GRI Content Index

• Separation of solid waste
• Use of treated water
• Reuse of water
• Rainwater capture
• Use of ecological toilets
• Use of materials made from recycled substances
• Use of lead-free vinyl paint
• Automatic shutoff of lighting and air-conditioning control systems.
• Installation of energy efficient lighting.

• Association of Banks of Mexico.
• Mexican Association of Afores.
• Mexican Association of Insurance Institutions.
• Mexican Association of Financial Leasing. Companies Credit and Factoring.

• National Commission for the Retirement Savings System.
• Mexican Association for Human Resources Management.
• Mexican Association of AFORES.

Corporate Governance.

The Board of Directors is the principal governing body of GFNorte, as well as the entity that decides on the actions necessary to ensure sound corporate governance, thus safeguarding the interests of shareholders, customers, employees, suppliers and the communities it serves. GFNorte has committees that support the Board of Directors: Audit and Corporate Practices Committee, the Risk Policy Committee, the Human Resources Committee and the Nominating Committee, which include independent members of the Board of Directors and, in some of them, officers of the institution, in accordance with the applicable regulations.

Sustainability.

Each Department head leads the relationship and dialogue with the different stakeholders, as often as the natural relationship requires. In case of an issue that, because of its importance, should be submitted to the Board of Directors, it is brought to the Board’s attention.

Extract from the Code of Conduct https://investors.banorte.com/~/media/Files/B/Banorte-IR/sustainability/policies-and-procedures/en/code-of-conduct-2017.pdf

Board members, officers and employees should at all times avoid actions that counteract or seem to counteract the legitimate interests of GFNorte. They should be especially careful in assessing the likelihood of a conflict of interest in business or personal relationships with customers, suppliers, associates, employees or competitors (including Board Members, officers and employees) of GFNorte. Any GFNorte Board member, officer or employee who has direct or indirect knowledge of an irregular act, conflict of interest or non-compliance with regulations that may constitute or lead to damage or destruction to GFNorte, or constitute non-compliance with any of the principles of this Code of Conduct, must report it with all due discretion, to the Deputy General Comptroller, and/or to the Executive Department of Audit, Bank and Subsidiary Operations or through the Ethic Points system and /or electronic channels established in the institution. A set of rules were established to facilitate a better understanding of the objective, scope, assessment and mandatory compliance which can be found at: https://investors.banorte.com/~/media/Files/B/Banorte-IR/sustainability/policies-and-procedures/en/code-of-conduct-2017.pdf

In addition to the foregoing, and in accordance with Articles 64, 64 Bis and 64 Bis 1 and the General Rules for Financial Groups and their financial entities, financial institutions must avoid conflicts of interest between them and their respective business units. The Audit and Corporate Practices Committee of the financial institutions, where appropriate, shall implement a system to prevent conflicts of interest and shall ensure at all times that functions in a manner consistent with the strategies and goals of these financial institutions, taking preventive and corrective measures to remedy any deficiency detected within a reasonable time, addressing the characteristics of such measures.

Corporate Governance.

The functions of the Board of Directors seek to promote social responsibility through changes in the mission, vision, values, goals, strategies, policies and objectives of the institution. The above is reflected in GFNorte’s Code of Conduct, same that was approved by the Board of Directors and which can be found at: https://investors.banorte.com/~/media/Files/B/Banorte-IR/sustainability/policies-and-procedures/en/code-of-conduct-2017.pdf

Corporate Governance.

The evaluation process is internal and confidential.

Sustainability.

One of the functions of the Board of Directors is to ensure the establishment of mechanisms for the identification, analysis, management, control and disclosure of risks and operational risk related to the business. To fulfill this function, the Board of Directors relies on the Audit and Corporate Practices and Risk Policy Committees; these in turn verify that the mechanisms for the control of risks are established and review of operations is carried out. In turn, the CEO, through a quarterly report, reports the situation of each of the identified risks to the Board of Directors. On an ongoing basis, the Board of Directors receives relevant information on corporate governance, economic, political and social issues, and other relevant issues that enable them to increase their knowledge and keep updated on current events.

Sustainability.

One of the functions of the Board of Directors is to ensure the establishment of mechanisms for the identification, analysis, management, control and disclosure of risks to business operations. To fulfill this function, the Board of Directors relies on the Audit and Corporate Practices and Risk Policy Committees; these in turn verify that risk control mechanisms for the control of risks are established and review of operations is carried out. In turn, the CEO, through a quarterly report, reports the situation of each of the identified risks to the Board of Directors. On an ongoing basis, the Board of Directors receives relevant information on corporate governance, economic, political and social issues, and other significant issues that enables Board Members to expand their knowledge and remain up to date on current events.

Message from the Chairman of the Board of Directors.

Message from the CEO.

Grupo Financiero Banorte SAB de CV is publicly-traded financial institution listed on the Bolsa Mexicana de Valores, as well as in various international exchanges. By virtue of this listing, shareholders or interested third parties must be notified of all critical events. GFNorte has established a procedure to notify these institutions of relevant events related to the same. For more information visit:
https://investors.banorte.com/en/governance/shareholders-meetings

Corporate Governance.

Among the faculties of the Board of Directors are to establish general strategies for the financial group, as well as specific strategies for managing, conducting and executing the business of the Company, its financial subsidiaries and any sub-holdings; as well as monitor, through the Corporate Practices Committee, the management and direction of the Company, its financial subsidiaries and any sub-holdings in which the institution owns a controlling position, considering the relevance that the latter has in the legal, administrative and financial situation of the financial group as a whole, as well as the performance of relevant managers, under the terms established in Articles 56 to 58 of the Law to Regulate Financial Groups. The Board of Directors created the following support committees that allow the analysis of critical issues that will be later be presented to the Board:

• Audit and Corporate Practices Committee.
• Risk Policy Committee.
• Human Resources Committee.
• Nominating Committee.

These committees are comprised of members of the Board of Directors, with the participation of officers of the institution in some of them.

Corporate Governance.

Remunerations for members of the Board of Directors of GFNorte are established by the Shareholders’ Meeting in its ordinary annual meeting, which usually takes place each year in April.

• Senior management 5%.
• Middle management 5%.
• Employees 6%.

Sustainability.

Materiality and sustainability context are found in our sustainability model.
Inclusion of stakeholders: through this report we respond to material topics to every stakeholder group.
Comprehensiveness: the scope of this report includes all of GFNorte.

We are Banorte. In 2010, we completed a merger with Interacciones, and this process required restatement of information in the following sections:

• Financial Capital.
• Infrastructure and IT Capital.
• Human Capital.
• Social Capital.
• Natural Capital.

At GFNorte we aim to publicize initiatives that respond to our material issues, as well as our assessment of management, following the International Integrated Reporting Council, IIRC guidelines. These initiatives can be seen in the following sections of the report:

• Financial Capital.
• Infrastructure and IT Capital.
• Intellectual Capital.
• Human Capital.
• Social Capital.
• Natural Capital.
• Sustainability.

Social Capital

We have no investment agreements. We have contracts with 467 suppliers (28% of the total who have stated their acknowledgement of and commitment to the Global Compact Principles) (without necessarily having signed them).

During 2018, we trained 7,625 company employees or 35% of the total, to act as brigadiers in GFNorte offices and branch locations in matters such as:

• Workers who are members of Civil Protection Brigades at branches: 3,650 (3 per branch; 1,152 x 3= 3,650)
• Workers who are members of Civil Protection Brigades in 16 corporate Buildings: 1,592 (10% del Personal; 1,592)
• Staff Area Workers that form part of Regional Contingency Committees: 85 (17x5=85).

• Workers participating in Health and Safety. Commissions at the branch level: 2,250 (3 per branch; 750 x 3= 2,250).
• Workers who are members of Health and Safety Commissions in Buildings: 48 (16 per Building; 16 x 3= 48).

3.- Sustainability and Energy Saving: Through Protection and Technological Security systems, we apply the energy saving program in 1,147 branch offices and 2 corporate buildings. As a result the Company achieved a 23% energy savings each month (by controlling and managing air conditioning units, lighting, electrical outlets and using external canopies). These employees are given training in the following manners:

• First aid.
• Evacuation and crisis management.
• Controlling and fighting fires.

• Civil Protection Induction
• Health and Safety
• Fire Prevention and Protection
• First Aid.

Sustainability.

Grupo Financiero Banorte has a Sustainability and Responsible Investment area with an experienced staff responsible for training teams distributed across the territories in which we operate, and whose activities are related to the lending. For more information, visit:
https://investors.banorte.com/en/sustainability