarantors of business secrets, by its employees. NRW.BANK. 4. To safeguard its competition-neutral status, NRW.BANK complies with the principle of The “Principles of Corporate Responsibility at non-discrimination. NRW.BANK” also define the framework for NRW.BANK’s 5. When commissioning third parties, NRW.BANK Sustainability Report. will pay attention not only to cost-efficiency but also to environmental protection, energy efficiency, female promotion and social aspects Living up to Our Corporate Responsibility in accordance with applicable legal regulations. 6. To confirm its sustainability targets, NRW.BANK 1. NRW.BANK considers sustainability to be a central will verify their attainment at regular intervals guiding principle and a key criterion in taking and join national and international initiatives decisions on business policy. This credo is or sign the voluntary commitments developed by reflected in all phases of NRW.BANK’s corporate such initiatives. For instance, NRW.BANK has 1 The public mission of NRW.BANK is based on the provisions of the “Verständigung II” agreement reached between the Federal Republic of Germany and the EU Commission. According to this agreement, NRW.BANK will permanently benefit from institutional and guarantor liability and the explicit guarantee granted by the state of North Rhine-Westphalia. In turn, NRW.BANK will be subject to certain business restrictions detailed in the agreement. 2 Financial Report 2012 Pursuant to the Act on NRW.BANK (see Section 3, signed the ten principles of the UN Global para. 1) and its statutes (see Section 5, para. 1), the Compact, the Finance Initiative of the United Bank gears all its activities to the principle of Nations Environment Programme as well as the sus tainability. For NRW.BANK this means within its German Diversity Charter. possibilities, “to meet the needs and aspirations of 7. NRW.BANK reviews its day-to-day work the present without compromising the ability to meet processes in light of sustainability-related those of the future”1. aspects. The Bank will continue to improve the sustainability of its business activities and make The Bank has anchored sustainability also in its overall the progress achieved measurable wherever strategy. For NRW.BANK and its guarantor, it is a possible. Focal points of these efforts include the general principle of Bank-wide significance for the integration of sustainability-related issues into strategic positioning that the Bank gears all its departmental tasks, products, guidelines and activities to the principle of sustainability, with the processes as well as the integration of details defined in the “Principles of Corporate sustainability aspects into the credit and Responsibility at NRW.BANK”. investment processes. 8. NRW.BANK publishes regular reports on the In this context, the integration of sustainability into the further development of its internal guidelines as Bank’s internal processes is an important precondition well as its activities in the individual areas and for the successful implementation of NRW.BANK’s the progress achieved. sustainability strategy, to which the development bank will therefore continue to attach great importance. The Bank has successfully installed an internal process for the introduction of new development and promotion In its function as state development bank, NRW.BANK products as well as the refinement and expansion assists the state of North Rhine-Westphalia and its of existing ones. As part of this process, products are municipal corporations in the fulfilment of their public checked for sustainability-related risks as well as for tasks, especially in the fields of structural, economic, compliance with the Principles of Corporate social and housing policy. The Bank consequently bears Responsibility prior to their introduction. an important responsibility towards the people, companies, municipalities and the business sector Statutory Framework and Internal Regulations in North Rhine-Westphalia. Labour Standards and Human Rights As the development bank of the state of North Rhine- As a public sector institution, NRW.BANK is subject to Westphalia, NRW.BANK works for its clients in the the “Verständigung II” agreement and operates in a region. Where its own business operations are non-discriminatory manner in the banking sector. For concerned, the Bank is fully and thoroughly committed this purpose, it cooperates closely with the banks in to compliance with human rights and with the labour North Rhine-Westphalia. standards that are applicable in Germany as well as to the rejection of child and forced labour. The Bank therefore incorporated these topics in its Principles of Corporate Responsibility in the past fiscal year. 1 Brundtland-Report, World Commission on Environment and Development (WCED), 1987. Financial Report 2012 3 Corporate Responsibility Equal Opportunities and Principle of compliance-related tasks. The latter not only imple- Non-discrimination ments and controls the necessary measures but also NRW.BANK attaches great importance to non- supports and advises the Managing Board and the discrimination and mutual respect. Equal opportunities management team in all compliance-related matters, and the prohibition of discrimination therefore for example through an annual report. represent an important element of “Assuming Social Responsibility for Employees” and support a fair Prevention plays an important role in connection with working environment within NRW.BANK: this issue. Employees are informed and their awareness is raised through regular face-to-face training as well The “Fairness at Work” labour agreement came into as written internal compliance policies. force in 2007 to promote mutual respect and fight discrimination, sexual harassment in the workplace All this ensures that compliance-relevant information is and mobbing within NRW.BANK. treated confidentially within the Bank. The aim of the Bank is to meet all compliance-related legal regulations In addition, the Bank has appointed an Equal and other regulatory provisions in order to prevent Opportunities Officer, who acts as the designated potential violations. complaint recipient under the German General Equal Treatment Act. She assists all employees who have Money Laundering Prevention suffered discrimination or harassment in spite of the Money laundering is defined as the deliberate act of precautionary measures taken. acquiring and possessing assets obtained through illegal activities and introducing such assets into the NRW.BANK has developed an Equal Opportunities Plan, financial system while concealing or camouflaging which comprises a catalogue of measures on the their origin. This definition also covers the collection subjects of recruitment, human resources development and provision of assets for the purpose of committing and balancing work and family life. This