LABORAL Kutxa declares that this Report has been prepared in accordance with the GRI standards: the exhaustive option, and complies with the requirements of Law 11/2018, dated 28 December, on non-financialinformation and diversity, according to the external verification carried out y AENOR.
SUSTAINABILITY REPORT AND NON-FINANCIAL INFORMATION STATEMENT 2019
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CONTENTS
0.Letter................................................................................................................................. 4
1.Aboutus............................................................................................................................ 7
1.1.GroupPresentation.....................................................................................................8
1.2.Operatingstructure.....................................................................................................9
1.3.Cooperativism...........................................................................................................10
1.4.Values,principles,standardsandrulesofconduct....................................................11
1.5.Geographicdistributionofoffices.............................................................................12
1.6.TheGroup'smainfigures..........................................................................................13
1.7.Strategyandriskmanagement..................................................................................14
1.8.Principlesandgovernance.........................................................................................17
1.9.Developmentofthegoverningbodies.......................................................................21
1.10.Remunerationofthegoverningbodies...................................................................21
1.11.Corruptionandbribery............................................................................................21
1.12.Moneylaundering...................................................................................................23
1.13.RegulatoryCompliance............................................................................................24
2.Responsiblemanagement................................................................................................25
2.1.Managementapproach.............................................................................................26
2.2.Commitmentsandachievements..............................................................................28
2.3.CSRRoadmap............................................................................................................29
2.4.LABORALKutxa'sCSRScorecard................................................................................30
2.5MaterialityAnalysis...................................................................................................31
2.6.UnitedNationsGlobalCompactandSustainableDevelopmentGoals(SDGs)............33
3.Managementof stakeholders...........................................................................................35
3.1.Ourrelationshipwithclients.....................................................................................363.1.1.Managementapproach..........................................................................................................363.1.2.Maincustomerfigures............................................................................................................363.1.3.Dialoguewiththeclientele....................................................................................................363.1.4.Responsiblemanagementwithcustomersandexcellenceinqualityofservice..................383.1.5. Protection of privacy and the security of data and operations..............................................41
3.2.Ourrelationshipwiththeworkforce.........................................................................483.2.1.Managementapproach..........................................................................................................483.2.2.Mainmagnitudesoftheworkforce.......................................................................................493.2.3.Dialoguewiththeworkforce..................................................................................................493.2.4.StaffDevelopment..................................................................................................................503.2.5.Diversityandequalopportunities..........................................................................................533.2.6.Conciliation.............................................................................................................................563.2.7.RemunerationManagement..................................................................................................563.2.8.OccupationalHealth&Safety................................................................................................57
3.1.6.Responsibleproductsandservices........................................................................................42
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3.3.Ourrelationshipwithsociety....................................................................................613.3.1.Managementapproach..........................................................................................................613.3.2.Mainfigures:Profitsharinginsociety...................................................................................653.3.3.Dialoguewithsociety.............................................................................................................663.3.4.InitiativesendorsedbyLABORALKutxa.................................................................................67
3.4.Ourrelationshipwiththeenvironment.....................................................................693.4.1.Managementapproach..........................................................................................................693.4.2.Mainfiguresandinitiativesdeveloped..................................................................................70
3.5.Ourrelationshipwithsuppliercompanies.................................................................763.5.1.Managementapproach..........................................................................................................763.5.2.Mainfigures............................................................................................................................773.5.3.Dialoguewithsuppliers..........................................................................................................773.5.4.Initiativesdevelopedduringtheyearforresponsiblesuppliermanagement......................78
4.Otherfigures...................................................................................................................79
4.1.Customers.................................................................................................................80
4.2.People.......................................................................................................................83
4.3.Environment.............................................................................................................89
5.InformationontheReport...............................................................................................90
6.Annexes............................................................................................................................93
6.1.Tableofequivalencies...............................................................................................94
6.2.TableofGRIindicators..............................................................................................96
6.3.ReportingleveloftheReport..................................................................................101
6.4.AENORverification..................................................................................................1016.5.Principles for Responsible Banking..........................................................................102
0.LETTER
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2019hasbeenbroughttoaclose,averyspecialyearforthepeopleofLABORALKutxaaswecelebratedourfirst60yearsofexistence.Itwasayearinwhich,lookingback,wewereabletorememberthereasonandthepurposeforwhichthiscooperativeprojectwascreated,aswellasthepathwehavetravelledtogethere.Butithasalsobeenayearinwhichwehavelookedto the future.Takingallof this intoaccount,wehaveundertakena strategicdeliberation toanalysethechallengesthatwewillfaceinthecomingyears.Thesearedemandingandexcitingchallengesthatwearekeentotackle,bearinginmind,aswehavedoneforthepast60years,ourwayofdoingthingsinwhichpeopleandacommitmenttoourenvironmentcontinuetobeamajorpartofourmission.
Duringthestrategicdeliberationthatwillguideusthroughuntil2022,wehaveanalysedourposition and the initiatives that we must promote in order to face challenges such as theacceleration of digitalisation and open banking, while maintaining the same vigour for ourtraditionalbusiness.Wehavealsoevaluatedthetechnological, talentanddatamanagementskillsthatweneedtostrengthentoachievethegoalswehaveset.Itisimportanttonoteherethat,forthefirsttimeever,oneofthefivemajorblocksinwhichthePlanhasbeenstructuredexplicitly includes sustainability as a strategic element for LABORAL Kutxa. This block isintendedtobeacross-cuttingelementthatsetsout,fromtheperspectiveofgovernanceandcommitmenttosustainability,howtherestoftheprogrammesareaddressed.Consistentwiththestrategicimportancethatwehavegivenit,wehavecommittedourselvesforthisstrategicperiod, together with the usual business and management objectives, to achieve 10measurable sustainability objectives. These objectives cover the main social andenvironmentalchallengeswefaceasacompany:equality, theenvironment,managementofsupplier companies and a contribution to the economic and social progress of oursurroundings.
In addition to our 60th anniversary and the process of strategic deliberation, anotherparticularlynoteworthydevelopment in2019was thechangeover,duetoretirement,of theGeneralManagementofLABORALKutxa.Thenewmanagementteamhasbeenheadingupthecompany fora yearnow,afteranefficienthandoverprocess thatallowedus toachieve theresults we had set ourselves, while at the same time achieving industry-leading solvency,liquidityandprofitabilityratios.
VictorHugoiscreditedwiththephrasethatnothingismorepowerfulthananideawhosetimehas come.Well, 2019has been the year inwhich sustainability has transformed thewayofthinkinginthefinancialsector.Fromthebankingregulators,throughtoindustryinitiativesandeverythingrelatedtosociallyresponsibleinvestment(SRI),aturningpointhasbeenreached.The impact of the business on society, good governance and especially the contribution offinanceincombatingtheclimatecrisisthatwemustaddresshavebecomethemainfocusofagendas,initiativesandprojects.
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Within this transformation, a milestone in 2019 that we are especially proud of is that inSeptemberwebecameoneofthe130foundingsignatoriestotheUnitedNationsPrinciplesforResponsibleBanking.Thisinitiative,whichisdestinedtobecomeareferencewithinthesector,seekstodefinethecommitmentandresponsibilitiesofthefinancialsystemtocontributetoasustainable future, in line with the Sustainable Development Goals (SDG) and the ParisAgreements on climate change. These Principles provide the framework for the sustainablebanking system of the future and help the industry to demonstrate how it contributespositivelytosociety.
In LABORAL Kutxa, as a credit cooperative created precisely to contribute in a fair andequitable manner to the economic and social progress of our society, we want to be keyplayersinthisnewwayofunderstandingthebankingsystemthatthePrinciplespromote.Thesamecanbesaidwithregardto theenvironmentalchallengeswe face,bothbecauseofourresponsibilitytowardstheplanetandfuturegenerations,andbecauseweareawarethattheworstconsequencesof theclimatecrisiswillbesufferedbythemostdisadvantagedForthisreason,in2020,oneaspectwewanttogivegreaterimpetustoistheanalysisofthepotentialimpactonourorganisationandonoursurroundingsoftherisks,bothdirectandtransitional,oftheclimatecrisis.
Before concluding, Iwould like to reiterate our commitment to the Principles of theUnitedNationsGlobalCompact inordertocontinueadvancingwithrespecttoHuman,EmploymentandEnvironmentalRightsandtheFightagainstCorruption.WealsomaintainoursupportfortheSustainableDevelopmentGoals(SDGs)ofthe2030Agenda.
TxominGarcíaHernández
ChairmanofLABORALKutxa
1.ABOUT US
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1.1.Grouppresentation
LABORAL Kutxa, is presented on its corporate website asa solid and responsiblemodel ofcooperativeandparticipativebanking.“LABORALKutxarepresentsadifferentwayofbanking,basedoncooperationandcommitmenttooursociety.Ourmainobjectiveisthesatisfactionofeach client and the generation of wealth and employment in our environment. We are aCooperative Bank, guided by values and a philosophy that lead us to prioritise the commoninterest over the individual, tomake decisions in a participative and responsibleway and toreinvestourprofitsinsociety.”
ItisacreditcooperativeinwhichthemajorityofthecapitalisheldbythecooperativesoftheMONDRAGÓNgroupandbyworkingorretiredmembers(collaborativepartners).
The consolidated LABORAL Kutxa Group includes banking and insurance businesses. The“Retail Banking” business offers both investment and savings products. In investment, themain areas of activity are the marketing of mortgage products, consumer credit, workingcapitalandcorporatefinance.Asregardssavings,themainproductsaredeposits(ondemandand term deposits), bank guarantees, means of payment services (credit and debit cards),investmentfunds,pensionfundsandEPSVs.ThisbusinessismainlycarriedoutbyCajaLaboralPopularCoop.deCrédito (hereinafterLABORALKutxaandwithheadquarters inMondragón,PaseoJMArizmendiarrietas/n20500Gipuzkoa),throughitsnetworkofbranches,orbycertaincompanies that are 100% dependent on it, which are considered a direct extension of thebusinesscarriedoutbytheParentCompany.Strategic,managementandoperationaldecision-makingisfocusedontheGoverningBoardofCajaLaboralPopularCoop.deCrédito.
The "Insurance Business" includes the activity carried out by the Group through SegurosLagun-Aro Vida, S.A. and Seguros Lagun-Aro, S.A. The Group is engaged in life insurancebusiness,marketinglifeinsurance,lifesavingspoliciesandunit-linkedpolicies.Inaddition,itisactive in non-life insurance, mainly in car insurance, civil liability and in multi-risk sectors,mainly forhomes.Strategic,managementandoperationaldecision-making is focusedontheBoardsofDirectorsofbothcompanies.
Seguros Lagun Aro Vida and Seguros Lagun Aro (hereinafter Seguros Lagun Aro) are twopublic companies, 100%owned by LABORAL Kutxa. Thus, evenwhen the employees do notownthecompany,theyparticipateinthemanagementandbusinessresults.
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TheinvesteecompaniesthatmakeuptheLABORALKutxaGroup:DependentEntities Activity %Owned HeadquartersSegurosLagunAroVida,S.A. Insurance 100%
CalleCapuchinosdeBasurtonº6,2º,48013Bilbao(Bizkaia)
SegurosLagunAro,S.A. Insurance 100%Seg.LagunAro2003,IEA Insurance 100%CajaLaboralGestiónSGIIC,S.A.
Investmentfundmanager
100%PaseoJoséMaríaArizmendiarrieta5,1ªArrasate-Mondragón20500Gipuzkoa
CajaLaboralPensionesGFP,S.A.
Pensionfundmanager
100%PaseoJoséMaríaArizmendiarrietaSNEdificio51ªArrasate-Mondragón20500Gipuzkoa
ISGAInmuebles,S.A.RealEstateDeveloper
100%
PaseoJoséMaríaArizmendiarrieta4Arrasate-Mondragón20500Gipuzkoa
CajaLaboralEuskadikoKutxaCartera,S.L.U.
Holdingcompany
100%
SociedadGestiónActivosCajaLaboral,S.A.U.
PropertyAssetManager.
100%
CajaLaboralBancaseguros(CLBS)O.B.S.V.,S.L.U.
BankingInsuranceOperator
100%CalleGranVíaDiegoLopezdeHaro,2–PISO1,Bilbao,48001,Bizkaia
AssociatedEntities
ATEGIGREENPOWER,S.L.Photovoltaicinstallations
28.57%CalleGoiru(edb),1–Piso3,Arrasate/Mondragón,20500,Gipuzkoa
1.2.Operatingstructure
The current structure as at 31/12 is basically spread across 5 large functional areas andexpandedthroughthevariousDepartments,Sections,ZonesandNetworkofoffices.
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LagunAroInsurance
1.3.Cooperativism
WHATDIFFERENTIATESUSFROMOTHERBANKSANDSAVINGSBANKS?
WEAREACOOPERATIVECREDITUNION
ThepeoplewhoserveyouatLABORALKutxaaremembersoftheorganisation,wearecommittedtotheprojectandbelieveinit,sowearededicatedtogivingeachpersonthebestservice.Customersatisfactionisthebestguaranteeforourbusinessplans.
GIVINGBACKTOSOCIETY.USEFULBANKING,COMMITTEDTOOURSOCIETY
Ourdividendiswhatwegivebacktosociety:25%ofourdistributablesurplusesareusedtofinanceprojectsofeconomicandsocialinterest,trainingandjobcreation.Therestwereinvestintheentitytostrengthenitssolvencyanditsfuturedevelopment.
WEAREWORKERS,PARTNERSANDSTAKEHOLDERS
LABORALKutxaisnotlistedonthestockexchange,itisnotsubjecttospeculativepressurefromthefinancialmarkets.Allpartnersparticipateinthecapitalandinthedecisionsoftheorganisation,withresponsibility,assumingtheconsequencesofourmanagement.ThekeydecisionsarevalidatedattheGeneralMeetingwiththeparticipationofallpartners,guaranteeinganefficientandresponsiblemanagementthatallowsustoobtainprofitsandreinvesttheminoursociety.
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SHARECAPITALASAT31/12/2019
759.6MEUROS
1.4.Values,principles,standardsandrulesofconduct
LABORALKutxaregulatesindividuals'activitiesonthebasisofcertainrulesofconduct.Intheareaofthesecuritiesmarket,theserulesorguidelinesofconductareessentiallyincludedinan"InternalCodeofConductspecifictothesecuritiesmarket",whichappliestothepeoplewhomake up the Governing Board, the Board of Directors and those involved in this area ofactivity.In2018,theadaptationtoRegulation596/2014oftheaforementionedInternalCodeofConductwasapprovedandtheCNMVwasinformed.Intheareaofethicsandintegrity,theentity'srules,whichalsoapplytoCLBS,aresetoutinthe"CodeofEthicsandProfessionalConduct"andthe"GuidetoGoodPracticeandProfessionalSecrecy".BothdocumentsarepublishedontheintranetandareupdatedandreviewedbytheRegulatoryComplianceDepartmentandthe InternalAuditDepartment.Modifications to theCodeofEthicsandProfessionalConductrequiretheapprovaloftheGoverningBoard.As a continuation of the Code of Ethics, in the field of prevention and response to possiblecriminalbehaviourapplicabletotheentity,theinternalregulationsareincludedinthe"CrimePreventionandResponseManual"andinthe"CriminalCompliancePolicy".Thereisa“ComplaintsChannel”thatallowspeopletoreport,guaranteeingtheprotectionofthe complainant, irregularities of potential importance linked to the Code of Ethics and theCriminalCompliancePolicyand the“EthicsCommittee”actsasa supervisorybody for theseregulations, which is chaired by the Social Management Department and also includesRegulatoryCompliance,LegalAdvice,theFinancialDepartmentandInternalAudit.Thisbody,inaddition tomonitoring,grantsauthorisationsorexceptionsanddealswith thecomplaintsreceivedthroughtheComplaintsChannel,ensuringtheappropriateaction.In2019and2018therewerenoqueriesorcomplaints.
TheGroup's insurancecompanies, Seguros LagunAroandSeguros LagunAroVida,althoughhavingalegalstatusasajoint-stockcompanyandnotasacooperativecompany,sharealargepartofthewaysofdoingbusinessandcooperativevalues.Seguros Lagun Aro is part of the European mutual and cooperative insurance association -EURESA,andsharesthevaluesofmutualityandcooperationthatthisAssociationdefendsandis,therefore,committedto:
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- applyingtheguidingprinciplesofthesocietaleconomyinallitsactivities,- designingproductsandservicesthatmeettherealneedsofconsumers,- ensuring that policyholders and shareholders are actively involved in the life of the
company,eitherdirectlyorthroughtheirrepresentatives,- combiningthefinancialpicturewithethicalconduct,and- ensuringthatitsactivitiesareundertakenwithinthecontextofapeople-centredeconomy
gearedtowardssustainableandsociallyresponsibledevelopment.
Thecontractsenteredintobytherealestateassetmanagementcompanieswiththirdpartiesin thecourseof theirbusiness,ensure that theycomplywith (andenforce their suppliers tocomply with) the regulations related to occupational health and safety, respect for theenvironmentandhumanrights,establishingspecificobligations, theirexpressacceptancebythirdparties,andseriouspenaltiesfornon-compliance.
1.5.Geographicdistributionofoffices
LABORALKutxaincorporatestheinsuranceactivitywithinastrategyofBankingandInsurance,sothattheGroupcompanies(SegurosLagunAroSAintheNon-LifeareasandSegurosLagunAro Vida) market their products for the most part through the offices and the website ofLABORALKutxa. Seguros LagunAro complements thesebanking channelswith a networkofselectedbrokers.
ThePrivateIndividualsofficesarestaffedbypeoplefromLABORALKutxaandalsopeoplefromitsinvestee,CajaLaboralBancasegurosSLU,anassociatedBanking-insuranceoperator-CLBS.CLBS incorporatedallthepeoplecomingfromSegurosLagunArowhowerepartoftheSalesNetwork of the "Direct Channel" of Seguros Lagun Aro, and also some other support staff,basicallyinmarketingactivities.In2019,5officeswereclosed.
There isalsoa specialisednetworkof companies (towhichmustbeadded theCooperativesandLargeCompaniesofficeandthePublicSectoroffice).
OFFICEDISTRIBUTIONMAP
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1.6.TheGroup'smainfigures
Item 2018 2019
Totalassets(Mll)OwnFunds(Mll)Customerdeposits(Mll)Credittocustomers(Mll)
22,9891,68919,48113,253
25,0581,76421,42513,973
OfficesATMs
309535
304538
InterestMargin(Mll)GrossMargin(Mll)AdministrationCosts(Mll)Profitaftertax(Mll)
246.5394.7227.0124.2
249.9395218.9127.4
ThedistributionofwealthgeneratedbytheGroupisshowninthefollowingtable:
Item(thousandsof€). 2018 2019
1. Directlygeneratedfinancialvalue 392,642 401,806
GrossMargin(beforeotheroperatingcharges)
ProfitsonSaleofMaterialandAwardedAssets
389,674
2,968
399,130
2,676
2. Distributedfinancialvalue 284,212 284,975Paymenttosuppliercompanies(Operatingcosts)- othergeneraladministrativecosts.- otheroperatingchargesStaffcostsIncometaxInterestoncapitalInvestment/DonationstothecommunityDevelopmentandEducationFund(FEP)IntercooperativeSocialFund(FSI)
107,01175,18031,831108,50611,41833,56523,7129,48514,227
104,73370,97933,754108,40611,68934,31625,83110,33215,498
3. Financialvalueretained(1-2) 108,430 116,831
Withregardtotherealestateassetmanagementcompanies,CajaLaboral istheowner(soleshareholder) of two companies, ISGA, S.A. and Sociedad para la Gestión de ActivosInmobiliariosdeCajaLaboral,S.L.(SGA).Thecompanieshaverecordedaloss,includedintheGroup'sconsolidatedresults,of€14.3M.Item(thousandsof€).Managementofrealestateassets 2018 2019Revenue(Sales) 68,320 45,286Operatingcosts 6,588 4,274Staffcosts 0 0Financialcostsforinterestanddividends 624 388Grosstax 2,527 2,085
RegardingCLBS,thekeyfinancialfigures,includedintheconsolidatedresults,are:Item(thousandsof€).CLBS 2018 2019Turnover(commissions) 39,758 41,400StaffCosts 10,703 10,270TotalCosts 37,459 37,911Pre-taxprofit 2,457 3,490
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Theobjectiveoftherealestateassetmanagementcompaniesin2019wastopurchaseassetsfromdevelopers inpaymentofdebtowedtoLABORALKutxaandtodisposeofalltheassetsowned, both finished products (houses, garages, premises, etc.), as well as completing theworkinprogressinordertosellthefinalproductandalsothesaleoflandoritsmanagementfortransformationintohousing,throughself-builddevelopmentorbybuilding.
In2019,viatheISGAcompany,workwascarriedouton17realestateprojects involvingtheconstruction of 707 homes, of which 4 projects have been completed, bringing the totalnumberofcompletedhomesto87.
Noneof the land, developments in progress or completedhousing is adjacent to or locatedwithinprotectednaturalareasorunprotectedareasofhighbiodiversity.
The activity of these real estate asset management companies, implies a minimumparticipation in theSpanishrealestatesector. Its indirecteffect is relatedto thecontractingouttothirdpartiesoftheactivitiesnecessaryforitsexecution.
LABORAL Kutxa performs its tax obligations in the regions in which it operates. It thuscontributes to the sustainabilityofpublic servicesand theprogressof Society. Theamountsrelatingto2019areasfollows:
Taxesandduties(thousandsof€)LABORALKutxa 2018 2019Corporateincometax 11,418 11,689Taxes(propertytax,taxonprofessionalandcommercialactivities,etc.) 7,593 7,451V.A.T. 2,198 7,620(1)Total 21,209 26,760Taxesandduties(thousandsof€)LagunAro 2018 2019Corporateincometax 1,951 1,904Taxes(propertytax,taxonprofessionalandcommercialactivities,etc.) 92 89Total 2,043 1,993(1)VATfortheconsolidationgroupfrom2019.
The Public Administration does not form part of the capital nor does it have anyrepresentationonthegoverningbodiesofLABORALKutxa.ThefinancialsupportreceivedfromtheAdministrationisasfollows:
Item(thousandsofeuros) 2018 2019Subsidies(aidforemployment,trainingandenergyinvestments) 538 308Item(thousandsofeuros) 2018 2019SubsidiesLagunAro(Euskera) 20 11
1.7.Strategyandriskmanagement
Astrategicdeliberationwascarriedoutduring2019whichledtothepreparationofaStrategicPlanfortheyears2020-2022.ThestrategicdeliberationsatLABORALKutxafollowanannualcycle, as part of a management process that systematises competitive surveillance in thevarious markets and the review of business models and strategic commitments, which arethendevelopedineachManagementPlan.
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The2020-2022StrategicPlanhasbeenpreparedafteraperiodofdeliberationthatbeganwithanassessmentofthedegreeofcompliancewiththe2016-2019StrategicPlanandadiagnosisoftheinternalandexternalsituation.Thiswasthefirststrategicdeliberationtobecarriedoutwithacross-groupperspectivewhichalsoincludedtheinsurancecompanies.Itwasaprocessledby theBoardofDirectors inwhichdifferent levels of the cooperativeparticipated, fromdepartment heads to section heads and staff from the sales network. The project wassupportedbyDeloitteandwasapprovedbytheGoverningBoard.
Thefollowingambitionwasdefined:
Transformationoftheentityinordertoensureitscompetitivenessandfuturesustainabilityinacomplexmarketenvironmentbymeansofadifferentiatingapproach.
Themainactionpointsthathaveemergedfromthestrategicdeliberationare• Profitability - incomestatement. Inanenvironmentofextremely low interest rates,
sustainingthecurrentlevelsofprofitwillbethemainobjectivefortheyear.Thiswillrequireanincreaseinbusinessvolumes.
• Solvency. Solvency management will be another of the fundamental managementtools,beingthemainparameterthatguaranteesthefutureandindependenceoftheentity.
• Businessstrategy.Thecommercialstrategywillbeaimedatincreasingmarketsharestoagreaterorlesserextentdependingonthedifferentregions,segmentsandprioritybusinesses,therebyincreasingthedynamicsofthecommercialactivity.
• The insurance business. Opportunities and competitive differentials should beharnessedtodrivegrowthbypromotinghigherlevelsofintegrationoforganisationalstrategies,policiesandculture.
• RiskPolicy.Thestrategicdeliberationwillleadtoareviewofthecurrentriskappetiteframework,andriskpolicieswillalsobereviewedand,whereappropriate,redefined.Thechangesinthebusinessstrategy,andtheprojectionsanddecisionsintheareaoftreasuryandcapitalmarketswillbealignedwiththisframework.
• Treasury and capital markets. In a scenario like the current one, marked by thecontinuousgenerationofliquidityandanunstableenvironmentwithmajordifficultiesin obtaining an acceptable risk-return ratio, the investment strategy for the surplusliquiditywillbeimplementedwithacriterionofprudence.
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The implementationoftheStrategicPlanfortheyears2020-2022willbebasedonfivemajorblockscovering15programmes.
Riskmanagementisconsideredtobeakeyelementinthisstrategicplan.Forthisreason,theriskappetiteframeworkdesiredbytheentityhasbeenreviewedandthefitoftheobjectivessetoutinallprogrammeshasbeensubsequentlyadjusted.Inaddition,measuresareproposedtoextendtheriskcultureinthenetworkandthefirststepsaretakentoimprovetheinternalmodels.
Sustainability and corporate governance appear for the first time in this Strategic Plan as atransversalelementthatcoversalltheprogrammesthatshapeit.Intheareaofsustainability,the company will continue to contribute to the economic and social progress of itssurroundings and to reduce the impact of its activities on the environment. These projectsalignwiththeSustainableDevelopmentGoals(SDGs)andwiththe2030Agenda.
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In addition, each yearSeguros LagunAro drawsup itsManagementPlan,whichestablishesobjectives and action plans, in accordancewith the balance of quantitative indicators in itsmanagementscorecardaswellasthequalitativeconclusions.
1.8.Principlesandgovernance
Corporategovernance
LABORALKutxahasnotestablishedanyformalpolicyforhiringseniormanagersnativetothegeographical areaswhere it carries out itswork, as thebusiness is carriedout at a nationallevel and the criteria followed are those based on appropriate professional skills. All of theexecutivestaff(the8membersoftheBoardofDirectors)arefromtheareaswheretheEntityoperates.
WithregardtoCorporateGovernance,wecanciteasprogressmadein2019that:• Asaresultofchanges in theGoverningBoard, thecompositionof theAuditCommittee
andtheRiskCommitteewerechanged,andperformancereportswerepreparedforthosedirectorswhostoodforre-election.
• The manual governing the procedure for selecting and assessing the suitability ofdirectorsandkeyoffice-holderswasadaptedtotheEBAguidelines.
• The "CNMV Technical Guide 1/2019 on Appointments and Remuneration Committees"wasincorporatedintotheinternalprocedures.
• Thepolicyfortheselection,appointment,reappointmentanddiversityofcandidatesforgoverning directors was updated. The balance of knowledge, skills, diversity andexperienceoftheGoverningBoardhasalsobeenassessed.
• TheannualassessmentofthesuitabilityofboththemembersoftheGoverningBoardandthekeyoffice-holdershasbeencarriedout.
• Theapplicationof theprocedures followed for the selectionandappointmentof seniormanagementmembersappointedin2019hasbeenanalysed.
AttheLagunAroBoardofDirectorsmeetinginJanuary2019,inaccordancewithArticle18ofRoyal Decree 1060/2015, 20 November, on the organisation, supervision and solvency ofinsurance and reinsurance companies ("RDOSSEAR"), the minutes recorded that each andeveryoneofthemembersoftheCompany'sBoardofDirectorshadfulfilledtherequirementsofsuitabilityandgoodrepute.
(1) 4ofwhichareworkingpartners.(2) Agedatanotavailable.
GoverningBodyBetween30and50 Over50
2018 2019 2018 2019M W M W M W M W
GoverningBoard(1) 2 3 1 4 4 3 5 2Auditors 1 0 1 0 1 1 1 1ResourcesCommittee(2) 9 3 9 3 - - - -OperationsCommittee 0 2 0 3 3 0 2 0AuditCommittee 1 0 0 1 0 2 2 1AppointmentsCommittee 1 1 1 1 2 1 2 1SocialCouncil 10 7 10 10 2 1 2 1BoardofDirectors 1 0 3 1 6 1 3 1RisksCommittee 0 2 0 3 2 1 2 1RemunerationCommittee 0 1 1 1 2 1 2 1
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AllinformationregardingcorporategovernanceisavailableontheLABORALKutxacorporatewebsite.https://corporativa.laboralkutxa.com/informes/
ThesupervisorybodiesofLABORALKutxaare:
Committee/Organisation DutiesYearofest.
Structureoftheadministrativebody
GoverningBoardSeniormanagement,supervisionofManagement,representationoftheCompany.AnalysesannuallytheaspectsrelatedtoCSRandtheimpacts,risksandeconomicandsocialopportunitiesonacontinuousbasis.
1960
ResourcesCommitteeStatutorybodyresponsibleforresolvingappealsagainstcertaindecisionsoftheGoverningBoard.ElectedattheGeneralMeeting
1993
AuditCommitteeSupervisesinternalauditservices,knowsthefinancialreportingprocessandinternalcontrolsystems,supervisescompliancewithcodesofconductandcorporategovernancerules
2004
AppointmentsCommittee
IdentifiescandidatesfortheGoverningBoard,evaluatesthesuitabilityofitsmembersandthebalanceofknowledge,skills,diversityandexperienceofthegroup.Pursuesanobjectiveofrepresentationoftheunderrepresentedsex.
2012
RisksCommitteeAdvisestheGoverningBoardonthemanagementandsupervisionofallsignificantrisksandonthemonitoringoftheapplicationoftheglobalpropensityforriskappropriatetotheCompany'sstrategy.
2015
RemunerationCommittee
ProposestotheGBthegeneralremunerationpolicy,ensuringanindependentannualevaluationofitsapplicationandinformingitoftheremunerationpolicyoftheexecutivesincludedinthe"identifiedgroup".
2016
SupervisoryandadvisorybodiesSocialCouncil Employmentsystem,advicetotheGoverningBoardandGeneralManagement 1960CustomerService Managementofcustomerqueries,complaintsandclaims. 1994HealthandSafetyCommittee
ConsultativebodyonOccupationalRiskPrevention. 1996
HizkuntzaBatzordea Committeeforlinguisticstandardisation. 2000EnvironmentCommittee EnvironmentalSystemManagement. 2001MoneyLaunderingPreventionCommittee
ControlandcommunicationbodyforthePreventionofMoneyLaundering. 2003
CSRCommittee
DelegatedbodyoftheBoardofDirectorsinmattersofCSRandwiththeparticipationofmembersfromthevariousDepartmentsandInsurance.ApprovestheCSRReport.ItischairedbytheHeadofQuality,whogivesanannualstatementtotheGov.Board.
2008
GlobalRiskControlandALCO
Controlofliquidity,interestrate,credit,marketandoperationalrisk.TheALCOistheAssetsandLiabilitiesCommittee.
2008
EqualityCommittee-Berdintasuna
PromotesandguaranteesequalitybetweenwomenandmenandmonitorsthecurrentEqualityPlan.
2009
OperationalRiskCommittee
Globalcontrolofoperationalrisk 2010
EthicsCommitteeEnsuretheapplicationoftheprinciplesandvaluesthatgovernthebusiness,primarilythoseincludedinitsCodeofEthicsandProfessionalConduct
2015
ProductsCommitteeInapplyingMiFID,itevaluatesandapprovestherisksofeachproductofferedtotheclients.
2015
IntegratedSecurityCommittee
EnsuresacomprehensivesecuritystrategyfortheEntity,bothphysicalandlogistical.
2015
ProjectsCommitteeOrdersandprioritisesthepriorityinterdepartmentalprojectstoensuretheirsuccess
2017
DataProtectionCommittee
Supervisesandpromotespoliciesandproceduresregardingdataprotection. 2019
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In order to avoid conflicts of interest between the Company and the members of theGoverningBoard, inaddition to the ruleson incapacitiesand incompatibilitiesestablished intheArticlesofAssociationandtheInternalCodeofConductfortheSecuritiesMarket,thereisa specific provision in the Governing Board’s Regulations concerning the voting system foradoptingresolutionsinwhichsuchconflictsmayarise.
Theseprocedures,whichhavebeenincludedinpreviousReports,consider:• IncapacitiesandincompatibilitiesofthemembersoftheGoverningBoard.• CodeofConductfortheSecuritiesMarket.• RegulationoftheGoverningBoard’sRegulationstoavoidconflictsofinterest.
TheEthicsCommittee'smissionistopromotetheethicalbehaviourofLABORALKutxainallitsactivities.ItisanautonomousbodyreportingtotheGeneralManagerthatisestablishedasachannelfortheComplaintsManagementSystemregardingbreachesoftheCodeofEthicsandprofessional conduct, as well as in criminal matters and as a manager in disciplinaryproceedings.EveryyearitsubmitsanEvaluationReporttotheBoardofDirectorsintheeventofanyproblematicsituation.TheCommittee ismadeupof5people,currently3menand2women.
Eachyear theAppointmentsCommitteeperformsa continuousassessmentof the individualsuitabilityofthemembersoftheGoverningBoard(theirintegrity,knowledge,experienceandwillingness to exercise good governance) and of the balance of knowledge, ability, diversityand experience of the Board as awhole. Also, the evaluation report on the structure, size,compositionandperformanceoftheGoverningBoardispresentedinthesameCommitteeonanannualbasis.
With respect to theRisk Committee, the Company conducts an annual review, based on itsstrategy and the level of health of its financial situation, of risk tolerance levels in what isknown as the Risk Appetite Framework, tolerance levels that refer to capital, liquidity andprofitability, and themonitoring of which is carried out with a series of indicators that arereported to the banking regulator. In addition, the Governing Board annually approves theCreditRiskPolicyManual,whichincludesriskpolicies,proceduresandcriteria.
In 2017, the Board of Directors approved a new Projects Committee, whose purpose,supported by a Project Office, is to improve the management of those projects that aredefinedasprioritieswithintheannualManagementPlan.
Asregardsriskmanagement,adetaileddescriptionofthedifferentbasicriskscanbefoundintheannual InformationofPrudentialRelevance,whichdetails thetrendsand impactonthebusinessof themost importantrisks:credit,market,operational, interestrateaswellas theriskprofileandmanagementmechanismsapplied.
AtSegurosLagunAro the final responsibility for themanagement, controlandmitigationofriskslieswiththeBoardofDirectorsandSeniorManagement.Thereisa"Policyofsuitabilityforkeypositions"thataimstoensurethatallthepeoplewhorunSegurosLagunAromeettherequirementsofsuitabilityandintegrity.Bothbodiesareresponsiblefor:• The communication of general principles and documented management policies,
includingthedesignandupdatingoftheriskmanagementframework.• The definition, understanding and periodic review of the exposure profile that the
Companywishestoassumeatanygiventimedependingonthedefinedbusinessstrategy.
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• Ensuring the suitability and periodic review of the limit structure of the different risks,takingintoaccountthedesiredexposureprofile.
• Ensuring an adequate organisational structure of the risk management: assigningresponsibilities, ensuring that there areno conflicts of interest through the appropriatesegregationofduties.
• Approvingriskmanagementpolicies,ensuringthattheyincludethefunctionsassumedbyeach body in relation to risk management and control, the hierarchical link betweenfunctionsandthereportinglines.
• Ensuring the independent review of the risk management framework and theincorporationofrecommendationsmadebyInternalAudit.
Independentlyofthemembersoftheadministrativeandmanagementbodies,SegurosLagunArohasdefinedthefollowingfundamentalfunctionsofthegovernancesystem:
Riskmanagementfunctionü Defining the methodologies and indicators to be used for the measurement and
evaluationofrisksandassistingintheirimplementation.ü Workingwith the technicaldivisions in the identificationandcategorisationof risksand
preparingtheCompany'sriskmatrix.ü Carryingoutperiodicevaluationsontheimpactthatfuturescenariosandstresssituations
wouldhaveonthelevelandsolvencyoftheCompany.ü Assisting the technical departments in applying themethodology and the underwriting
riskmeasurementandevaluationmodels.ü Evaluatingthestructuralmismatchbetweenassetsandliabilitiesü Evaluatingtheadequacyandintegrityoftheinformationusedtoquantifyriskü Activelyparticipatinginthenewproductapprovalprocessü Leading the process of internal evaluation of risks and solvency of the Company, being
responsibleforpreparingtheappropriatereport.
Regulatorycompliancefunctionü Determining and assessing the risk of regulatory non-compliance and keeping the
regulatoryriskmapuptodate.ü Advisingonnewproducts,servicesandmarketsfromaregulatorypointofview.ü Verifyingthepreparation,coordinationandexecutionoftheCompliancePlan.ü Continuousstafftrainingonregulatorycompliance.
InternalAuditFunction:Checktheadequacyandeffectivenessofthe internalcontrolsystemandthevariouselementsoftheGovernanceSystem.
Actuarialfunctionü CoordinatingandreviewingthecalculationofTechnicalProvisions.ü ExpressinganopinionontheunderwritingstrategyofeachCompany.ü Expressinganopiniononreinsuranceagreementsandretentionstrategy.ü Contributingtotheeffectiveimplementationoftheriskmanagementsystem.
For each of the above-mentioned functions, there are written policies approved by themanagementandgoverningbodyoftheCompanywhichdefine,amongotherthings,thetasksand responsibilities with a suitable distribution and a clear separation of functions inaccordancewiththecurrentSolvencyIIregulationsonindependence.
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1.9.Developmentofthegoverningbodies
In2018, the third trainingprogrammedirectedat themembersof theGoverningBoardandmembersofManagementwascompleted.This136-hourtrainingprogramme,providedbyAFISchoolofAppliedFinance,beganin2017andcoveredaspectsofeconomics,financialmarketsand investment management (regulation, risks, etc.), banking company management,companyfinanceandinsurancecompanymanagement.Thefourthprogrammewasdesignedduring2019andwillcommenceinFebruary2020.
Trainingoncorruption issues is referredto inthe2014Report. In2016, themembersof theGoverning Board received the same training as everyone else on the Crime Prevention andResponseManualandtheCriminalCompliancePolicy.
1.10.Remunerationofthegoverningbodies
The people who form part of the Governing Board of LABORAL Kutxa and the Board ofDirectors of Lagun Aro do not receive remuneration for their governing functions and,therefore,thereisnolinkbetweentheirremunerationandtheperformanceoftheCompany.The following table shows the remuneration of themembers of the Board ofDirectors, theChairmanof theGoverningBoard and theDirectorswho, asworkingpartners, have formedpartoftheGoverningBoardintheyearsindicated.
LKItem(thousandsofeuros) 2018 2019Totalpayfortheirwork 1,390 1,534Capitalisedcooperativereturns+Contributioninterest 284 243Total 1,678 1,777Averagepayperperson 139.9 126.9
WithregardtotheremunerationoftheBoardofDirectorsofLagunAroLagunAroItem(thousandsofeuros) 2018 2019Totalpayfortheirwork 484 458Capitalisedcooperativereturns+Contributioninterest 3 3.9Total 487 461.9Averagepayperperson* 97.4 92.38* 3menand2womenin2019and4menandonewomanin2018.
1.11.Corruptionandbribery
LaboralKutxahasaCriminalCompliancePolicy,withseveralRegulationsandCodesofConductincluding,amongothers:
- CodeofEthicsandProfessionalConduct,- GuideofGoodPracticesandProfessionalSecrecy,- InternalRulesofConductspecifictothestockmarket.
Organisationally, ithasalso setupanEthicsCommittee, an InternalAuditdepartmentandaRegulatory Compliance department to prevent irregularities and monitor compliance withrulesandprocedures.
Businessunitsanalysed
BelowarethebusinessunitsofLABORALKutxathathavebeenanalysedwithrespecttorisksrelatedtocorruption:
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2018 2019Actual Target Actual Target
Totalno.ofofficesanalysed 83 83 93 88
%Officesanalysed 27% 27% 31% 29%
Itshouldbenotedthatthecontrolsandremoteauditanalysesimplementedhaveaneffecton100%ofthebranchesoftheOrganisation.Inthe2realestateassetmanagementcompanies,ISGAandSGA,thenecessarypreparationshave been made to adapt to the new regulations in the area of Prevention of MoneyLaundering,andthesehavebeenexaminedbyindependentexperts.
Withrespecttomeasurestakeninresponsetoincidentsinvolvingcorruption,therehavenotbeenanysuchcasesin2018or2019.
During 2019, the internal control and communications procedures and organisations weresubject to an annual review by an external expert, PB Consultores S.L., which assessed theoperational effectiveness of the procedures and organisations in the prevention of moneylaunderingas“VeryGood”withahigherscorethanthatofthepreviousyear.Belowaretheactionsthatwerecarriedoutduringthepastyear:
Actionstakenin2019TheManualonthePreventionofMoneyLaunderingandFinancingofTerrorismhasbeenamended,introducingseveralimprovements.Thesix-monthlyreports,SummaryofSpecialExaminationTransactionsandaSelf-assessmentRiskReportonMoneyLaunderinghavebeenproduced.Thetransactionrelatingtothe"StatementofMovementofMeansofPayment"hasbeenimproved,addinganoticeontheconsequencesoftransferringmeansofpaymentwithouttheS1document.Internally,theexistenceofaComplaintsChannelintheEntitytoreportillegalactionshasbeenreiteratedthroughanInformativeNoteTheRemediationPlanhasbeenupdatedtoaddressdeficienciesintheFormalIdentificationofcustomers.AnalystsandthepersoninchargeofthePBCUnithavereceivedspecificpracticaltraininginthePreventionofMoneyLaundering
The Money Laundering Prevention Unit has sent 10 reports of transactions suspected ofmoney laundering to the Executive Service of the Commission for the Prevention ofMoneyLaunderingandMonetaryOffences.
In Seguros Lagun Aro, the planning of internal audits to supervise the inherent risks ofsubscriptionandcompliancewithregulationsand/oradministrativeprocedures,aswellasthedocumentmanagement,arecarriedoutin100%ofthebranches,bothintheCLBSchannelandin theBrokeragechannel,basedon thealertsandanalysisof the riskgroupsestablished forthevariousaudits,bothannualanddaily.
Regulationsandcodesofconduct
LABORALKutxaregulatesindividuals'activitiesonthebasisofcertainrulesofconduct.Intheareaofthesecuritiesmarket,theserulesorguidelinesofconductareessentiallyincludedinan"InternalCodeofConductspecifictothesecuritiesmarket",whichappliestothepeoplewhomake up the Governing Board, the Board of Directors and those involved in this area ofactivity.
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Intheareaofethicsandintegrity,theEntity'srulesarearesetoutinthe"CodeofEthicsandProfessional Conduct" and in the “Guide to Good Practices and Professional Secrecy”. Bothdocuments are published on the intranet and are updated and reviewed by the RegulatoryComplianceDepartmentandtheInternalAuditDepartment,respectively.
As a continuation of the Code of Ethics, in the field of prevention and response to possiblecriminalbehaviourapplicabletotheEntity,theinternalregulationsareincludedinthe"CrimePreventionandResponseManual"andinthe"CriminalCompliancePolicy".In2019,acriminalriskreassessmentprocesswasinitiated,aswellastheabove-mentionedupdateoftheManualandthePolicy,thatwillbecompletednextyear.
There is a "Complaints Channel" that allows people to report irregularities of potentialimportance linkedtotheCodeofEthicsandtheCriminalCompliancePolicy.There isalsoan"EthicsCommittee"asabody forcriminalprevention,with themissionofpromotingethicalbehaviorintheEntity,resolvingqueriesonthesubjectanddealingwithcomplaintsreceivedintheComplaintsChannel.
1.12.Moneylaundering
The management policies of LABORAL Kutxa identify the greatest risks in the areas ofcorruptionandbriberywiththefightagainstmoneylaunderingandthefinancingofterrorism.In this regard, itundertakes toestablish thenecessarybodiesandprocedures inaccordancewithcurrentregulationsandinternationalstandards.Forthisreason,• TheCommittee for the Prevention ofMoney Laundering and the Financing of Terrorism
andaPreventionUnithavebeencreatedwithintheorganisationalstructureoftheEntity,withspecificfunctionsintheareaofprevention.
• Precise rules and procedures have also been established, which are contained in a“MoneyLaunderingandFinancingofTerrorismPreventionManual”,thelatestversionofwhichwasapprovedon30/01/2019.
ThispolicyappliestotheentireLABORALKutxaGroup,includingthesubsidiaries.
Theobjectivesoftheserulesandprocedures,whichmustbecompliedwith,are:- To strictly comply with the regulations in force at all times, as well as the
recommendationsissuedbynationalandinternationalbodiesandauthorities.- To introduce rules for action and appropriate control and communication systems to
prevent funds of a criminal origin from being channelled through the LABORAL KutxaGroupandtoimpedeaccesstocertainpersons.
- Toestablishcustomeradmissionpolicies.- To ensure that working partners and other employees adhere to the "know your
customer"procedures.
Thesepoliciesandproceduresareprimarilypreventiveinnature.Inaddition,internalcontrolprocedures are subject to an annual review by an external expert so that a rationale forcontinuous improvement in reducing exposure to thesemoney laundering and financing ofterrorismriskscanbeapplied.
The real estate asset management companies maintain a policy and have implemented amoneylaunderingpreventionsystemthatestablishesthebodies,procedures,internalcontrols
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andappropriatetoolstocomplywiththeregulationsapplicableinthisfield.Thequalityofthissystemand itspracticalapplicationareexaminedannuallybyan independentexpertand, inthe examination relating to the 2019 financial year, it was rated positively without anyincidents.
1.13.22RegulatoryCompliance
TheRegulatoryComplianceDepartmentincludes,withinitsmanagementscope,thedetectionof transactions suspectedofmarketabuse. In2019 thecomputerapplication registered474alarmswhich, once analysed,werenot classified as transactions suspectedofmarket abuseand,therefore,nocasewasreportedtotheCNMVin2019.
WithregardtoLagunAro:
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2.RESPONSIBLE MANAGEMENT
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2.1.Managementapproach
Therelationshipwithourmainstakeholdersisbasedonthefollowingbasiclines:
Asthebankingactivityisbasicallyaimedattheserviceofandrelationshipwithcustomers,theresponsible management of customers is a priority, especially with regard to the sale ofcomplex savings products, and excellence in service quality as well as contact with thecustomer are aspects identified as being of the highest importance in our outward-lookingmatrix. In all of the above, our objective is for these to be areas in which LABORAL Kutxamaintainssustainableadvantagesoverourcompetitors.Specifically, the comparative data with competing entities show positive differentiations ingeneral,buttheyareparticularlysignificantinimportantaspectssuchasthetransparencyandclarity of information, the trust we generate among our customers and, in general, thecommitmentthatourEntitytakesonwithsocietyasawhole.Inpoint3.1Ourrelationshipwithcustomers,wedescribeindetailourachievementsintheseareas, also including our efforts at transparencywith regard to the solution of problematicsituations with a significant social impact such as over-indebtedness of customers for thepurchaseofhomesorclaimsoflackofvalidity,duespecificallytoalackoftransparency,ortofloorclausesappliedtointerestonmortgageloans.
In relation topeople,LABORALKutxa isaCooperativeCreditUnion inwhichworkingpeoplearemembersandownersofthecompanywithfullrightsandresponsibilities,bothincarryingout their professional duties and in the right to participate in management through therelevant bodies and in the profits from the business. This difference compared to othercompanies defines the approach to the relationships within the company, meaning thatworkers are involved in all three of the possible areas: ownership, results and alsomanagement methods, because our aim is to make our management democratic andresponsible. Specifically, the key decisions are validated at the General Meeting with theparticipation of all partners, guaranteeing an efficient and responsible management thatallowsustoobtainprofitsandreinvesttheminoursociety.
The Cooperative Education training programmes reinforce the cooperative identity of themembers, and encourage the integration and socio-entrepreneurial involvement of newmembers.
In point 3.2 Our relationship with the workforce these and other initiatives are developedfurther.
AnothersignificantdistinguishingfeatureofLABORALKutxais itscommitmenttosocietyduetoitslegalstatusasaCreditCooperative.Asaresult,bylaw,10%ofthedistributableannualprofitofcreditcooperatives isdirectlyallocated tosociety. In thecaseofourCompany, thispercentageissubstantiallyhigher,25%tobeprecise.
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LABORALKutxawasfoundedintheBasqueCountryaspartofaBusinessGroupwithastrongcommitment to serve society, whose mission includes the creation of associated andparticipatory cooperative work as an essential way to create wealth and well-being, bothamongitsdirectsocialpartnersandinthesocietyinwhichitisimmersed.
Duetoitslegalnatureanditscooperativevocation,LABORALKutxadirectsasignificantpartofits charitable contributions to the promotion of the cooperative world, but it also reservesspecificprovisionsforlocalinitiativesintheareaswhereitsofficesarelocated,andparticularlyforspecificactivitiessuchasthepromotionofself-employmentandentrepreneurship (inthiscasethroughaspecificFoundation,Gaztenpresa)andsupportfortheBasquelanguageandthepromotionofBasqueculture.
Thesemechanismsaredescribedinpoint3.3Ourrelationshipwithsociety.
In order to optimise its relationship with the environment, since 2001, LABORAL Kutxa hasbeenusinganEnvironmentalManagementSystem,inaccordancewiththeISO14001standardforalltheactivitiesitcarriesoutinthethreebuildingsatitsCentralHeadquarters.Althoughitisnotpartofthecertifiedsystem,LABORALKutxatransfersthemajorityofitsenvironmentalactivities from central services to the otherwork centres. This certificationwas renewed in2019.
TheEnvironmentalManagementSystemistheresponsibilityofanEnvironmentalCommitteemadeupofmembersoftheLegalDepartment,InternalAudit,Risks,FixedAssets,SecurityandGeneral Services and Management Planning and Control, with the latter acting as theCoordinator. In accordance with the precautionary principle of the Rio Declaration, itaddresses the possible impacts of the activitywith a view to preventing any environmentaldamage.
Averysignificantnewdevelopmentin2019wasthesigningbyLABORALKutxaoftheUnitedNationsPrinciplesforResponsibleBanking.AlthoughthesePrinciplesrefertotheentireareaof sustainability, given the emergency situation of the climate crisis, they place specialemphasisontheimpactofouractivity(creditandinvestment)ontheenvironment.
Point3.4Ourrelationshipwiththeenvironment,describesthesemechanisms.
With respect to the management of suppliers, it is important to remember the value ofadequatemanagementof the supply chain inorder to achieve theobjectivesof responsibleactivity.
Withoutadoubt,thefinancialactivitythatwecarryout,aswellasthelocalpresenceinaveryspecific geographical area, means that the management risks of these companies are notexcessively important. Nevertheless, as will be seen later on, LABORAL Kutxa has severalinitiativesunderwaywithregardtosuppliers.
AspecialmentionwithinthesuppliersisthatofLagunAro'sbrokers,whichreachesthelevelofsignificant stakeholder within the insurance activity. At the Group level, it is considered asupplierwithdifferentiatedcharacteristics.
Point3.4Ourrelationshipwithsuppliercompanies,describesthesemechanisms.
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2.2.Commitmentsandachievements
BelowarethemainCSRactionscarriedoutduring2019,inaccordancewiththecommitmentsmadebyLABORALKutxa in itspreviousCSR reports,aswellaswith theobjectives for2020.TheseactionsaresegmentedaccordingtotheInterestgroups(inadditiontotheenvironment)defined by the Entity: People-Workforce (P), Customers (C), Society (S) and SupplierCompanies(Sup).
ActionsinthefieldofCSRStatusoftheaction/objective
Governancemechanismsinplaceandexecutiontime
Materialityandstakeholdersaffected
Basicprojectsandactionsin2019andpendingfrompreviousyearsStrengthensolvencyandliquidity Ongoing Strategicpriority HighPandCMiFIDII.Planstoimprovecustomerinformationandadvisorysystemsandtools
Completed2017Prioritisedproject
HighC
Developmentofproceduresandsystemsforcontractingsuppliers.Developmentofapplicationandrecruitmenttable.
Completed2017Supplierprojectworkinggroup
MediumSup
ImplementationoftheIIIBerdintasunaPlan-Equality.PreparationoftheIV.
CompletedCommitteeBerdintasuna16-19
HighP
Usingdigitalisationtoreducepaperconsumptionandboostthemulti-channelrelationship
PartiallyCompleted.Digitalisationstrategicfocus
MediumS
Carryoutthemergerofofficestoincreaseefficiencywhileavoidingthefinancialexclusionofsmallcommunities.
CompletedCommercialDivision2016
MediumS
Linguisticstandardisation:ImplementationoftheStrategicPlanfortheBasqueCountry2016-2019
CompletedHizkuntzaBatzordea16-19
LowCandP
DevelopmentofdigitalskillsforStaff OngoingStrategicfocus2018digitalskills
HighP
Maintainpositionsofexcellenceinthemanagementofcustomerrelations
OngoingIntegratedQualityProcess
HighC
ContinuetoexpandthecoverageofSociallyResponsibleInvestment
PartiallyCompleted Specificteam MediumCandS
GreenMiFID Delayeduntil20202019ManagementPlan
MediumCandM
ImplementBIDEANandensureitssustainability
CompletedCultureandvaluesstrategicfocus19
HighP
Ren.EIFInnovFinandEaSISocialagreement
CompletedEIF2019agreements
Medium-highSandC
Developmentofmanagementsystemsthatpromoteaconstructiveandcollaborativeculture,withself-relianceandcontinuouslearning
OngoingCultureandvaluesstrategicfocus2019
HighP
Reviewofmarketabusecontrolprocedures
PartiallyCompleted.AwaitingITdevelopment
2019ManagementPlan
HighS
FormationoftheDataProtectionCommittee
Completed PDSI2019 HighSandC
ImplementaRecognitionSystemforpeople.
Designed,implementationin2020
Cultureandvaluesstrategicfocus19
HighP
Developmentofmulti-channelcustomerrelations,paymentmethodsanddirectmarketing
OngoingStrategicfocusOmni-channelling,Onenak4.02019
MediumCandP
ImplementtheZainduzHealthPlan Completed Workingteam2019 HighP
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SupportforcreatingandconsolidatingcompaniesthroughMONDRAGON
OngoingFundsthroughFSIandFEP2019
Medium-lowSandC
Financialeducationplan. CompletedFinancialEducationCommittee2019
Medium-lowSandC
ActionsinthefieldofCSR.Basicprojectsandactionsfor2020Coaching400entrepreneurstolaunchtheirmicro-enterprise
StrategicobjectiveGaztenpresaFoundation
Medium-highSandC
Reducepaperconsumptionby8% StrategicobjectiveEnvironmentCommittee
MediumM
Replacetheelectricitysupplywithonebasedsolelyonrenewablesources.
StrategicobjectiveEnvironmentCommittee
MediumM
Developmentofagreenfinancingproduct StrategicobjectiveBusinessdevelopment
MediumMandC
MoveaheadwiththeapplicationofSociallyResponsibleInvestment(SRI)criteriaintheassetsmanagedbytheManager,Treasuryandintheconcessionofrisks
Strategicobjective
BusinessdevelopmentTreasuryManagerRisks
Medium-highC,SandM
Conductanimpactanalysisofthedirectandtransitionalrisksofclimatechange.
CommitmentundertakenwiththePrinciplesofResponsibleBanking
CSRCommitteeMedium-highSandM
Implementsustainablemobilitymeasuresfortheworkforce.
SustainablemobilityEnvironmentCommittee
MediumMandP
2.3.CSRRoadmap
Asaresultofthedeliberationandconsultationprocesscarriedoutwiththestakeholders(seeMateriality Analysis), the CSR Roadmap has been defined, which addresses the risks andopportunities that were identified as being themost important, and is the benchmark thatLABORALKutxausestoprioritiseitsactivitiesrelatingtoSocialResponsibility.
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2.4.LABORALKutxa'sCSRScorecard
TheLABORALKutxascorecardprovidesaglobalvisionofthekeyindicatorsintheorganisationwithrespecttothethreeaspects:economic,socialandenvironmental.
Economicperformanceindicators(consolidateddata):Indicators 2018 2019
Profitaftertax(€M) 124,173 127,364
EfficiencyIndex(%)(1) 61.93 61.00
Customerdeposits(€M) 19,481 21,425Customercredit(€M) 13,278 13,973
Solvency(%)(2) 18.76 20.17SpecialFunds(€M) 1,059 954%DoubtfulRisks/Investment 4.46 3.54
(1) EfficiencyIndex:AdministrationCosts+Amortisation/GrossMargin.(2)Totalcapitalratio(CET1)isused.
Prioritisationofareasforaction G. interest/scope
1Excellenceinqualityofservice:transparency,friendliness,avoidanceoferrors,speed
andsimplicityoftheoperationCustomers
2 Protectionofprivacyandthesecurityofdataandoperations. Customers
3 ReinforcetheEntity'ssolvencyandliquidity Economic
4Responsiblemanagementtowardscustomers:explanationandsaleofcomplexsavings
products,avoidingover-indebtednessofcustomers...Customers
5Peoplemanagement:genderequality,work-lifebalance,salarylevelsandintervals,
etc.People
6CSRmeasures:againstmoneylaundering,armsfinancingcontrol,gambling,
pornography...Customers/Society
7Developmentinthedigitalisationofchannels(electronicbanking,telephonebanking,
mobilebanking)Customers
8 Promotingequalitybetweenwomenandmen Society/people
9Reviewandimprovementofinternalcontrolmechanisms(managementdecisions,
codeofethics,corruption,costcontrol).CorporateGovernance
10Contributiontotheeconomicandfinancialdevelopmentofthebusinessfabric:Financingagreementsforcompanies,supportforentrepreneurs,University...
Company
11 Sociallyresponsibleproductsandservices Customers/Society
12Suppliermanagement.Responsiblepurchasingcriteria:purchaselocallyandtakesocial
andenvironmentalcriteriaintoaccountinadditiontoprice.Suppliers
13 Improvethecommunicationwithcustomersandotherstakeholders Customers
14Controloftheresponsibleactivityofoursuppliers:workingconditions,occupational
risks,paymentstotheTaxAuthorities...Suppliers/People
15 Fairbalancebetweencostschargedandinterestpaid.Mutualbenefit. Customers16 Reductioningreenhousegasemissionsandcarbonfootprint Environment
17Environmentalmanagement:recycling,reductioninconsumptionandwaste,selective
collection...Environment
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Socialperformanceindicators:Aspect/Indicator 2018 Year2019
PeopleNumberofpeopleactive(LK+CLBS) 2,105 2,074TrainingTraininghours/totalworkforce 41.71 81.38Trainingevaluation(1-10) 7.96 7.91HealthandSafetyAbsenteeismin% 3.85 3.80ProfessionaldevelopmentAverageemploymentindex 2.4 2.36Promotion:IncreaseinStructuralIndex 5.5 7.09
Aspect/Indicator2018 Year2019
Women Men % Women Men %EmploymentdynamicsRateofdepartures/turnover 7.5% 7.3% 8.4% 6.70% 6.76% 7.09%Equality%Womenmembers 48.7% 49.54%%Womenmanagers/totalmanagers 30.6% 31.97%Noobjectivesareestablishedregardingemploymentdynamicsandequality.Norisitbrokendownbyregionduetothereducedgeographicalscope.
Aspect/Indicator 2018 2019
Contribution.Funds(FEPandFSI)(thousand€) 21,037 23,437
Taxespaid(thousand€) 21,209 26,760Gaztenpresacompaniescreated 415 405
Environmentalperformanceindicators:Consumptionof: 2018 2019
Advertisingpaper:Kg/Client 0.093 0.116
Internalpaper(Kg/Client) 0.238 0.251Waterinm3 7,447 10,898Electricity(Kwh) 13,277,248 12,915,786Tonercartridge:Unitsconsumed 3,317 3,502Dieselinlitres 1,505 581Kgwastemanaged(1) 158,950 162,283
(1) Theobjectiveistomanage100%ofthewaste.Itsvolumedependseachyearondifferentcircumstances.
2.5MaterialityAnalysis
The 2014 Report describes in greater detail the process followed by the Entity for theconstruction of the firstmaterialitymatrix thatmade it possible to identify the informationneedsofthemainstakeholdersandtoprioritisetheirdemands.
In subsequent years, the information collected has been expanded, improving theinterpretation of the needs and expectations of the different stakeholders with which theEntityinteracts.In2017andin2019,themethodologyandthequestionnairewerereviewed,comparing the resultswith those obtained by other competitors and adjusting them to thedemandsofthestakeholders.
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TherevisedquestionnaireshavebeenusedforthematerialityanalysisofthisReport,havingobtainedinformationfrom:• Customers (annual consultation): 43 companies, 417 self-employedworkers andmicro-
enterprises,45customersandclientsofpersonalbankingand163KIDEclients(linked),intotal668.TheyareclientsofbothLABORALKutxaandLagunAro.
• 14suppliercompanies(biannualconsultation),• 109workers(members,casualworkersandCLBS;annualconsultation),• ThebiannualconsultationwiththemembersoftheCSRCommittee,whoseopinionsare
representativeofthoseoftheManagement,giventhepeopleinvolved.
Theevolutionovertimeofthematerialityanalysesrevealsthis:- It highlights the alignment between the prioritisation of the stakeholders and that of
LABORALKutxa.61%oftheassessedaspectsareinthesamequadrantofimportanceandtherearenoaspectsinthehigh-low/low-highquadrants.
- The results are very consistent, with the prioritised aspects and those considered lessmaterialvaryingverylittleovertime.
- Awareness is progressively increasing in aspects suchas environmental care and suppliermanagement,althoughinbothcasestheirmaterialityisstillconsideredtobemedium.
Inthematerialityanalysistherearetwoelementsofwhichtheinternalandexternalrelevanceisclassifiedasminor,butwhichareconsideredtobeatthecoreofourmissionandthereforecannot be overlooked as areas of preferential attention. These are the support to thecooperativesofMONDRAGONandthecontributiontothepromotionoftheBasquelanguage.Weunderstandthatonereasonforthelowdemandexpressedforbothelementsisthattheirexpectationsarealreadywellcovered,sothereisnoneedforadditionalinitiatives.
MaterialityMatrix2019Mater. Aspect
HIGH 6-Excellence in service quality: reduce errors and improve operations
12-Protection of privacy and operational and data security
MEDIUM-HIGH
1-Strengthen the solvency and liquidity of the Entity
16-Promotion of equality between women and men
9- CSR measures: against money laundering, control of financing to arms, gambling,pornography,...
11- People management: gender equality, conciliation, salary levels and intervals, etc.
5- Responsible management with clients: explanation and sale of complex savings products,avoid over-indebtedness of clients...
7-Development in the digitalisation of the channels (electronic, telephone, mobile banking)
18-Review and improve the internal control mechanisms (administrative decisions, moneylaundering, ethical code, corruption, cost control).
MEDIUM
15- Environmental management: recycling, reduction of consumption and waste, selectivecollection...
3- Contribution to the economic and financial development of the business fabric: Businessfinancing agreements, support for entrepreneurs, University...
10-Socially responsible products and services
13-Improve communication with our clients and other stakeholders
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21- Control of the responsible performance of our suppliers: working conditions, occupationalhazards, payments to the Tax Office...
23- Supplier Management. Responsible purchasing criteria: local purchasing and taking intoaccount social and environmental criteria as well as the price.
8-Reduction of the emission of greenhouse gases and carbon footprint
14- Fair balance in costs charged and interest paid. Mutual benefit.
MEDIUM-LOW
17- Social action: sponsorship, contributions to NGOs, social activities, developmentcooperation...
20-Flexibility in the recovery and refinancing of unpaid debts
LOW
22-Contribution to the Sustainable Development Goals (SDGs) of the 2030 Agenda of theUnited Nations.
2-Support the cooperatives of Mondragon
4-Contribute to the financial education of clients and society19-Promotion of the Basque language and culture, as well as promoting the use of the Basquelanguage in internal relations and with customers
2.6.UnitedNationsGlobalCompactandSustainableDevelopmentGoals(SDGs)
EachyearLABORALKutxahascarriedout,withinitsacquiredcommitment,astatementoftheannualprogressonthePrinciplesoftheGlobalCompact.Since2018,theprogressachievedontheSustainableDevelopmentGoals(SDGs)and,thisyear,ontheUNPrinciplesofResponsibleBankinghasbeenaddedtothisstatement.
ThemainaspectsthatLABORALKutxahasworkedonin2019,aswellasthedegreeofprogressmade, are setout in theCommitmentsandAchievements section in the secondpartof thisReport. Therefore, the following table analyses which of these aspects are in line with thePrinciples of the Global Compact, the Sustainable Development Goals and the Principles ofResponsibleBanking:
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CSRobjectivesandchallengesassumedinthe2019CSRReport
GlobalCompact SDGResponsible
BankingPrinciplesCarryoutthemergerofofficestoincreaseefficiencywhileavoidingthefinancialexclusionofsmallcommunities.
Principle1Objectives1,3and
8Principles1,2,3
and4DeploymentoftheIIIBerdintasunaPlan-EqualityanddevelopmentoftheIV.
Principles1and6 Objective5 Principles1and4
Useofdigitalisationtoreducepaperconsumptionandtocreateapersonaliseddistancerelationship
Principle9Objectives13and
15Principles1,2and
3Linguisticstandardisation:ImplementationoftheStrategicPlanfortheBasqueCountry2016-2019
Noprincipleapplies
Objective11 Principles1and4
Implementationofcontractingproceduresandsystemswithsuppliercompanies
Principles1to5Objectives1,3,5,6,8,10,12and16
Principles1,4,5and6
Developmentofthedigitalcompetencesoftheworkforce Principle9Objectives8,9and
12Principle4
Implementthehealthplan-Zainduzforallpeople. Principles1and8Objectives3,8,11,
12and17Principles1and4
Maintainpositionsofexcellenceinthemanagementofcustomerrelations
Principle1 Goal8 Principles3and6
Developmentofmanagementsystemsthatpromoteaconstructiveandcollaborativeculture,withself-responsibilityandcontinuouslearning
Principles1,6and10
Objectives5,8and17
Principles1,5and6
RenewalofEIFguaranteeagreementsformicrocreditsandinnovativecompanies
Principle1Objectives1,5,8,
9and10Principles1and3
Accompanimentto425entrepreneurstolaunchtheirmicroenterprise
Principle1Objectives1,5,8,
9and10Principles1,2and
3ImplementGreenMIFID Principles1to10 Allobjectives Principles3and6Developmentofmulti-channelcustomerrelations,paymentmethodsanddirectmarketing
Principle9Objectives8,9and
12Principle3
ContinuetoexpandthecoverageofSociallyResponsibleInvestment
Alltheprinciples AllobjectivesAllthe
BeginningSupportforthecreationofcompaniesandconsolidationofexistingonesthroughMONDRAGÓN
Principles1,3and6
Objectives5,8,9,10and16
Principles1and4
ImplementBIDEANandensureitssustainabilityPrinciples7,8and
9Objectives8,9and
12Principles4and5
Reviewofmarketabuseprocedures Principle10 Goal16 Principles5and6
Financialeducationplan. Principle1Objectives4,12
and17Principles1,3and
4
FormationoftheDataProtectionCommittee Principle1Objectives8,9,12
and16Allthe
Beginning
SustainableDevelopmentGoals(SDGs):OngoingactivitiesThemain actions that LABORAL Kutxa is developing andwhich are explained in this ReportlinkedtotheaspectsconsideredasprioritiesoftheSustainableDevelopmentGoals(SDGs)andtheUnitedNations2030Agendaaresummarisedbelow:• Obj. 5 Gender equality : Prepared the IV LK Equality Plan; Equality objectives of the
StrategicPlan.• Obj.8Decentworkandeconomicgrowth :Gaztenpresa;Recruitment tableandsupplier
managementapplication;ZainduzHealthPlan,FinancialEducation;Sustainablemobility.• Obj. 9 Industry, innovation and infrastructure : Different improvements in digitalisation;
PDSI-2;Dataprotectioncommittee.• Obj. 10 Reduction of inequalities: Green MiFID; Review of market abuse control
procedures;SociallyResponsibleInvestment.• Obj.17AlliancestoachievetheObjectives:Brandpositioning;RenewaloftheEIFInnovFin
andEaSISocialagreements;UNResponsibleBankingPrinciples.
MANAGEMENT OF STAKEHOLDERS
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3.1.Ourrelationshipwithclients
3.1.1.Managementapproach
ThepolicyoftheLABORALKutxaGroupinitsrelationshipwithcustomersandresponsibilityforproductshasbeenincludedinpreviousreportsandintheresponsiblemanagementapproach.The importancegiven to thisarea is reflected in theexistenceofaDepartmentwhosebasicfunction is the application of this approach. The clientele is segmented between Privateclients, Self-employed clients, Business clients and Company clients. There is a specificmanagement process for each of these segments and a commercial offer tailored to theirneedsandexpectations.
3.1.2.Maincustomerfigures
The following table shows the evolution of the Group's clientele. The database is updatedannually,whichmeansthatinactivecustomersareremovedfromthedatabase
GeographicAreaNumberofclients
%2018 2019
Araba 141,839 136,658 12.17Aragon,CataloniaandLaRioja 72,149 72,176 6.43AsturiasandCantabria 32,623 33,041 2.94Bizkaia 350,029 348,540 31.05CastilleandLeon 125,232 125,397 11.17Gipuzkoa 280,056 260,435 23.20Madrid 18,319 18,968 1.69Navarra 119,990 119,848 10.68Headquarters 7,568 7,585 0.68TotalKutxaLABOR 1,147,805 1,122,648 100%PrivateCustomers(%) 87.47% 87.14%AutonomousCustomers(%) 8.3% 8.5%BusinessCustomers(%) 3.27% 3.41%BusinessCustomers(%) 0.87% 0.95%
3.1.3.Dialoguewiththeclientele
As in previous years, in 2019 an effort has been made to maintain a dialogue with thecustomers in order to meet expectations and demands regarding financial and insuranceproductsinordertoundertakenewimprovementactions.Inaddition,thesemechanismsareintegratedintoacomprehensivequalityprocess,thepermanentobjectiveofwhichisthatthequalityofcustomerserviceandcare,inthevariousrelationshipchannels,bemaintainedasadifferentialadvantageovercompetitors.
Thefollowingdiagramdescribesthenumerouscommunicationmechanismsinplace:
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Theresultscomparedtootherbankingandinsurancecompetitorsarefavourable.Someofthemostrepresentativeareincludedinthefollowingtables.
Satisfactionofbankingcustomers(score1to10) 2018 2019Satisfactionamongpreferentialcustomers 7.24 7.21Recommendationlevel 6.97 7.01Source:TrackingstudyoftheimageandbrandofLABORALKutxa.TheareaistheBasqueCountryandNavarre.IkerfelComparativebenchmarkingwiththebankingsector.Potentialcustomers(score1to10)
2018Differentialwithsector.2018
2019Differentialwithsector.2019
SectoralObjectiveQualityStudy(EQUOS-Stiga) 7.59 +0.39 7.75 + 0.39Satisfactionofbankingcustomers(BMKSFIN–Stiga) 7.83 +0.38 7.73 + 0.25
LagunAro.BenchmarkingintheinsurancesectorSatisfactionofinsurancebrokers(score1to10)
2018 2019
Overallsatisfactionwiththecompany 8.1 7.4InsuranceMarket 8.1 7.3Source:ICEAcontinuoussatisfactionstudy.
LagunAroisthesecondentityinthestudyinnetrecommendationsinreportswithanNPSof26.5.
Based on these dialogue mechanisms and the expectations detected in the customers,improvementactionsarecarriedouttoincreasetheirsatisfactionwiththeservicereceived.LABORAL Kutxa Customer Service has responded since 1994 to the queries, complaints andclaimsthatclientsmake.Theactivity intheServicehasdecreasedby28.05%withrespecttothe previous year, mainly due to the lower number of complaints and claims related tomortgageloanformalisationexpensesandalsotothedecreaseinthecasesrelatedtobankingactivity.
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TheresultsofthisServiceare:CustomerService 2018 2019Numberofcasesopened 9,121 6,563Written:brochure/letter 7,456 5,228Internet/Telephone 1,240 972Publicbodies:OMIC/RegionalGovernments 336 341Others 89 22
Following preparation of the 2018 CSR Report, as has become customary in recent years, acommunicationcampaignwaslaunchedinwhichtheReport'sExecutiveSummarywassenttothemostcloselylinkedcustomers.Alongwiththisinformation,aquestionnairewasattached,by means of which those who wanted could contribute their opinion on Corporate SocialResponsibility. Four differentmailingswere sent: to company customers (6,755 customers),self-employed and micro-business customers (82,409), private individual customers fromPersonalBanking(14,684)andtoKIDEprivatecustomers(156,437).Intotal260,285customersofwhich30%readthemail.Intotaltherewere668responses.Themainresultsandconclusionsofthisdialogueprocessaredetailedbelow:WhenaskediftheircompanypreparesaCSRreport,23%currentlyprepareaCSRreport,27%plantodosoand50%sayitisnotamongtheirpriorities.
QuestionnaireNo.ofmailings
No.ofreplies
Assessment
2019 2019 2018 2019Companycustomers 6,755 43 7.4 7.8Self-employedandmicro-businesses 82,409 417 7.6 7.6PrivateindividualsfromPersonalBanking 14,684 45 8.7 8.7KIDEprivatecustomers 156,437 163 7.9 8.2Total 260,285 668 7.9 8,075
Whencompanyclientswereasked if theyproducedaCSRreport,23%currentlydidso,27%plannedtodosoand50%saiditwasnotamongtheirpriorities.
3.1.4.Responsiblemanagementwithcustomersandexcellenceinqualityofservice
Responsiblemanagementwith the LABORAL Kutxa customers focusesmainly on the sale ofcomplexsavingsproducts.Excellence inthequalityofserviceandcontactwiththecustomerareaspectsidentifiedasbeingofhighestimportanceinourmaterialitymatrix.ü In2019,financinghasbeenanareaofintensework.Specifically,inMay2019westarted
the accreditation process in the Law on Real Estate Credit Contracts (LCCI) and 1,589people have obtained the APT category required by the Bank of Spain (94% of thoseaffected).
ü In the same line of responsible management towards clients, in order to facilitatebusiness financing, a particularly relevant line of action is the collaboration with theEuropean Investment Fund (EIF) of the European Investment Bank (EIB). During 2019,three agreements have been in force whereby the EIF guarantees a part of the riskassumed by LABORAL Kutxa, so that the financing can be carried out under morefavourable price conditions and guarantees for those companies included in theagreements:
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o European Union Program for Employment and Social Innovation-EaSI, for jobcreation viamicrocredits up to€25,000, aimedat entrepreneurs. Signed in 2015foranamountof€75MandrenewedinMarch2018.
o InnovFin SME Guarantee Facility to facilitate innovation in SMEs and small andmedium capitalisation companies. Signed in 2016 for an amount of €100M andrenewedinJuly2018.
o Specific EaSI programme for the promotion of social economy companies.RenewedinOctober2019foranother2andahalfyears,andanamountof€50M,withtheamountoftheoperationsbeingabletoreachupto€500,000.
ü Coveringtheareasofcustomerrelationsmanagement(transparency,kindness,inquiryoftheneedsandactivelistening,clarityintheexplanations,...)andthatrelatedtocustomerserviceinaspectsofquality,personalservice,absenceoferrors,etc.,themostimportantinitiative is the “Integrated Quality Management Process”. A process that seeksexcellence in compliance with the measurement parameters of the external (towardscustomers)andinternal(fromtheCentralServicestoitsinternalcustomers,theBranches)service.
ü A key element in the quality of advice and relations is the speed of adaptation to theunstoppable digital transformation. An adequate user experience in a digital bankingworld requires a personalised, but omni-channel relationship between manager andclient, an objective that LABORAL Kutxa seeks with the deployment of theOnenak 4.0projectinitsoffices.
Inrelationtotransparencyandclarityofinformationü LABORALKutxahasbeenamemberofAutocontrolsince29July2008,anassociationwith
theobjectiveof contributing toadvertisingbeingaparticularlyuseful instrument in theeconomic process, ensuring respect for advertising ethics and the rights of consumers,withtheexclusionofthedefenceofpersonalinterests.In2019LABORALKutxamadethefollowingenquiriestoAutocontrol:
Preliminaryadvice 2018 2019Positive 319 370Withmodifications 52 126Negative 1 0TOTAL 372 496Professionalethicsconsultations 69 65
ü All the information onmain products/services (Savings, cards,Mortgages, Loans, Plans,Funds, Insurance,Services,Onlinebanking) ,aswellassocialnetworks (Blog,Facebook,Twitter,YouTube,etc.) isavailable fromthehomepageofourwebsiteLaborkutxa.com,aswellasontheLagunArowebsite.
Another area related to responsible management with customers is the problem of over-indebtedness.Itsimportanceaccordingtothematerialitymatrixhasbeenreduced,inparallelwith the improvement of the economic situation and the greater normalisation ofunemploymentrates.Givenitshighimpactonthepeopleaffected,butalsoinordertoensuretransparencyinanareathathasgeneratedasignificantsocialandmediaimpact,ouractionsin
40
relation to customerswithpaymentdifficulties,especiallyon theirmortgages, aredescribedbelow.Within the policy of personalised negotiation in cases where customers have difficulties inpayingfortheirhomes,thefirststepistoofferthecustomer(iftheymeettherequirements)theCodeofGoodPracticeswhichLABORALKutxa joined in2012,providingasecondchancemechanism,areductioninthefinancialburdenandothermeasures.Codeofgoodpractice 2018 2019
Applications 56 67Denied 44 53Approved 12 14
TheconditionssetoutinthisDecreehavebeenappliedtothe14approvedoperations,whichalsoincludetaxbenefits.Ofthese,12havebeensigned.
Therearealso31homesassigned,outofthe35available,totheSocialHousingFund.
The operations to which this Code does not apply, because they do not meet any of therequirements laid down by law, have followed the procedures and protocols of LABORALKutxa.These, inaddition to restructuringof thedebts, also includedation inpaymentasanalternativeforsharingthelossofvalueofthemortgagedproperty,aswellasagreementsfortheformerowner'srighttoremain,despitethejudicialawardingofthepropertytoLABORALKutxa.Notwithstanding thishigh levelofagreements, theBankhasbeenawarded39homes (26ofthemnon-habitual),insomecasesapplyingdationinpaymentagreementsandinothersasaresultofjudicialenforcement.Evenafterthecourtrulinginthelattercases,itmaybepossibleto apply for a stay of executionon the disposal of the former home. In 1 case, the right toremain in thepropertywas recognised in thecaseofapersonwhoceased tobe theowneraftertheenforcement.
FloorclausesIn January 2017, an extrajudicial procedurewas regulated to resolve claims related to floorclauses in mortgage contracts for home purchases. Based on consumer protection, theseclausesweredeclaredabusive,andthereforevoid,notinthemselves,butbecauseofthelackof transparency intheir inclusion incontracts.Thus,channelswereestablished,regulatedbyRDL 1/2017, to make it easier for customers to reach out-of-court settlements in order toeliminatetheeffectoftheseclauses.LABORAL Kutxa informed its customers of a voluntary claim systemprior to instituting legalproceedings.CustomerswhohavenotwantedtousethisadditionalsystemhavebeenabletogototheSAC,althoughthenumberhasbeensmall.Thecumulativevolumesofclaimsreceivedarethefollowing:Extrajudicialclaimsforfloorclauses.RDL1/2017 AsatDec2018 AsatDec2019
- Rejected(RDLnotapplicable) 1,008 1,089- Accepted 449 465- Denied 3,337 3,427- Beinghandled 25 24
TOTALincoming 4,819 5,005
41
ThemostfrequentreasonfordenyingtheclaimisthattheEntityconsidersittobeproventhatin thisparticularcase the transparencyrequirementsweremet.Ascanbeseen, in2019thenumberofclaimsreceivedwasmuchlowerthantheprevioustwoyears.
LABORALKutxaalsohasaregularpracticeofconsultingitscustomersonthedifferentaspectsofitsactivity.Withintheusualquestionnairetherearetwoquestionsdirectlyrelatedtotheirperception of LABORAL Kutxa as a socially responsible financial institution. In 2019, 2,400surveyswereconductedasking:whichorganisationsdoyouthinkstandout inthefieldof…?(Multipleandspontaneousanswers).Theresultwas:• With honest and responsible management, which can be trusted: 20% of respondents
nameLABORALKutxa.• Nationalentity,committedtosocietyandlocaldevelopment:35%.
CustomerService 2018 2019Totalcases 9,121 6,563NatureofthecasesComplaints 7,506 5,073Claims 1,286 1,319Consultations 5 13Suggestions 9 12Lettersofcongratulations/gratitude - 2Sundrypetitions,others 315 144
3.1.5.Protectionofprivacyandthesecurityofdataandoperations.
Personaldata.In compliance with Regulation 2016/679, dated 27 April 2016, regarding the protection ofnaturalpersons in relation to theprocessingofpersonaldataandwithOrganic Law3/2018,dated5December,ontheProtectionofPersonalData,LABORKutxamustapplyappropriatetechnicalandorganisationalmeasuresinordertoguaranteeandbeabletodemonstratethattheprocessingisinaccordancewithsuchregulations.To this end, LABORAL Kutxa has approved a "Personal Data Protection Manual" and hasappointed a Data Protection Officer in order to comply with the following data protectionprinciples,byvirtueofwhichpersonaldatamustbe:
a) treated in a lawful, honest and transparent manner in relation to the data subject(“lawfulness,honestyandtransparency”)
b) collected for specific, explicit and legitimate purposes, and not subsequentlyprocessedinamannerincompatiblewithsuchpurposes("limitationofpurpose")
c) appropriate,relevantandlimitedtowhat isnecessary inrelationtothepurposesforwhichtheyareprocessed("dataminimisation")
d) accurateand,wherenecessary,updated("accuracy")e) held in a form that permits identification of the data subjects for no longer than is
necessaryforthepurposesofprocessingthepersonaldata(“limitationofthestorageperiod”)
f) processed in a way that ensures adequate security of personal data, includingprotection against unauthorised or unlawful processing and accidental loss,destruction or damage, through the use of appropriate technical or organisationalmeasures(“integrityandconfidentiality”)
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For the implementation and continuous improvement of the obligations described above,LABORALKutxamustcarryoutabiannualexternalaudit.
ComprehensiveSecurityMasterPlan(PDSI)In 2019,we continuedandaddressednew security initiatives, included in theplan thatwasapprovedin2016.Duringtheyear,theEntity increaseditssecuritycapabilities intheareaofGovernance (dissemination of the Security Standards Body, continuous training activities incybersecurity,ongoingdevelopments in regulatorycompliance,etc.),Protection (developingits third partymanagementmodel, improving themanagement of privilegeduser identities,updatingguidestoimprovethesecuredevelopmentofsoftware,etc.),surveillance(SOC/SIEMservice,cyber-intelligence,hackingexercises,etc.)andResilience(updatingincidentresponseprocedures,implementingaBusinessContinuityManagementSystem,etc.)Inaddition,attheendoftheyear,LABORALKutxacarriedoutanewsecurityassessment inorder to evaluate its level of maturity based on a reference framework, with the aim ofidentifying its strengthsandweaknesses, comparing itwithother similarentitiesandhavingsufficient information to make decisions, so as to be able to define a new comprehensivesecurityplanforthenext3years,inlinewiththeentity'sstrategy.
3.1.6.Responsibleproductsandservices
Socialorsustainabilitycriteriaincreditpolicyarepresentinthefollowingproducts:§ Micro-loans:SeetheinformationregardingGaztenpresa.In2019theagreementwithEIF
(theEuropean InvestmentFund,anagencyof theEIB -European InvestmentBank)wasrenewed with the EaSI programme - European Programme for Employment and SocialInnovation.With the support of this European programme, the conditions required forbothentrepreneursandmicro-enterprisesarefurtherenhancedbyincreasingtheiraccesstomicro-credits.
§ Loans for social economy companies: Through the EASI line, providing loans and creditaccountsofupto€500,000tocompanieswithaturnoveroflessthan€30million.Intotal,LABORALKutxawillallocate50million.
§ Secured Cards: Cards that have favourable conditions such as Accident Insurance withLagunAroInsurance.FortheGoldcard,TravelassistancewithCaser.
§ Personalloans:Thereare0%APRloansforspecialsituationsandsalaryadvances.Thereare also loans aimed at young people to finance studies (material, tuition, etc.), forexample, in 2019, agreements with: AEK, University of Navarra, Public University ofNavarra,MONDRAGONUnib.andMONDRAGONLingua.
§ Agreements and Arrangements: with Erkide (financial advantages for its associatecooperative members), with FCTC (Catalan Federation of Workers' Cooperatives), withCEPESforthefinancingofcapitalcontributionsandfinancialadvantagesforcooperativemembers.
§ AgreementsandarrangementswithdifferentcompaniessuchasSEAEmpresasAlavesas,ELKARGIMutualGuaranteeSociety,LUZAROFinancialCreditEstablishmentandSENDOTU.
Index
43
AgreementsandpartnershipswithPublicAuthoritiesAshasbeenexplainedthroughoutthisReport,LABORALKutxaactivelyworkswiththevariousPublic Authorities to open up lines of financing under preferential conditions forentrepreneurs,self-employedpeopleandcompanies,orfortherefurbishmentofhomes,orbyprovidingfinancetoSMEsunderbetterconditionsthroughagreementsorlinesofcreditwithvariousMutualGuaranteeSocieties(MGS).Someofthemcanbeseenonourwebsite:• Forcompanies:https://www.laboralkutxa.com/es/empresas/financiacion/convenios• Businessandprofessionals:https://www.laboralkutxa.com/es/pro-negocios-y-
profesionales/financiacion/convenios• Socialeconomycompanies:
https://www.laboralkutxa.com/es/empresas/financiacion/convenios/easi-economia-social
• Subsidies: https://www.laboralkutxa.com/es/pro-negocios-y-profesionales/apoyos-para-tu-negocio/convenios
AffinitycardsLABORALKutxaassignsaportionoftheincomeobtainedfromtheusemadebycustomersofAffinitycards for theirpurchases, to:MedicusMundi,CaritasandtheConfederationofIkastolas.Theamountoftheyearlyassignmentis:- Foreachcardholderattheendoftheyear:2.5euro/year- 1euro/yearpercardbeneficiary.- Forpurchaseinvoices:20%oftheprofitsobtained.
AmountdonatedforAFINITYCards 2018 2019Totalinvoices(euros) 45,908,906 46,256,939Channelledsocialbenefit(euros) 53,117 52,670
• MedicusMundi 23,743 23,494• Caritas 3,324 3,311• Ikastolak 26,050 25,864
DonationsforinternationalcooperationprojectsThe LABORALKutxa Super55Passbookhas apoints*programme, for incomeandbalances,that customers canexchange forgiftsordonations forprojects indevelopingcountries.Theprojectsandamountsassignedarethefollowing:
Amountdonatedbycustomers(euros)perproject 2018 2019Zaporeak. Project: "Help in the field of nutrition". Cooking and hospitality school in theEthiopiantownofWukroandthefeedingofrefugeesontheGreekislandofChios. 2,606 3,572
MundukideFundazioa.Project:“Openthetap.Mozambiqueneedsmotorisedpumpsforirrigation.” 2,530 4,436
Mundubat."SupportfortherighttohealthoftheSaharawipeople." 3,619 -Savethechildren.Project:“Investineducationtofightchildpoverty” 5,564 -Alboan. Project: "Against discrimination and exclusion in India". Implementation ofprojectsthatpromotethedefenceofrightsandaccesstoeducationfortheDalitpeople. - 3,283
Medicus Mundi. Project: "Promoting sexual and reproductive rights." Supportprogrammes, inPeruandtheD.R.oftheCongo,thatpromotegenuineequalitybetweenmenandwomen,sexeducationandthecommitmentofpublicinstitutionstotheserights.
- 2,543
Totalamount(withVATincluded)donated 14,319 13,834
44
NGOinsuranceLABORALKutxahas an Insurance aimedexclusively atNGOs that provides cover and specialconditionstotheseorganisationsviatwopolicies:
§ Accident policy. It covers volunteers for accidents occurring during the exercise of theNGO'sownactivities,includingtherisk"initinere"(necessarytravel).
§ Civil liabilitypolicy. It covers claims fordamages to thirdpartiesor toproperty thatdoesnot belong to the organisation, resulting from the usual activities carried out by thevolunteers.In2019,theinsurancecovered46associations,with725insuredparties.
Supportforthecreationofacompanycompanies.MondragonGroupApartfromfinancingthroughcreditinvestment,LABORALKutxasupportsthedevelopmentofMondragoncooperativesthroughthecontributionoffundsfromtheirprofits,withtheaimofcreatingnewjobsandconsolidatingexistingones.Thesecontributionsaremadeto:§ MONDRAGÓN Inversiones, which is in charge of partially financing Cooperative
developmentprojects,bothinSpainandabroad.§ MONDRAGONS.COOP.,CorporateGroupCentre.§ MONDRAGONFoundation,inorderto,amongotherdestinations,financethedevelopment
ofthe15researchcentrespromotedbytheCooperatives.
§ MondragonGroupContributionsThousandsofEuros 2018 2019ContributiontoMONDRAGONInvestments 6,014 6,639ContributiontoMONDRAGONS.Coop. 4,338 4,429ContributiontoMONDRAGONFoundation 9,708 10,718Totalcontributions 20,060 21,786InvestmentinMONDRAGONCompanies(1) 702,020 608,000(1) Theinvestmentincludedis:Current,StructuralandFirm.
SociallyresponsibleinvestmentSociallyresponsible investment(SRI) isonethatappliesEnvironmental,Social andcorporateGovernancecriteria(ESGcriteria)whenselectinginvestmentorfinancingprojects.2019wasayear inwhichSRIgainedgreatstrengthwithin the financial sector,withnumerous initiativesandproposalsformakingprogress,bothfromtheindustryandfromregulators.
LABORALKutxahasbeenworkinginthisfieldforanumberofyears,withexclusioncriteriainplacetopreventinvestmentorfundingofactivitiesthatarecontrarytoourprinciples.Theseexclusioncriteriaaffectaspectssuchasgambling,pornography,tobacco,weapons,coal…
As part of the Strategic Plan developed in 2019 for 2020-2022, an objective has beenestablished to apply SRI criteria to 100%of the assetsmanagedby the Fund/PlanManager,Treasuryandintheconcessionofrisks.Inthesameway,theaimistoadvanceanddeepenthecriteriaapplied,movingfromthecurrentexclusioncriteriatoothermoreadvancedconcepts.
In 2019, the responsible Investment Fund, LABORAL Kutxa Konpromiso, FI, wasmaintained,withanethicalandcharitableapproach,sinceitsinvestmentsapplycontrolsbymeasuringtheapplication of environmental, social and good corporate governance criteria. It is charitablebecause LABORAL Kutxa channels a significant part of the management fee it charges itscustomerstothreeNGOsfromamongwhichthecustomercanchoose.
45
Contributions 2018 2019MEDICOSMUNDI €11,866.33 18,533.45MUNDUKIDE €8,883.89 14,490.74CARITAS €8,566.60 €11,130.57TOTAL €29,316.82 €44,154.77
Meanwhile, in theareaof corporate investment,both in thatmanagedby theTreasuryandCapital Markets Department and in that administered by Pension and Investment FundManagers,weareincorporatingnon-financialinformationintotheprocessesofselectingassetissuersinwhichtoinvest.
Thirdly,inrelationtocreditinvestmentincompanies,since2017therehasbeenaprocedurefor requiring additional non-financial information fromcompanies identified ashaving socialrisks,thusextendingthesystempreviouslyappliedtopotentiallyproblematiccompaniesfroman environmental point of view. In 2018 it was decided to reduce the financing to 1 clientcompanythatworksinthefieldofonlinegambling.
EnvironmentallyresponsibleproductsandservicesLABORALKutxa,asafinancialentityfocusedonaspecificgeographicalarea,doesnotforeseesignificantimpactsfortheorganisation,eitherrisksoropportunities,intheshorttermduetoclimatechange.Also,inaccordancewithitsstrategyofcontributingtoabetterenvironment,ithasproductsandservicestohelpslowdownclimatechange.
ElectroniccustomerdeliveryserviceTheLABORALKutxaPosta-mailforsendingstatementsandreceiptstocustomersbye-mailcontinuestogrowsignificantly,helpingtoreducepaperconsumption.Theannualobjectiveisalwaystoincreasethenumberofusersfromthepreviousyearand,tothisend,theNetworkconstantlyexplainsthisservice.ThesectiononOurrelationshipwiththeenvironmentinthisReportshowsthetrendinthenumberand%ofusers.
46
CreditsforrenewableenergiesLABORALKutxaisafinancialentityanditsactivityhasnodirectorsignificantrelationshipwithclimatechange.Companyfinancingorgrantingofcreditsinthefieldofrenewableenergiesorsimilarhasevolvedasfollows:
2018 2019
Loansprovided(thousandsof€) 18,412 20,616
Accessibilitytofinancialservices
SmalltownsDuring the rationalisation process of the commercial network that has been carried out inrecentyearsinresponsetothenewchallengesofthefinancialsector,aneffortisbeingmadeto not financially exclude places with relatively small populations. The aim is to not ceaseservingthoseruralorsparselypopulatedareaswherewehavebeenpresentformanyyears.Therefore, the closure of offices is avoided, despite their reduced profitability, byimplementingmeasuressuchasopeningoncertaindaysoftheweek.
ArchitecturalbarriersInalltheinterventionprojectsundertakeninoffices,theobjectiveistoimproveaccessibility,intermsofbothaccessandinterior layout.Thiseliminatesexistingarchitecturalbarriersandcomplieswith the Accessibility Standard. As these actions have been taking place formanyyears, therearecurrentlyvery fewworkplaces thathaveaccessibilityproblems. In2019, therenovationworkstartedattheHondarribiaoffice.
Accessviainternetandmobilephone.Multi-channelbankingDevelopmentsin2019:• Improvement/expansionofPOSinformationinonlinebanking.• Newonlineportal fortheself-employed:Portalwithexclusiveservices forself-employed
workers,groupedunderasinglesection.• Insurance:
o Pre-priced home insurance: The client receives the price of the home insurance, byprovidingthepostaladdressandthesquaremetersregistered.
o Lagun Aro Postanet: Communications from Lagun Aro Insurance are listed in thecorrespondencesectionoftheOnlineBankingplatform.
o InsurancePostamail:Westartedsendinginsurancecommunicationsbyemail.o Home,businessandcarinsuranceclaimsportal:optiontomanageandtrackprogress
throughSMSmessages.Pushandonlinebanking.• Contractingofretirement/pensionplansinonlinebanking.• Newoptiontotemporarilyactivateanddeactivatethecards.• LKpay. Complete change of design and biometric access with fingerprint and facial
recognition.• Multi-channel signature:Possibilityof initiating thecontractingofa currentaccountata
branchanddeferringthesignatureoftheparticipantstootherbranchesortotheOnlineBankingplatform.
• Contact themanager: This operation allows you to contact themanager from the newOnlineBankingplatform,senddocumentstobesigned,makevideocallsorwrite.
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• Change of signature system for private individuals and self-employed workers: The themethod for signing and accessing online banking has been changed due to PSD2.SignaturesarecompletedbymeansofanSMSsenttothecustomer'smobilephone.Also,inorder to gain access, every90days the customer is asked toenter the codes sentbySMS.
• Alerts.Noticeofaregularcontributiontoaplannotmadeduetolackofbalance.
FinancialcultureLABORAL Kutxa has continued to use social networks to create financial culture and boostknowledge regarding cooperativism. For example, 67 articles of general interest have beenincludedintheEntity'sblog(blog.LABORALkutxa.com),21ofwhichhavefocusedonhelpingtoimprovethecultureandknowledgeofcurrentfinancialaffairs.Inthisway,withasimpleandaccessible format, contents of financial culture are alternated with others more related tosocialresponsibility,suchas:ethicalfinances,insuranceobligations,taxnews,howtosetupacompany,etc.
During 2019, a Pro Newsletter has been sent four times (March, May, October andNovember). This is an information bulletin in electronic format for Pro and micro-businessclientsintheBasqueAutonomousCommunityandNavarre(morethan60,000).Thisactionispartof theConsultingPro freeguidanceservicetoassistclients in themanagementof theirbusiness, offering information of special interest (grants and subsidies, tax and legal news,salestechniques,etc.)fortheself-employedandotherprofessionals.ThisNewsletterhighlightssomeofthemostrelevantandrecentcontentoftheConsultingProwebsite, which offers content such as news, articles of interest, management tools, andinformationonevents,grantsandsubsidies...952querieshavebeenansweredbytheConsultingProservicein2019,madeeitherinperson,bytelephone(freehotline900100240),orthroughtheformavailableonthewebsite.Pro Seminars are training actions aimed at owners of SMEs and the self-employed. 16seminarswereheld in2019.Themainoneswereheld in thecapitalsof theBasqueCountryandNavarra.Thetopicscoveredwere:• April: What does it mean to be part of the Self-Employed Social Security Regime?
practicalmatters(239attendees/4sessions)• June:Grantsandsubsidiesfortheself-employedandsmallbusinesses(150attendees/
4sessions).• October: Enhance your company's communication with LinkedIn (138 attendees / 4
sessions).• December:Understandthetaxesyoupayandplanforthelatestincometaxrulings(126
attendees/4sessions).Another four seminarswereheld inPamplonaand the surroundingareawithNavarra tradeassociations,attendedby50people,bringingthetotalnumberofpeopleattendingseminarsin2019to853.
• Sakana Merchants Association - Etxarri Town Council: “How to ensure your onlinepresencewithoutdyingintheprocess”
• AssociationofCommerce,Hotel&CateringandServiceBusinessesfromthePamplonaarea-DesignThinkingWorkshop
• AnsoainMerchantsAssociation-Windowdressingforretailers
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A video is prepared on a monthly basis (in collaboration with AFI, International FinancialAnalysts) on the economic climate and the situation of the financial markets. This video isemailedtothePersonalandPremiumBankingcustomersanduploadedtoCLNet.
SupportforinternationalisationThroughout 2018, as part of LABORAL Kutxa's strategy of providing a global service to itscorporatecustomersandsupporting them in their search fornewmarkets, the internationalagreementssignedinrecentyearshavebeencontinuedwithaviewtoprovidingaservicetocustomers.TheagreementsweremainlysignedwithcooperativeorganisationsthatsharethephilosophyofLABORALKutxa:- NationalCooperativeBank(USA).- CréditCoopératif(France).- RaiffeisenBankInternational(Austria).- Banorte(Mexico).- BMCEBanqueMarocainedeCommerceextérieur
3.2.Ourrelationshipwiththeworkforce
3.2.1.Managementapproach
In relationtothedirectactivityofLABORALKutxawithrespect to itsownworkers, the legalstatusofco-operativeisanambitiousdevelopmentoftheinspiringprinciplesoftheUniversalDeclarationofHumanRights,namelythatallhumanbeingsareequalindignityandinrights.Indeed, the co-operative method implies that the people who work in the company arepartners with equal rights and obligations, regardless of their knowledge or status in thehierarchy.Requiringallpeopletosharerightsandobligations,astheyallshareintherisksandrewardsofthebusiness.The concept of cooperation also extends to a commitment to our society. We are aCooperative Bank, guided by values and a philosophy that lead us to prioritise the commoninterest over the individual, tomake decisions in a participative and responsibleway and toreinvestourprofitsinsociety.
In theareaofpeople, themost significant risks linked tonon-compliancewithhuman rightsarerelatedtocorruptionandharassmentatwork.
• Withrespecttocorruption,seeCorporateGovernanceinSection1.• Withregardtoharassmentintheworkplace,itshouldbenotedthatthisisaproblem
witha lowquantitative incidence,butapotentiallyseriouseffectonthepeoplewhomightbeinvolvedinasituationofthiskind.Intheprocedures,thereisaProtocolforaction in cases of harassment at work, updated on 31/01/2015. The organisationincorporatesanInvestigationCommittee,whichhasaspecificcomplaintschannel.Thisprotocol includes situations of sexual and gender harassment (known as mobbing).There have been no complaints or enquiries in 2019 and 2018 concerning theaforementionedcomplaintschannel.
Thefinancialactivitywecarryout,thegeographicalscopeofouractivitiesandtheownershipstructure make it impossible for threats of violation of the provisions of the fundamentalconventionsoftheInternationalLabourOrganisationtooccur.
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LagunAroalsohasaprocedureformanagingconflict,harassmentandviolenceatwork.Therehavebeenno complaintsunder thisProcedure. TheProtocol against sexualharassmentandharassment based on sex in the workplace has been defined and approved within theframeworkofthe2ndEqualityPlan.
3.2.2.Mainmagnitudesoftheworkforce
Indicators concerning the people in the Group, both overall and according to differentcategories(gender,age,etc.)areavailableinsection4.Othermagnitudes.
3.2.3.Dialoguewiththeworkforce
Asacreditcooperative,therearemanychannelsfordialoguewithpeople:ü TheInternalCustomerSatisfactionSurvey(ESCI)wascarriedoutsothatthebusiness
network could assess the quality of the services provided by Central Services,makesuggestionsfor improvementandprovideanycommentsitdeemedappropriate.Thequestionnairewas sent to516peopleand therewasa response rateof61.8%.Asaresult of the quantitative and qualitative assessments obtained from the survey,numerousimprovementmeasureshavebeenimplemented.
ü Internal Suggestions System. From 2017 to the end of 2019, 1,038 employeecontributionswerereceived,ofwhich126(12.14%)wereimplemented.
ü Participationanddecision-makingcapacityinthebasicgoverningbodies:OrdinaryandExtraordinaryMeetingsandGoverningBoard,andinthepreparationofStrategicandManagementPlans.
ü Activity of the Social Council, with extensive negotiation and decision-makingcapacities.
ü An appearance by the Chairperson and the Director-General before everyone ingeographical groups, in order to share the assessment of the situation and themeasures being taken. Here, everybody can intervene by making comments orrequestingtheclarificationstheyconsiderappropriate.
ü Staff meeting system: "Giltza-Collaborators Meeting" between managers and theirteams.
CollectivenegotiationThe Cooperative Credit Union Collective Bargaining Agreement is the general framework ofreference, although, in 1996 LABORAL Kutxa adopted a standard for Company CollectiveBargaining,throughwhichaspecificCollectiveBargainingmodelwasestablished.
CollectivebargainingistheprocessbywhichtheemploymentandworkingconditionsofallthepeopleinLABORALKutxa(partnersandemployees)andthecompanyguaranteesthatensureitsapplicationareestablished.Theresultofthisprocessisthesetofrulesandproceduresthatregulatethegeneralconditionsofworkof100%ofthepeopleatLABORALKutxaandbindtheparties(theBoardofDirectorsandtheSocialCouncil)andallpersons.
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Inadditiontotheusualmattersconcerningcompensationforexpenses,schedules,etc.,whicharenegotiatedeachyear,agreementshavebeenreachedin2019onthefollowingmatters:
• Paidandunpaidleave.• Socialbenefits
Likeeveryyear,attheendoftheannualnegotiationprocess,bothpartiesexchangedthelistofpointstobenegotiatedin2020.
Seguros LagunAromaintains a close relationshipwith the Legal Representation ofWorkers(R.L.T.) with whom the Company Statutory Agreement is negotiated. In 2018, a newagreementwassignedforthefour-yearperiod2018-2021thatcovers100%oftheworkforce.
WithregardtothestaffofCajaLaboralBancasegurosS.L.U(CLBS,acompanywhichiswhollyownedandoperatedbyLABORALKutxa),allofwhomareemployees,theworkingconditionsaresetoutinitsowncollectiveagreement,whichwasrenewedin2016,andingenerallabourlegislation. This agreement,which governs the professional and labour aspects that directlyaffectthegroupofworkers,hasasignificantlevelofconvergencewiththelabourregulationsandproceduresofLABORALKutxa.
3.2.4.StaffDevelopment
Throughout this financial year, we at LABORAL Kutxa have implemented the followingfundamentalactionsinrelationtopeople:• InMay2019webegantheaccreditationprocessinaccordancewiththeRealEstateCredit
ContractLaw(LCCI)and1,589peopleobtainedtheAPTrequiredbytheBankofSpain(94%oftheaffectedstaff),onceagainprovingthecommitmentandknow-howofthepeopleatLABORALKutxa.
• Launch of BIDEAN, the new system for personal development, which seeks continuousimprovement through the reviewof a series of professional, business and digital skills, acultureofcontinuousfeedbackandthedefinitionofqualityIndividualDevelopmentPlans.BIDEANhasinitiatedaprocessofculturalchangeatLABORALKutxathatistransformingthewaypeopledevelop.Bearinginmindthatthisisthefirstimplementation,theassessmentisvery favourable in relation to thedevelopment interviewsheldand theagreed IndividualDevelopmentPlans,aswellaswithregardtotheirmonitoring.
• BetweenAprilandNovember,thefirsteditionoftheLKBusinessDataAnalyticsprogrammewas developedwith the end purpose of providing participantswith new knowledge andskillsinrelationtodata-basedmanagement.o We have worked on the "What", based on the Data Life Cycle, the "Hows", using
techniquesandtoolssuchasMicrostrategyandSAS,butwithaclearframeworkofthe"What for", strongly focused on generating business opportunitieswith and from thedataandforwhichwehavebroughtinhigh-levelexternalspeakers.
In parallel to the sessions on "discovery", concepts and tools, the knowledge acquiredthroughthegroupcompletionofthreerealprojectshasbeenputintopractice.Theprogrammehasbeenverypositivelyrated.Theacademicdirectionoftheprogrammeand the hybrid approach of external and internal speakers, as well as its applicability.Nevertheless,theeditionwewilllaunchin2020willincludesomeimprovements.
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• WehaveincorporatedasignificantpartofthestaffofCajaLaboralBancaseguros-CLBSintothecompany,andhaveimplementedthecorrespondingcorporateintegrationplan.
• Definition and launch of the ZAINDUZ programme, a Health Management Plan with apreventive approach, which seeks to raise awareness throughout the organisation andpromoteaculturalchange,providingmanagementtoolsandactionprotocols.
• Within the framework of Financial Education aimed at promoting a financial culture insociety, we have launched various initiatives to improve the understanding of financialproducts and to develop decision-making skills. Special mention should be made of thedesign of the Financial Education skills for first-year baccalaureate students and the"inclusivefinance"courseforthemostdisadvantagedgroups.
• Lastly,withinthedefinitionframeworkoftheEntity'sStrategicPlanfor2020-22,inwhichthe transformative role also encompasses the area of people management, we havedeveloped the "Culture and Talent" programme, which introduces new perspectivesbeyondthemanagementoftheprocessestraditionallyassignedtotherole.Thegoalistoprovide a differential positioning for customers and society through committed peopleandleaderswiththeskillsrequiredintoday'stransformationalenvironment.
Inallthecompaniesinthegroup,theorganisationofworkislimitedtonormalofficehours.
ContinuousEducationProgrammesTrainingactivityatLABORALKutxain2019consistedof456coursesand168,298hours(81.38perperson).Ofthese,88,185hours(52%)wereforwomenand80,113hours(48%)wereformen, compared to 54/46% in 2018. The average score for the training courses in 2019was7.94,whilein2018itwas7.96.
FollowingthepublicationinMarchofLaw5/2019,governingrealestatecreditcontracts,andsubsequentlyinApriloftheRoyalDecreeandMinisterialOrderspecifyingtheknowledgeandskillsrequiredbytheregulatoryauthorities,inJulytheprocessbeganfortheaccreditationofpeoplewho design, inform and commercialise real estate credit products. This is a 50-hourtrainingprocessthatconcludeswithanassessmenttest(exam).
The accreditation of the people affected by this regulation has been carried out on 4occasions: July,October,November andDecember. At the endof the year,we reachedourgoaland99.6%ofthepeoplewhoappliedfortheaccreditationobtainedit.
Furthermore,thegenerallinesfollowedbytrainingmanagementduring2019havebeen:• MiFIDII:Continuoustrainingrequiredbyregulatorsconsistingof30hoursoftraining
perperson.• Insurance, including the training provided for in the Management Plan and that
included in the InsuranceTxokowhichcounts towardsmeeting the triennial traininghoursrequiredbytheInsuranceMediationAct.
• ThetrainingincludedinBIDEAN-PerformanceManagement.• Digitalisation, with a specific programme developedwithMondragon Unibertsitatea
aimedatallADNstaffandconsistingof3modulesThefirstmoduleistheonecarriedoutin2019.Therestwilltakeplaceduring2020.
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Newcommercialmodel-Onenak4.0In 2019, the new model of commercial excellence was deployed throughout the entirecommercial network. Onenak 4.0 aims to expand commercial capacity on the network,evolving the roles and skills of individuals and commercial teams, and empowering them intheiractivity. Inaddition, it seeks toguide theprioritiesof thecommercialnetwork towardsmanagementandoperationsofgreateraddedvalueandtoadaptourrelationalbankingmodeltothedigitalworldandthenewcompetitiveenvironment.TheobjectivesofOnenak4.0canbeoutlinedinfivemaingoals:
1. Totakeadvantageoftheopportunitiesthatdigitalisationofferstobetterunderstandthecustomers'needs.
2. Toredefinetherolesofpeopleandchannelsincustomerrelations.3. Togearthecommercialstrategymoretowardscustomerloyalty.4. Toadaptour relationalbankingmodel todigitalisationand increase theefficiencyof
theplanningaspect.5. Tooptimisemanagementsystemsinordertodrivetransformationandpreparepeople
intheorganisationbydevelopingtheirskillsandcompetencessotheycanrespondtonewchallenges.
Performancemanagement-BideanIn 2019, a new system, called BIDEAN, was launched to manage personal development. Itconsists of a system focused on people and their development, encouraging them to beadaptable,withinitiativeandcapableofconstantlearning,aswellasacultureofself-demand,co-responsibility and collaborative work. It is the evolution of the old PerformanceManagement System (SGD), aligned with business strategy, organisational culture andtransformation.Thissystemhasbeendesignedbasedonthefollowingpillars:• Itisasystemgearedtowardspeopleandtheirdevelopment,• It focusesonongoingconversationsbetweenmanagementandemployees,encouraging
continuousfeedback,• Itpivotsonstrengthsandisfuture-oriented,• Itembodiesacontinuouslearningandself-learningdynamic,• It is agile, simple and flexible, geared towards self-management and co-responsibility,
whichmeansthatwearethemainactorsandresponsibleforourowndevelopment.A systemthatwillmake itpossible to identifyorganisationalpotential, creatinga contextofempowerment and development that contributes to the fulfilment of LABORAL Kutxa'sstrategyandtopeople'ssatisfactionandcommitment.Theimplementationofthisnewsystementailsthedevelopmentofnewknowledgeandskills,and for this purpose, we have designed a specific training plan, which has been deployedacrosstheorganisationthroughouttheyear.
67% of people at LABORAL Kutxa and CLBS have had a development interview with theirmanagerin2019.ThesystemwillbeimplementedinLagunAroin2020.
Traininginanti-corruptionprocedures.All manuals and procedures relating to anti-corruption issues and the code of conduct arepostedontheintranetandavailableto100%ofstaff.
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Similarly, in 2016, the training course "Systems and policies for the prevention of criminalbehaviour"waslaunchedandithasbeencompletedby80.9%ofthestaff.
BasqueThe process of preparing the Basque Strategic Plan, approved by the Board of Directors inJanuary2020,consistedofthefollowingstages:
ü Listeningstage.ü Creationstage.ü Sharingstage.ü Communicationstage.
The people who make up the Language Commission, the Basque Language TechnicalCommission and the process Coordination Group have all participated throughout thedifferentstages. Inaddition,110membersand910clientshavegiventheirhelpandopinionthroughtwosurveys.Therefore,ithasbeenahighlyparticipatoryandcollaborativeprocess.Theapproveddocumentcontains2areasofworkand5mainchallenges:• SERVICELANGUAGE
o 1. To guarantee and encourage the use of the Basque language in the service tocustomers.
o 2.ToshowthattheEntityiscommittedtotheBasquelanguage.• WORKLANGUAGE
o 3.TointegrateBasqueintothedynamicsoftheorganisation.o 4.Toincreasetheworkers'knowledgeoftheBasquelanguage.o 5.ToincreasetheinternaluseofBasque.
Inaddition,withaviewtothecomingyears,thefollowingVISIONhasbeenestablishedwithregard todeveloping theBasque language in our Entity: "May LABORALKutxabe aBasque-speakingentityofreferenceintheBasqueCountry".
3.2.5.Diversityandequalopportunities
LABORAL Kutxa has been and continues to be a pioneering organisation and a point ofreference in thedesign and implementationof activepolicies in favourof equality betweenwomenandmen;anexampleofitscommitmenttocooperativevaluesandthepromotionofequalopportunitiesforall.Wehavebeen committed to equality formore than twodecades. In 1997weobtained thedistinctionofEmakundeCollaboratingEntity,theBasqueInstituteforWomen,thusbecomingthefirstfinancialentitytoachievesuchrecognition.Over all these years, in addition to creating a stable structure for thepromotionof equalitypolicies and activating variouswork groups to address specific issues, we havemanaged toincorporate equality into the entity's strategy, making it a topic that is included in theManagement'sagenda,andwehavethenecessaryeconomicresourcestobeabletodevelopthepoliciesandactivitiesthathavebeendefinedintheEqualityPlansthatwehavedesignedandimplementedcontinuallyinrecentyears.Thankstotheworkcarriedout,anequalrepresentationinboththeGoverningBoardandtheSocialCouncilisnowareality.Asforprivateindividualsofficemanagers,53%intheNafarroanetworkand50%intheGipuzkoanetworkarewomen.
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However, we still have work to do and there are still great challenges to be faced. Ourambition is to achieve a greater presence of women in leadership positions and decision-making areas, and to move towards a shared leadership model that includes the genderperspective. A model in which the traits and behaviours most associated with femininityacquiregreaterrelevance,whethertheyareexercisedbywomenornot.Inshort,wewanttotakeadvantageofalltheexistingtalentintheEntity,withoutgenderbeinganobstacle.
Inordertoachievethisgoal,wehavedevelopedvariousinitiativesthroughout2019.• Firstly,whenthetermoftheIIIEqualityPlancametoanendlastyear,weworkedonthe
designoftheIVPlanfortheEqualityofWomenandMen.Forthis,westartedbyassessingthelevelofcomplianceandeffectivenessoftheIIIEqualityPlanandthenwecarriedoutthe diagnosticwork. In our approach,we considered both the quantitative informationavailable in the organisation and the qualitative information obtained through thequestionnaire distributed to all employees, in which we surveyed the perception thatpeople in the organisation had of the situation of equality at LABORAL Kutxa. Thisquestionnaire also contributed to raising people's awareness regarding equality issues.Basedontheresultsofthediagnosticworkcarriedoutandthecontributionsreceived,weproceededtodesigntheIVPlanforEquality(2020-2022).
• Secondly,withintheframeworkoftheprojectTowardsshared leadership,weorganisedthree new editions of the School of Empowerment aimed at the women of theOrganisation. This workshop seeks to contribute to the personal transformation of theparticipantsand isdesignedto improvewomen'sperceptionof their leadershipabilitiesandtogeneratecriticalawarenessofgenderrolesandstereotypes.ThesessionswereledbyMaru Sarasola, a leadership expert and coach. In total 40women tookpart and thelevelofsatisfactionwasveryhigh,soin2020weplantoorganisemoreeditions.
• Inaddition,we launchedtheawarenessworkshopformen. Inspringwecarriedoutthepilottestoftheworkshop,withtheinvolvementofLehendakariJuanJoséIbarretxe,andwithwhatwe learned, in autumnwe organised the first edition of theworkshop, alsodirectedbyMaruSarasola.Throughtheworkshopweaimedtoshowtheconnectionsthatexistbetweenthenewstyleofleadershipthatwearepromotingandgenderequality;tostressthevalueof"soft"skillsandgivethemmeaning(activelistening,empathy,capacitytobuildrelationshipsandconnections,etc.);andtoraiseawarenessofthedifference inopportunitiesthatexistbetweenwomenandmentoaccessmanagementpositionsintheentity. A total of 31 men took part in the workshops and rated the initiative veryfavourably,sowewillcontinuewiththeseawareness-raisingsessionsin2020.
• With regard to external dissemination and communication, we developed variousinitiativestopublicisetheworkwearedoinginthefieldofequality.Forexample,wetookpart intheconferenceorganisedbytheLabourInspectorateoftheBasqueAutonomousCommunity on Public control of gender-based wage discrimination; we explained theproject Towards shared leadership in the magazine TULankide; and we took part inEmakunde's BaiSarea network, together with other organisations identified asCollaboratingEntities,sharinggoodpracticesinequalityandlearningtogether.
In addition,we have continued to sponsor various initiatives to encourage the participationandempowermentofwomen,suchastheEuskadiFoundation,EmakumeMasterCup,Lilatón,etc.
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Wemust also highlight the fact that the Provincial Council of Gipuzkoa organised an awardaimed at local companies called Experiencias para la Igualdad de Mujeres y Hombres(Experiences for the Equality of Women and Men) for the first time, and that the workpresentedbyLABORALKutxawasawardedthefirstprizeattheendof2018.Themainpurposeof theaward is to recognise theactions carriedout in favourofequalityandco-responsiblework-lifebalance.WeareawareoftheinfluencethattheEntity'swayshaveontheregionandweareconvincedthatwecanbeadrivingforceforsocialtransformation.Therefore,inthecomingyearswewillcontinuetopromoteinitiativesinfavourofequalityanddiversity.
The Entity meets the requirements regarding diversity policies in compliance with theguidelines and regulations on the assessment of the suitability of the members of thegoverningbodyandtheholdersofkeyfunctions,consideringaspectssuchasacademicprofile,professional profile, gender and age in the Policy for the Selection of Candidates for theGoverningBoardandintheassessmentandsuitabilityprocesses.
Inaddition,asat31December2019,weexceededtheminimumpercentagerequiredfortheleast represented gender, since the gender parity achieved in 2017 in themembers of theGoverningBoard,thehighestgoverningbodyofthecooperative,wasmaintained.
Furthermore, in terms of selection and appointments and renewal of Senior Managementmembers, Caja Laboral has a Succession Plan for key positions, which identifies the criticalpositionsandtheprofessionalpathsandprofilesoforiginfortheirreplacement,establishingprofessionaldevelopmentplansforthepeopleidentifiedandsuccessionplansforeachofthepositions.Theidentificationofthekeypositionseligibleforasuccessionplan,aswellasofthepeople capable of becoming the future replacements for the current occupants of suchpositions, takes into account variables such as training, experience and knowledge,management track record, performancehistory, personal skills andabilities, commitment totheEntity,potential,etc.
Withregardtotheemploymentofdisabledstaff,LABORALKutxahas17peopleundertheseconditions and CLBS has two,while in Seguros Lagun Aro there are none. Also, compliancewiththeLISMIisachievedthroughamonetarydonationtoGUREAKINKLUSIOFUNDAZIOAforthe implementationof labour insertionactivitiesandthecreationofemployment forpeoplewithdisabilities.
Withregardtoanti-discriminationpoliciesthatdonotrefertogender,theCSRpolicyexpresslyreferstodiscriminationonthebasisofsexualorientationandthosearisingfrommaternityandthe assumption of family obligations. In the same way, the Criminal Compliance Policycontemplatesdiscriminationongroundscontrarytoconstitutionalrightsandfreedoms.
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3.2.6.Conciliation
ConciliationmeasuresThe InternalRegulationscontemplatemeasures for theConciliationofpersonalandworkinglife,asawaytoeasethedifficultiesofattendingtothestaff'speremptoryneedsofa familynaturebymeansofspecificpermitsand/orleavesofabsence.Theyrefertoaspectsofworkinghours,non-presentialwork,paidleaveandunpaidleave.
In 2019 these advantageswere extended bymaking the timetable at Central Servicesmoreflexible during the summer (continuous working day) and by expanding the possibilities oftakingpaidandunpaidleave.
FlexibleworkinghoursAll those who regularly work in the Central Services, both at Headquarters and in theTerritorialDirectorates,cantakeadvantageoftheflexibleschedulesystemintermsofarrivingandleaving.In2019,tosimplifythework-lifebalanceandtoencourageparentstotakejointresponsibility, the flexibility of this staff has been increased in terms of timetables. Thecompanyhasnowswitchedtoamonthlycalculationofhours,withadailyminimumof5:15hours of work and flexible entry and exit times. At the same time, members with childrenunder 12 years of age and/or people dependent on them due to age or illness may, uponrequestandapproval,extendtheentrytimeuntil9.30a.m.
Also,therearecurrentlynopoliciesinplaceregardingworkdisconnection.
3.2.7.RemunerationManagement
AtLABORALKutxa,remuneration isreceivedaccordingtoprofessionalcategory.Allpositionsareassignedacategoryandaremuneration(samejobtitle,samesalary,regardlessofwhethermale or female), with salary increases being the same for all staff. There are also nodifferencesaccordingtoage,exceptfortheeffectofthefiveyearsofseniority.
At LagunAro, evenwhen theworkersdonotown thecompany, they still participate in themanagementandthebusinessresults.Theydoso:
- throughauniversalIndividualVariableRemuneration,and- a Collective Variable Remuneration applicable to people with an indefinite contract
(close to 100% of theworkforce) voluntarily joining a company formed precisely toenabletheparticipationofworkersintheresultsofthecompany.
Intermsofpaylevels,thesalaryrangeissubstantiallynarrowerthanintherestofthebankingsector.LKstartingsalary 2018 2019Minimumsalaryuponentryforpartnersin€/no.hoursworkedMinimumsalaryuponentryforpartnersin€/Minimuminter-professionalsalary*
15.002.43%
15.182.01%
(*)Theminimuminter-professionalsalarycorrespondstothatapprovedbytheSpanishGovernmentforeachyear.Thereisnodifferencebysexintherangeofratiosbetweenthestandardstartingsalaryandthelocalminimumwage,therefore,thisdataisnotbrokendownbysex.
ForCLBStheratiosforbothsetsoffiguresisthesameasforLK.
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LagunArostartingsalary 2018 2019Minimumsalaryuponentryin€/no.hoursworkedMinimumsalaryuponentryin€/Minimuminter-professionalsalary
11.191.48
11.301.49
Asregardssalarydispersion,thereisaverynarrowrangeofsalaries,consistentwiththevalueofsolidarityinherentincooperatives,asshownbelow:
2018 2019
TotalpayforbestpaidpersonLK/averagetotalpayIncreaseinannualpayofthebestpaidpersonLK/averageannualpayinc.
3.611.34
3.60.82
TotalpayforbestpaidpersonCLBS/averagetotalpayIncreaseinannualpayofthebestpaidpersonCLBS/averageannualpayinc.
NdNd
2.020.59
Totalpayforbestpaidperson/averagetotalpayLagunAro 2.3 2.1IncreaseinannualpayofthebestpaidpersonLagunAro/averageannualpayinc. Nd 3.33*In LABORAL Kutxa, remuneration is received according to professional category (same job title, same salary, regardless ofwhetheritismaleorfemale),withsalaryincreasesbeingthesameforallstaff.
At the endof the financial year, the achievement attained, linked to the Individual VariableRemuneration (IVR), is reviewed,evaluatingthe financialyearalreadyconcludedwithregardto qualitative or quantitative objectives, as the case may be. This evaluation affects allmembers,with 523 of themhaving individual objectives in 2019 (513 in 2018) and the resthavingobjectivesassociatedwiththeirworkteam.
Theevolutionofwhatvariableremuneration(individual+collective)meansforstaffinrelationtototalremunerationisasfollows:
2018 2019VariableRemuneration/TotalRemuneration(in%) 8.33% Nd(1)
(1) DatanotavailableatthecloseofthisReport
RemunerationtosharecapitalMembers' contributions to the Share Capital have been remunerated in 2019 at the annualrateof4.5%grossforcompulsoryandvoluntarycontributions.RemunerationtoShareCapital(thousandsofeuros) 2018 2019TotalpaymentofinteresttoCapital(toassociatedcompanies,toworkingpartners,etc.)
33,565 34,316
Sharereceivedbyworkingandcollaboratingmembers(1) 11,766 12,189(1) CollaboratingmembersareretiredworkingmemberswhomaintaintheirshareinLABORALKutxa.
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3.2.8.OccupationalHealth&Safety
LABORALKutxahasanOccupationalHealthandSafetyManagementSystem(hereinafterOHS)inaccordancewithOHSAS18001:2007,certifiedbyOndoanAICsince2009.LABORALKutxaisamemberoftheOsartenJointPreventionService.
In 2018 LABORAL Kutxa and CLBS passed the regulatory audit and renewed their OHSAScertification.In2019,thefirstfollow-upauditwaspassed.ToachievetheobjectivesdefinedintheOccupationalHealthandSafetyPolicy(OHS),theactivitiesareplannedannuallyintheOHSManagementPlan:
Managementprogramme:Proposedactionsfor2019andtheirsituation.
1. Perform500medicalcheck-ups(LKandCLBS).Notmet:369
2. Performriskassessmentsthataffect500workers.Completed(537)
3. Implementationofaplanformanagingconflictbetweenworkers.DiscontinuedduetooverlappingwithotherinitiativesunderwayfromSocialM.(BideanandOnenak.4).
4. Reach85%ofstaffwhocomplywithemergencytraining:postponedtothefirstquarterof2020.
5. Adaptthecountersof30officesandreplace150oldmodelchairs:Completed(52desksand675chairs).
ManagementProgram:2020Commitments
1. Implementanewsystemforofficemanagementtoinspectofficelocations.
2. AdaptthemanagementsystemtoISO45001.
3. Perform500medicalcheck-ups(LKandCLBS).
4. Reach85%ofstaffwhocomplywithemergencytraining
5. LinkthebusinessactivitycoordinationsoftwaretoaccesscontrolinCentralServices(CS).
TheHealthandSafetyCommitteeisaJointCommitteewithequalrepresentation,whichisalsoattended by the Director of the Social Management Area and the Company Physician. TheChairmanofthisCommitteeisoneoftheworkers'representatives(PreventionDelegate).ThisCommitteemeetsatleastonceaquarter,andeverythingdiscussedinitsmeetingsisrecordedin minutes, which are made available to everyone on Giltzanet (intranet). All people arecoveredbythisCommittee.
The most relevant indicators regarding occupational health and safety management arepresentedindetailbelow.
Accidentrate 2018 2019Employeeaccidentrate.No.employeeaccidents.No.offatalitiesamongemployees.No.ofrobberies
1.043802
1.074606
Theaccidentrate isestablishedbasedonthefrequencyofaccidents,excludingthosethathavetakenplace"in itinere"(onthewaytoorfromwork)andthosethathavenotresultedinmedicalleave,inordertocalculateonlythemostseriousaccidentsthattakeplaceintheworkplace.Thisindexisdeterminedbasedonthenumberofaccidentspermillionhoursworked.Therearenorecognisedoccupationalillnesses.
TheOHSSystemviewstheriskofrobberyasoneofthespecificrisksarisingfromtheactivityofLABORALKutxa, forwhichaseriesof instructionshavebeen issued,providedtoallstaffand
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publishedontheIntranet,establishingbothpreventivemeasuresandmeasurestobetakenintheeventofsuchsituations.
In 2018, a protocol was developed and approved for situations of external violence thatincludesactionintheeventofaggression,threatsorinsultstoourstaff.Thesesituationshavecometobetreatedasoccupationalaccidents.
Emergency drills are conducted every year in theHeadquarters buildings. Also, all theworkcentres have emergency plans,which are available on the intranet so that each person canrefertotheonethatisapplicabletothem.Noobjectivesareset,butratherforecastsaremaderegardingtheabsenteeismvariables,iftheyaremaderegardingtheoverallrate.
A novelty in 2019 was the launch, in collaboration with Osarten-Psia, of a psychologicalsupport service. It consists of referring any situations that may require psychologicalinterventiontoanexternalservice,whichguaranteesanonymity.SocialManagementandtheMedical Service will be responsible for detecting these needs. In addition, in 2019 theoccupational risk prevention management system was adapted to the new ISO 45001standard.
LagunAroalsohasaHealthandSafetyJointCommitteewithstaffrepresentationcoveringtheentireworkforce.
HealthPlan-ZainduzIn2018,ahealthplanwasdesignedforLABORALKutxastaff.Zainduzisaprogramdesignedtotake care of your health and promote healthy lifestyle habits. It covers aspects such asimprovements in diet, physical activity andhealth atwork, so as to improve thehealth andphysicalandemotionalwell-beingofthepeoplewhobelongtotheLABORALKutxaGroup.Theactionswereimplementedin2019.Themainactionscarriedoutwere:• Creation of amultidisciplinary and transversal work team, and an identifying logo and a
specificspaceontheintranet.• Organisationofaconferenceonhealthyeating.• DistributionofaglasswaterbottlewiththeZainduzlogotoeveryoneasameasuretoraise
awarenessoftheimportanceofhydrationduringtheworkday.• Publication of videos promoting health improvements: managing emotions, for better
sleep,backcare,preventionofcardiovasculardisease,...• Nutritionalcarebyremovingunhealthyproductsfromvendingmachines,aswellassugar,
bydefault,incoffees.• Nutritioninformationpacks,raffleoffruitbaskets,interventioninthecafeteria,...
In2019,SegurosLagunAronhasgivencontinuitytotheHealthPromotionProject"AtSegurosLagunArowetakecareofourown".
Bywayofsummary:
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SocialBenefitsPackageLABORALKutxahasdevelopedthefollowinginitiativesfocusedonimprovingthesocialbenefitsreceivedbyitspeople:
Socialbenefits
Annualcelebrationofadayofgatheringandsocialising(everyone),ElkarteEguna,andparticipationthroughClubLankide(financedbytheEntityitself)inculturalandsportingactivitiesasavehicleforpersonalinteractionoutsideworkinghours.
Advantagesinfinancialproducts(members):Assets: Subsidised loan for primary residence, primary supplementary loan, loan for other domestic use, salaryadvance.Liabilities:salaryaccount.Bankingservices:feewaivers,cardfeeswaivers,discounts.Accidentinsurance.
Otherbenefits(partners):FinancingofprivateandBasquelanguagestudiesFundingforextraordinarypersonalrequirementsSubsidisedcompanydiningroom(everyone).Vehicledamagecover.Extraordinaryexpensesduetothedeathofmembers.FinancialadvantagesforthoseretiredfromLABORALKutxawhomaintaintheirstatusasacollaboratingpartnerandtheirwidows/widowerswhoarealsocollaboratingpartners.Theseadvantagesinclude:salaryaccount,exemptionfromsomefeesandloanswithpreferentialconditions.
Specifically,theEntity'sworkingpartnershavethefollowingsocialbenefits:
LankideClubLABORAL Kutxa believes that joint cultural, sporting and tourist activities, etc. are an idealvehicleforencouragingcontactbetweencolleaguesoutsideworkinghours.Accordingly,ithasagreedtosetupLankideclubsatHeadquartersand ineachof theregions,withtheprimaryaim of promoting interpersonal relations through the enjoyment and implementation ofleisureactivities.
In addition to holding the annual fellowship events (Elkarte Eguna) in 2019, cultural, sports,and leisure activities have also been held, such as: season tickets for theatre and music,
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mountainandcyclingassociationgrants,footballtournaments,footballandbasketballseasonticketsorexcursions.Thetotalbudgetfor2018was€30,532.
Capitalisedcooperativereturns(individualpensionplan)Eachyear, LABORALKutxadistributes12.5%of itsavailableprofitsamong itsmembers,asacooperativereturnorshare intheprofits,which iscapitalisedandaddedtotheshare inthecapitalofeachofthemembers.
ThisshareofthecapitalstockisnotavailableuntiltheworkingpartnerceasestoworkattheEntity, and is practically an individual pension plan after growing throughout the person'sworkinglifeattheEntity.Thissharereceivesanannualremuneration(4.5%in2018and2019)intheformofinterestoncapital.Theindividualannualallocationofthecooperativereturnisbasedontheirtotalgrosssalary.
Cooperativereturnallocatedtoworkingpartners(thousandsofeuros) 2018 2019AnnualoverallamountAverageamountperpartner
11,8565.91
12,915Nd(1)
(1) DatanotavailableuntiltheGeneralMeeting.
MeetingthefinancingrequirementsofasupplementaryhealthcaresystemLABORALKutxa covers, for thebenefitof itsmembersandworkingpartners, co-paymentofthe fees required for the annual financing of a comprehensive health care system,complementary to that of the public social security system, which the MONDRAGONCorporationprovidesforitsparticipatingmembers.In2019,thisco-paymentwas1.85%ontheadvanceofgrossconsumption.
3.3.Ourrelationshipwithsociety
3.3.1.Managementapproach
LABORALKutxawasfoundedintheBasqueCountryaspartofabusinessgroupwithastrongcommitment to serving society, whose mission includes the creation of associated andparticipativeworkof a cooperative nature, as an essentialwayof creatingwealth andwell-being,bothamongitsdirectmembersandintheSocietyinwhichitisimmersed.Thecriteriaandmechanismsfortheallocationofsocialassistanceareunique:§ Due to its legal nature and its cooperative vocation, LABORALKutxadirects a significant
partofitshumanitarianaidcontributionstothepromotionofthecooperativeworld.§ InthedistributionofsubsidiesunderoneoftheheadingsoftheEducationandPromotion
Fund,thedistributionofwhichcorrespondstotheinstitutionalbodiesofthecooperative,thesectionknownas"GeneralDistribution",oneoftheorganisationsthattakespartistheSocialCouncil,whichistherepresentativebodyoftheentity'sworkingmembers.
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§ In addition, it also reserves a specific section of the social projects for local assistance(LocalDistribution),bymeansofallocationsthroughthe304branchesofLABORALKutxa,which steer the aid towards their own areas (neighbourhood associations, nearbyeducational centres, parochial social action groups, immigrant social assistance centres,etc.).
ThepurposeoftheEducationandPromotionFund(FEP)is:§ Trainingandeducationoftheworkforceincooperativeprinciplesandvalues.§ The dissemination of cooperativism, as well as the promotion of inter-cooperative
relations.§ Thecultural,professionalandassistentialpromotionofthecommunityingeneral,aswell
as improving the quality of life and the community development and environmentalprotectionactivities.
TheInter-CooperativeSocialFund-FSIaimsto:§ Promote business projects and the expansion of cooperatives through Mondragon
InvestmentsandtheFEC(CorporateExpansionFund).§ Among other uses, support forMONDRAGON co-operatives in difficulty, R&D&I projects
andtrainingthroughtheMondragonFoundationandtheFCD(CohesionandDevelopmentFund).
During2019,LABORALKutxahascontinuedtostrengthenitscommitmenttotheenvironment,biodiversity and sustainable development, thanks to the signing of various agreementswiththemainagentsintheagri-foodsector,andthesupportgiventoinitiativeslinkedtotheruralenvironment.
GaztenpresaFoundationThe Gaztenpresa Foundation is a private, non-profit organisation. It is part of the welfareprogrammeof LABORAL Kutxa and its aim is to support initiatives and develop actions thatfacilitatethecreationandpreservationofemployment,throughprogrammesandservicesthataddvaluetothebusinessandprofessionaldevelopmentofitsusers,andalsotoitsalliesandsocietyasawhole.TheFoundation'stargetgroupincludes:
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• Entrepreneurs,mainlyyoungpeople.• Collectiveswithdifficultiesintheirsocialandlabourinsertion.• Youngmicro-enterpriseswithdevelopmentprojects.• Training institutions that want to encourage the entrepreneurial spirit among their
students.
ThebusinesscreationactivityoftheGaztenpresaFoundation,financedbyLABORALKutxaandCorporaciónMondragón, as well as by the Basque Government (Dept. of Employment andSocialPolicies)throughLanbideandtheEuropeanSocialFund,wasagainsubstantialin2019.The projects supported and which went beyond the feasibility phase generated 405companies,creating787jobs.ItsscopeofactivityistheBasqueCountryandNavarre.The general objective is to promote the creation, development and maintenance of smallbusinesses andmicro-SMEs, identifying employment opportunities through self-employmentforpeoplewhoareunemployedoratriskofbecomingunemployed.The process involves identifying and developing the person who wishes to become anentrepreneurandassessingtheirsuitabilitytotherealityofthemarket,inordertodetermineand suggest the self-employment opportunities best suited to their situation. It offers all-round support, providing a response to the general demand for guidance, training andtechnicalassistance,bothforstart-upandfortheconsolidationandsurvivalofthecompaniescreated.Theintentionisthatpeoplewhodecidetostarttheirownbusinesscandeveloptheirpersonalinitiativeandgettoknowthebusinessframeworktheyarehopingtoenter,andforthistheywillhavequalifiedpeopletoguidethemonthepathtofollow,therebydevelopingtheirownprofessionalplans.
GaztenpresaProjects 2018 2019Viableandopenthebusiness 415 405Notviable/Viablebutdonotopenthebusiness 144 195Consolidation 120 50Derivatives 108 96Consultations 298 295Total 1,085 1,041
Amongtheviableonesthatopenthebusiness,theregionaldistributionisasfollows.Gaztenpresaprojectsin2018 Araba Bizkaia Gipuzkoa Navarra TotalViableandopenthebusiness 65 182 97 61 405
Thesearesmallbusinesses,withservicesandretailbeingthemostcommonsectorsofactivity:- theaverageinvestmentin2019was€81,000,- TheaveragefinanceprovidedbytheBankwas€42,100,49%- employed2peopleattheoutset,- theaverageageoftheentrepreneurwas39yearsoldand,- bygender,thepercentageofwomenentrepreneurswas47%.
Oncethecompanyisupandrunning,theentrepreneurfacesmanypracticaldifficultiesandasense of isolation that often prevents him or her from dealing with them properly.Gaztenpresa runs workshops that provides further support to these entrepreneurs, alsoansweringqueriesonnewinvestments,closuredecisions,changeofmarketorapplicationsfornewsubsidies.
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Businessconsolidation 2018 2019No.workshops 75 50Companiesinconsolidation 120 175
QuerieshandledinPROservice 432 372
Mentoringprogramme 27 20
Also, the mentoring programme offers one-to-one coaching for a year. A volunteer withentrepreneurial experience helps an entrepreneur who is starting his or her first businessventure to improve their skills and competence, enhancing both their personal andprofessional development as well as the consolidation of their business. The Gaztenpresamentoring programme is a structured process designed based on the experience of othermembersoftheYouthBusinessInternationalNetworkandwiththesupportofAccenture.
IndirectcontributionstosocietyThemostsignificantindirecteconomiceffectisthegenerationanddistributionofwealthandemployment,preferablyinacooperativemanner,whichisachievedthroughthecontributionofresourcesfromLABORALKutxatotheMONDRAGÓNgroup.Wealsohavean influenceonsociety through hundreds of sponsorship and promotional activities to which we allocateeconomicresources.
Morethan200 initiativesweresupported in2019:conferences,awards,culturalactivitiesorthepromotionoftheBasquelanguage,sportsorcharitablework.
Theseinclude:
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https://blog.laboralkutxa.com/todos-los-patrocinios-de-laboral-kutxa-en-2019/
Also,thestaffatCentralServicesaregiventheopportunity,twiceayear,todonatebloodforthebenefitof theGipuzkoaAssociationofBloodDonors. In2019,116donationsweremade(121in2018).
BasqueCyclingFoundationAparticularlyimportantinitiativein2019wasLABORALKutxa'ssupportforthecreationoftheBasqueCyclingFoundation.Theprojectgoesbeyondsportsandaimstorelaunchthetrainingworkinordertocreatearegionalstructurethatguaranteesthepracticeofbasiccyclinginthebestpossibleconditions.
It is a cross-cutting project because values such as equality, healthy lifestyle and building amore sustainable future for the environment are promoted through the practice of cyclingamongyoungpeople.
RelationswithGovernmentAgenciesandpoliticalpartiesLABORAL Kutxa defines the management of government agencies in the Public SectorManagementManualasadistinct, integrated,coordinatedanddynamicmanagementbythePublicSectorOfficewithinthenetworkofCompanies.Thisdocumentdefinestheresponsibilityand functions of each Division of LABORAL Kutxa in the management of this segment, ineverything that affects the segmentation, management systems, information systems,commercialstrategiesandriskmanagement.
Inthesameway,theLABORALKutxaRiskManual"CreditRiskPolicy,MethodsandCriteria",considers in Chapter 5 the "Risk Policy to be applied to the Public Sector", establishing adifferentiated policy within the scope of Companies due to their accounting particularities.LABORAL Kutxa does not provide finance to any political association or national orinternational entity, except for the loans and guarantees to political parties listed in thefollowingtable:
2018 2019EuskoAlkartasuna 118 104EAJ-PNV 793 670Loans(thousandsofeuros) 911 774
3.3.2.Mainfigures:Profitsharinginsociety
As explained in the management approach, the main contribution of the LABORAL KutxaGrouptosocietyisthroughthedistributionof25%ofitsdistributableannualprofit.In2019itwasalmost23.5millioneuros.Thedistributionamongheadingswasasfollows:
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Item(thousandsofeuros)Yearsofapplication2018 2019
Charitablecontributiontothelaunchandconsolidationofcooperativecompanies(throughMONDRAGON)
12,887 14,227
Inter-cooperativeSocialFund-FSI(15%ofDistributableprofit) 12,887 14,227CooperativePromotionthroughMONDRAGON(68%FEP)andotherdestinations(UNACC,etc.)
5,841 6,593
FRES,FundforRestructuringandCompanyEmployment 698 0EntrepreneurshipandBusinessandvocationaltraining(FundaciónGaztenpresa) 311 331Culturalactivitiesingeneralandothers 543 845PromotionoftheBasque-languageandBasqueCulture 321 703Welfareinstitutionsanddevelopingcountries 373 630Agri-foodsector 63 105EducationandPromotionFund-FEP(10%ofDistrib.profit). 8,150 9,210SumFSI+FEP 21,037 23,437
3.3.3.Dialoguewithsociety
Thesearethemostrelevantmechanismsfordialoguewithsociety.GroupofInterest:SocietyDialoguemechanismsimplementedin2019:§ Membership of Izaite, Association of Basque companies for sustainability, which focuses on social and
environmentalissues.§ Social network with entrepreneurs to share concerns and propose collaborative actions through the
Gaztenpresa Foundation. And adhesion, as a founding member, to YBI- YBS Youth Business International inSpain,aninternationalnetworkofGoodPracticesandsupporttoyoungentrepreneurs.
§ Participation and dynamisation of virtual communities with a presence in blogs and social networks on theInternettoreinforcecontactandthepoolingofideasandinitiatives:
v Instagram:5,301followersv Facebook:17,545fansv Twitter:5,926followersv Blog:185,160readersv WhatsApp:Morethan1,000usersattendedtopermonth.§ Specificanalysisof theopinionsandexpectationsof theusersofOnLineBanking through theuseof internet
toolstomonitoropinions,forums,socialnetworksandexpertreviews.§ Acknowledgments,incollaborationwithvariousinstitutions,suchas:NavarraPrizeforsolidaritywhichwentto
"Emaus", Humanities Prize (with Eusko Ikaskuntza) which went to Juan Ignacio Pérez Iglesias, EtxepareTranslationPrizewhichwenttoAinaraMunt.
§ Surveyofcustomersfromcompanies,personalbanking,KideandPro-microcompaniesontheirassessmentofCSRactivitiesatLABORALKutxa,whilesendingouttheExecutiveReportonthe2018Report.
§ PublicPresences.RepresentativesofLABORALKutxaattendedforums(universities, interviews,talks)towhichtheywere invited to explain their way of doing things and their commitment to society. These forums alsoenabledialoguewithstakeholders.Amongthepublicappearances,thepresenceinSeptemberofourChairmanatthesigningoftheUnitedNationsPrinciplesforResponsibleBankingisparticularlyrelevant.ThesigningtookplaceinNewYorkandmarkedthelaunchofthisinitiativetogeneratetransformationwithinthefinancialsector.9
In 2019 LABORAL Kutxa continued its line of dissemination of Social Responsibility amongdifferentgroupsofinterest.Inthisrespect,LABORALKutxa:§ HasmadetheReportavailabletothepubliconthewebsitesofGRI,IzaiteandtheEntity.§ IthasdistributedtheCSRReporttoitsstaffviatheintranet(Giltzanet).§ It has sent an email to more than 250,000 clients with the Executive Report with the
general lines of the annual Report, alsomaking the full version available.We have alsomadeuseofthiscontacttoaskforthecustomers'opinionontheestablishmentofCSRatLABORALKutxa.
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3.3.4.InitiativesendorsedbyLABORALKutxa
ThefollowingtableshowsthecurrentinitiativescarriedoutbyLABORALKutxa:Name Purpose When
AgreementwithFIARE,renewedwithBancaPopolareEtica
Commitmenttocollaboratewithethicalbanking.In2017itwasrenewedonceFiarebecameaSpanishbranchofBancaPopolareEtica
2005
AdherencetotheUnitedNationsGlobalCompact.
Commitmentandprogressinthe10PrinciplesoftheCompact.
2006
AffiliationtoIzaite,AssociationofBasqueCompaniesforSustainability.
Toshareexperiencesinbusinesssustainabilityandpromotetraininganddisseminationinthefieldofsustainabledevelopment.
2006
JoinedAutocontrol.AssociationfortheSelf-RegulationofCommercialCommunication.
2007
WorldRuralForumTopromoteruraldevelopmentasanintegralpartofoveralleconomicdevelopment.
2007
EmekinProgramme,withtheProvincialCouncilofGipuzkoaandtheAssociationofWomenEntrepreneurs
Fullcoachingforwomenwithaviewtopromotingabusiness.AdditionalagreementswiththeassociationsofWomenEntrepreneursandDirectorsofBizkaia,Gipuzkoa,AlavaandNavarre:AED,ASPEGI,AMPEA,AMEDNA
2007
EFMAEuropeanforums:SMECouncil,OperationalExcellenceCouncil,SpanishRetailBankingDecisionMakersClub
ExchangeofgoodcommercialandmanagementpracticesbetweenleadingEuropeanbanksandsavingsbanksthroughEFMA-EuropeanFinancialManagementAssociation.
2010
AgreementswithvarioustowncouncilstopromotetheuseoftheBasquelanguageintheirreciprocalrelationships
InitiallywithAndoain,Astigarraga,Hernani,Lasarte-OriaandUrnieta.Expandedin2016toinclude38townsgroupedinUEMA.
2011
Agreementstosupportthesocialeconomy
AnnualagreementswithassociationslinkedtothesocialeconomyintheBasqueCountryandNavarre:Erkide,AsleandAnelAnnualagreementswithCepesatanationallevel.
2012
AgreementswiththeEuropeanInvestmentFund(EIF).
Agreementstosupportthecreationandreinforcementofmicro-enterprisesandrelatedjobs.Progressprogramme.In2015itwascontinuedthroughtheEaSIProgramme.In2016therewasInnovfintosupportinnovativecompanies.In2017EaSIsocialeconomy
2013
LABORALKutxafinancialmanagementprogramme-Cebek
TrainingseminarsandworkshopsforentrepreneursandSMEmanagersinBizkaia.TherearesimilarpartnershipswithSEA-EmpresariosAlaveses,andwiththeChambersofCommerceandIndustryinAlavaandGipuzkoa
2013
LocalfoundingpartnerofYBS-YouthBusinessSpain
ParticipationinYouthBusinessInternational,InternationalNetworktoHelpYoungEntrepreneurs.
2014
AgreementwiththeBasqueGovernmenttosafeguardlinguisticrights
Allowingcustomerstocarryoutalltheiroperationsineitherofthetwoofficiallanguages.
2015
CodeofGoodPracticeforFinancialEducationinitiatives
Educationalprogrammesonfinancialmatters.DevelopedinconjunctionwiththeCNMVandtheBankofSpain,andseparatedfromthebusinessactivity
2016
UnitedNationsPrinciplesforResponsibleBanking
Frameworkforthesustainablebankingsystemofthefuture.Commitmenttothe6Principles.
2019
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LagunAroInsurance:
FinancialeducationThemainactivitiescarriedoutduring2019inthefieldoffinancialeducationwere:• FinantzetanMurgilduzErronka.AgreementwithIkastolenElkarteatocreateresourcesfor
thedevelopmentofFinancialEduc. ineducationalcentres.ProgrammeaimedatA leveland3rd-4thyearsecondarystudents.
• SchoolvisitstoLK.• Finantzargi (University). Basic finance training for university students. Launch of the
projectinMondragonUnibertsitatea.IrunandOñateCampus6groups(March-April-May)and6groupsinNovember-DecemberinBilbaoandIrun.
• 3workshopsoninclusivefinancefordisadvantagedgroups.40peopleinconjunctionwithLantegiBatuakinErandioandDerio.
• CreationofasectiononFinancialEducationwithinthecorporatewebsite.
AwardsreceivedThefollowingawardshavebeenreceivedoverthepastthreeyears:• 1stPrize forExperiencesofEqualitybetweenWomenandMen incompanies inGipuzkoa
2018,awardedbytheProvincialCouncilofGipuzkoa• In2017,theawardfortheeventtosupportentrepreneurshipandinnovationintheBasque
Country, EUSTART Up, as the company having contributed most to supportingentrepreneurship.
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AsforLagunAro,itreceivedrecognitionin2018:
3.4.Ourrelationshipwiththeenvironment
3.4.1.Managementapproach
Since2001,LABORALKutxahasbeen implementinganEnvironmentalManagementSystem-EMS inaccordancewith ISO14001, forall itsactivities in the threeHeadquartersbuildings.Although it is not part of the certified system, LABORAL Kutxa transfers themajority of itsenvironmental activities from central services to the other work centres. In 2019 thecertificationwasrenewedforthreeyears.
TheEnvironmentalManagementSystemistheresponsibilityofanEnvironmentalCommitteemadeupofmembersoftheLegalDepartment,InternalAudit,Risks,FixedAssets,SecurityandGeneral Services and Management Planning and Control, with the latter acting as theCoordinator. In accordance with the precautionary principle of the Rio Declaration, itaddresses the possible impacts of the activity with a view to preventing environmentaldamage.Althoughthedirecteffectsofthefinancialandinsuranceactivityontheenvironmentareverylimited,thereareindirecteffects.
SegurosLagunArosharestheenvironmentalmanagementpolicyofLABORALKutxa,theaimof which is the continuous improvement of environmental behaviour, the prevention ofpollutionandtheprotectionoftheenvironment.AswithLABORALKutxa'snetworkofoffices,itisnotintegratedintoitsEnvironmentalManagementSystem.
Due to the very nature of its activity, the environmental impact caused by the insurancecompanyisminimal.
However,itsmanagementfocusesontheissuesrelatedtopaperconsumption.In2019,2,605more printouts were made at Central Services as a result of the internalisation of themanagement of registered letters,which had previously been carried out off-site. The hugeeffortmade in thisareasincetheendof2017has ledtoa reductionofmorethan1millionprintoutsandphotocopiesperyearforthebusiness.
From an environmental point of view, a particularly significant initiative in 2019 was theparticipationofLABORALKutxaintheEKIANsolarplant.Withasurfaceareaof55hectares,anoperating power of 24MW and an estimated production of 40,000MWh per year, it is thelargest photovoltaic plant in the Basque Autonomous Community. The Entity's participationshowsitswillingnesstocontributetothetransitiontoamoresustainableenergymodel.
AdistinguishingfeatureofLABORALKutxa'sSocialResponsibilitypolicyistheimplementationof an extensive concept of Socially Responsible Investment - SRI, whereby environmental,socialandgoodgovernancecriteriaaretakenintoaccountwhendecidingonthecompaniesin
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whichcorporate fundsor those fromcustomersare investedthrough investmentorpensionfunds,butalsoinrelationtocreditinvestment.
The EMS is audited annually by AENOR. In the certification renewal audit report, dated17/10/2019,thestrengthsoftheEMSwerelistedas:
- TheEntity'sinitiativesrelatedtoSociallyResponsibleInvestment.- Participationinthe'Ekian'project,theArasurPhotovoltaicPlant.- ThecompletionoftheworkontheLK1buildingforthecentralservices,withtheuseof
energyfromthegeothermalheatingsystemandtheuseofthebiomassplant.
Italsomentionstwonon-conformities inthesystemrelatedtoemergencypreparednessandresponseandcomplianceassessment.
As stated in the ISO standard followed by the EMS, the success of an environmentalmanagement system depends on the commitment of all the functions and levels of theorganisation,undertheleadershipofseniormanagement.Thus:
- LABORAL Kutxa has an Environment Policy, approved by senior management, withaccess for all its partners and customers, through its publication on the corporatewebsite.
- Everyyear,itcarriesoutplanningtodeterminetherisksandopportunitiesrelatedtoitsenvironmentalissues.
- On thebasisof this, itestablishesobjectives thataremonitoredandcommunicated,bothinternallyandexternally.
- It also plans the appropriate actions to achieve these environmental objectives,determiningwhat is to be done,withwhat resources,whowill be responsible, andwithwhatindicatorsitsachievementandcompliancewithdeadlineswillbeevaluated.
3.4.2.Mainfiguresandinitiativesdeveloped
Intermsofresourcesdedicatedtothepreventionofenvironmentalrisks:
DirectexpenseschargedtotheEMS 2018 2019
MaintenanceoftheEMS(1) 4,106 6,763Wastemanagement(2) 5,220 4,830Environmentalpromotion 3,763 168Measurements(discharge) 1,118 565Totalin€ 14,206 12,326
(1) IZAITE,AENOR,HoraPlaneta,adviceandlegalrequirements.(2) RemovalofPaper,oilandSafetyAdvisor.
These expenses are those directly managed by the Environmental Committee and do notincludecostsmanagedbyspecificdepartmentsoranyinvestmentsmade.LagunAroInsuancedoesnothavespecificheadingsforthispurpose.
With regard to the principle of precaution, as explained above, LABORAL Kutxa has anenvironmentalmanagementsysteminwhichenvironmentalrisksandopportunitiesaretakeninto account and analysed. Within this analysis, no products or technologies have beendetectedthatarebeingimplementedandaresuspectedofposingarisktopublichealthortotheenvironment.
Norisitconsiderednecessarytomakeprovisionsorguaranteesforenvironmentalrisks.
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EnvironmentalriskassessmentAspartofitsEnvironmentalManagementSystem,LABORALKutxahasa“ReviewControlandRiskManagement”procedurethatsetsoutthestepstobefollowedinordertoevaluateandcontrol theenvironmental risks inalloperations involvingcommercial credit investmentandcompanyrisks,assigningeachactivityaHigh,MediumorLowlevelofrisk,excludingtheareasoftreasury,securitiesportfolioandmonetaryassets.WhentheassignedrisklevelisHigh,thisfactor is taken into account as another evaluation factor for deciding whether or not toauthorisethetransaction.
2018Segment OperationNo. Thousandsof€ High Medium Low
Companies 561 723,472 22 80 459Individuals 14 47,480 1 1 12Self-employed 0 0 0 0 0Businesses 10 10,465 0 3 7Developers 121 296,651 0 0 121Institutional 150 415,131 4 30 116Public 32 435,029 0 0 32Fin.Loan 6 10,975 0 0 6Total 894 1,939,203 27 114 753
Year2019Segment OperationNo. Thousandsof€ High Medium Low
Companies 562 878,324 27 87 448Individuals 12 29,699 - - 12Self-employed 1 1,400 - - 1Businesses 12 9,084 - - 12Developers 85 294,990 - - 85Institutional 127 471.016 5 3. 4 84Public 27 392,869 - - 27Fin.Loan 9 7,662 - - 9Total 835 2,085,043 32 121 682
Ifthecompanyinquestionhasseveralproductioncentres,theriskassessment iscarriedoutforeachofthem,withtheriskassignedtothecompanybeingequivalenttothehighestoftherisks obtained. In the last three years, no operation has been rejected on the grounds ofenvironmentalrisk.
Elsewhere, in section 4.2 Socially Responsible Investment, reference is made to otherenvironmental controls carried out from an environmental point of view in both creditinvestmentandinvestmentmanagement.
TransparencyinexposuretofossilfuelsA Communication from the European Commission in March 2018 includes an Action Plan,entitledFinancingsustainabledevelopment,theobjectivesofwhichinclude
- redirectingcapitalflowstowardssustainableinvestments,and- managingfinancialrisksarising,inparticular,fromclimatechange.
Inthesamelineofemphasisontheimportanceofmanagingtherisksofclimatechange,theTaskForceonClimate-relatedFinancialDisclosure-TCFDoftheFinancialStabilityBoard-FSBpublished, in June 2017, some recommendations on climate-related reporting which, in
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relationtobanking,stressestheimportanceofmeasuringandmanagingtheconcentrationofriskexposuretocarbon-relatedassets, includingthoserelatingtotheindustryproducingandsupplyingenergy fromfossil fuels,excluding renewableenergysources. It therefore includescompaniesinvolvedintheproductionandsupplyofconventionalelectricity,oil,gasandcoalmining.
Exposuretofossilfuelsasat31/12thousands€ 2018 2019ExposuretoCreditRiskCirculatingrisk 16,714.3 46,332.2Structuralriskbalancesandguarantees 6,513.2 7,170Sharesinwholesalerisk 10,839.5 0Totalexposure 34,067 53,502.2
It was confirmed that LABORAL Kutxa's exposure to the incidence of climate risk in theseindustriesisverylimited.
PollutionDuringrecentyears,LABORALKutxahasmadeasignificantinvestmenteffortthathasresultedin the complete renovation of two of the three buildings ofMondragon's Central Services.These actions have involved the introduction of the latest technologies in lighting, airconditioningand insulation,whichhas led toachieving thehighestenvironmental rating (A).The introduction of renewable technologies such as geothermal and biomass for the air-conditioning of the buildings is of particular importance. In addition, when renovating thebranch offices of the business network, these technologies are applied with the aim ofreducing the impact of the activity and minimising emissions. Lastly, a continuous effort isbeingmadetodigitalisethebusiness.Thisistruebothfortherelationshipwithourcustomersandfortheinternalactivity.
Noise is not considered to be a significant issue in the annual assessment of environmentalmatterswithintheenvironmentalprogramme.Withrespectto lightpollution, it isnottakenintoaccountduetothesmallimpactoffinancialbusinessonthismatter.Moreover,therearemechanismstoturnoffthelightingoftheluminoussignsoftheofficesafteracertaintimeatnight.
CirculareconomyandwastepreventionandmanagementWithrespecttoenvironmentalsafety,theCentralServicesbuildingsandfacilitieshaveemergencyplansthatconsiderpossibleeffectsontheenvironmentintheeventofanincident,aswellashowtoacttominimisethisimpact.Therearealsoemergencyplansforalltheworkplaces,although,inthenetworkofoffices,thepotentialenvironmentaleffectsofemergenciesaremuchlower.Forwastemanagement,wasteismanagedcorrectlywithintheframeworkoftheenvironmentalcertification.Inaddition,themostimportantwaste,paperandtoner,aremanagedcentrallyforallworkcentres.Themostsignificantwasterelatedtoouractivityareindicatedbelow:
LABORALK. SegurosLAIndicator Unit 2018 2019 2018 2019Cardboardandpaperwaste Kg 105,994 106,927 132,463(1) 5,652Recycledtonercartridges No. 3,821 6,321
(two)Usedvegetableoil Litres 1,520 2,295
(1) Awarehousewascleanedin2018fromwhichover120tonswereremoved.(2) ThiswasteisnotgeneratedforLagunAro.
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Attheendof2019,anewwastemanagementsystemwasimplementedintheofficenetwork.Theindividualwastebinsthatexisteduntilnowinalltheworkplaceshavebeenremovedandreplaced by shared bins that differentiate between three types of waste: paper,packaging/plastics andotherwaste. This thereby improves the selective collectionofwaste,makesbothstaffandcustomersawareof the importanceofcaring for theenvironmentandensuresbettermanagementofthepapertobedestroyedandrecycled.
Giventheactivitycarriedout,nomeasuresaretakentocombatfoodwaste.
The water used drains into the municipal sewage network. The wastewater is analysedexternallyeachyeartoverifythatitiswithintheauthorisedlimits.
SustainableuseofresourcesAlthough water consumption is not significant in a financial institution, within ourenvironmental system the consumption by central services is managed, not that of thebranches or Lagun Aro. As part of the refurbishment of the Headquarters buildings, thepipelines have been renewed with the aim of reducing leaks and water losses. The waterconsumptionofLagunAroandthebusinessnetworkislimitedtothetoiletfacilities,soitisnotconsidered significant ormanageable, unlike the Headquarters, where it is also used in thekitchenandforirrigation.
Waterconsumption(m3)atHeadquarters 2018 2019
Waterconsumption 7,447 10,898
Each year, the environmental programme identifies, records and evaluates environmentalfactorsinordertodeterminetheirassociatedenvironmentalimpactsandestablishtheirlevelof significance froma life-cycleperspective.To thisend, the scaleanddegreeofdangeraredetermined,obtainingasignificancelevel.BelowarethemainindicatorsoftheEnvironmentalManagement Programme of LABORAL Kutxa and Lagun Aro based on the results of thisevaluation.
LABORALK. SegurosLA
Paperconsumptionkg 2018 2019(1) 2018Promotionalpaper 106,578 130,785 64,425Officepaper 272,922 282,081 1,052Totalpaperconsumption 379,500 412,866 65,477(1)2019showsthejointdataofLABORALKutxaandLagunAro.
Allthepaperconsumedwasenvironmentallyfriendly,chlorine-freepaper.
Inordertoreducetheamountofpaperusedincustomercommunications,asignificantdrivehas been made in recent years towards the use of new technologies and e-mailcommunications(Postamail)
LagunArokeepstrackofthenumberofprintoutsmadebyemployeesinordertoreducetheirnumberand,therefore,theamountofpaperused.
That iswhy the totalweightof the tonerhasbeenadded,whichshows thesavings thatarebeingproduced.
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LABORALK. SegurosLA
Tonerconsumptioninunits 2018 2019(1) 2018Totaltonercartridgeconsumption 3,317 3,502 50Cartridgeconsumptionperperson 1.51 1.57 0.30Weightoftonerusedkg 2,438 2,602
(1) LABORALKutxaandLagunAro
TheimpactsoftheLABORALKutxaactivityarelimited.Oneofthemostimportantiselectricityconsumption.Mondragón'scentralservicesarewithinthescopeofISO14001environmentalcertificationandareactivelymanaged:
LABORALK. SegurosLA
Year/Unit 2018 2019 2018 2019
ElectricityconsumptioninKwh/yearCentralServices 3,454,918 3,380,870 360,210 348,851ElectricityconsumptioninKwh/yearTOTALLK 13,277,248 12,915,786
InternalenergyconsumptionAimprovedsignificantlywithrespecttothepreviousyear,exceptforelectricityconsumptionasaresultofworks.
External energy consumption B, the petrol used for travelling, entailed a consumption of20,215GJ(19,728GJin2018).ForLagunAroitwas1,426GJin2019and1,593GJin2018.
Energy intensity,measuredastotalenergyconsumption(including internalAandexternalB)amongthetotalnumberofemployees(LABORALKutxaandCLBS)was32.37in2019comparedto32.82in2018.
As noted above, significant efforts have been made in recent years to improve energyefficiency.Thefollowingisworthmentioning:• Theintroductionofageothermalsystemtoair-conditionthecentralservicesbuildings.• The construction of a biomass plant to meet the heating needs of the biomass. Both
systemshavemadeitpossibletoeliminateclimatecontrolusingfossilfuels.• Refurbishmentoftheinsulation(lowemissionglass),equipment(LED)andmachineryto
increasetheefficiencyofairconditioningandlighting.
ClimatechangeLABORAL Kutxa's concern about the climate crisis is reflected in its adherence to initiativessuch as the Global Compact, the SDGs, its commitment to the Paris agreements and,morerecently, to theUnitedNationsPrinciples forResponsibleBanking.Allof themcommitus tocarryout an analysis of the risks andopportunitiesof climate change, forceus to introducesustainabilityintotheEntity'sstrategyandencourageustomakeeffortstoreducetheimpactofouractivity.Anaspectofparticularrelevanceisthecalculationofourbusiness'scarbonfootprint.
LABORALK. SegurosLABreakdownofemissionsbysource.CarbonFootprint 2018 2019 2018 2019Scope1:Directemissions 356 160 0 0Scope2:Indirectemissions 3,717 3,616 101 98Scope3:Otherindirectemissions 963 1,069 81 70TotalemissionsTonnesofCO2 5,036 4,849 182 168TheBasqueGovernment'sKlima2050calculatorwasusedtoobtainthisdata in2019,sothe2018datahasbeenreformulatedfromthatshowninthepreviousReport.
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Thefollowingweretakenintoaccount:• Forscope1,consumptionofdiesel,propaneandemissionsofrefrigerationgases.• Forscope2,thetotalelectricityconsumption(CS,theofficenetworkandregionalmanagementbuildings)
wastakenintoaccount.• Forscope3,wehavetakenintoaccountemissionsduetotravelduringworktime,kilometrestravelledby
taxi, the emission resulting frompaper consumption, electricity consumption of customerswhenusingourwebsite,wastemanagementandwatersupply.
Aspreviouslystated,LABORALKutxahasmadeacontinuouseffortinrecentyearstocombatand adapt to the consequences of climate change: investments, digitalisation, actions toimprove energy efficiency… In addition, the following areas of action are planned for thecomingyears:
• Duringthestrategicdeliberationthattookplacein2019,sustainabilitywasintroducedas an across-the-board strategic variable. Multi-year objectives have been set toreduce Co2 emissions and paper consumption, as well as the creation of greenproductsandthefurtherimplementationofSociallyResponsibleInvestment.
• Secondly and in parallel, since the beginning of 2019work has been started on theconceptof sustainablemobility.To thisend,a staffmobility surveyhasbeencarriedout. As a result, some areas for action have been proposed to move towardssustainablemobilityandtoreduceCO2emissions.
• AsaresultoftheadoptionoftheUnitedNationsPrinciplesforResponsibleBanking,ananalysisoftheimpactoftheclimatecrisisonLABORALKutxa'sbusinesswillbecarriedout in 2020. It will analyse the impact of the direct and indirect risks towhich it isexposed in its investment and credit portfolios. To this end, information is alreadybeingcollectedontheenergyratingofhomesandthefuelusedbythevehiclesbeingfinanced.
• Lastly, as mentioned above, in 2020 the Ekian project will be launched, the largestsolar plant in the Basque Country, a project in which LABORAL Kutxa is one of theparticipatingentities.
ProtectionofbiodiversityLABORALKutxa'sfinancialactivitydoesnotaffectbiodiversityorimpactonprotectedareas.
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3.5.Ourrelationshipwithsuppliercompanies
3.5.1.Managementapproach
The financial activity that we carry out, as well as the local presence in a very specificgeographicalarea,meansthatthemanagementrisksofsubcontractorsandsuppliersarenotexcessivelyimportant.
Nevertheless, LABORAL Kutxa, aware of the importance of supply chainmanagement in theareaof sustainability,hasdevelopedthe followingareasofactionregardingsuppliersduring2019:1. With regard to occupational risk prevention, progress has been made in coordinating
businessactivities.Therearemorethan300workcentresinLABORALKutxawheremanypeoplebelongingtoothercompaniescometoperformprofessionaltasks:subcontractors,works,maintenance… In 2018, a computer systemwas acquired and implemented thatallows us to establish the controls and exchanges of information and documentationnecessary to ensure that the people who come to our premises to carry out theseactivities meet all the established requirements. In 2019, progress was made in itsimplementationwiththeobjectiveofcoveringallsuppliercompanies.
2. The first phase of the supplier companymanagement project to organise the purchasemanagementof thedifferentdepartmentshasbeen completed.Aspart of this project,the Corporate Social Responsibility Committee approved the following documentationthatfullydemonstratesLABORALKutxa'sdesiretoworkwithitssuppliercompaniesinanethicalandsustainablemanner:
1) ResponsiblepurchasingpolicyofLABORALKutxa.2) Suppliercodeofethics.3) Codeofconductforresponsiblepurchasing.
Giventhecharacteristicsofoursuppliercompanies,itisnotconsiderednecessarytocarryoutaudits on them on aspects not related to the characteristics of the product or service theyprovide.Forthisreason,suppliercompaniesarecurrentlynotevaluatedforenvironmentalorsocialaspects,however,theimpactsoftheiractivityareconsideredtobelow.Incompliancewith the precautionary principle, there are other factors that influence the selection ofsupplier companies, in addition to the origin, such as technical requirements, thecharacteristics of the product or service they provide and the price. At the same time,LABORALKutxaensurescompliancewithsocialandemployment legislation throughaclausethatithasinplace:
§ Compliance with employment, Social Security and occupational health and safetyregulations.
§ The certified Management, Environmental and Occupational Health and SafetySystemsalsohaveproceduresestablishedformanagingpurchasesandsubcontracting,takingintoaccounttherequirementsoutlinedforthesesystems.
Inourareaofactivity,weonlyidentifysignificantriskslinkedtonon-compliancewithhumanrights in relation to corruption risks and with our indirect actions to ensure compliance bycompanies that supply us. The activities related to these two aspects are described in therespectivesections.
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3.5.2.Mainfigures2018 2019
Purchasevolume(thousandsofeuros) 173,369 166,229
%ofgoodsandservicespurchasedfromlocalcompanies(2) 94.2% 96.4%%oflocalsuppliersoftotal 93.3% 93.4%%ofdomesticpurchases,notimported(1) 98.9% 99.5(1) In2019LABORALKutxahad17suppliercompanies(1.08%ofthetotalandrepresenting0.51%ofthegoodsandservices
acquired),fromoutsideSpain.ThesewereallfromEuropeanUnioncountriesexcept4fromtheUSA.43.7%oftheamountcomesfromwhatisknownastheTraditionalNetwork(CAVandNavarra).
(2) Localaretheoneswhoseaddressisinaprovincewherewehaveapresencethroughournetworkofoffices.
3.5.3.Dialoguewithsuppliers
RegardingthedialoguewithsuppliercompaniesconcerningCSR,aquestionnairewassentto98 supplier companies for the purposes of this Report. Companieswere specifically chosenbecause theirworkers performworkwithin our premises. This included subcontractors andoutsourcingcompanies.Aresponsewasreceivedfrom15ofthem,whoratedtheimportanceofthisReportas8.5.
With regard towhether theyproduceaCSR report,57%said that theydoandanother29%saidthattheydonotbutthattheyplantodoso.
Also,aspartof thesuppliermanagementproject,ane-mailchannelhasbeensetupforoursuppliercompaniestocommunicatewithustoresolveanydoubtstheymayhaveortopassonanycomplaintsorconcerns.
In theareaof suppliers, specialattentionshouldbepaid to themediationchannelof LagunAro. From the perspective of insurance companies, brokers and agents are stakeholders intheirownright,giventheirimportancetothebusiness.AtGroupleveltheyarenotconsideredassuch,butevensotheyaresupplierswithwhomaspecificrelationshiphasbeenestablished:
• Theirsatisfactionandthedegreetowhichtheirexpectationsaremetisanalysed:
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• Regularchannelsofcommunicationaremaintainedwiththem:RECOGNITIONANDTRAININGFOROURBROKERS
OnMarch7weheldtheBROKERS'CONVENTIONattheAIC(AutomotiveIntelligenceCentre)inBoroa. Our best brokers enjoyed a day of recognition in an environment where we couldwitnessthechangestakingplaceintheautomotivesector.ThemembersoftheSPECIALCLUBreceivedtwotrainingdaysinJulyandOctober.Onthe10thand11ththeconsultant,JulioEloyPaez,offeredaverydynamicpresentationonPlanningandOptimisingTime.On29October, JavierSierra,aspecialistconsultant in the insurancesector,gaveatrainingcourseonhowtobringcommercialvaluetoallthejobsinthebrokeragefirm,allofwhichwasverymuchappreciatedbyourbrokers.
3.5.4.Initiativesdevelopedduringtheyearforresponsiblesuppliermanagement
During 2019, LABORAL Kutxa has developed the following action plans with regard tosuppliers:• With respect to occupational risk prevention, as mentioned above, progress has been
made in implementing thecomputerisedmanagementsystem. Inorder toanalyse theirdegree of compliance, all external personnel who come to Central Services areperiodically checked for compliance with the controls and the necessary exchange ofinformationanddocumentation.For2020,theobjectiveistolinkthesystemtotheaccesscontrol so thatno subcontractor canenterourpremiseswithouthaving theup-to-datedocumentation.Inthesameway,weintendtoimprovethecontrolofthesubcontractorsthathaveaccesstoourbranchoffices.
• Within the supplier companies management project, development of the computerapplicationthatwillnowserveas thebasis forcontractingsuppliers for theentireBankhasbeencompleted.Afteratrialandadjustmentperiodduringthelatterpartoftheyear,ithasbeencompulsorytouseitforpurchasinggoodsandservicessinceJanuary2020.
ThepurchasingprocedurerequiressuppliercompaniestoadopttheSuppliercodeofethics.Bysigning the Code, they are committing themselves to environmental, human rights andequality, anti-money laundering and anti-corruption and data protection principles andobligations.Inaddition,thenewapplicationdistinguishesthreetypesofsuppliercompaniesaccordingtotheirgeographicalorigin:• Closecompanies:thosethatarebasedintheBasqueAutonomousCommunity.• Local Companies: those that are not close but whose headquarters are in a province
whereLABORALKutxahasaphysicalpresence(branchoffice).• Others.During2020theobjectivesofthisprojectare:• Toensurethefullimplementationoftheprocedure.• Toevaluatethisimplementationbydetectingpossibleareasforimprovement.• To consider a second phase of the procedure. Among other possible steps forward,
evaluate the possibility of implementing sustainability criteriawhen selecting suppliers:localpurchase,environmentalcertifications,equality,etc…
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4.OTHER FIGURES
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4.1.CustomersBasedonthekeybusinessareas(CreditandInsurance),eachportfolio isdetailedbelow.Theprofileofcreditcustomersisasfollows:
Loansbysector(Mofeuros) 2018 2019Publicsector 201.4 773.2OtherResidentSectors 13,344.2 13,444.8
NationalEconomies 10,433.2 10,470.0- Mortgages 9,837.7 9,818.3- Consumerfinancing 362.1 410.6- Others 233.4 241.2Companies 2,422 2.379OtherLoans 488.9 595.8
Non-ResidentCredit 41.8 30.6TotalCredittoGrossCustomers 13,587.4 14,248.7Valueadjustmentsduetoassetimpairment -352.8 -289.6TotalCredittoNetCustomers 13,234.6 13,959.1
ThegeographicaldistributionofLKcustomersisasfollows:
GeographicalareaCreditinvestment Deposits
2018 2019 2018 2019
Bizkaia 30.90% 25.06% 34.31% 33.02%
Gipuzkoa 18.35% 15.43% 29.27% 27.98%
Araba 11.46% 8.03% 14.41% 11.31%
Nafarroa 12.22% 9.75% 10.19% 9.63%
Burgos 2.68% 2.49% 1.08% 1.66%
Madrid 3.53% 3.30% 1.01% 1.01%
Valladolid 4.15% 3.91% 2.21% 2.11%
Zaragoza 6.71% 5.05% 1.76% 1.65%
Others 5.43% 26.98% 5.77% 11.63%
TOTAL 100% 100% 100% 100%
TheCLBSCustomerprofileasat31/12/2019isasfollows:
CategoryInsuredmen Insuredwomen
No.PoliciesAveragecapital
AverageAge
No.PoliciesAveragecapital
AverageAge
LifeRisk 44,794 46,567 46 40,592 45,536 45EarlyPartialRedemption 30,768 4,528 45 15,158 4,279 47EarlyPartialRedemption 5,302 62,164 40 5,010 59,218 40
Homeowner 62,302 - 54 46,469 - 54Landlord/Landlady 6,672 - 56 5,486 - 56
Tenant 3,064 - 48 3,259 - 47
CustomerServiceCustomerService-Amountsclaimed(thousandsofeuros) 2018 2019AmountsforcasesresolvedinfavouroftheCompany 1,627 1,150Amountsforcasesresolvedinfavourofthecustomer 44 69IndemnitiespaidbytheCompany 44 68AmountsreturnedtoCustomersbytheCompany,nopaymentdue 0 1Amountscompensatedorrefundedbythirdparties 0 0
Total 1,671 1,218
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Meanwhile,during2019,thelarge-scalelegalactionsagainsttheEntitywerereceivedforthefollowingthreemainreasons:• Those due to the trading of Eroski and Fagor's Subordinated Financial Contributions,
whichbetween2014and2016werethelargestnumber,continuedtofall,settlingat13in2019(0inthelastthreemonths),whichrepresents56%ofthefewthatenteredin2018,11%for2017and1%for2016.
• Thoseduetothefloorclauses inmortgageloanshavefallento177,being19%ofthosethatenteredin2018and39%for2017.
• Andthosearising fromthecosts incurred in the formalisationofmortgage loans,whichamountedto2,252in2019,areductionof10%comparedto2018.
• Lastly,68otherclaimshavebeenreceivedforothercauses.
Reasonforopeningcases(SAC) 2018 2019Centralisedcustomerservices 3% 3%Commissionsandexpenses 71% 73%Economicterms 16% 14%Missingorinaccurateinformation one% 0%Coverageofneeds 0% one%Informationmissingorincorrect two% 3%Aspectsofcustomerrelations one% two%Campaignsingeneral 0% 0%ATMs one% two%Amountoftheclaims 2018 2019≤€100 28.03% 24.43%> €100≤€250 4.95% 3.62%> €250≤€1,000 32.91% 54.76%> €1,000 34.11% 17.19%
Theclaimspresentedthroughthevariousavailablechannelshavebeen:2018 2019
No.ofclaimssubmittedtotheClaimsServiceoftheBankofSpaininrelationtoproductsafety(1) 2 0No.ofclaimsinwhichBoShaspronouncedinfavourofLABORALKutxa 1 0
Claimsrelatedtothefraudulentuseofmeansofpaymentandphishing.
2018 2019No.ofclaimssubmittedtotheClaimsServiceoftheBankofSpain,DGS,CNMVandUNACCregardinginformationonproductsandservices(1)
12(2) 23
No.ofclaimsinwhichBoSandCNMVhavepronouncedinfavourofLK 9 10(1) Claimsrelatedtoincorrectinformationorbadadvice,mainlyinformationaboutalltypesoffeesandcosts(accountmaintenance,overdraft,etc.).(2) 290claimsreferringtoformalisationcostsand/orarchivedfloorsinfavourofLABORALKutxamustbeaddedtothisfigure.
2018 2019No.ofclaimssubmittedtotheClaimsServiceoftheBankofSpainandtheCNMVinrelationtotheadvertisingofproductsandservicesandprivacy.
3 0
No.ofclaimsinwhichBoSandCNMVhavepronouncedinfavourofLABORALKutxa 3 0Costoffinesfornon-compliancewithregulationsontheprovisionanduseofservices. 0 0
2018 2019PenaltiesimposedontheGroup(euros)fornon-compliancewithlawsandregulations 14,400 40.001
BothamountscorrespondtopenaltiesfromtheDataProtectionAgency(DPA).
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LagunAro 2018 2019Opencases(claimsandcomplaints) 721 695No.ofclaimssubmittedtotheInsuranceandPensionFundsD.G.ClaimsService 23 30%ofclosedcasesestimatedorpartiallyestimated 46.2% 49.9%Averageresponsetime(days) 9.86 10.35Amountofpaymentsinfavourofthecustomer€ 123,100 115,758%finalreportsreceivedfromsupervisor(totalorpartial)infavouroftheclaimant 18.4% 3.2%CLBS 2018 2019Opencases(claimsandcomplaints) 16 10(1)%ofclosedcasesestimatedorpartiallyestimated 15.8% 0%Averageresponsetime(days) 2.47 0.44Amountofpaymentsinfavourofthecustomer€ 0 0
(1) The10claimssubmittedwereaddressedtootherEntities,sotheywereinadmissible.
Mainfiguresforresponsibleproductsandservices
2018 2019No. Thousand€ No. Thousand€
Micro-credits 1,447 22,709 1,127 17,795PersonalLoan 356 1,765 283 1,032MortgageLoan 0 0 0 0InsuredCards 291,794 - 273,147 - ErkideLoan 0 0 1 1.3FCTCLoan 0 0 0 0CEPES/ASLELoan 1 5 0 0SocialEcon.EaSILoans 103 9,563 282 25,297
Thevolumeoftheseagreementsin2018and2019wasasfollows:
PublicOrganisation(thousandsofeuros)
No.ofoperationsformalised AmountformalisedBalanceavailableasat
31/122018 2019 2018 2019 2018 2019
ICO 0 0 0 0 9,999 7,559BasqueGovernment 11 11 1,797 4,635 101,234 90,409GovernmentofNavarra 0 0 0 0 105,080 94,981GovernmentofCastilleandLeon
0 0 0 0 7,291 6,572
CentralGovernmentArabaProvincialCouncil
00
00
00
00
53,341359
48,082235
GipuzkoaProvincialCouncil 0 0 0 0 547 465SPRI-AFI 0 0 0 0 18,233 13,959OtherAgreements 314 267 1,348 981 3,230 2,817Sum 325 278 3,145 5,616 299,313 265,080MGS 270 570 38,893 41,643 149,809 153,073
Customersusingnewchannels 2018 2019No.ofCLNetcontracts 650,120 677,920CustomersactiveonCLNet 395,930 430,504%activecustomersbasedoncontracts 60.9% 63.5%MobileBanking(userswhohaveaccessedviamobile) 299,334 342,528Alerts(activecontracts) 360,980 377,360Bizum 94,308 160,014
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4.2.People
PartnerworkforceofLKbysexandprofessionalcategory*
2018 2019Men Women Men Women
No. % No. % No. % No. %Directors 22 1.3% 5 0.3% 17 1.0% 6 0.4%Managers 246 14% 121 6.9% 236 14% 120 7.1%Technicians 316 17.9% 359 20.4% 307 18.1% 356 21.0%Clericalstaff 144 8.2% 280 15.9% 122 7.2% 248 14.6%Others 161 9.1% 108 6.1% 167 9.8% 116 6.8%Total 889 50% 873 50% 849 50% 846 50%Activepartners 1,762 1,695*ThecategoriesincludedinthedifferentProfessionalGroupsarethefollowing:• Directors:Dir.General,AreaDir.,RegionalDir.andDept.Directors.• Managers:SectionManagers,AreaManagersandBranchManagers.• Technicians:CSTechs.,OfficeManagersandTechnicians(SalesManagers).• Clericalstaff:1stOfficers,2ndOfficers,AdministrativeAssistantsandOperators.• Others:D.D.O.P.V.
LKworkforcebyage2018 2019
Partner RemainderPartner Remainder
Men Women Total Men Women TotalUpto30 14 89 1 3 4 43 73 116Between31and40 410 49 122 218 340 17 43 60Between41and50 853 8 430 428 858 8 4 12Between51and60 453 3 273 189 462 2 1 3Over60 32 0 23 8 31 0 0 0Totalworkforce 1,762 149 849 846 1,695 70 121 191
CLBSworkforcebysex,prof.categoryandbusinessarea
2018 2019Men Women Men Women
No. % No. % No. % No. %Directors 1 0.6% 0 0% 1 0.6% 0 0%Managers 8 4.5% 2 1.1% 8 4.7% 2 1.2%Technicians 0 0% 6 3.4% 0 0% 6 3.5%Salesmanagers 29 16.4% 131 74% 30 17.5% 124 72.5%Totalworkforce 38 21.5% 139 78.5% 39 22.8% 132 77.2%CentralServ. 2 1.1% 7 4% 2 1.2% 6 3.5%CommercialNetwork 36. 20.3% 132 74.6% 37 21.6% 126 73.7%Totalworkforce 38 21.5% 139 78.5% 39 22.8% 132 77.2%Totalworkforce 177 171
CLBSworkforcebyage 20182019
Men Women TotalUpto30 0 1 0 1Between31and40 3. 4 3 21 24Between41and50 96 21 76 97Between51and60 47 14 35 49Over60 - 0 0 -Totalworkforce 177 39 132 171
LagunArostaffbysexandprof.category2018 2019
Men Women Men WomenNo. % No. % No. % No. %
Directors 5 3% 1 one% 4 8% 2 4%
Managers 14 8% 11 7% 14 26% 122.3%
Technicians3.4
twenty% 53 32% 31 58% 50 94%
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Clericalstaff 4 two% 44 27% 4 8% 46 87%Totalworkforce 57 33% 109 67% 53 33% 110 67%
StaffofLagunArobyage2018 2019
M W M W
Upto30 0 1 0 1
Between31and40 7 14 5 11
Between41and50 21 59 18 59
Between51and60 29 3. 4 29 38
Over60 0 1 1 1
Sum 57 109 53 110
Totalworkforce 166 163
AllofLagunAro'sworkersareindefinite.
TheentireCLBSworkforce,exceptone,hasapermanentcontract,beingdistributedbetweentheLABORALKutxaHeadOfficeandthebusinessnetwork.There isa temporaryman,under30,whoisabusinessmanager.TheentireworkforceinLagunAroispermanent.ContractualrelationshipLK(situationasat31/12)
2018 2019
Total Men Women Total Men Women
Activepartners 1,762 889 873 1,695 849 846Leaveofabsence 28 8 20 27 2 25
Secondment 15 6 9 15 5 10
Earlyretirees 161 120 41 161 110 51
Companycontracts 1,967 1,023 943 1,898 966 932
Temps.Full-time 142 44 98 182 63 119
Temps.Part-time 1 0 1 3 1 2
TemporaryContracts 143 44 99 185 64 121
IndefiniteContracts 6 6 0 6 6 0
Totalworkforceasat31/12 2,116 1,073 1,042 2,089 1.036 1,053
LagunArocontractualrelationship 166 57 109 163 53 110
LKcontractsbyageasat12/31
2018 2019
TotalUpto30
31-40
41-50
51-60
>60
TotalUpto30
31-40
41-50
51-60
>60
Activepartners 1,762 14 410 853 453 32 1,695 4 340 858 462 31Leaveofabsence 29 1 16 8 2 2 27 1 20 5 1 -
Secondment 15 - 5 7 3 - 15 1 6 4 4 -
Earlyretirees 161 - - - 143 18 161 - - - 121 40
Companycontracts 1,967 15 431 868 601 52 1,898 6 366 867 588 71
Temps.Full-time 142 88 49 4 1 - 182 113 50 10 8 1
Temps.Part-time 1 1 - - - - 3 3 - - - -
TemporaryContracts 143 89 49 4 1 - 185 116 50 10 8 1
IndefiniteContracts 6 - - 4 2 - 6 - - 1 3 2
Totalworkforce 2,116 104 480 876 604 52 2,089 122 416 878 599 74
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Workforcebylocation(LKandCLBS)
2018 2019
Partners Employee Women Men Partners Employee Women Men
CentralServices 398 37 219 216 401 42 227 216Individuals 30 0 13 17 27 0 12 15Insurance 30 0 9 21 28 0 10 18Company 90 1 24 67 91 1 24 68Reg.Network1 578 69 384 263 546 95 383 258
Reg.Network2 636 42 323 355 602 53 311 344
Total31/12 1,762 149 972 939 1,695 191 967 919
TheentireworkforceofLagunAroworksincentralservices.
Terminations/leaveandannualturnoverofworkingpartnersinLK 2018 2019Terminations/leaveintheyear: 124 117VoluntaryandPublicOfficeLeave 6 2LeaveCaringforchildren/family 37 43Retirement 8 6DeathorDisability 4 4VoluntaryResignation 2 5Onsecondment 0 2Earlyretirees 67 55TerminationsofWomenintheyear 63 45TerminationsofMenintheyear 61 72Totaldeparturerate(*) 6.70% 6.64%Directorsdeparturerate 16.7% 18.52%Managersdeparturerate 5.7% 5.18%Techniciansdeparturerate 6.2% 7.56%Clericalstaffdeparturerate 7.5% 6.06%Womendeparturerate 6.76% 8.13%Women<30departurerate 0% 0.23%Women>30departurerate 6.76% 7.90%Men’sdeparturerate 7.09% 5.06%Men<30departurerate 0% 0.00%Men>30departurerate 7.09% 5.06%(*)Thedeparturerateiscalculatedbasedonthenumberofpeopleleavingduringtheyearandthetotalnumberofactive members at the end of the previous year. Neither departures or turnover of members by area areconsidered,insteadtheyaredealtwithinanaggregatemanner.In2018and2019therewerenoinvoluntarydepartures.
TerminationsandannualturnoverinCLBS 2018 2019Terminations/leaveintheyear: 22 8LeaveCaringforchildren/family 5 1Retirement 1 0Disability 0 1Agreedendofcontract 11 0VoluntaryResignation 3 5Endofcontract 0 0Dismissals 2 1TerminationsofWomenintheyear 15 6TerminationsofMenintheyear 7 2Totaldeparturerate 12.02 4.68%Womendeparturerate 10.48 4.32%Men’sdeparturerate 17.5 5.13%*Alldepartures,bothmenandwomen,areover30years.
86
TerminationsandannualrotationofWorkingPartnersinLagunAro 2018 2019Terminations/leaveintheyear: 8 5VoluntaryResignation 0 0Others 8 5TerminationsofWomenintheyear 4 2TerminationsofMenintheyear 4 3Totaldeparturerate* 4.82 3.07%Womendeparturerate 3.67 1.82%Men’sdeparturerate 7.01 5.66%**Totaldepartures,forbothmenandwomen,arepeopleover30.
InLABORALKutxatherehavebeennodismissalsinthelasttwoyears.
DismissalsinCLBS:2018 2019
Sex Age Category Sex Age CategoryM 59 GES W 58 GESM 61 GES - - -
DismissalsatSegurosLagunAro:2018 2019
Sex Age Category Sex Age CategoryW 47 Administrativestaff M 58 DirectorM 59 Director M 58 ManagerM 62 Director W 60 SpecialistM 60 Specialist W 60 Administrativestaff- - - M 46 Administrativestaff
TraininginLABORALKutxaandCLBS 2018 2019Numberofcourses 415 456Hoursoftraining 87,333 168,298Hoursoftraining/person 41.71 81.38Partner 41.85 83.27Temporary 40.26 62.15Averagetraininginhoursbycategory(individually)Directors 71.12 71.83OfficeManagersandDirectors 39.13 93.90
Technicians 44.35 82.26
Clericalstaff 35.99 73.70
73,5886,3840,4847,5245,8853,8637,2343,70
0
100
Directors
FemaleDirectors
Officemanagersanddirectors
Hoursoftraining2018
119,2
24,5
126,5
61,3 70,693,9
58,988,5
0
200 Directors
FemaleDirectors
Officemanagersanddirectors
TrainingHours2019
87
TraininginSegurosLagunAro 2018 2019Hoursoftraining 4,752.4 3,737.3Women 2,608.5 2,567.8Men 2,143.9 1,169.5Hoursoftraining/person 28.6 20.31Directors 964.3 620
OfficeManagersandDirectors 1,385 643
Technicians 2,378.6 2,311.3Clericalstaff 24.5 163
The proportion between participants on courses by sex (women / men) in 2019 was 1.1comparedto1.61in2018.Thepercentageofdifferentpeopletrainedwas99%in2019and2018.Regardingthepromotionindex,understoodasanimprovementinthestructuralwageindex,in 2019 itwas 7.09%. Includingother non-structural concepts such as seniority, this rises to28.21%(5.45%and36.61%in2018).
LKaverageemploymentindex 2018 2019Women 2.19 2.21Men 2.51 2.50DifferenceM/W 14.5% 13.2%*Theaverageemploymentindexwas2.36,whichwasequivalentasat31/12/19to€2,937.47grosspermonth.
LKaverageemploymentindex2018 2019
M W M WDirect. 4.83 3.95 4.80 3.95Manager 2.84 2.70 2.84 2.72Specialist 2.37 2.20 2.36 2.20Admin. 2.07 1.93 2.10 1.95
LKpaybyage2018 2019
Man Woman Man WomanUpto30 42,711 33,420 - (1) 36,147Between31and40 40,792 34,251 41,218 35,604Between41and50 47,327 40,240 47,171 40,378Between51and60 52,991 43,495 50,664 44,691Over60 56,217 41,640 51,581 43,149
(1) Therearenomenunder30.
AverageemploymentindexCLBS 2018 2019Women 2.07 2.12Men 2.70 2.68DifferenceM/W 30.4 26.4%
AverageemploymentindexCLBS2018 2019
M W M WDirect. 3.33 - 3.34 - (1)Manager 3.18 3.37 3.46 3.39Specialist 2.83 2.60 0.00 2.66Mngr. 2.51 2.03 2.45 2.07
(1) Therearenofemaledirectors.
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RemunerationatCLBSbyage2018 2019
Man Woman Man WomanUpto30 -* -* 1.27 -*Between31and40 2.12 1.99 1.95 2.08Between41and50 2.51 2.06 2.47 2.12Between51and60 3.24 2.09 3.25 2.14Over60 -* 2.15 -* -**Therearenopeopleinthisrange.
LagunAroaveragesalary 2018 2019Women 47,141 47.294Men 65,554 64,517DifferenceM/W 39.06% 36.42%
Salarybysexandprofessionalcat.(€thou.)2018 2019
Men Women Men WomenDirectors 100.6 81.3 99.5 79.63Managers 74.1 67.3 74.5 68.66Technicians 60.6 51.51 59.27 50.13Clericalstaff 37.42 36.25 45.3 37.5
RemunerationatLABORALARObyage2018 2019
Man Woman Man WomanUpto30 0 37,448 0 38,106Between31and40 50,693 38,926 48,012 34,465Between41and50 62,569 47,350 64,954 47,200Between51and60 71,302 50,723 67,467 50,977Over60 0 61,913 91,874 63,216
ThedatarelatingtoabsenteeismintheGrouparepresentedbelow.Hoursandabsenteeismrate 2018 Men Women 2019 Men Women
AccidentandIllness 117,184 42,384 74,800 111,443 41,856 69,587Maternity 22,918 - - 20,653 - -Paternity 3,998 - - 4,858 - -Other* 5,669 - - 2,874 - -
TotalHoursAbsenteeismLK 149,769 - - 139,828 - -AbsenteeismRateLK 3.85 2.76 4.96 3.80 2.83 4.79
AbsenteeismRateLagunAro 4.57 4.03 0.55 3.89 0.36 4.01TotalhoursabsenteeismLagunAro nd - - 1,607 - -
AbsenteeismrateCLBS 5.65 3.68 6.19 4.99 3.40 8.24TotalhoursabsenteeismCLBS nd - - 16,281 - -
* Careofsickchildren
ThefollowingisinformationregardingaccidentsintheGroup.
LKandCLBSworkaccidents 2018 2019
Accidents 38 46Accidentfrequency(1) 4.49 3.22Accidentseverity(2) 0.23 0.05AccidentsLagunAro 0 0
(1) Accumulatedno.ofaccidentswithsickleave*1,000,000/h.worked(2) hourslostduetoaccident*100/h.theoreticaltobeworked
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Outoftheaccidents in2018,17arewomenandofthose in2019,18.Mostoftheaccidentstakeplacetravellingtoorfromwork.Thereisnodataonfrequencyandseveritydisaggregatedbysex.TherearenooccupationalillnessesinouractivityfortheGroup.
4.3.Environment
PostamailUsers 2018 2019Numberofusers. 543,231 568,282
%Usersfromtotalcustomerbase 47.33% 50.62%
LABORALK. SegurosLA
Paperconsumptionkg 2018 2019(1) 2018Promotionalpaper/customer 0.093 0.116 0.18Officepaper/customer 0.238 0.251 0.003Totalconsumption/customer 0.331 0.323 0.368 0.18Totalpaperconsumption/person 181.75 184.56 394.44The2019dataincludesLABORALKutxaandLagunAro
Energy(Gj) 2018 2019SegurosLA
2018SegurosLA
2019Electricity 47,798 46,497 1,297 1,256Diesel 54.2 20.9 0 0Propane 0.49 0.47 0 0EnergyconsumptionA 47,853 46,518 1,297 1,256Energyconsumption/pers. 22.92 22.43 7.8 7.7ThedatapresentedcorrespondstoallLABORALKutxa,aswellasallthestaff.
The intensityof thegreenhousegasemissions,measuredas the totalCO2emissionsamongtheLKworkforcewouldbe2.55inthiscase,comparedto2.69in2018.
Index
5.INFORMATION ON THE REPORT
Index
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ReportProfile
The2019ReportisthesixthCSRReportpresentedbytheentityresultingfromtheintegrationin2012ofCaja Laboraland IparKutxaand refers toa full year. Since2005, the formerCajaLaboralpublishedannualCSRreports.
LABORALKutxawishestocontinuepublishingitsCSRReportonanannualbasis,inaccordancewith the guidelines laid down by the GRI. The LABORAL Kutxa CSR Report for 2019 waspreparedfollowingthe"comprehensive"optionoftheGRIStandardsandtheFinancialSectorSupplement,bothfromtheGRI.Whenchoosingthecomprehensiveoption,allthe indicatorsrelatedtothematerialaspectsidentifiedshouldbeanswered.
ThisreportalsocomplieswiththeprovisionsofLaw11/2018of28Decemberonnon-financialinformation and diversity, also taking into account the Communication from the EuropeanCommission2017/C215/01onGuidelinesforthepresentationofnon-financialreports.
It concerns the consolidated Group and includes both banking and insurance activities.Information regarding the two insurance companieswill be given jointly. For the restof thecompanies, due to their organisation and activity, the information is included with that ofLABORALKutxa,unlessthereisaspecificaspectthatrequiresseparatereporting.
In addition, LABORAL Kutxa maintained significant information in terms of sustainabilityrelatingto:
• Real estate asset management companies, which are companies through whichLABORALKutxamanages the real estatebusiness. Theyare instrumental companies,sotheirdataandimpactsareintegratedintothoseofLABORALKutxa.
• CajaLaboralBancaSeguros(CLBS)isanindependentbroker,100%ownedbyLABORALKutxa, theunderlyingpurposeofwhich is to integratethe insuranceactivity intothebusinessandcommercialstrategyofLABORALKutxa.Itsworkersarehiredemployees.
TheservicethatLABORALKutxaprovidestoCLBSisthecessionofthedistributionnetworkforthe mediation of insurance products. As it is integrated in LABORAL Kutxa, many of theindicators of its activity are integrated. Those aspects for which there are independentindicatorsarelistedthroughouttheReport.
LABORALKutxaisamemberofMONDRAGON.MONDRAGONismadeupof266autonomousandindependentcompaniesandco-operativesthatusetheirownreportingsystems.
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ScopeofGRIindicatorsandaspectsIn accordancewith the established cover, there are no limitations in LABORAL Kutxa's 2019CSRReporttothescopeestablishedbyGRI,exceptfor:
§ Forindicatorsthatcouldnotbecoveredduetothelackofameasurementsystem,inwhichcasetheyhavebeenidentifiedintheReportandintheGRIIndicatorTable,andaneffortwillbemadetomeasuretheminfutureReports.
§ For the indicators that do not apply due to their scarce or even null relevance ormateriality in the activity of a financial entity and the economic, political and socialcontext of the Entity and the limitations of which are specified in each of theindicators.
Allindicatorsforwhichithasnotbeenpossibletoprovidedetailedinformationfortheabove-mentionedreasonswillbeindicatedintheReport.
Startingwiththe2014Report,amaterialityanalysisisincludedinordertodeterminethemostrelevantissuesinthefieldofSocialResponsibility.ThisanalysishasbeencarriedoutwiththeadviceofCegosDeployment, a companywithwhich LABORALKutxa cooperates regularly toguarantee the correct understanding of theGlobal Reporting Initiative - GRI guidelines. TheresultsofthisanalysisaredescribedintheMaterialityAnalysissectionofpart2.
PolicyregardingtheverificationoftheReportAENOR has been carrying out the verification of CSR Reports prepared by the former CajaLaboralsince2005.Giventheknowledgethattheverifyingorganisationhasacquiredoverallthese years of relations, LABORALKutxa, through the Financial Area, plans to continuewiththisverificationsysteminthefuture.
ContactAccesstheLABORALKutxawebsitewww.LABORALkutxa.comonthecorporatewebsite, in itsReportsandrelevantfactssection,thefollowingareavailable:
§ FinancialReport§ IndividualandConsolidatedAnnualStatements§ CorporateGovernanceReport§ TransparencyInformation§ CSRReports§ Non-FinancialInformationStatement
IntheContactsection,youcansendanytypeofsuggestion,complaint,claim,opinion,etc.Toaccess additional information or topics related to this Report, please send an e-mail to thefollowingaddress:[email protected]
6.ANNEXES
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6.1.TableofequivalenciesNon-financialinformationtobereported:
Chapters/sectionoftheAnnualReport_Page
Correspondence/GRIIndicators
Briefdescriptionofthegroup'sbusinessmodel(includingitsbusinessenvironment,organisationandstructure,themarketsinwhichitoperates,itsobjectivesandstrategies,andthemainfactorsandtrendsthatmayaffectitsfuturedevelopment).
Aboutus_PresentationoftheGroupAboutus_Businessmodel
GRI102-1GRI102-2GRI102-3GRI102-4GRI102-6GRI102-7GRI102-14GRI102-15
Adescriptionofthepoliciesappliedbythegroupthatwillinclude:theduediligenceproceduresappliedfortheidentification,evaluation,preventionandmitigationofsignificantrisksandimpacts,andverificationandcontrolprocedures,includingthemeasuresinwhichtheyhavebeenadopted.
Aboutus_PrinciplesandgovernmentGRI103-2GRI103-3
Theresultsofthesepolicies,whichshouldincluderelevantnon-financialkeyperformanceindicatorsthatallowprogresstobemonitoredandevaluatedandthatallowcomparisonstobemadebetweencompaniesandsectors,inaccordancewiththenational,Europeanorinternationalreferenceframeworksusedforeacharea.
ResponsibleManagement_ScorecardCustomerManagement_MainFiguresOurrelationshipwithstaff_MainfiguresOurrelationshipwithsociety_MainfiguresResponsibleenvironmentalmanagement_MainfiguresResponsiblemanagementofsuppliers_Mainfigures
GRI103-2GRI103-3
Themainrisksrelatedtoissueslinkedtogroupactivities(businessrelationships,productsorservices)thatmayhaveanadverseeffectontheseareas,andhowthegroupmanagestheserisks,explainingtheproceduresusedtodetectandevaluatetheminaccordancewiththenational,Europeanorinternationalreferenceframeworksforeacharea.Informationshouldbeincludedontheimpactsthathavebeenidentified,brokendown,andespeciallyonthemainrisksintheshort,mediumandlongterm.
Aboutus_RiskManagementandStrategyResponsibleManagement_MaterialityAnalysisResponsibleManagement_CommitmenttoSustainabilityResponsibleManagement_Scorecard
GRI102-15GRI102-30
Detailedinformationonthecurrentandforeseeableeffectsofthecompany'sactivitiesontheenvironmentand,whereappropriate,onhealthandsafety,theevaluationproceduresorenvironmentalcertification;theresourcesdedicatedtothepreventionofenvironmentalrisks;theapplicationoftheprecautionaryprinciple,theamountofprovisionsandguaranteesforenvironmentalrisks.
Aboutus_RiskManagementandStrategyAboutus_PrinciplesandGovernmentResponsibleenvironmentalmanagement_Managementapproach
GRI102-29GRI102-31GRI201-2
GRI103-2(GRIoftheenvironmentaldimension)
GRI102-11GRI102-29GRI102-11
Pollution:
Measurestoprevent,reduceorremedycarbonemissionsthatseriouslyaffecttheenvironment,takingintoaccountanyactivity-specificformofpollutionoftheatmosphere,includingnoiseandlightpollution.
Responsibleenvironmentalmanagement_PollutionResponsibleenvironmentalmanagement_Useofresources
GRI103-2(GRI302and305)
Circulareconomyandwastepreventionandmanagement:
Measuresforprevention,recycling,reuse,otherformsofwasterecoveryanddisposal;actionstocombatfoodwaste.Responsibleenvironmentalmanagement_Circulareconomyandwastepreventionandmanagement
GRI103-2(GRI306)GRI301-2GRI306-1
Sustainableuseofresources:Waterconsumptionandsupplyinaccordancewithlocallimitations
Responsibleenvironmentalmanagement_Useofresources
GRI303-1
Consumptionofrawmaterialsandthemeasuresadoptedtoimprovetheefficiencyoftheiruse.GRI103-2(GRI301)
GRI301-1GRI301-2
Energy:Consumption,directandindirect;Measuresadoptedtoimproveenergyefficiency,useofrenewableenergy.GRI103-2(GRI302)
GRI302-1GRI302-3
Climatechange:
Importantelementsofthegreenhousegasemissionsgeneratedaspartofbusinessactivity(includinggoodsandservicesproduced)
Responsibleenvironmentalmanagement_Climatechange
GRI103-2(GRI305)GRI305-1GRI305-2GRI305-3GRI305-4
Measuresadoptedtoadjusttotheconsequencesofclimatechange.GRI103-2(GRI305)
GRI201-2ReductiontargetssetvoluntarilyforthemediumandlongtermtoreduceGHGemissionsandthemeansimplementedtothisend.
GRI103-2(GRI305)
Protectionofbioiversity:Measuresadoptedtopreserveorrestorebiodiversity Theimpactscausedbythedirectactivitiesof
theLABORALKutxaconsolidatedGrouponbiodiversityarenotmaterialduetothefinancialandinsuranceactivitiesperformedbytheGroup.
GRI304-2GRI306-5Impactscausedbyprotectedareaactivitiesoroperations
Employment:
Totalnumberanddistributionofemployeesbygender,age,countryandprofessionalcategoryOurrelationshipwithstaff_MainworkforcefiguresOtherfigures_workforce.
GRI103-2(GRI401)GRI102-8GRI405-1
Totalnumberanddistributionofcontractmodalitiesandannualaverageofindefinitecontracts,temporarycontracts,andpart-timecontractsby:gender,ageandprofessionalcategory
OurrelationshipwithMembers_MainworkforcefiguresOtherfigures_workforce.
GRI102-8GRI405-1
Numberofdismissalsby:gender,ageandprofessionalcategory.Ourrelationshipwithstaff_Mainworkforcefigures.Otherfigures_Members
GRI401-1
Averageremunerationanditsevolutiondisaggregatedby:sex,ageandprofessionalclassification.OurrelationshipwithSlatemplate_MainmagnitudesofPartnersOtherfigures_workforce.
GRI405-2
SalarygapandcompensationforequaloraveragejobsinsocietyOurrelationshipwithstaff_Mainworkforcefigures.Otherfigures_workforce.
GRI103-2(GRI405)GRI405-2
Averageremunerationofdirectorsandexecutives(includingvariableremuneration,allowances,compensation,paymenttolong-termsavingsforecastingsystemsandanyotherpaymentbrokendownbygender
Aboutus_PrinciplesandGovernmentGRI102-35GRI102-36
GRI103-2(GRI405)
ImplementationofworkdisconnectionpoliciesOurrelationshipwithstaff_Mainworkforcefigures.
GRI103-2(GRI401)
EmployeeswithdisabilitiesOurrelationshipwithstaff_Mainworkforcefigures
GRI405-1
Workorganisation:
OrganisationofworkingtimeOurrelationshipwithstaff_Personaldevelopment
GRI103-2(GRI401)
Numberofhoursofabsenteeism Ourrelationshipwithstaff_Mainworkforce GRI403-2
Index
95
figuresOtherfigures_workforce
Measurestofacilitatetheenjoymentofwork-lifebalanceandtoencourageparentstopracticejointresponsibilityOurrelationshipwithstaff_Work-lifebalance
GRI103-2(GRI401)
Healthandsafety:
OccupationalhealthandsafetyconditionsOurrelationshipwithstaff_OccupationalHealthandSafety
GRI102-41
Workaccidents,particularlytheirfrequencyandseverity,aswellasoccupationalillnesses.Dividedbygender.Ourrelationshipwithstaff_MainworkforcefiguresOtherfigures_workforce
GRI403-2GRI403-3
Socialrelations:Organisationofsocialdialogue(includingproceduresforinforming,consultingandnegotiatingwithstaff)
Ourrelationshipwithstaff_Dialoguewithworkers
GRI103-2(GRI402)
PercentageofemployeescoveredbycollectiveagreementbycountryOurrelationshipwithstaff_Mainworkforcefigures
GRI102-41
Balanceofcollectiveagreements(particularlyinthefieldofoccupationalhealthandsafety)Ourrelationshipwithstaff_OccupationalHealthandSafety
GRI403-1GRI403-4
Training:
Thepoliciesimplementedinthefieldoftraining
Ourrelationshipwithstaff_DevelopmentOurrelationshipwithstaff_MainworkforcefiguresOtherfigures_workforce
GRI103-2(GRI404)GRI404-2
Accessibility:
UniversalaccessibilityforpeopleOurrelationshipwithstaff_Diversityandequalopportunities
GRI103-2(GRI405)
Equality:Measuresadoptedtopromoteequaltreatmentandopportunitiesbetweenwomenandmen;equalityplans(ChapterIIIofOrganicLaw3/2007,of22March,fortheeffectiveequalityofwomenandmen),measuresadoptedtopromoteemployment,protocolsagainstsexualandgender-basedharassment,integrationanduniversalaccessibilityofpeoplewithdisabilities;apolicyagainstalltypesofdiscriminationand,whereappropriate,diversitymanagement.
Ourrelationshipwithstaff_Diversityandequalopportunities
GRI103-2(GRI405and406)
ApplicationofduediligenceproceduresinthefieldofHumanRights
Ourrelationshipwithstaff_Workforcemanagementapproach
GRI102-16GRI102-17
GRI103-2(GRI412)GRI410-1GRI412-1GRI412-3
Preventionofrisksofhumanrightsviolationsand,whereappropriate,measurestomitigate,manageandremedypossiblemisconduct
Complaintsrelatedtotheviolationofhumanrights GRI406-1PromotionofandcompliancewiththeprovisionsoftheInternationalLabourOrganisation'sfundamentaltreatiesrelatingtorespectforfreedomofassociationandtherighttocollectivenegotiation.
GRI103-2(406,407,408and409)
Measuresadoptedtopreventcorruptionandbribery
1.Aboutus_PrinciplesandGovernment
GRI102-16GRI102-17
GRI103-2(GRI205)GRI205-1GRI205-2GRI205-3
Measurestocountermoneylaundering
Contributionstonon-profitorganisationsandfoundations GRI413-1Thecompany'scommitmenttosustainabledevelopment
Theimpactofthecompany'sactivityonlocaldevelopmentandemploymentOurrelationshipwithsociety_ManagementApproach
Theimpactofthecompany'sactivityonterritorialandlocalpopulationsOurrelationshipwithsociety_ManagementApproach
TherelationsmaintainedwiththeactorsofthelocalcommunitiesandthemethodsofdialogueestablishedtherewithOurrelationshipwithsociety_Dialoguewithsociety
AssociationorsponsorshipactionsOurrelationshipwithsociety_Dialoguewithsociety
Subcontractingandsuppliers:
Inclusionofthepurchasingpolicyregardingsocial,genderequalityandenvironmentalissuesResponsiblemanagementofsuppliers_Managementapproach
GRI103-2(GRI204,308and414)
ConsiderationintherelationswithsuppliersandsubcontractorsoftheirobligationsResponsiblemanagementofsuppliers_Managementapproach
GRI102-9SupplyChainGRI103-2(GRI204,308and
414)GRI204-1GRI308-1GRI414-1
SupervisoryandauditsystemsandresolutionthereofResponsiblemanagementofsuppliers_Managementapproach
GRI103-2(GRI204)
Consumers:
MeasuresforthehealthandsafetyofconsumersCustomermanagement_Responsiblecustomermanagement
GRI103-2(GRI416,417and418)
GRI416-1GRI417-1G4-FS15
Claimssystemsandcomplaintsreceivedandresolutionthereof
CustomerManagement_MaincustomerfiguresCustomermanagement_DialoguewithcustomersOtherfigures_Customers
GRI102-17GRI103-2(GRI416,417and
418)GRI416-2GRI417-2GRI418-1
Taxinformation:Profitsobtainedcountrybycountry
1.Aboutus_MainGroupFiguresGRI103-2(GRI201)
TaxesobtainedonbenefitspaidPublicgrantsreceived GRI201-4Anyotherrelevantinformation:
96
6.2.TableofGRIindicatorsAny indicators that directly affect those areas that according to the materiality matrix areconsideredtobeofhighormedium-highrelevancearedisplayedwithabluebackground.
ORGANISATIONPROFILE102-1 Nameoftheorganisation. CajaLABORALPopularCoop.deCrédito
102-2 Activities,brands,productsandservices.8-9PresentationoftheGroup38-39ResponsibleproductsandservicesRefertoWebsite www.LABORALkutxa.com
102-3 Locationoftheorganisation'smainoffices.JoséMªArizmendiarrietas/n.20500Arrasate-Mondragón(Gipuzkoa)
102-4 Statethenumberofcountriesinwhichtheorganisationoperates. LABORALKutxaoperatesexclusivelyintheSpanishState102-5 Propertyregimeandlegalform. CajaLaboralPopularCoop.deCrédito
102-6Specifywhichmarketsareserved(withageographicalbreakdown,bysectorandtypeofcustomersandrecipients).
12Geographicdistribution36managementapproachandMaincustomerfigures80-81-82Othercustomerfigures
102-7
Determinethescaleoftheorganisation,indicating:NumberofpeopleemployedNumberofoperationsNetsalesornetincomeCapitalisation,brokendownintermsofdebtandequityQuantityofproductsorservicesoffered
13-14MainFiguresoftheGroup
102-8
Determine:Numberofpeopleemployedbycontracttypeandgender.NumberofpermanentemployeesbycontracttypeandregionStaffsizebyemployedpersons,contractedworkersandgender.Indicatewhetherasubstantialpartoftheorganisation'sworkiscarriedoutbylegallyrecognisedself-employedpersonsorbypersonswhoareneitheremployeesnorcontractworkers,suchaspersonsemployedandsub-employedhiredbycontractors.
83-89Otherfigures-People
102-9 Describetheorganisation'ssupplychain. 76Ourrelationshipwithsuppliercompanies
102-10Reportanysignificantchangesduringtheperiodunderreviewinthesize,structure,shareholdingorsupplychainoftheorganisation.
5-6Letter9-10Operatingstructure14-17Riskmanagementandstrategy9InvesteeCompanies76Ourrelationshipwithsuppliercompanies
102-11 Describehowtheorganisationaddresses,ifapplicable,theprecautionaryprinciple.
14-17Riskmanagementandstrategy17-20PrinciplesandGovernment26-27ManagementApproachRisksaregenerallymanagedbytheGoverningBoard'sRiskCommitteeandtheRiskAppetiteFramework,andarereportedannuallyintheInformationwithPrudentialRelevance.EnvironmentalrisksaremanagedwithinasystemcertifiedwithISO14001:2015.RisksforcustomersofnewproductscomeunderthescopeoftheProductsCommittee
102-12Preparealistofletters,principlesorotherexternalinitiativesofaneconomic,environmentalandsocialnaturethattheorganisationendorsesorhasadopted. 67-69InitiativesendorsedbyLABORALKutxa
102-13Preparealistofnationalandinternationalassociationsandorganisationstowhichthecompanybelongs.
STRATEGY
102-14Statementfromtheorganisation'schiefdecision-maker. 5-6Letter
102-15Mainimpacts,risksandopportunities.
14-17Riskmanagementandstrategy31-33Materiality28-29CommitmentsandAchievements30-31CSRScorecard
ETHICSANDINTEGRITY
102-16 Describethevalues,principles,standardsandregulationsoftheorganisation.11-12Values,principles,standardsandcodesofconduct
102-17
Describetheinternalandexternaladvisorymechanismsforethicalandlawfulconduct,andforconsultingonmattersrelatedtotheintegrityoftheorganisation.Describetheinternalandexternalmechanismsforreportingunethicalorillegalconductandmattersrelatedtotheintegrityoftheorganisation.
21-22-23Corruptionandbribery38CustomerService
GOVERNANCE
102-18Describetheorganisation'sgovernancestructure,includingthecommitteesofthehighestgoverningbody.Identifythecommitteesresponsibleformakingdecisionsoneconomic,environmentalandsocialissues
9-10OperatingStructure17-20CorporateGovernance36-37Dialoguewithcustomers31-32MaterialityanalysisRefertoCorporateGovernanceReport
102-19Describetheprocessbywhichthehighestgoverningbodydelegatesitsauthoritytoseniormanagementandcertainemployeesoneconomic,environmentalandsocialmatters.
102-20 ProcessforsubmittingaccountstotheBoard102-21 Processesforconsultingwithstakeholders102-22 Describethecompositionofthehighestgoverningbodyanditscommittees.102-23 Executiveornon-executivenatureofthehighestgoverningbody.
102-24Describetheappointmentandselectionprocessesforthehighestgoverningbodyanditscommittees,aswellasthecriteriaonwhichtheappointmentofthemembersoftheformerisbased.
RefertoCorporateGovernanceReport
102-25Describetheprocessesthehighestgoverningbodyfollowstopreventandmanagepotentialconflictsofinterest.Indicatewhetherthestakeholdersareinformedinthisregard.
15-18CorporateGovernanceRefertoCorporateGovernanceReport
Roleofthehighestgoverningbodyintheselectionofobjectives,valuesandstrategy102-26 Describetherolesofthehighestgoverningbodyandseniormanagementinthedevelopment,approval, 17-20CorporateGovernance
Index
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andupdatingoftheorganisation'spurpose,valuesormissionstatements,strategies,policies,andobjectiveswithrespecttoeconomic,environmental,andsocialimpacts.
11-12Values,principles,standardsandcodesofconductRefertoCorporateGovernanceReport
Collectiveknowledgeofthehighestgoverningbody
102-27Specifythemeasuresadoptedtodevelopandimprovethecollectiveknowledgeofthehighestgoverningbodyinrelationtoeconomic,environmentalandsocialmatters.
21Developmentofthegoverningbodies
102-28
Describetheprocessesforevaluatingtheperformanceofthehighestgoverningbodyinrelationtothegovernanceofeconomic,environmentalandsocialaffairs.Statewhethertheevaluationisindependentandhowoftenitiscarriedout.Specifywhetheritisaself-evaluation.Describethemeasuresadoptedasaresultoftheperformanceassessmentofthehighestgoverningbodyinrelationtothemanagementofeconomic,environmentalandsocialaffairs;amongotheraspects,specifyatleastwhethertherehavebeenchangesinmembersorinorganisationalpractices.
17-20CorporategovernanceRefertoCorporateGovernanceReport.102-29
Describetheroleofthehighestbodyinidentifyingandmanagingeconomic,environmentalandsocialimpacts,risksandopportunities.Alsooutlinetheroleofthehighestgoverningbodyinimplementingtheduediligenceprocesses.Indicatewhetherthestakeholdersareapproachedforinputintheworkofthehighestgoverningbodyintheidentificationandmanagementofeconomic,environmentalandsocialimpacts,risksandopportunities.
102-30Describetheroleofthehighestgoverningbodyinanalysingtheeffectivenessoftheorganisation'sriskmanagementprocesseswithrespecttoeconomic,environmentalandsocialissues.
102-31Indicatethefrequencywithwhichthehighestgoverningbodyanalyseseconomic,environmentalandsocialimpacts,risksandopportunities.ROLEOFTHEHIGHESTGOVERNINGBODYINTHEPREPARATIONOFTHESUSTAINABILITYREPORT
102-32IdentifythemostimportantcommitteeorpositionthatreviewsandapprovestheSustainabilityReportandensuresthatallsignificantaspectsareaddressed.
17-20Corporategovernance
ROLEOFTHESENIORBODYINTHEEVALUATIONOFECONOMIC,ENVIRONMENTALANDSOCIALPERFORMANCE102-33 Describetheprocessforbringingimportantconcernstotheattentionofthehighestgoverningbody. 17-20CorporateGovernance
102-34Statethenatureandnumberofsignificantconcernsthatweretransmittedtothehighestbody,includingadescriptionofthemechanismsthatwereusedtoaddressandassessthem.
49DialoguewithstaffIntheannualreporttotheGoverningBoardregardingCSRactivities,therelevantactivitieswereidentified
REMUNERATIONANDINCENTIVES
102-35Describetheremunerationpoliciesforthehighestgoverningbodyandseniormanagement.Listtheperformancecriteriathataffecttheremunerationpolicywiththeeconomic,environmentalandsocialobjectivesofthehighestgoverningbodyandseniormanagement.
21RemunerationoftheGoverningBodiesRefertoConsolidatedAnnualStatementp.33
102-36Describetheprocessesusedtocalculateremuneration.Specifywhetherconsultantsareusedtodetermineremunerationandwhethertheyareindependentwithrespecttothemanagement.Indicateanyothertypeofrelationshipthatsuchcompensationconsultantsmayhavewiththeorganisation.
56-57Remunerationmanagement21RemunerationoftheGoverningBodiesSeeprudentialrelevancereport
102-37Explainhowstakeholders'viewsonremunerationaresoughtandtakenintoaccount,including,whereappropriate,theresultsofvotesonpoliciesandproposals
17-20Corporategovernance56-57Remunerationmanagement
102-38
Calculatethecorrelationbetweenthetotalannualremunerationofthehighestpaidpersonintheorganisationandtheaveragetotalannualremunerationoftheentireworkforce(notincludingthehighestpaidindividual).
56-57Remunerationmanagement
102-39Calculatethecorrelationbetweenthepercentualincreaseofthetotalannualremunerationofthehighestpaidpersonandthepercentualincreaseoftheaveragetotalannualremunerationoftheentireworkforce(notincludingthehighestpaidindividual).
PARTICIPATIONOFSTAKEHOLDERS
102-40
Createalistofstakeholdersrelatedtotheorganisation.
28-29CommitmentsandachievementsThestakeholdersareexaminedannuallyinthematerialitystudy.31-33Materiality36-37Dialoguewithcustomers49DialoguewithPeople49JointNegotiation66DialoguewithSociety
102-41
Percentageofemployedpersonscoveredbycollectiveagreements.
102-42
Indicatethegroundsforthechoiceofstakeholderswithwhichtheorganisationworks.
102-43
Describetheorganisation'sapproachtostakeholderengagement,includingthefrequencyofcollaborationwithdifferenttypesofstakeholders,orwhetheragroupwasspecificallyinvolvedinthereportingprocess.
102-44
Identifykeyissuesandproblemsthathavearisenfromstakeholderengagementanddescribetheorganisation'sassessment,includingthroughitsReport.Specifywhichstakeholderswereinvolvedineachofthekeyissuesandproblems.
MATERIALASPECTSANDCOVERAGE
102-45
Preparealistoftheentitiesappearingintheorganisation'sconsolidatedfinancialstatementsandotherequivalentdocumentsIndicatewhetheranyoftheentitieslistedintheorganisation'sconsolidatedfinancialstatementsandotherequivalentdocumentsarenotincludedintheReport.
9InvesteeCompanies
102-46DescribetheprocessfollowedtodeterminethecontentoftheReportandthescopeofeachAspect.ExplainhowtheReportingPrincipleshavebeenappliedtodeterminetheContentoftheReport.
91ReportProfile31-33Materiality
102-47 PreparealistofmaterialAspectsthatwereidentifiedwhiledefiningthecontentsoftheReport. 31-33Materiality
102-48 DescribetheconsequencesofthereformulationsoftheinformationprovidedinpreviousReportsandtheircauses.ThechangesthathavetakenplacearedescribedthroughouttheReport
102-49 MentionanysignificantchangeinthescopeandcoverageofeachaspectwithrespecttopreviousReports. 91ReportProfile
102-50 PeriodcoveredbytheReport. Year2019102-51 DateofthelastReport(ifapplicable). Reportfor2018publishedinMay2019102-52 Reportingcycle(annual,biennial). 91ReportProfile
102-53 ProvideapointofcontacttoresolveanydoubtsthatmayariseregardingthecontentsoftheReport.OntheWebpage:www.LABORALkutxa.com ormail:[email protected]
GRIINDEX
102-54102-55
Indicatewhichoptionyouhavechosen“inaccordance”withtheGuide.ProvidetheGRIindexofthechosenoption.GivereferencetotheExternalVerificationreportifthishasbeenperformed.
1Cover94-101GRIIndicatorsLastpage.AENORVerificationandreportinglevel
VERIFICATION
98
102-56
Describetheorganisation'spolicyandcurrentpracticeswithregardtoexternalverificationoftheReport.IfnotmentionedintheverificationreportattachedtotheSustainabilityReport,pleaseindicatethescopeandbasisoftheexternalverification.Describetherelationshipbetweentheorganisationandthecompaniesprovidingtheverification.Indicatewhetherthehighestgoverningbodyorseniormanagementhavebeeninvolvedintherequestforexternalverificationoftheorganisation'ssustainabilityReport.
91ReportProfileTheDirectoroftheFinancialAreaapprovedtherequestforverificationoftheReport.
MANAGEMENTAPPROACH
103-1 Specifythecoverageoftheorganisationforeachsignificantaspect.31-33Materiality14-17Riskmanagementandstrategy
103-2103-3
ManagementapproachanditscomponentsEvaluationofthemanagementapproach.
13-14Mainfigures26-27/36/48-49/61-62/69-70Managementapproach31-33Materiality14-17Riskmanagementandstrategy
CATEGORY:ECONOMYAspect:economicperformance
201-1 Directeconomicvaluegeneratedanddistributed. 14-15MainFigures
201-2Financialimplicationsandotherrisksandopportunitiesfortheorganisation'sactivitiesduetoclimatechange
38-41EnvironmentallyResponsibleProductsandServices.71-72Transparencyinfossilfuelexposure74-75Climatechange
201-3 Scopeofobligationsarisingfromthebenefitsplan.56-57Remunerationmanagement61Coop.ReturnsCapitalised
201-4 Financialaidgrantedbygovernmententities. 14GrantsAspect:marketpresence
202-1 Correlationbetweentheinitialsalarybrokendownbygenderandthelocalminimumwage. 56-57Remunerationmanagement202-2 Percentageofseniormanagersfromthelocalcommunity 17-20Corporategovernance
Aspect:indirecteconomicimpacts
203-1 Developmentandimpactofinvestmentininfrastructureandtypesofservices69-70OurrelationshipwiththeEnvironment62-64Gaztenpresa14Taxesandduties
203-2 Significantindirectfinancialimpactsandtheirscope. 64-65IndirectContributionstoSocietyAspect:Acquisitionpractices
204-1Percentageoftheexpenditureinplaceswithsignificantoperationsthatcorrespondstolocalsuppliers.
77Mainfigures-suppliers
Aspect:thefightagainstcorruption
205-1NumberandpercentageofcentreswhereRisksrelatedtocorruptionhavebeenassessedandrisksidentified.
21-23Corruptionandbribery
205-2 Anti-corruptioncommunicationandtrainingpoliciesandprocedures53TraininginAnti-CorruptionProcedures21Developmentofthegoverningbodies21-23Corruptionandbribery
205-3 Confirmedcasesandmeasurestaken21-23Corruptionandbribery24Regulatorycompliance
Aspect:unfaircompetitionpractices
206-1 Numberofclaimsofunfaircompetition,monopolyoranti-competitivepracticesandtheiroutcomeTherewerenoclaimsorlegalactionsintheyearscoveredbytheReport
CATEGORY:ENVIRONMENTAspect:materials301-1 MaterialsUSEDbyweightorvolume. 73-74Sustainableuseofresources301-2 Percentageofthematerialsusedthatarerecycledmaterials. 73-74Sustainableuseofresources
301-3Percentageofproductssoldandtheirpackagingmaterialsthatarerecoveredattheendoftheirusefullife,byproductcategory.
Thephysicalcomponentoffinancialproductsisnotsignificant.
Aspect:energy
302-1 Internalenergyconsumption. 73-74Sustainableuseofresources
302-2 Externalenergyconsumption73-74Sustainableuseofresources74-75Climatechange
302-3 Energyintensity 73-74Sustainableuseofresources302-4 Reductioninenergyconsumption. 73-74Sustainableuseofresources
302-5Reductionsintheenergyrequirementsofproductsandservices.
38-41EnvironmentallyResponsibleProductsandServices.
………………Aspect:water303-1 Totalwaterharvestingaccordingtothesource. 73-74Sustainableuseofresources303-2 Watersourcesthathavebeensignificantlyaffectedbywaterharvesting. Therewerenoaffectedwatersourcesdetected303-3 Percentageandtotalvolumeofrecycledandreusedwater. Waterisnotrecycledorreused………………Aspect:biodiversity
304-1Own,leasedormanagedbusinessunitsthatareadjacentto,containorarelocatedinprotected(orunprotected)areasofhighbiodiversityvalue.
LABORALKutxa'sfinancialactivitydoesnotaffectbiodiversityorimpactonprotectedareas.
304-2Descriptionofthemostsignificantimpactsonthebiodiversityinprotectedareasorinunprotectedhighbiodiversityareas,derivedfromtheactivities,productsandservices. LABORALKutxa'sfinancialactivitydoesnot
affectbiodiversityorimpactonprotectedareas.
304-3 Protectedorrestoredhabitats.
304-4NumberofspeciesincludedintheIUCNRedListandinnationalconservationlistswhosehabitatsareinareasaffectedbythebusiness,accordingtothelevelofdangerofextinctionofthespecies.
Aspect:emissions305-1305-2
Totaldirectandindirectgreenhousegasemissionsbyweight 74-75Climatechange
305-3 Otherindirectgreenhousegasemissions,byweight. 74-75Climatechange305-4 Intensityofgreenhousegasemissions 89Otherfigures-Environment
305-5 Reductioningreenhousegasemissions.69-70OurRelationshipwiththeEnvironment74-75Climatechange
99
305-6 Emissionsofozone-depletingsubstancesNoozone-depletingsubstancesareproduced,importedorexported.
305-7 NO,SOandothersignificantatmosphericemissions.Emissionsofthistypearetheresultofairconditioningsystemsandarenotconsideredtobesignificant.
Aspect:effluentsandwaste
306-1 Totalwastewaterdischarge,accordingtoitsnatureanddestination.72-73Circulareconomyandwastepreventionandmanagement
306-2 Totalweightofmanagedwaste,accordingtotypeandmethodoftreatment.72-73Circulareconomyandwastepreventionandmanagement
306-3 Numberandtotalvolumeofsignificantaccidentalspills Nosignificantaccidentalspillsweredetected306-4
Weightoftransported,imported,exportedortreatedwastedeemedhazardousunderAnnexesI,II,IIIandVIIIoftheBaselConventionandpercentageofthewastetransportedinternationally
Wedonotworkwiththetypeofwastedefinedintheindicator
306-5Identification,size,protectionstatusandbiodiversityvalueofwaterbodiesandrelatedhabitatssignificantlyaffectedbydischargesandrunofffromtheorganisation.
Noeffectonbiodiversityfromwaterdischargesorrunoffwatershasbeendetected
Aspect:regulatorycompliance
307-1Costofsignificantfinesandnumberofnon-monetarysanctionsfornon-compliancewithenvironmentalregulations.
ThecostoffinesandpenaltiesintheyearscoveredbytheReportwas0.
Aspect:environmentalassessmentofsuppliercompanies308-1 Percentageofnewsuppliercompaniesthatwereexaminedbasedonenvironmentalcriteria
76Ourrelationshipwithsuppliercompanies308-2
Significantactualandpotentialnegativeenvironmentalimpactsinthesupplychainandmeasurestaken
CATEGORY:EMPLOYMENT Aspect:employment
401-1Numberandrateofrecruitmentandaverageturnoverofpeopleemployed,brokendownbyagegroup,sexandregion.
83-89Otherfigures-Workforce
401-2Socialbenefitsforfull-timeemployeeswhicharenotofferedtotemporaryorpart-timeemployees,brokendownbykeyactivitylocations.
60SocialBenefits
401-3 Returntoworkandretentionratesaftermaternityorpaternityleave,brokendownbysex. 83-89Otherfigures-Workforce…………….Aspect:management-employeerelations
402-1Minimumnoticeperiodforoperationalchangesandpossibleinclusionoftheseincollectiveagreements.
Thereisnocollectiveagreementinthecooperative.AlthoughneithertheInternalRegulationsnortheinternalemploymentregulationsexpresslyestablishaminimumperiodofnoticeforinformingworkingpartnersofjoborworkplacechanges,majororganisationaloroperationalchangesmustbesubmittedtotheSocialCouncil.
Aspect:occupationalhealthandsafety
403-1Percentageoftheworkforcethatisrepresentedonformaljointhealthandsafetycommitteesformanagementandstaff,establishedtohelpmonitorandadviseonH&Sprogrammes
58-59OccupationalHealthandSafety
403-2
Typeandrateofinjuries,occupationalillnesses,dayslost,absenteeismandnumberofwork-relatedfatalitiesbyregionandbysex
58-59OccupationalHealthandSafety
403-3 Personnelwhoseprofessionhasahighincidenceorriskofillness.Giventhefinancialnatureofthebusiness,therearenooccupationalillnessesorhighrisksofillness.
403-4 Healthandsafetyissuescoveredinformalagreementswithtradeunions. 58-59OccupationalHealthandSafetyAspect:trainingandeducation404-1 Averagehoursoftrainingperyearperemployee,brokendownbysexandbyprofessionalcategory 83-89Otherfigures-Workforce
404-2Skillsmanagementandcontinuingeducationprogrammesthatpromoteemployabilityandhelpmanagetheendoftheirprofessionalcareers.
51-52Continuingeducationprogrammes
404-3Percentageofpeoplewhoreceiveregularperformanceandcareerdevelopmentreviews,brokendownbysexandbyprofessionalcategory
52-53PerformanceManagement-Bidean
Aspect:diversityandequalopportunities
405-1Compositionofthegoverningbodiesandbreakdownoftheworkforcebyprofessionalcategoryandsex,age,membershipofminoritygroupsandotherdiversityindicators.
83-89Otherfigures-Workforce17-20CorporateGovernance
405-2 Ratioofbasicsalaryofmentowomen,brokendownbyprofessionalcategoryandkeybusinesslocations.
56-57Remunerationmanagement83-89Otherfigures-WorkforceEqualpayforequalwork,regardlessofwhethermaleorfemale
Aspect:non-discrimination
406-1 Numberofcasesofdiscriminationandcorrectivemeasurestaken.NoincidentsofdiscriminationoccurredduringtheperiodcoveredbytheReport
Aspect:freedomofassociationandcollectivebargaining
407-1Identificationofsignificantcentresorsuppliercompanieswherefreedomofassociationandtherighttoenterintocollectiveagreementsmaybeviolatedorunderthreat,andmeasurestakentodefendtheserights.
BothLABORALKutxaandpracticallyallitssuppliercompaniesarebasedinSpain.Thismeansthat,bylaw,humanrightsmustberespected,includingthefreedomofassociationandcollectivebargaining.
Aspect:childlabour
408-1Identificationofcentresandsuppliercompaniesthatentailapotentialriskofincidencesofchildexploitation,andthemeasuresadoptedtocontributetotheabolitionofsuchexploitation.
BothLABORALKutxaandpracticallyallitssuppliercompaniesoperatesolelyinSpain.Thismeansthat,bylaw,humanrightsmustberespected,includingthenon-exploitationofchildren.
Aspect:forcedlabour
409-1CentresandSupplierCompanieswithasignificantriskofbeingthesourceofincidencesofforcedlabour,andthemeasuresadoptedtocontributetotheeliminationofallformsofforcedlabour.
BothLABORALKutxaandpracticallyallitssuppliercompaniesoperatesolelyinSpain.Thismeansthat,bylaw,humanrightsmustberespected,includingforcedlabour
Aspect:securitymeasures
410-1Percentageofsecuritystaffwhohavereceivedtrainingontheorganisation'shumanrightspoliciesorproceduresastheyapplytothebusiness.
LABORALKutxahiresitssecuritystaffthroughauthorisedexternalcompanies,whoguaranteethat100%ofthepeopleemployedforthejobareproperlytrained.
Aspect:rightsoftheindigenouspopulation
411-1Numberofcasesofviolationoftherightsofindigenouspeopleandthemeasurestaken
Thisindicatorisnotapplicable,asthegeographicalareaofLABORALKutxaisSpain
Aspect:assessment
100
412-1Numberandpercentageofcentresthathaveundergonehumanrightsimpactassessmentsorreviews
Therehavebeennoreviewsofactivitiesinaspectsrelatedtohumanrights,sincetheriskoftheirviolationisverylowornon-existent.
Aspect:localcommunities
413-1Percentageofcentreswhereprogrammesfordevelopment,impactassessmentandlocalcommunityparticipationhavebeenimplemented
65-66Profitsharing31-33Materiality
413-2Businesscentreswithsignificantactualorpotentialnegativeeffectsonlocalcommunities
Noactivitieswithanegativeorpotentialimpactonlocalcommunitieshavebeenidentified.
Aspect:assessmentofsuppliercompaniesinrelationtohumanrights
414-1Percentageofnewsuppliercompaniesthatwereexaminedbasedonsocialcriteria
Therewerenohumanrightsassessmentsofthevarioussuppliersandsubcontractorsbecause,apriori,nosuppliercompanieswereidentifiedthat,duetothevolumeofpurchasesinquestion,thetypeofbusinesstheywereengagedinortheirlocation,mightposeasignificanthumanrightsrisk.Nevertheless,asalreadystated,LABORALKutxaaimstomakeprogressindefiningasystemforevaluatingsuppliersfromasocialandenvironmentalpointofview,inlinewiththeprinciplesoftheGlobalCompact
414-2Significantactualandpotentialnegativesocialimpactsinthesupplychainandthemeasurestaken.
Aspect:publicpolicy415-1 Valueofpoliticalcontributions,bycountryandrecipient 65RelationswithGovernmentAgenciesandPoliticalParties
Aspect:healthandsafetyofcustomers
416-1Percentageofsignificantproductandservicecategoriesforwhichhealthandsafetyimpactshavebeenassessedtopromoteimprovements
36-48Ourrelationshipwithcustomers42-43Responsibleproductsandservices
416-2Numberofincidentsarisingfromnon-compliancewithregulationsorvoluntarycodesconcerninghealthandsafetyimpactsofproductsandservicesduringtheirlifecycle,brokendownbytypeofoutcome
81Sanctions80-82CustomerService
…………………..Aspect:labellingofproductsandservices
417-1Typeofinformationrequiredbytheorganisation'sproceduresrelatingtotheinformationandlabellingofitsproductsandservices,andpercentageofsignificantproductandservicecategoriesthataresubjecttosuchrequirements
AlltheproductsandservicesofLABORALKutxaaresubjecttotheregulationsoftheBankofSpainandtheSpanishNationalSecuritiesMarketCommission(CNMV)withregardtoinformationaboutthemandtheirformofmarketing,whichguaranteestransparencyintheseprocedures.Furthermore,theMIFIDregulationsareappliedtoprotectthecustomer(classification,test,information,etc.).36-48OurRelationshipwithCustomers
417-2Numberoffailurestocomplywithregulationsandvoluntarycodesconcerningproductandserviceinformationandlabelling,brokendownbytypeofresult.
81Sanctions80-82CustomerService
417-3Numberofcasesofnon-compliancewithregulationsorvoluntarycodesinrelationtomarketingcommunications,suchasadvertising,promotionandsponsorship,brokendownbytypeofresult
81Sanctions80-82CustomerService
Aspect:customerprivacy
418-1 Numberofsubstantiatedcomplaintsaboutviolationofprivacyandleakingofcustomerdata81Sanctions80-82CustomerService
Aspect:regulatorycompliance
419-1Costofsignificantfinesduetonon-compliancewithregulationsandlegislationconcerningthesupplyanduseofproductsandservices
81Sanctions80-82CustomerService24RegulatoryCompliance
PRODUCTPORTFOLIO
FS1Descriptionofthepolicieswithspecificenvironmentalandsocialcontentappliedtothebusinessareas
28-29Commitmentsandachievements62-64GaztenpresaFoundation44-45SociallyResponsibleInvestment69-75Ourrelationshipwiththeenvironment
FS2Descriptionoftheproceduresforevaluatingandselectingthesocialandenvironmentalrisksineachofthepoliciesdescribedaboveandappliedtothebusinessareas.
53-56DiversityandEqualOpportunities44-45SociallyResponsibleInvestment69-75Ourrelationshipwiththeenvironment
FS3
Descriptionoftheproceduresforensuringandcontrollingcompliancewiththesocialandenvironmentalrequirementsbythecustomersincludedinthecontractsortransactions
Thereisnosystemformonitoringandcontrollingourcustomersaftertheevent,duetothelocationofouractivitiesandtheprojectswefinance
FS4Descriptionoftheprocess(es)toimprovetheskillsofemployeesforimplementingenvironmentalandsocialpoliciesandproceduresastheyapplytobusinessareas
63-56OurrelationshipwiththeEnvironment
FS5Descriptionoftheinteractionswithcustomersandotherstakeholdersintermsofriskmanagementandenvironmentalandsocialopportunities
36-37DialoguewithCustomers49DialoguewithPeople66DialoguewithSociety
FS6Percentageoftheportfolioforeachofthebusinessareasbrokendownbyregion,sizeandbusinesssector
12Geographicdistributionofoffices36Maincustomerfigures80-82Otherfigures-Customers
FS7Monetaryvalueofproductsandservicesdesignedtoprovideaspecificsocialbenefitineachofthebusinessareasandbrokendownbysocialobjectives
42-48SociallyResponsibleProductsandServices
FS8Monetaryvalueofproductsandservicesdesignedtoprovideaspecificenvironmentalbenefitineachofthebusinessareasandbrokendownbyenvironmentalobjectives
46LoansforRenewableEnergies
FS9Auditcoverageandfrequencyforassessingthedegreeofimplementationofpoliciesandproceduresforsocialandenvironmentalriskmanagement.
91ReportProfile53-56Ourrelationshipwiththeenvironment
FS10PercentageandnumberofcompanieswithintheOrganisation'sportfoliowithwhichtheOrganisationhasinteractedonsocialandenvironmentalmatters.
36-37Dialoguewithcustomers76Ourrelationshipwithsuppliercompanies
FS11Percentageofassetssubjecttopositiveand/ornegativeenvironmentalandsocialscreening
71Environmentalriskassessment44-45SociallyResponsibleInvestment
FS12Votingpoliciesappliedtosocialorenvironmentalissueswherethereportingorganisationholdstherighttovotingactionsorvotingrecommendations
NotapplicableduetothetypeandlegalformoftheOrganisation
FS13 Accesstofinancialservicesindepopulated/disadvantagedareasbytypeofaccess. 46AccessibilitytoFinancialServicesFS14 Initiativestoimproveaccesstopeoplewithdisabilities 46ArchitecturalbarriersandaccessviaInternetandmobilephone.
FS15 Policiesregardingthefairdesignandmarketingoffinancialproductsandservices
LABORALKutxafollowsstrictregulationswhendesigningandmarketingproducts.ItalsohasaCodeofConduct.36-37OurRelationshipwithCustomers38-41Responsiblemanagementwithcustomers
FS16 Initiativestoexpandfinancialculture,brokendownbytypesofbeneficiaries
47-48FinancialCulture68Financialeducation62-64GaztenpresaFoundation64-65Indirectcontributionstosociety
101
6.3.ReportingleveloftheReport
LABORALKutxadeclares thisReport tobe comprehensive in termsof theapplicationofGRIStandards, according to the table above, given that this is confirmed by the results of theexternalverificationbyAENOR.ThelocationofeachofthebasiccontentsoftheGRIStandardsGuideisdetailedbelow.
6.4.AENORverification
Index
6.5. PRINCIPLESFORRESPONSIBLEBANKING
ReportingandSelf-AssessmentRequirements High-level summary of
bank’sresponseReference(s)/Link(s) to bank’sfull response/ relevantinformation
Principle1:AlignmentAlign the business strategy to be consistentwith and contribute to individuals’needs and society’s goals, asexpressed in the Sustainable Development Goals, the Paris Climate Agreement and relevant national andregionalframeworks.1.1. Describe (high-level) the bank's business
model, including the main customersegments served, types of products andservices provided, the main sectors andtypes of activities, andwhere relevant thetechnologies financed across the maingeographiesinwhichyourbankoperatesorprovidesproductsandservices.
We provide answers tothesequestionsthroughoutthe 2019 SustainabilityReport and Non-FinancialInformation Statement,which follows GRIstandards and has beenauditedbyAENOR.
1.1 GroupPresentation(P.7)1.3.Cooperativism(P.10)1.5. Geographical BranchDistribution(P.12)1.6Group'sMainFigures(P.13)3.1.2. Main Customer Figures(P.36)3.1.6.ResponsibleProductsandServices(P.42-48)4.1Customers(P.80)Main figures of ResponsibleProductsandServices(P.82)
1.2. Describe how the bank has aligned and/oris planning to align its strategy to beconsistentwith and contribute to society'sgoals, as expressed in the SustainableDevelopment Goals (SDGs), the ParisClimate Agreement, and relevant nationalandregionalframeworks.
In LABORAL Kutxa'sstrategic reflection for theperiod 2020-2022 we haveintegratedthePrinciplesforResponsibleBanking.
1.7. Strategy and RiskManagement(P.14-17)2.6. United Nations GlobalCompact and SustainableDevelopmentGoals(P.33-34)
Principle2:ImpactandTargetSettingContinuously increase positive impacts while reducing the negative impacts on, and managing the risks to,people and environment resulting from activities, products and services. To this end, set and publish targetswherewecanhavethemostsignificantimpacts.2.1 ImpactAnalysis:Showthatthebankhasidentifiedtheareasinwhich it has its most significant (potential)positive and negative impact through animpact analysis that fulfils the followingelements:
a) Scope: The bank’s core business areas,products/services across the maingeographies that the bank operates in asdescribed under 1.1. have been consideredinthescopeoftheanalysis.
b) Scale of Exposure: Where its corebusiness/its major activities lie in terms ofindustries,technologiesandgeographies.
c) Context & Relevance: most relevantchallenges and priorities related tosustainabledevelopment.
d) Scale and intensity/salience of impact:social,economicandenvironmentalimpactsresulting from the bank’s activities andprovisionofproductsandservices.
Show that building on this analysis, the bank
• Identified and disclosed its areas of mostsignificant (potential) positive and negativeimpact.
To prepare theSustainability Report, wecarried out an analysis ofimpacts, risks andopportunities, as well as amaterialitystudy.For2020wewillcarryoutaspecific analysis, using thetool launched by UNEP FI,for which we participatedin the development. Thetool is designed to analysethe impact of banks'portfolios, helping toanalyse the impactsassociated with their retailand wholesale portfolios.The analysis will enable usto set targets where it isimportant to boostcontribution to society'sgoals, as required by thePrinciples for Responsible
1.7. Strategy and RiskManagement(P.14-17)1.8. Principles and Governance(P.17-20)2.5. Materiality Analysis (P.31-33)3.16. Responsible Products andServices(P.42-48)3.4. Our Relationship with theEnvironment(P.69-75)
102
Index
• Identified strategic business opportunities inrelation to the increase of positive impacts /reductionofnegativeimpacts.
Banking.
Pleaseprovidethebank’sconclusion/statementifithasfulfilledtherequirementsregardingImpactAnalysis.
Thisyearwehaveconductedtheanalysisinthesamewayasinrecentyears,butingreaterdepthaftersigninguptothePrinciplesforResponsibleBanking.Wewillsoonconductamorein-depthanalysisusingthetoolproposedbyUNEPFI.Thisanalysiswillbeincorporatedinnextyear'sreport.2.2. TargetSettingShow that the bank has set and published aminimum of 2 specific, measurable (qualitativeor quantitative), achievable, relevant and time-bound targets, which address at least 2 of theidentified"areasofmostsignificantimpact".Show that the targets are linked to and drivealignment with and greater contribution toappropriate SDGs, the goals of the ParisAgreement, and other relevant international,nationalorregionalframeworks.Identifyandsettargetsagainst thisbaseline (assessedagainstaparticularyear).Show that the bank has analysed andacknowledged significant (potential) negativeimpacts of the targets and that it has set outrelevant actions to mitigate them as far asfeasibletomaximizethenetpositiveimpact.
In 2019, LABORAL Kutxamadeastrategicreflection,in which it set 10measurable targets thatcontribute to society'sgoals. To set these targets,the Principles ofResponsible Banking havebeen taken into account,aligning them with thebank'stargets.
1.7. Strategy and RiskManagement(P.14-17)2.6. United Nations GlobalCompact and SustainableDevelopmentGoals(P.33-34)
Pleaseprovideyourbank’sconclusion/statementifithasfulfilledtherequirementsregardingTargetSetting.AsaresultofsigninguptothePrinciplesforResponsibleBanking,wehaveset10measurabletargetsinour2020-2022strategicperiod.2.3. Plans for Target Implementation and
MonitoringShow that the bank has defined actions andmilestonestomeetthesettargets.Showthatthebankhasputinplacethemeanstomeasureandmonitorprogressagainstthesettargets.Definitionsofkeyperformanceindicators,anychangesinthesedefinitions,andanyrebasingofbaselinesshouldbetransparent.
In addition to the StrategicPlan,thetargetshavebeenintegrated into the AnnualManagement Plan, withpartial targets, managersand lines of action. Forexample, one action for2020 is to change theelectricity consumed toelectricity exclusively fromrenewablesources.Throughout2019weperformedactionsfortheimplementationofthePrinciples.TheyareallmentionedintheSustainabilityReport.Tothisend,LABORALKutxahasestablishedaseriesofinitiativesandactionplans.ExamplesofthesearetheEqualityPlanandGaztenpresa.
2.6. United Nations GlobalCompact and SustainableDevelopmentGoals(P.33-34)3.2.5. Diversity and EqualOpportunities(P.53-56)GaztenpresaFoundation(P.62-63)
Please provide your bank’s conclusion/statement if it has fulfilled the requirements regarding Plans for TargetImplementationandMonitoring.
IntheManagementPlanwehaveputinplaceplansandlinesofactiontomeetthetargets.Theseareconstantlymonitoredandevaluatedattheendofeachperiod.
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2.4.ProgressonImplementingTargetsForeachtargetseparately:Show that you have implemented the actionspreviouslydefined.Explain why actions could not beimplemented/needed to be changed and howthe bank is adapting its plan to meet its settarget.Report on the bank’s progress over the last 12months towards achieving each of the settargets and the impact its progress resulted in(Where feasible and appropriate, includequantitativedisclosures)
In 2019, the Principles forResponsible Banking weresignedandtargetsweresetas part of the strategicreflection made. Actionshave also been set out toachieve these objectives.The progress made will beexplained in the 2020report.
1.7. Strategy and RiskManagement(P.14-17)2.6. United Nations GlobalCompact and SustainableDevelopmentGoals(P.33-34)
Please provide your bank’s conclusion/statement if it has fulfilled the requirements regarding Progress onImplementingTargetsInthe2019financialyear,plansweremadetoimplementthetargetssetforthe2020-22strategicreflection.The2020reportwillexplaintheprogressmade.Principle3:ClientsandCustomersWorkresponsiblywithclientsandcustomerstoencouragesustainablepracticesandenableeconomicactivitiesthatcreatesharedprosperityforcurrentandfuturegenerations.3.1. Provide an overview of the policies andpractices the bank has in place and/or isplanningtoputinplacetopromoteresponsiblerelationships with its customers. Include high-level information on any programmes andactions implemented (and/or planned), theirscaleandtheresultsthereof.
We describe the practicesimplemented by LABORALKutxa to promoteresponsible relations withcustomers.Weareconvincedthat,asacreditcooperative,thiswayof acting responsibly hasbeen a constant from thebeginning.
3.1. Our relationship withCustomers(P.36-48)
3.2. Describe how your bank has worked withand/or is planning to work with its clients andcustomers to encourage sustainable economicactivities. Include information on actionsplanned/implemented, products and servicesdeveloped,andtheimpactsachieved.
This section describes theactions carried out toimplement responsiblecustomerrelations.
3.1. Our relationship withCustomers(P.36-48)3.1.3. Dialoguewith Customers(P.36-38)
Principle4:StakeholdersProactivelyandresponsiblyconsult,engageandpartnerwithrelevantstakeholderstoachievesociety’sgoals.4.1. Describe which stakeholders you haveconsulted, engaged, collaborated or partneredwith for the purpose of implementing thePrinciples and improving the bank’s impacts.Describe how the bank has identified relevantstakeholders and what issues wereaddressed/resultsachieved.
TopreparetheCSRReport,we have identified thestakeholders andestablishedmechanismsfordialoguewiththem.
2.5. Materiality Analysis (P.31-33)
Principle5:Governance&CultureImplementthecommitmenttothesePrinciplesthrougheffectivegovernanceandacultureofresponsiblebanking5.1. Describe the relevant governancestructures,policiesandproceduresthebankhasin place/is planning to manage significantpositive and negative (potential) impacts andsupport effective implementation of thePrinciples.
LABORAL Kutxa hasmechanisms for managingimpactsandrisks,aswellasa CSR Committee. The CSRCommittee is responsibleforand leadsthe initiativesrelated to sustainability,includingthePrinciples.
1.8. Principles and governance(P.17-20)
5.2. Describe the initiatives and measures thebankhasimplementedorplanstoimplementtofosteracultureofresponsiblebankingamongitsemployees. This should include a high-leveloverview of capacity building, inclusion inremuneration structures and performance
LABORAL Kutxa is a creditcooperative in which theworkers are the owners ofthe company, andtherefore they take partdemocratically in
1.3.Cooperativism(P.10-11)1.10. Remuneration of theGoverningBodies(P.21)3.2.4.StaffDevelopment(P.50)3.2.7. CompensationManagement(P.56-57)
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management and leadership communication,amongstothers.
management and decision-making.Our cooperative banking isa social economy and theculture of responsiblebanking is part of ouroperation.
5.3. Governance Structure for ImplementationofthePrinciplesShow that thebankhasagovernancestructureincludinga) target-setting and actions to achieve
targets.b) remedial action in the event they arenot
achieved or unexpected negative impactsaredetected.
As mentioned above, thePrinciples have beenintegrated into theStrategic Plan and theManagementPlan.The CSR committee leads,promotes and monitorseverything related tosustainability.
In the specific case of theenvironmental targets,weholdenvironmentalcertificationUNEENISO140013.4.1.Management Approach -Environment(P.69-70)
Please provide your bank’s conclusion/statement if it has fulfilled the requirements regarding GovernanceStructureforImplementationofthePrinciples.LABORAL Kutxa maintains a suitable structure for sustainability management, including the Principles forResponsible Banking. This structure stems both from our configuration as a credit cooperative and from thecontinuousefforttoimproveandadaptourorganisation.Principle6:Transparency&AccountabilityPeriodically review the individualandcollective implementationof thesePrinciplesandbe transparentaboutandaccountableforpositiveandnegativeimpactsandcontributiontosociety’sgoals.6.1. Progresson Implementing thePrinciples for
ResponsibleBankingShow that the bank has progressed onimplementing the Principles over the last 12months and has set and implemented thetargetsinminimumtwoareas(see2.1-2.4).Showthatthebankhasconsideredexistingandemerging international/regional good practicesrelevant for the implementation of thePrinciples and has defined priorities andambitions to align with good practices.Showthatthebankhasimplemented/isworkingonimplementingchangesinexistingpracticestoreflectandbeinlinewithexistingandemerginginternational/regional good practices and hasmade progress on its implementation of thesePrinciples.
Forthefirst6monthssincethe signing of thePrinciples, LABORAL Kutxahas incorporatedsustainability into thestrategic reflection for thenext three years,establishing 10sustainability targets inaddition to the businesstargets.
Since the signing of thePrinciples,wehaveparticipatedin the initiatives carried out byUNEP FI to advance theirimplementation. This allows usto be at the forefront of thegood practices that are beingcarried out at internationallevel.
Providethebank’sconclusion/statement if ithas fulfilled therequirements regardingProgresson ImplementingthePrinciplesforResponsibleBankingSincethesigningofthePrinciples,wehaveworkedintensivelytodevelopinitiativestoimplementtheobjectivesandtointroducethemintoourstrategyandobjectives.
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