CSR governance

The members of the Board of Directors and of the Executive Board are entirely separate. The same person cannot sit on both boards at the same time, thus ensuring strict separation between the functions of operational management and the responsibilities of strategic oversight. The corporate governance principles, presented in the Annual Report, explain how the Bank is managed, administered and controlled in accordance with best practice.

CSR governance at BSF conforms to this logic of clearly defined responsibilities, transparent decision-making and the incorporation of sustainability issues into strategic and operational governing bodies. It aims to ensure coherent and measurable implementation aligned with the Bank’s global strategy.

The Board of Directors (BoD) is the supreme management, oversight and governing body of the Bank. It approves the strategic directions, including with regard to CSR, and supervises their implementation.

The seven members of the BoD are elected in compliance with the Law of 22 November 1998 on the Banque Cantonale de Fribourg (LBCF), which defines the election procedure, terms of office and requirements with regard to competencies. The composition of the Board of Directors plus the career paths, training and other mandates of its members – including those of the chair – are published on the BCF website and in its Annual Report. The competencies attributed to the Board of Directors and its expert committees are defined in detail and disclosed to the public. The nomination and selection process for the members of the supreme governing body is also formalised and published, thus ensuring transparency and institutional rigour.

The directors have the professional skills required to perform their function (banking, finance, risk management, law, strategy, governance). They are considered independent of the Executive Board as legally required, which ensures the Bank’s strategic autonomy and the quality of the oversight exercised. The highest governing body undergoes an annual self-assessment of its performance to reinforce the transparency and efficiency of its guiding mission.

Ms Dominique Jordan has been the BoD member in charge of sustainability strategy since September 2023. In this role, she oversees the management of sustainability issues, thus consolidating a coherent approach at all levels of governance.

In the context of its remit regarding sustainability, the BoD:

• approves the strategic directions with regard to CSR;
• is informed 2 to 3 times per year on the progress made with CSR goals, with key indicators, as well as the risks and opportunities identified;
• approves the annual CSR Report, thus ensuring the coherence, transparency and reliability of the published information.

Aware of the rapid evolution of regulatory, climate and social issues, the BoD members are also invited to attend conferences and training on sustainable development to improve their knowledge. Four members of the Board of Directors attended a conference in 2025 entitled “Integrate sustainability and natural risks in banking strategy”. This conference was led by Gaël Giraud and moderated by Rodolphe Bocquet, two known experts in the fields of financial macroeconomics, climate change and corporate social responsibility (CSR).

The Audit and Risk Committee oversees the rigorous management and control of the Bank’s risks. Any major concerns are communicated to the Executive Board and the Board of Directors to ensure that decisions are made in an informed and responsive manner.

The Audit and Risk Committee of the BoD is made aware of climate issues and oversees the progressive incorporation of sustainability-related risks – in particular climate and nature-related risks – as part of the general risk management framework. This approach helps strengthen the Bank’s resilience and anticipate regulatory and economic changes.

The Executive Board is responsible for the operational implementation of the CSR strategy. It oversees the integration of sustainability requirements in business processes, internal policies and operational priorities. It designs sustainable business models and guides the action plans.

The Bank has designated two CSR ambassadors within the EB to strengthen the visibility of this strategic area and ensure its integration at all levels of the organisation.

The first ambassador is Daniel Wenger, Chairman of the Executive Board. In this capacity, he highlights the importance of CSR, its strategic focus and its relevance to all decisions taken by the Bank. He actively supports the implementation of CSR measures approved by the EB.

The second ambassador is Christophe Mettler, Head of Legal, Risk and Compliance and member of the Executive Board. He is the main sponsor for regulatory issues, the Sustainability policy and monitoring of ESG commitments. He also oversees the assessment and overall management of risks, including those specifically related to ESG issues.

Sandra Galliker, the Head of CSR, reports to the EB on a monthly basis, providing regular updates on progress with action plans, indicators and approved measures. This framework ensures sustained guidance and the capacity for rapid arbitration.

A CSR working group is responsible for the operational coordination of the implementation procedure. It is a crossover body comprising representatives of all the divisions and business areas involved.

The CSR working group

• proposes and consolidates CSR measures;
• ensures action plans are followed up;
• identifies synergies and interdependencies between business areas;
• contributes to the ongoing improvement of the procedure;
• undertakes the necessary preparation for reporting to the Executive Board and Board of Directors;
• edits the annual CSR Report;
• establishes and implements BCF’s sustainability policy;
• leads, through its members, crossover projects related to sustainability.

Operation

• Frequency: meets monthly
• Steering: ensured by the Head of CSR
• Assumption of responsibility: each member is responsible for taking measures within their own remit and providing regular feedback.

Specialised project groups

In view of the strategic importance of investment and lending activity, there are specialised project groups in each of these areas to embed sustainability within these value-adding operations. There are also specialised groups for managing ESG risks and to protect the environment.

Investments
This project group comprising representatives of the Investment Office, Asset Management, Wealth Management and the Head of CSR:

• manages the integration of CSR criteria in investment and advisory processes;
• monitors changes in regulatory requirements and market standards;
• develops and adapts the range of sustainable products;
• ensures coherence between the investment strategy and the Bank’s CSR commitments.

Loans
This project group comprising representatives of Credit Risk Management, Front Office Credit, Credit Control and a data manager:

• progressively incorporates sustainability criteria into the analysis and granting of funding;
• develops financing solutions favouring the energy and economic transition;
• supports the sales teams in applying the CSR guidelines.

ESG risk management
The management of ESG risks is performed by a specific project group comprising representatives of Risk Management, Credit Risk Management, data management and the Head of CSR. This project group:

• identifies and evaluates relevant climate and environmental risks;
• identifies and implements key indicators.

Ecology and protection of the environment
The “Real Estate and Logistics” team is in charge of gathering annual data to measure the carbon footprint. It implements measures designed to eliminate as soon as possible the use of fossil fuels for heating buildings. It also oversees waste management and applies strict natural resource protection principles for the Bank’s property portfolio. A package of measures has been drawn up to reduce the Bank’s greenhouse gas emissions.

Operational responsibility

Sandra Galliker assumed the position of Head of CSR with effect from 1 April 2025. In this role, her duties include the following:

• proposing and implementing the CSR strategy;
• providing a link between the operational and strategic management bodies (EB and BoD);
• coordinating CSR initiatives;
• supporting the analysis of ESG risks and their incorporation into the Bank’s risk management;
• monitoring regulatory developments in relation to sustainability;
• coordinating the writing of the CSR Report;
• contributing to the development of a sustainability culture in-house;
• representing the Bank on various committees;
• steering the CSR working group.

In order to remain relevant, the CSR strategy must focus on those areas where the Bank has the most capacity to act and where it faces the highest risks. BCF achieved a major milestone in the second semester of 2025 by updating its materiality matrix in line with the double materiality principle.

The transition to double materiality

This rigorous approach consists of evaluating issues from two complementary angles:

• The inside-out perspective: the impact (positive or negative) generated by the Bank and its funding for society and the environment.
• The outside-in perspective: the potential impact of environmental, social and governance (ESG) themes on the Bank itself via the prism of short, medium and long-term financial risks and opportunities.

BCF was accompanied by Fribourg company Climate Services SA, an external entity specialising in carbon accounting and the management of sustainability issues, to ensure objectivity and compliance with GRI standards.

Four-stage methodology

An internal multidisciplinary working group of managers from the credit, investment, risk management, human resources, communication, infrastructure and sustainability sectors met a number of times to steer this project, which is structured around the following phases:

Stage 1: Mapping and analysis of the value chain

The project started with an ideas workshop set up to integrate recent regulatory developments. The group conducted a detailed mapping exercise of BCF’s value chain (operational upstream and financial downstream). The stakeholders were also mapped by rating them according to their level of interest and influence on the Bank’s strategic directions.

Stage 2: Identification of IROs and connection to the business (interviews)

The aim of this stage was to identify the universe of potential Impacts, Risks and Opportunities (IRO). Climate Services held a series of individual interviews with representatives of key divisions to ensure this analysis reflected the reality on the ground.

These interviews allowed us to evaluate:

• Internal appropriation: the way in which ESG topics (particularly those in the Sustainability charter) are perceived and how the everyday operational processes are adapted in line with these goals.
• Business reality: the main risks and opportunities perceived directly by the divisional heads in view of the challenges of their sector and the potential obstacles involved in implementing the measures.

Stage 3: Evaluation and rating (scoring)

Each theme identified was subsequently subjected to a strict cross-evaluation based on GRI criteria:

1. Severity and probability of the Bank’s impact on its ecosystem (upstream/downstream).
2. Financial scale of the risk or opportunity for the Bank under different time horizons.

The materiality threshold was fixed at 2.5 (out of a maximum of 5). That means those topics with a score below or equal to 2 are considered “non-material” and therefore do not have their own chapter in this report. One notable example of that was Waste, with a relatively low incidence for a bank, and the socio-environmental evaluation of suppliers, which are seen as representing a very low risk (respect for the legal framework in force in Switzerland for direct and Fairtrade suppliers), and the Bank’s activities having a much bigger downstream than upstream impact on its value chain.

Stage 4: Executive Board approval

The original process and the results of the double materiality matrix were presented to the Executive Board for discussion. It approved the proposed matrix following some minor alterations.

Sustained improvement and external consultation

The determination of materiality is not a static exercise but a process of ongoing dialogue. In order to provide a platform for stakeholders to express themselves and to incorporate their positions into its strategy, BCF is planning a consultation phase for its external stakeholders during 2026. This will allow the Bank to measure internal results against their actual expectations and fine-tune a shared perception of the material issues.

On conclusion of this interdisciplinary evaluation process (societal impacts on one hand, and financial risks/opportunities on the other), BCF has consolidated its new double materiality matrix. In order for a topic to be considered “material” (and therefore covered in this report), it must have obtained a high relevance score on at least one of the two axes (Impact or Finance). The Board of Directors has formally approved this list, which will structure the Bank’s CSR strategy going forward.

The topics were arranged in four strategic pillars underpinned by a foundation.

A universal foundation: Transparency, security and integrity
This element focuses on those areas where the Bank’s risk tolerance is weakest, because they are fundamental to customer confidence and regulatory requirements.

• Data confidentiality and cybersecurity (GRI 418): (max. score 5/5). This score means the topic is an absolute priority. Protecting client data against the growing cyber threat is imperative, as much for the Bank’s societal impact as for its financial and reputational stability.
• Anti-corruption and compliance (GRI 205): observing an irreproachable business culture and strict compliance with market directives (prevention of money laundering and financing of terrorism).

Pillar 1: Regional and societal engagement

This pillar reflects the Bank’s double mandate: supporting the canton while managing the risks stemming from the environmental transition.

• Regional economy (GRI 201+203): the primary mission as a Cantonal Bank. Ensuring the financing, development and resilience of the local economic fabric (SMEs, cantonal real estate).

Pillar 2: Responsible products and services

• Marketing practices (GRI 417): transparency and responsibility when giving financial advice to customers (particularly relating to sustainable financing and FinSA compliance).

Pillar 3: A responsible employer

Human capital is the primary resource against a backdrop of talent scarcity and rapid evolution of banking jobs.

• Training and education (GRI 404): the ongoing development of employee skills to manage digitalisation and the new ESG requirements.
• Employment (GRI 401) and Health/Safety (GRI 403): offering attractive working conditions, protecting the psychosocial well-being of staff and maintaining constructive dialogue between the Executive Board and staff (GRI 402).

Pillar 4: Environment and climate protection

• Greenhouse gas emissions (GRI 305): guiding customers towards a low-carbon economy (financed emission management) and reducing the Bank’s operational footprint.
• Energy (GRI 302) and Biodiversity (GRI 101/304): these emerging topics are the subject of growing attention from the Bank, notably via the adoption of the ecological scarcity method for measuring its global footprint.

Methodological note: Topics related to the supply chain (GRI 308, GRI 414) and waste management (GRI 306) received a low materiality score. Although the Bank observes good operational methods in these areas, they are not seen as strategically material and therefore do not merit a detailed chapter in this report.

Dialogue with stakeholders (GRI 2-29)

Mapping to act more effectively
As a Cantonal bank, BCF operates at the heart of a complex ecosystem. Value creation over the long term hinges on the Bank’s capacity to understand, anticipate and respond to the expectations of those parties who influence it or are affected by its decisions.

The working group conducted a stakeholder mapping exercise as part of its double materiality concept initiated in 2025. Each stakeholder was evaluated and positioned on a matrix with two strategic axes:

• Interest: the level of expectation or concern of the group with regard to the Bank’s ESG activities and performance.
• Influence: the capacity of the group to affect the Bank’s decision-making process, reputation and results.

Analysis of the scores allowed for the segmentation of stakeholders into four engagement categories, thus defining the way in which the Bank interacts with them:

Key parties (close collaboration and continual dialogue)
(major influence and strong interest)
These groups are at the core of the business model. Their expectations directly shape the Bank’s CSR strategy and market offering.

• Investors and savers: they demand full transparency regarding risk management and the performance of their investments.
• Customers (private and corporate): their needs are evolving rapidly towards sustainable financing solutions (energy renovation, transition of SMEs).
• Regulators and umbrella organisations (FINMA, SBA): these stakeholders exercise the greatest operational influence, defining the reporting and compliance standards (combating greenwashing, capital requirements).
• The Canton of Fribourg (via the Cantonal Council and Cantonal Parliament): in its capacity as an owner and manager, the canton ensures that the Bank fulfils its public mandate while conforming to cantonal climate goals.

Influential parties (satisfaction and strategic alignment)
(major influence and focused interest)
Comprises the parties that evaluate the Bank’s sustainability performance.

• Rating agencies: although their everyday interest is moderate, their influence on refinancing conditions is major.

Drivers of the transformation (information and active involvement)
(strong interest and moderate influence)

• Staff: staff have one of the highest interest scores in the Bank’s matrix, making them the primary ambassadors in its sustainability operations. Their commitment and training are crucial to the success of the transition.
• Suppliers: essential partners, especially in the area of technology, with whom the Bank collaborates to reduce its operational footprint (Scope 3 upstream).

Civil society (vigilance, listening and global responsibility) (indirect or emerging influence and interest)
Although their direct influence on the Bank’s operations has been considered relatively weak in the past, these parties are the Bank’s social conscience.

• Population of the canton and NGOs: the Bank maintains open dialogue to understand local and territorial sensitivities.
• Future generations: the Bank took the forward-looking decision to formally integrate this “silent stakeholder” in its mapping exercise. This is an acknowledgement of its long-term responsibility, especially with regard to protecting biodiversity and combating climate change.

Engagement perspectives
This mapping is not an outcome in itself, but the start of the relational strategy. As explained in its materiality methodology, the Bank plans to initiate an external consultation with its key stakeholders in the course of 2026. This will allow for the validation of their actual expectations and the alignment of those expectations with the CSR roadmap.