27th of June 2022

To our stakeholders:

I am pleased to confirm that Sparebanken Vest reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Jan Erik Kjerpeseth
CEO

Sparebanken Vest’s vision is to help to make life in Western Norway even better. We want to set an example for how businesses can contribute to social development in Western Norway, and we recognise that our task as part of society goes further than the statutory requirements we are subject to. Sparebanken Vest will contribute through our own processes, the projects and customers we choose to finance and how we conduct ourselves in relation to customers, society and the environment. The Principles of CSR document describes our principles for ethical conduct and for exercising corporate social responsibility (CSR) in our business operations and in our dealings with our customers, through the businesses we invest in, the requirements we make of our suppliers, and what we emphasise to ensure that our operations, corporate governance and ownership are sustainable. These guidelines are intended to ensure that Sparebanken Vest does not contribute to violations of human rights or labour rights, money laundering and terrorism financing, corruption, serious environmental harm or to other actions that can be perceived as unethical.

Our commitments are based on recognised international guidelines such as:
 The Universal Declaration of Human Rights (UDHR)
 The UN Global Compact
 The OECD Guidelines for Multinational Enterprises
 The UNEP FI Statement
 The UN Principles for Responsible Investments (PRI)
 The UN Guiding Principles on Business and Human Rights
Sparebanken Vest works on CSR at the strategic level, in day-to-day operations and by making good reporting available. Sparebanken Vest has endorsed the UN Global Compact, and we make active endeavours to ensure that our operations are compatible with global sustainability. Through our endorsement of the initiative, we are committed to basing our strategy and operating processes on principles concerning human rights, the working environment, the natural environment and corruption.
Reporting is a key part of following up goal attainment and transparency about our work on CSR. Our annual report follows the guidelines of GRI core and we aim to contribute to a better access to sustainability data to build on transparency and openness.

Our customers must be able to trust us to give advice and financing that contribute to long-term and sustainable growth for both individual businesses and projects and also for Western Norway as a region. We contribute to this by advising customers to make sound financial choices, and by ensuring that we finance businesses that operate within the bounds of the law. We have established guidelines intended to assess operational risk factors such as violations of human rights or labour rights, corruption, serious environmental harm or other actions that can be perceived as unethical.

The new Norwegian law, Transparency Act (“Åpenhetsloven”) imposes a number of duties on the Bank and other major traders relating to basic human rights and decent working conditions and entitles all stakeholders to inform on the handling of actual and possible negative consequences for these rights.
Sparebanken Vest and Sparebanken Vest Boligkreditt AS are obliged to carry out due diligence for their own operations and value chain in line with the OECD guidelines for multinational companies.
The work on adaptations to new regulatory requirements has been implemented both in departments that are responsible for processes that are made directly by new obligations and at the group level in order to identify the need for adjustments in group processes related to reporting and transparency.
The due diligence work consists of the following elements:
• Anchor accountability in guidelines and management systems
• Map and assess negative impact/damage based on your own business, supply chain and business partners.
• Stop, prevent or reduce negative impact/injury.
• Monitor implementation and results.
• Communicate how the impact is handled.
• Provide and contribute to recovery where required.
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The Transparency Act and the Bank's obligations are anchored in the Board of Directors and Group Management, both for Sparebanken Vest and Sparebanken Vest Boligkreditt AS. An analysis has been carried out of how existing policies, systems and routines correspond to both legal requirements and the actual methodology for due diligence, which follows from the OECD and the UN Guiding Principles on Business and Human Rights, which provide a good starting point for identifying where measures may be needed.
An interdisciplinary team has been established that includes departments and functions related to value chains and own activities, as well as appointed employees with special follow-up responsibilities in various areas.
Existing processes for risk management, procurement, notification, treatment protocols and annual plans form the basis for implementing the due diligence in practice and updated accordingly. Training has been carried out on what the Transparency Act entails for relevant divisions, and this futher training programs will be rolled out.
An important part of the due diligence is communication of priority risk, measures and their effect. The Bank will explain this in its annual report or equivalent from 2023.

We require all our suppliers to comply with Norwegian laws and binding international agreements. The requirements, which are enshrined in our procurement policy, can be summarised in the following main categories:
 Human rights
 Working conditions
 Environmental management
 Ethical practices
 Reporting
 Climate requirements
The purpose of our procurement policy is to promote responsible supplier chains in order to safeguard human rights and labour rights, sustainable development and responsible environmental management. All the supplier agreements we enter into must include documentation concerning the supplier’s climate efforts, CSR and HSE work. The documentation must confirm that the supplier complies with all local, national and international laws, rules and other industry principles. The same requirements apply to the supplier’s subcontractors.

We require our fund suppliers to have a good and conscious approach to CSR in their investments. We also require them to have signed or to comply with investment principles corresponding to UN PRI, and to have clear guidelines for the exclusion of companies. Managers must not invest in companies involved in weapons production, human rights or labour rights violations or breaches of environmental criteria and anti-corruption work. We will prioritise fund managers who give consideration to issues such as responsible management of our common resources, for example water resources, fisheries and aquaculture, forests and timber, the extractive industries, responsible oil recovery and refining of petroleum products, and other issues that are included in the industry assessments in this document.
The management team, the size of the organisation and its reputation are also part of the assessment. Reliable and robust fund managers are a precondition for creating trust in distribution through our channels, and are necessary if we are to trust the managers to follow up our requirements for ethics and sustainability in their fund management.
We only distribute funds where the manager manages the funds themselves. We also carry out further investigations if a potential fund has underlying products and deliveries from other parties, to ensure that it has been clarified what the actual risk is and who the real counterparty is.

As part of the assessment of relevant risks relating to ethics and sustainability, the bank has prepared a guide containing questions about issues such as ethics, the climate, the environment, ownership structures, labour rights and corruption. These questions are used as a guidance and assessment tool when necessary or expedient. The focus will be on issues that are particularly relevant to the customer’s risk.
A criterion for any customer relationship is that the customers follow legislation and agreements that apply in Norway and in the countries where the customers are present. This includes, among other things, supporting and respecting protection of internationally recognized human rights and not contributing to violations of employee or human rights, in-house, at suppliers or in other parts of the value chain.
Sparebanken Vest wants our customers to strive for equality, have zero tolerance for racism and other discrimination in their workplaces and with their subcontractors.
Similarly, we expect customers to have an environmental policy for how to take care of the environment and minimize their environmental footprint. Sparebanken Vest expects our customers to take into account regulations for the use of natural resources, activity in areas that currently have other uses for local people or indigenous peoples, or in areas with a vulnerable environment, endangered species or water shortages. The bank also expects the FPIC principles for free, prior and informed consent to be followed in order to prevent conflicts over natural resources and land, including conflicts over small-scale farming.
Country risk will be included in the assessment if the customer operates or has projects in countries other than the high-income countries in the OECD. We use the OECD’s country classification as our point of departure. A country risk analysis must be conducted when relevant. Such analyses are used to assess risks relating to money laundering, corruption, financing of terrorism, the environment, labour and human rights.

The Transparency Act and the Bank's obligations are anchored in the Board of Directors and Group Management, both for Sparebanken Vest and Sparebanken Vest Boligkreditt AS. An analysis has been carried out of how existing policies, systems and routines correspond to both legal requirements and the actual methodology for due diligence, which follows from the OECD and the UN Guiding Principles on Business and Human Rights, which provide a good starting point for identifying where measures may be needed.
An interdisciplinary team has been established that includes departments and functions related to value chains and own activities, as well as appointed employees with special follow-up responsibilities in various areas.
Existing processes for risk management, procurement, notification, treatment protocols and annual plans form the basis for implementing the due diligence in practice and updated accordingly. Training has been carried out on what the Transparency Act entails for relevant divisions, and this futher training programs will be rolled out.
An important part of the due diligence is communication of priority risk, measures and their effect. The Bank will explain this in its annual report or equivalent from 2023.
Our Reporting follows the GRI-standard, and our performance is monitored and reported on accordingly.

Sparebanken Vest is engaged in banking, investment, insurance and financing operations in the counties of Vestland, Rogaland and Volda in Møre and Romsdal. In the following chapter, we describe how we work on CSR in our internal business processes and in relation to our customers, and which projects and businesses we finance by granting credit and making investments. Our different roles give us different opportunities to demonstrate CSR, which means that it is important to distinguish between the different roles and the tools available to us. Our fundamental principles, values and attitudes form the basis for all our assessments, but the tools we can use to exercise influence vary. This chapter describes the different roles and our CSR efforts:
Internal processes and requirements of our own processes, employees and suppliers. As an organisation, we influence our customers, employees, the working environment, climate and local environment through our day-to-day operations, for example through our employment processes, follow-up of employees and managers, choice of suppliers and procurements, property management and transport. Every year, the bank distributes donations, which is made possible by profitable banking operations. Our allocation of these funds is also part of these internal processes.

Through the UN Global Compact initiative, Sparebanken Vest has undertaken to apply the ‘better safe than sorry’ principle in relation to environmental challenges, to take the initiative to promote increased environmental awareness and to encourage the development and use of environmentally friendly technology. In the Paris Agreement in 2015, the world’s leaders agreed that global warming must be kept well below 2 degrees – and we will aim for 1.5 degrees – to be able to prevent dangerous climate change. This means that we will have to change and adapt in many areas of society. Sparebanken Vest takes its responsibility to help reach the Paris Agreement’s goals seriously. Sparebanken Vest commit to consult with stakeholders on environmental issues.

We set a goal in 2018 to reduce our own climate footprint by 50% by 2025, a goal that was reached in 2020. In connection with this work, we have decided that our business shall be climate neutral, with effect from autumn 2018. As of 1 November 2018, we meet these obligations by complying with the UN’s requirements of climate neutral enterprises, defined in the initiative Climate Neutral Now.
We fulfil the climate neutrality requirements by meeting the following criteria:
 Every year, we publish approved climate accounts for our business, prepared by
CEMAsys.com AS
 We have evaluated our consumption, and set goals for reducing emissions
 We offset residual emissions by purchasing approved carbon credits
We keep track of our own greenhouse gas emissions, both directly through transport and indirectly through purchased energy, in the annual energy and climate accounts. The accounts show a considerable reduction in emissions from transport, electricity and waste over the course of the past two years, which is a result of targeted work and measures over time. We constantly endeavour to further reduce our emissions.
Sparebanken Vest’s goal is to reach net zero carbon emissions, also with respect to our total scope 3 emissions by 2040. We also encourage our customers, suppliers and sponsorships to be climate neutral, and to publish their emission data and climate measures. We are working on further measures to reduce emissions in the main industries that we invest in for the period 2019–2025.
In recent years, the Board of Directors of Sparebanken Vest has had sustainability and climate risk as a topic in all board meetings, and the bank's strong ESG focus has been established as one of the bank's competitive advantages. Our sustainability strategy and annual plan for priorities and initiatives is adopted by the board of managers. The Head of Corporate Social Responsibility is responsible of ensuring that the bank's sustainability strategy is complied with, while 17 dedicated roles in all of the bank's divisions ensure that we integrate climate and sustainability into everything we do, use our entire room for manoeuvre and take effective and results-oriented measures to promote this.

The bank’s head office in Jonsvoll was certified as an Eco-Lighthouse in September 2017. The Eco-Lighthouse certification is an external verification of Sparebanken Vest that confirms that the bank meets a set of criteria and implements measures to achieve more environmentally friendly operations and a good working environment.

Jonsvoll is a modern building in a central location in Bergen city centre, that is easy to get to using public transport. When choosing solutions for the building, it was emphasised that the architecture should be attuned to the city district and the local environs, and stringent energy and environmental requirements were applied. All heating is supplied by district heating radiators and water-borne underfloor heating. Cooling is ventilation-based using seawater as the coolant. The building is connected to the city’s underground waste disposal network and waste is handled in large recycling stations in all parts of the building. One hundred per cent of Sparebanken Vest’s electricity consumption comes from renewable sources, and we make sure that the supply can be traced to specific power stations through certificates.

Sparebanken Vest makes active efforts to identify and minimise climate-related risk in its activities. We are subject to three different types of climate risk: physical risk, transitional risk and liability risk.
The Board of Directors and the organisation have received training and are involved in the work on climate-related risk and how the Company can report on this. We follow the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in this work and we have included the TCFD structure in our annual report.
Sparebanken Vest has completed training in TCFD for the Board, management and key personnel in the bank. Our responsibility for sustainability is integrated in the bank’s strategy, business plan, financial planning and risk management. We have implemented specific targets for reducing our own and our suppliers' carbon footprint. From 2019 onwards we measure the carbon footprint of our customer portfolio in 70% of the bank’s business portfolio. This will constitute a particularly important tool for understanding and reducing the bank’s climate risk, and to be able to identify sectors and projects that contribute to the transition and new possibilities for earning.
We believe finance can be an important driving force in the transition to a fossil-free society.
We want to give our customers an opportunity to make conscious choices that benefit the climate and environment by offering savings products with an environmental profile through our green fund for retail customers. We also offer green mortgages for new loans and refinancing, for homes that meet environmental requirements.

By Norwegian standards, Sparebanken Vest has a high annual volume of goods and service procurements, and thereby has the power to influence how suppliers practise CSR and take responsibility for sustainable value creation. From the end of 2020, all our suppliers will be climate neutral.

We fulfil the climate neutrality requirements by meeting the following criteria:
 Every year, we publish approved climate accounts for our business, prepared by
CEMAsys.com AS
 We have evaluated our consumption, and set goals for reducing emissions
 We offset residual emissions by purchasing approved carbon credits

From 2021 we are in addition to publishing climate accounts for our own emissions (scope 1 and 2), we also publish scope 3 emissions for a major share of our loanbook. Please see our annual report for more details.

Sparebanken Vest shall ensure that all our investments serve to promote long-term value creation and contribute to a sustainable global financial system. We are working on including an assessment of the risk of corruption relating to potential investment objects in our procedures. This is in order to ensure that we only invest in companies with expedient procedures for handling corruption. In our own investments and in our expectations of our suppliers, we support the UN Principles for Responsible Investment (PRI). We also follow the principle that, in the absence of more stringent local legislation, companies must as a minimum comply with international standards for industries and enterprises. We endeavour to ensure that our investments and procedures for assessing and following up our investments are in accordance with the initiative’s six principles for responsible investments. The abbreviation ESG is defined in Chapter 3.
UN Principles for Responsible Investment
1. We will incorporate ESG issues in our investment analyses and decision-making processes.
2. We will be active owners and incorporate ESG issues in how we exercise ownership.
3. We will endeavour to ensure that the companies we invest in report satisfactorily on ESG issues.
4. We will promote acceptance and implementation of the principles in the financial market.
5. We will cooperate in order to ensure effective implementation of the principles.
6. We will report on our activities and the progress of the work of implementing the principles.

Sparebanken Vest has implemented systems and complies with the procedures set out in applicable anti-money laundering legislation. It is a requirement that the companies we finance or invest in are not involved in financial crime, including corruption or attempts to prevent the exposure of corruption. The companies we finance must confirm that they comply with this requirement through a self-declaration, and that they are not aware of any corruption or trading in influence, present or past, in their own organisation, with the intermediaries they use or with their suppliers or subcontractors.
As a minimum, the companies must have given due consideration to corruption and the risk factors associated with it. In the case of large companies that we finance, we have a minimum requirement that they have satisfactory management and control systems in place that include measures for dealing with suspected corruption, whistleblowing procedures for internal suspicions of corruption, and that they require their suppliers and subcontractors to comply with the same criteria.
Sparebanken Vest wants the companies we finance to demonstrate that they have procedures in place to comply with statutory requirements and that they, in word and deed, conduct themselves in a manner that is in accordance with general perceptions of what constitutes ethical conduct. In the event that a customer acts in conflict with the purpose and nature of the customer relationship, we will seek to terminate the relationship.
As a bank with a strong regional position, we have a particular responsibility to exert influence through the channels available to us. In our contact with customers, we wish to raise awareness of CSR among our corporate customers, which we believe can add value to the customer relationship. As a natural part of our risk assessments, we have established guidelines to look at how customers handle environmental and societal considerations and corporate governance. This applies to both small and large companies. What documentation is required will depend on the size of the customer’s enterprise and, in the case of large corporate customers, we will look at the company’s attitude to sustainability and how it is followed up.

As part of the bank’s ‘Know your customer’ procedures, we always carry out a thorough identity check of new customers, their owners and beneficial owners. Before we enter into a customer relationship with corporate customers, we investigate and assess matters such as the company’s corporate structure, ownership structure, tax affairs and origins of the customer’s equity. We refuse to be involved in tax planning processes that appear or are perceived by us to constitute tax evasion. Corporate customers must have a clear and transparent company and ownership structure. The bank must understand complicated company structures, and the identity of beneficial owners will be assessed as part of the credit assessment. We also expect customers to have a clear picture of who their own customers are and to ensure that the business is based on lawful activity.
We have defined the following process for new and existing customers:
1. The companies must not be included on Norges Bank’s list of excluded companies, also known as the exclusion list
2. In the credit assessment, we look for particular risk relating to ethics, the climate, the environment, ownership structures, breaches of labour and human rights, and corruption. This is done by using relevant questions and assessments described in a dedicated question guide, and a country risk assessment where relevant. If the risk is deemed to be low and the assessment concludes that the bank will not be in breach of the principles for social responsibility, the customer will be assessed pursuant to the bank’s credit strategy. Credit will be disbursed if the decision is positive.
3. Where the risk is deemed to be medium or high, a separate risk assessment is carried out of relevant risk factors, and documentation of the assessment must be included in the credit documents. Cases that are assessed as entailing medium to high risk will be considered by the Director of Corporate Market and the Director of Risk Management. The estimated severity of the negative impact will be a decisive factor in the decision to offer financing and whether to impose requirements for measures and remediation of non-conformities within a suitable time period. If the risk and assessment indicate that the bank will be in breach of CSR principles, the process will be stopped.

8.3 Industry-specific CSR risks and controversial activities
Certain industries are associated with a special risk of negative environmental and social impact on nature areas and protected areas. If expedient measures are not implemented, this can lead to increased financial risk, legal risk and, in part, conflicts of interest. Sparebanken Vest has therefore established different assessment criteria for certain relevant industries in addition to the general criteria. They are specifically described in the guidelines for general requirements and industry-specific assessments in Chapter 9.

As part of the assessment of relevant risks relating to ethics and sustainability, the bank has prepared a guide containing questions about issues such as ethics, the climate, the environment, ownership structures, labour rights and corruption. These questions are used as a guidance and assessment tool when necessary or expedient. The focus will be on issues that are particularly relevant to the customer’s risk.
A criterion for any customer relationship is that the customers follow legislation and agreements that apply in Norway and in the countries where the customers are present. This includes, among other things, supporting and respecting protection of internationally recognized human rights and not contributing to violations of employee or human rights, in-house, at suppliers or in other parts of the value chain.
Sparebanken Vest wants our customers to strive for equality, have zero tolerance for racism and other discrimination in their workplaces and with their subcontractors.
Similarly, we expect customers to have an environmental policy for how to take care of the environment and minimize their environmental footprint. Sparebanken Vest expects our customers to take into account regulations for the use of natural resources, activity in areas that currently have other uses for local people or indigenous peoples, or in areas with a vulnerable environment, endangered species or water shortages. The bank also expects the FPIC principles for free, prior and informed consent to be followed in order to prevent conflicts over natural resources and land, including conflicts over small-scale farming.
Country risk will be included in the assessment if the customer operates or has projects in countries other than the high-income countries in the OECD. We use the OECD’s country classification as our point of departure. A country risk analysis must be conducted when relevant. Such analyses are used to assess risks relating to money laundering, corruption, financing of terrorism, the environment, labour and human rights