In Armenia’s financial sector, Corporate Social Responsibility often takes the form of sporadic donations and seasonal charity drives. AraratBank has taken a different path, building what they describe as a systematic approach to social and environmental impact over the past five years. We spoke with Anna Allahverdyan, Head of the Communication and CSR Programs Coordination Division at AraratBank, about their methodology and what they’ve learned from five years of implementation.
Text : Margarit Mirzoyan
Photo : AraratBank
The Philosophy: Beyond One-Time Acts
“We are not interested in one-time acts,” Anna Allahverdyan starts our conversation, outlining the principle that has shaped AraratBank’s approach since its 2020 rebranding. “We do not simply solve a present problem but support target social groups through various programs that have a long-term impact.” This philosophy distinguishes their work from conventional corporate charity. When Anna defines their CSR approach, she emphasizes responsibility for “the impact of activities on social, economic, and environmental aspects through responsible management.
That responsibility is crucial for sustainable development in the long term.” As a financial institution, AraratBank naturally focuses on long-term, strategic projects that deliver lasting impact rather than addressing immediate symptoms. They support target social groups through comprehensive programs, not individuals through isolated interventions. The bank’s leadership operates under this clear principle across all its initiatives, from its AMD 2 billion green portfolio to partnerships with international organizations like EBRD and FMO worth USD 35 million. As Armenia’s only banking sector participant in the UN Global Compact, AraratBank has positioned itself within international frameworks for sustainable development.
Green Finance in Practice: Building Green Finance Expertise Through International Partnerships
AraratBank’s journey in green finance began with a structured approach to building internal expertise through getting technical support from EBRD in 2012 and drafting a respective policy. In 2016, the Bank received another round of technical support from IPC consulting company within the framework of KfW Bank’s green lending program.
IPC organized comprehensive training courses focused on green lending and the application of green loan differentiation tools. These training sessions involved credit specialists from the Corporate Business Lending Department, regional managers, and monitoring department specialists. A special course was also organized for branch managers. Throughout the entire program, consulting company staff provided ongoing advisory support. Building on this foundation, in 2024, the management of the Bank made a commitment to promoting green lending by adopting a Green Lending Guide and Climate Transition Plan, and establishing a Climate Risk Management and Sustainable Development Committee.
Impressive Portfolio Growth and Performance
The results of this systematic approach are remarkable. As of the second quarter of 2025, the Bank’s business loan portfolio exceeded 123 billion Armenian drams, comprising over 4,295 loans. Each loan was assessed using environmental and social risk evaluations that categorize lending activities into four risk groups by sector: low, medium, high, and prohibited. It should be noted that the Bank pays particular attention to sectors assessed as medium and high environmental and social risk through regular monitoring and targeted measures. In accordance with its Exclusion List, the Bank does not finance activities involving forced labor, population displacement, GHG emissions, unprocessed chemical waste, ozone-depleting substance production, GMO release and production, child labor, and other similar sectors as determined by the Bank’s Executive Board.
Strategic Vision and Market Leadership
“Even when green loans weren’t popular in Armenia, they were considered one of the key parts of our portfolio,” Ms. Allahverdyan notes. “This came from our collaboration with international financial institutions, studying international best practices, and adapting proven methodologies. It was a strategic direction from the beginning, not a market response.” The bank’s commitment to green finance dates back over a decade. “We recognized the importance of the Green Agenda back in 2012, being one of the first financial institutions to sign a loan agreement with the GGF Investment Fund, thereby becoming one of the pioneers in the sector of green financing. However, this was not merely a contract. Under the contract, we were provided with technical assistance. The contract enabled us to invest in energy-efficient programs and train our staff, with the involvement of international experts Charley Swords and Malik Ramic. The training sessions were organized not only for our employees, but also for our clients,” Ms. Allahverdyan says.
Comprehensive Client Education and Impact Measurement
The bank provides comprehensive client education on circular economy and energy efficiency principles beyond simple financing. They monitor whether borrowers spend funds appropriately and measure actual CO2 reduction benefits. Years ago, they partnered with the GGF foundation to provide training and technical support on energy efficiency concepts to both clients and employees. The education component focused on demonstrating how replacing old equipment with energy-efficient alternatives created win-win scenarios. If new equipment passed energy-saving audits with at least 20% improvement, both environmental and business benefits followed. Companies saved on energy costs while increasing production capacity, potentially doubling output with the same energy input.
Financial Literacy and Community Engagement
Expanding their educational mission beyond green finance, AraratBank recently launched a mutual project with Ara Chalabyan, AraratBank Board Member and Finance Lecturer at the American University of Armenia, to produce a series of financial literacy videos as part of the “Parzits Parz” podcast (a series of video explainers on hard stuff in simple words). These episodes address phone and online fraud, phishing and social engineering, risks and benefits of digital mobile services, credit history improvement, smart borrowing, BNPL (Buy Now, Pay Later) tools, and other important topics on financial literacy. To complement the financial literacy video series, financial literacy courses have also been conducted with a focus on the regions. The first course was held in Marmarik village for about 80 young people from different regions of Armenia and Javakhk, while the second one—in Gargar village in Lori, Stepanavan.
International Partnerships as Capacity Building
This strategic domestic foundation has enabled AraratBank to attract significant international partnerships that amplify its impact. Their international partnerships demonstrate this systematic approach in action. The Dutch Entrepreneurial Development Bank (FMO), has secured USD 25 million in funding specifically designed for businesses with founders from Artsakh or a substantial number of Artsakh-native employees. Forty percent (40%) of this funding targets green sustainable projects, while 60% addresses social inequality.
A USD 10 million partnership with EBRD, implemented with the EU, the Green Climate Fund, and Climate Investment Funds, focuses on helping micro, small, and medium enterprises transition to competitive, low-carbon operations. This includes specialized support to the persons displaced in 2020 and 2023, with the EBRD providing incentives for enterprises founded by or employing displaced individuals. “These are not just funding arrangements—they are capacity-building partnerships that enhance our domestic capabilities while connecting Armenia to international best practices,” Ms. Allahverdyan emphasizes.
Partnership Selection Criteria
The success of these international collaborations reflects AraratBank’s rigorous approach to partnership development. When selecting partners—whether domestic foundations or international organizations—AraratBank has developed specific criteria that reflect its long-term approach. Ms. Allahverdyan explains their evaluation process: “We consider transparency, accountability, sustainability, and the leadership behind each foundation.” In healthcare, they work with the City of Smile Foundation and the Health Fund for Children of Armenia.
“These organizations ensure transparency through detailed reporting and continuous engagement, demonstrating a strong commitment to accountability in order to earn and maintain public trust,” Ms. Allahverdyan says. Their requirements include transparency, public accountability, programs with measurable long-term impact, and demonstrable value for investment. These criteria reflect their institutional values: responsibility, transparency, and joint development with their community. This same systematic partnership approach extends beyond the financial sector into cultural, educational, and social entrepreneurial initiatives.
Cultural Investment and Recognition
AraratBank’s approach spans diverse sectors, extending its “no one-time acts” philosophy into cultural preservation and education. This demonstrates how their systematic thinking transcends traditional banking boundaries to create a comprehensive social impact. Their Matenadaran collaboration exemplifies this integrated thinking, combining education, culture, and heritage preservation. Beyond funding the annual “The Faces of Memory” international seminar, the laboratory for biological research of manuscripts at the Matenadaran was also re-equipped under the sponsorship of AraratBank. These diverse initiatives, spanning from green finance to cultural preservation, reflect a cohesive approach rather than scattered acts of philanthropy.
The bank’s internal practices reinforce this philosophy through comprehensive circular economy implementation. As part of their operations, they have established waste separation systems with special collection boxes for different materials, promoted digital transactions to reduce paper usage, and included sustainability reminders in client communications and at ATMs when offering receipt options. Since 2020, the Bank has eliminated a significant portion of the plastics used in its operations, replacing them with other materials that promote environmental initiatives. Regarding the portion that cannot be replaced or is impossible to substitute, these materials are submitted for recycling together with waste paper when discarded.
It should be noted that the Bank endeavors each year to reduce plastic usage, whereby its modest contribution will contribute to environmental improvement and pollution reduction. All internal departments actively participate in circular economy practices, collecting paper waste for specialized recycling organizations and participating in tree planting initiatives. As part of Charles Aznavour’s 100th anniversary, AraratBank sponsored environmental projects, including a forestation drive, in collaboration with My Forest Armenia, demonstrating how cultural celebrations can integrate environmental action. These internal practices foster an ecological mindset throughout the organization, strengthening work processes directed toward responsible resource utilization.
Measuring Impact and Recognition
AraratBank’s systematic methodology extends to how they measure and communicate their impact. Each year, in addition to the financial reports they present non-financial reports at their Annual General Meeting of Shareholders. For three consecutive years, they have included visual presentations of their social programs, with bank employees themselves serving as presenters for the past two years, a practice that internally reinforces their culture of social responsibility.
This transparency and systematic approach recently earned them ICC Armenia’s NVIROUM Award as Armenia’s leader in CSR among the largest companies in the country. The evaluation process involved a diverse jury—H.E. Eric De Muyck, Ambassador Extraordinary and Plenipotentiary of the Kingdom of Belgium to Armenia, Dr. Mary Papazian, 30th President (former) of San Jose State University and Executive Vice President of the Association of Governing Boards of Universities and Colleges, Dr. Salwa Nacouzi, Rector of the French University in Armenia, Vazgen Yakubyan, President of AGBU Armenia, and Raffi Baghdjian, Foundation Advisor (Scientific Innovation and Education Center Foundation)—representing multiple sectors, reflecting the cross-industry recognition of their methodology.
The award ceremony was organized by the International Chamber of Commerce (ICC) Armenia National Committee with the support of ICC Global. The event aimed to recognize and celebrate the contributions of Armenian and international businesses in environmental protection, social support, and good corporate governance.
Systemic Challenges and Future Outlook
While AraratBank has developed effective internal systems, broader policy frameworks could better support systematic CSR investment.
Ms. Allahverdyan points to Article 123 of Armenia’s Tax Code as one area for improvement: “When calculating taxes, social expenses, that is social investments to libraries, museums, schools, nursing homes, orphanages, medical institutions, and non-commercial organizations, allow for a reduction of 0.25% of gross income, which I believe is a low percentage. It would be beneficial if that indicator were higher, so that we would have greater opportunity to invest our resources in social sectors. Ms. Allahverdyan sees financial institutions as uniquely positioned to drive change.
They provide capital, but also educate clients, monitor implementation, and measure outcomes, connecting initiatives across different sectors. When they finance a solar installation, they simultaneously teach circular economy principles, support local employment, reduce carbon emissions, and strengthen energy independence. “This approach focuses on long-term transformation rather than one-time acts and represents our interpretation of impact banking,” Anna concludes.
Join us on Telegram