Sustainable Finance

ESG Integration within Credit Risk Management

We believe that evaluating certain environmental and social factors in managing our credit risk may lead to more complete financial analysis and better-informed decisions. As part of our standard due diligence process in credit analysis, we consider various factors that may include, but are not limited to, financial performance, industry trends, quality of management, reputational and other risks, to the extent they may be financially relevant.

Environmental Risk Program

We view environmental due diligence as critical to helping prevent loan losses attributable to diminished collateral value and impairment of borrower’s cashflow due to environmental costs. Our Environmental Risk Program has an Environmental Policy in place that outlines the required decision process for environmental due diligence for all loans secured with real property. To further strengthen our analytical approach in 2022, we brought our Environmental Risk Program in-house under the direction of a newly recruited leader with experience in building an environmental program with a larger regional banking organization.

Environmental Policy

Our Environmental Policy contains policies and procedures that must be followed during loan underwriting to protect us from losses due to environmental impairment of collateral properties or clients’ business income that might lead to loan default. The due diligence includes a detailed environmental questionnaire, database searches, desktop reviews, file reviews, and environmental site assessments, investigating past and current uses of the subject property to identify potential environmental concerns.

Socially Sensitive Industry Assessment

Our goal is to continue to be a leader in corporate citizenship. We are also committed to sound business practices and to meeting the needs of clients across multiple industries. We apply stringent risk assessment standards, which include reputational as well as credit risk considerations, to determine the viability of all business relationships. Because we serve a variety of clients with varied views, we avoid taking socially- or politically-divisive positions on matters.

We created a Socially Sensitive Industry Assessment Program (SSIAP) to ensure we properly consider socially sensitive issues through a variety of lenses to effectively determine a stance on the risks of banking a particular industry or business within an industry. The SSIAP includes a framework for understanding, assessing, and considering the risks by establishing an assessment/due diligence process. The assessment takes into consideration potential strategic, reputational, credit, legal, compliance, and financial risks, and the outcome of this process includes establishing a risk appetite to help inform business decisions where practices, incidences or events related to certain sectors or companies could have potentially adverse impacts on business operations, reputation, team members, clients, shareholders, or communities.

Risk identification and assessment questions are posed to representatives from a cross-functional group, with questions being specific to the area of risk for which they are responding. After answering the questions, each representative assigns a level of risk for banking that particular industry and/or business, based on our risk impact scale. Dependent on the level of risk, we may choose to limit our exposure to the industry in question.

Access, Affordability, and Community Development

We believe in creating positive, lasting change for individuals and communities. Our education initiatives, partnerships, and programs are helping to improve financial outcomes across a spectrum of demographics. We aspire to find the best solution to every client’s unique financial situation and enable our clients and communities to fulfill their financial goals.

Strengthening Communities with Safe, Affordable Financial Access

Synovus has a long history of community development, and we continuously refine and invest in programs to be more intentional, transparent, and impactful. We have actionable goals for each of our 58 Community Reinvestment Act (CRA) assessment areas and senior management reviews score cards on a quarterly basis. We engage in ongoing monitoring and training with our lenders and credit partners to ensure they have a thorough understanding of the types of affordable loans and programs we offer.

Our community development plan and strategy are developed annually to specifically outline objectives, oversight, types of partnerships, role and responsibilities, and performance outcomes. It is administered by the Community Development Department under the bank’s Consumer Compliance Division responsible for community development efforts across the bank’s entire footprint. The plan aligns with and furthers the bank’s efforts under the CRA. Activities are reported to the Executive Risk Committee, Regulatory Compliance Risk Committee, and the Risk Committee of the Board. Our local-market community development manager oversees programs across our market segments to ensure accountability for progress locally. Our most recent CRA rating, from January 2021, was “Satisfactory.”

We engage our communities in multiple ways, with our primary focus areas outlined below:

• Affordable housing for low- and moderate-income (LMI) individuals, including multifamily rental housing
• Community services (childcare, educational, health/social service, job training, credit/financial services) targeted to LMI individuals
• Activities that promote economic development by financing small businesses or farms
• Activities that revitalize or stabilize LMI geographies
• Programming and activities associated with Community Development (CD) lending
  • Community Development Loans to finance
  • Multi-family affordable housing projects
  • Nonprofit organizations that provide services to LMI, small or minority development businesses
  • Local/state government for CD activities in LMI area improvement projects
• Community requests that support CRA qualified investments may include grants, donations/contributions, or deposits/shares in, or to organizations or causes that provide:
  • Donations to homeless shelters
  • Contributions to scholarships funds designated to LMI students
  • Purchase stock in a Community Development Corporation
  • Equity investments in a low-income housing tax credit project
  • Contribution to a Healthcare Crisis Center providing free health care services to LMI individuals
  • Donations to a CRA qualified organization to sponsor a fundraising event which benefits the organization’s mission

For more information, please see our corporate donations and community outreach on our website.

Community Development Loans

Synovus Mortgage committed $400 million to an Affordable Mortgage Program, with approximately $439 million funded through the end of 2021. We made 212 community development loans in 2021 (including PPP loans) totaling approximately $550 million, and our affordable housing team originated more than $234 million in project loans and invested more than $173 million in tax credit equity. We also have mortgage community bankers throughout our footprint focused solely on affordable housing and first-time homebuyer financial education and mortgage loan origination, as well as community development managers focused on community development loans, investments and services.

In 2021, we exceeded our CRA targets, as seen in the tables below.

CRA Scorecard Synovus Footprint Jan. - Dec. 2021

Removing Barriers to Financial Access

We view our approach to socially-responsible banking as the cornerstone to our purpose-driven mission to support low-income, financially underserved populations. We have advanced our internal infrastructure and increased training to empower team members with the knowledge and capacity to meet a wide array of needs from our customers. We partner with Operation Hope to provide financial literacy and credit counseling to those in need, and our consumer products include no-fee retail checking options and a range of other products with flexible fee structures.

Meeting Needs of Low-Income Consumers

During 2021, we introduced Synovus Budget Checking, a BankOn-certified budget checking product to better serve the underbanked, featuring low costs, no overdraft fees, robust transaction capabilities, and online bill pay. This Budget Checking account has received the Cities for Financial Empowerment Fund's national Bank On certification for meeting the 2021-2022 BankOn National Account Standards in recognition for our providing safe, affordable, and appropriate accounts that meet the needs of consumers with low incomes, particularly those outside of the financial mainstream.

Commitment to Accessible Banking

We are committed to providing banking services that are easy and convenient for all customers. To ensure that customers with disabilities can conduct their banking independently and with ease, the bank's branch locations and automated teller machines are compliant with the Americans with Disabilities Act. To accommodate persons who are blind or have low vision, we offer qualified readers and assistance with reading, filling out, and completing forms.

Sustainable Investing

We developed a Sustainable Investment Statement in 2021 for clients, prospective clients, team members, investors and other key stakeholders so that they may better understand how we approach different aspects of sustainable investing. This statement was developed through stakeholder engagement including the Board’s Corporate Governance and Nominating Committee and senior executives from multiple Synovus departments and divisions based on a peer review and recommendations of an external consultant. For more information, please see our Sustainable Investment Statement on our Governance Documents library.

Environmental Lending and Investments

We made more than $129 million in solar energy loans outstanding as of year-end 2021, and $18.9 million of capital invested in renewable energy credits as of December 31, 2021. Moreover, our loan policies consider a client’s practices and policies related to environmental issues as part of the credit underwriting process. Each of our loans undergoes a robust environmental due diligence process involving an in-house specialist with expertise in environmental due diligence.

ESG/Impact Investing

We view ESG/Impact Investing as the selection of securities based on the beneficial consequences that the asset may have on the environment or society, for example, in areas such as healthcare, education or the environment. We have expanded our ESG-related funds across our investment platform to now include one bond mutual fund, one individual equity portfolio, as well as the opportunity to provide custom portfolios through our family wealth office.

During 2021, we also launched a partnership with JAM FINTOP, an investment organization that brings together bank experts and seasoned fintech entrepreneurs to invest in financial solutions to serve their customers more effectively. Our strategic investments are aimed at advancing initiatives driven to help access the capital markets for black banks through the National Black Bank Foundation.

Award and Recognition

• 2022 Private Asset Management (PAM) Award for Best Impact Investment Offering