Our environmental strategy is focused on the efficient, sustainable stewardship of resources.

Natural capital is essential to the development of our services and operations. Our impact on the environment comes mainly from the direct and indirect use of energy and our management of inputs and waste.

Environmental policy

We have a public environmental policy aligned with the regulatory framework, with national and international initiatives, and international standard ISO 14001, which encompasses the following aspects:

• Responsibilities.
• Identification and management of environmental indicators and their impacts.
• Compliance with applicable legislation.
• Execution of resource efficiency initiatives (energy, water, waste) including their responsible use and disposal.
• Integration of environmental criteria into procurement processes.
• Cooperation with stakeholders.
• Adhesion to environmental initiatives.
• Minimization of environmental impact in credit and investment activities.
• Transparent communication of our performance.

Through a matrix we use for identifying, evaluating and classifying environmental impacts, we support this policy and annually review business processes that show present and potential risks in the area of the environment. This table enables us to manage 128 environmental aspects that may have six possible environmental impacts, and identify current environmental laws that apply to us.

Natural capital is essential to the development of our services and operations

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Energy and emissions

Includes the acquisition of Grupo Financiero Interacciones.
Diesel includes consumption by utility vehicles and emergency power generators; LP gas include fork lifts and a kitchen; gasoline applies only to utility vehicles.
* In 2018, we vacated the building where natural gas was consumed so we no longer consume this fuel.
** The increase in diesel and reduction in gasoline was due to the segregation of fuel consumption by utility vehicles; previously we calculated these amounts assuming gasoline as the only fuel used in vehicles for the banking sector.
*** Does not include energy generated from solar panels.
Gasoline consumption by the Warehousing, Leasing and Factoring, and Insurance and Annuity sectors, as well as Banorte consumption of diesel from fixed sources, estimated based on spending and monthly average price of each fuel.

Our buildings and bank branches incorporate characteristics like double-insulating glass, natural lighting and low-energy equipment that enable them to operate efficiently. Features such as these earned the KOI Tower and Torre Mayor buildings gold and silver LEED certifications, respectively.

Our network of Banorte branches functions in accordance with the Comprehensive Energy Control System (CECS). This means they have high-efficiency equipment that regulate operation times for lighting and air conditioning. Two of the branches have solar panels installed, which we estimate saves a 14,054 kWh a year, avoiding the emission of 7.4 metric tons of CO₂e.

In 2018, we replaced 633 automatic teller machines—7.5% of the total—with more energy-efficient models.

Furthermore, in order to promote environmental awareness and improve our energy efficiency, we developed a program for automatically shutting down computer equipment during non-business hours. By monitoring equipment in the network of administrative buildings, we were able to introduce automatic shutoff systems and establish metrics for tracking their use (excluding equipment that must always remain on for operational reasons). More than 7,000 computers were connected to this initiative, which has saved an estimated 66,452 kWh in energy since it was begun in September 2018.

As for fuel consumption, only one of our nine cafeterias consumes LP gas; the rest run on electricity. During the year we moved out of the only building that used natural gas for heating, so we no longer use this fossil fuel in our operation.

In our vehicle fleet, we reduced total consumption by 5.8% for our subsidiaries. The vehicle leasing contract stipulates that cars be upgraded to newer models every four years.

For the second year in a row, we participated in the Energy Efficiency Excellence Labeling program created by the National Council for Energy Use Efficiency (CONUEE), which recognized the energy efficiency of two of our branches, based on the results of an evaluation algorithm that factors in building consumption and infrastructure.

We regularly report on emissions and energy consumption to the Mexican Ministry of the Environment and Natural Resources, through the Annual Operating Certificate, under the guidelines of the General Law on Climate Change in its regulation regarding the National Emissions Registry (RENE). Additionally, we participate voluntarily in Mexico’s GhG program, and we publicize our strategy and performance with regard to climate change in the global initiative CDP Climate Change, in keeping with our commitment to transparency.

To compensate for this impact, we encouraged our employees to use digital media for online meetings and videoconferencing. In 2018, we recorded 103,566 videoconferences, which is 10.8% more than the year before. Furthermore, we saved an estimated 257,000 kilometers of travel thanks to videoconferencing at Arrendadora y Factoraje Banorte and Banorte-Ixe Securities International, which represent a reduction of 35 metric tons of CO₂.

We introduced remote selling and self-service technology in our automatic tellers, which are equipped with functions like the sale and cancellation of insurance, opening new loans and renewing existing lines of credit, and data collection campaigns. We also have a network of 28,277 correspondents that handled more than 49 million transactions for us in 2018 (+51% compared to 2017). This means customers who need to perform certain transactions do not have to travel to a bank branch, reducing the time, expense and impact of such trips.

We also promoted online banking and mobile banking channels through which our clients can do their banking from anywhere in the world. In 2018, more than 1.42 billion transactions were performed in online banking (+3% in the year) and 311 million by mobile banking (+75% in the year).

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Refrigerant gases

We account for emissions from the recharge of refrigerating equipment at the offices of Banorte and Afore XXI, which account for 93% of the Group’s employees. Currently, recharges of the refrigerant gas R-410A—which does not affect the ozone layer—make up 49% of the total. Since 2015, Banorte has acquired no cooling equipment that uses R-22 gas.

Climate change

As one measure for dealing with possible environmental contingencies stemming from climate change, we have mobile Banorte units equipped with multi-purpose ATMs and a customer service area for acquiring products and services. These units have operating advantages because they can be brought to communities affected by natural disasters. Also, in Banorte’s branches in coastal regions we installed anti-cyclone curtains and provide preventive maintenance against premature erosion of buildings from humidity.

Together with companies responsible for a large share of emissions in Mexico, we participated in the first simulation exercise of a carbon market in Mexico, organized by MÉXICO2, the Ministry of the Environment, Grupo BMV and the Environmental Defense Fund. Although we are not included in the scope of this market, we believe it represents an opportunity to the bank to pay a role as intermediary in its functioning.

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Our commitment

We are committed to reducing our emissions. In line with a nationwide strategy implemented in Mexico, we will work toward a 30% reduction in emissions intensity per employee by the year 2020, using the year 2009 as baseline.

Our 2020 emissions intensity reduction goal targets an indicator of 2.02 tCO₂e per employee; does not include scope 3 emissions.

Furthermore, since 2016 we have been signing members of the Science Based Targets (SBT) initiative for establishing medium- and long-term reduction goals, based on international scientific standards. Using the C-Fact methodology published by Autodesk, we have set targets for scopes 1 and 2, reporting our progress each year to the CDP. But because scope 3 is the most important for financial institutions and that there so far is no methodology for these emissions, the target has been validated unofficially.

Waste management

We estimated the amount of waste generated in our administrative buildings and branches according to the NMX-AA-22-1985 Standard, which gave us the result of 1,986 metric tons generated in our banking sector operations in 20108. This is an 18% reduction against the global estimate for the previous year. Furthermore, we calculate a total of 1,124 metric tons of paper waste generated in our operations.

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Not including paper sent for recycling.

We continue to work on reducing the generation of solid urban waste and correctly disposing of special-handling waste.

At our Torre Mayor and Tlalpan offices, we sent more than 27 metric tons of waste for recycling. The economic resources recovered from this program are donated to schools for furniture maintenance. In addition, our recycling program was extended to include the Corporativo Santa Fe and Palo Alto buildings at the end of 2018.

Our recycling program focuses primarily on paper, which accounts for the majority of the waste the Group generates. In 2018, we sent 522 metric tons for recycling, 4.5% more than the previous year.

We also promote the efficient use of paper in our operations through the use of digital media and crossed sales, to reduce consumption.

Our strategies in this area include the Origina program, which optimizes loan contract forms, reducing the number of pages per contract. This initiative saved more than 7.5 million sheets of paper, or 34 metric tons in all.

In order to encourage responsible printing, we used the Papercut application to administer paper and toner in corporate buildings for the banking sector by controlling the number of pages printed per employee directly from the multifunctional printer. This program avoided the printing of 773,181 printed pages in 2018, a savings of 3.1 metric tons of paper.

Starting in September 2016, all Enlace Personal accounts are opened with paperless selected as the default method of account statement delivery. In 2018, more than 110,000 account holders who opened their account before the start of the Paperless program migrated to this system, representing approximately 46% of total Enlace Personal accounts, saving 7.5 metric tons of paper and Ps. 673,000.

We also encouraged the elimination of printed ATM tickets, reducing the number of printouts by 45,777 against 2017, equivalent to saving more than 17 metric tons of paper and Ps. 472,000.

With respect to toner consumption, we recycled the equivalent of 14% of the toner cartridges purchased by Banorte in 2018, which implied the recovery of 5.3 metric tons of components such as plastic, toner, cardboard, aluminum and other metals.

As part of our service digitalization effort, we encouraged customers to adopt the smartphone token method instead of physical tokens, which meant fewer of these devices had to be produced and later disposed of. In 2019, 29,490 users migrated from physical to smartphone tokens, and 1,281,860 smartphone tokens were assigned to new accounts, making a total of 1,311,350 users who have adopted this method (+148% in the year). We also received 32,181 expired physical tokens from our users, 5,656 of which were refurbished for reuse and 26,525 of which were went for disposal and recovery of components for recycling.

Water

Our estimated water consumption in 2018 was 668,223 m³, encompassing 99% of the Group’s operations. The water consumed in our facilities comes from local networks and waste is returned to those networks. To promote efficient water use, our corporate buildings have water-saving sinks, dry urinals and low-consumption toilets.

GFNORTE WATER CONSUMPTION
Consumption	2018	2017	2016	% Chge. 18/17
m3 Water	668,223	616,421	623,181	8.4
m3 Water / employee	21.87	20.61	22.65	6.1

Biodiversity

We promote the sustainable occupation of urban spaces. Our main focus of action is the green roof located at the Roberto González Barrera Contact Center in Monterrey, Mexico. The roof has a landscaped surface area of 1,784 m², where we conserve 60 species of native Mexican plants, 13 of them mentioned in NOM-059-SEMARNAT-2010 environmental protection standard.

Additionally, in 2018 we participated in two reforestation events with Reforestamos México, restoring three hectares of the Cumbres Park in Monterrey and the Nevado de Toluca near Mexico City by planting 3,600 trees. With this we want to expand the environmental benefits of the forest zones; protect and conserve biodiversity, avoid soil erosion, improve water infiltration capacity to subsoil and clean the air. Furthermore, these species are estimated to capture 308 metric tons of carbon once they grow.

We also donated to the Reino Animal center for sustainable conservation of flora and fauna, a natural protected area covering 52 hectares of land that are home to more than 1,400 animals representing 130 species of mammals, reptiles, birds, fish and insects. The money is applied to various area of action, focused on environmental education and research, care and conservation of the area and the species that inhabit it.