Stakeholders, Governance & Risk

Stakeholders, Governance & Risk

We're listening to you, collaborating with you, and ensuring we have strong policies and processes that mitigate risk and create a thriving environment for all our stakeholders. This page provides an overview of our approach to stakeholder engagement, materiality, governance of social and environmental topics as well as how we manage social and environmental risks to protect to the long-term sustainability of our communities and business. Please click on the links below to skip to the various sections contained on this page:

Further details on our programs can be found in our most recent Corporate Responsibility Report

Stakeholder Engagement

We define our stakeholders as employees, customers, communities, shareholders/investors, government/regulators, suppliers and our non-profit partners. We engage each stakeholder clearly, honestly and respectfully to understand current and emerging trends that may affect our business. We work together to identify social, environmental and governance topics that demand our attention. We are proactive and responsive to the unique needs of each stakeholder, evaluating each of their priorities based on its influence, legitimacy and urgency. We understand that meaningful engagement with our stakeholders is critical to improving our business and communities.

ESG Materiality

Our Corporate Responsibility and Sustainability program centers on the material topics identified in our most recent materiality assessment. The company completes a formal materiality assessment whenever there are significant changes in the scope, size and complexity of its operations or operating environment. We found that topics remain consistent, absent of significant changes, allowing us to track trends and our impact. We define material topics as those that affect our economic, environmental and social performance or influence the decisions of our stakeholders today and into the future.
 To identify our material topics we conduct in-depth research, including media audits, surveys and regularly engage with all our stakeholder groups. Once we identify the priority topics, we validate the results with executive management to ensure appropriate alignment with the company’s strategic objectives. The goal of our materiality process is to help inform our overall Corporate Responsibility program, set priorities which are brought to life through our BEST Community Comeback, effectively leverage resources and ensure we are managing those material topics in an appropriate matter. The priority topics outlined below illustrate where our long-term business success aligns with marketplace and stakeholder priorities. These topics include:

Leadership & Governance
  • Board Governance
  • Risk Management and Compliance
Human Capital Management
  • Recruitment, Retention, Training and Engagement
  • Diversity, Equity and Inclusion
  • Health and Safety
Responsible Banking
  • Business Ethics and Consumer Financial Protection
  • Customer Satisfaction
  • Data Privacy, Cybersecurity and Fraud
  • ESG Risk Management
  • Community Investments
Environment Sustainability
  • Financing Enviromental Sustainability
  • Climate Change
  • Energy and Natural Resource Management
Financial Access & Affordability
  • Homeownership
  • Small Business Lending
  • Community Development Lending and Investments

Social & Environmental Governance

Berkshire Hills Bancorp Corporate Responsibility & Culture Committee
The joint Corporate Responsibility and Culture Committee of the Board of Directors of Berkshire Bank and Berkshire Hills Bancorp, Inc., is responsible for overseeing the management of the Company’s enterprise-wide Corporate Social Responsibility, Environmental Sustainability (including climate change), Diversity & Inclusion, and Culture programs. The Committee is appointed by the Board to approve policies and oversee management’s implementation of the corporate responsibility program. Read the committee's full charter here.

Environmental, Social, Governance (ESG) Management Committee

The Environmental, Social & Governance Committee is responsible for overseeing the management of the Company’s enterprise-wide ESG and Corporate Responsibility program consistent with its Be FIRST values and leading socially responsible community bank vision. The Committee, comprised on members of the executive management team, monitors and approves strategies designed to identify, measure, control, and enhance the Company’s ESG/Corporate Responsibility performance.

Responsible & Sustainable Business Policy

We implemented our Responsible & Sustainable Business Policy, which applies to all Company operations, as part of our efforts to build a more socially responsible and sustainable company. It provides guidance on our social and environmental business practices, principles and commitments. By complimenting an extensive network of existing Company policies, our Responsible & Sustainable Business policy empowers employees to act in accordance with our Be FIRST values to help ensure we operate in a manner consistent with being the leading socially responsible community bank.
 The policy includes the following major areas:

  • Roles & Responsibilities
  • Responsible & Sustainable Business Culture
  • Responsible & Sustainable Business Commitments
  • Environmental Sustainability Principles
  • Third Party Responsible Business Principles
  • Fraud Reporting & Suspicious Activity
  • Conflict of Interest
  • Exceptions
All employees receive annual training on the policy and new third party partners are screened against the policy. Please click here to view the full policy. Additional company policies, including our Business Code of Conduct and Anonymous Reporting Line can be found by visiting our Investor Relations website.

Social & Environmental Risk Management

We understand that social and environmental risks, including Climate Change, can lead to reputational, strategic and credit risks affecting both short-and long-term stakeholder value as well as our communities. Our approach to managing those risks is grounded in our Enterprise Risk Management program and integrates social and environmental considerations into our due diligence and business processes. This ensures we implement effective controls and programs to mitigate, monitor and manage those risks in a manner consistent with the size and complexity of our business.
Berkshire leverages several measures to ensure it is appropriately managing social and environmental risks, including formal policies that apply to all operations, comprehensive risk assessments, emerging risk briefs, and integrated due diligence processes.
  • Social Responsibility, Climate Change, Culture and Reputation Risk Assessments- Completed annually, based on the company's Enterprise Risk Management framework, to ensure there are proper controls in place to monitor, mitigate and control social, environmental and cultural risks which could lead to reputation, strategic, and credit risks. When ineffective controls or new risks are identified, the company implements action plans to improve performance and protect the company and its stakeholders. The final results are reviewed with executive management, management committees and the appropriate Board of Directors committee.
  • Emerging Risk Briefing(s)- Briefs are provided to the credit and lending teams as well as other impacted business lines on potential emerging social, environmental and culture risks that could impact business activities. The briefings provide guidance to front line teams to ensure risks are appropriately mitigated and managed.
  • FDIC Diversity & Inclusion Self-Assessment- Completed annually to assess the strengths and risks of the company's Diversity, Equity and Inclusion program, including workplace employment practices, procurement and business practices as well as practices that promote transparency of organizational commitments to Diversity and Inclusion.
  • Social & Environmental Credit Risk Due Diligence
    • Standard ESG due diligence is conducted for all transactions when the social, environmental and reputational risks are well understood and expected to be relatively low, site specific or completely reversible for the borrower, business activity, industry or community. Due diligence begins with front line staff and involves credit, risk and lending teams. The process generally includes, but is not limited to, research, ensuring compliance with all federal, state and local laws and permits, assessment of creditworthiness and screening against all applicable company policies and procedures including the prohibited businesses list which includes industries ranging from marijuana businesses to firearms and ammunition manufactures. If, during this process, staff determine the borrower, business activity, industry or community impacts pose heightened social, environmental or reputational risk because the transaction is subject to the Environmental Loan Policy, the Responsible & Sustainable Business Areas of our Loan, Deposit or Investment Policies or may be inconsistent with the Company’s Be FIRST values then an enhanced level of due diligence is conducted.
    • Enhanced due diligence includes a deeper analysis of topics, documentation, assessments and risks related to the transaction to ensure the company understands the full environmental, social and reputational impact. These policies and procedures apply to all company operations. Credit, Lending, Risk, Operations and Corporate Responsibility teams all play a role in the due diligence process.
      • Environmental Loan Policy: A borrower, business activity, or industry requires enhanced due diligence related to environmental topics if it is subject to the company’s Environmental Loan Policy and falls within the company’s list of environmentally sensitive industries. Evaluation of environmental matters take place in accordance with the Environmental Loan Policy. The evaluation is conducted by front line staff in collaboration with the risk management function, subject matter experts and external consultants. The review includes a deeper analysis of environmental assessments and risks related to the transaction to ensure the company understands the full environmental impact and manages risk accordingly. For the most highly sensitive industries, additional documentation, assessments and ongoing monitoring are required.
      • Responsible & Sustainable Business- Loan Policy: Transactions in industries that pose the highest potential for social, environmental and reputational impacts are treated as exception-based loans. This includes any transaction with the oil & gas, mining and chemical sectors as well as private prisons and detention centers. To ensure the Bank proactively manages, mitigates and monitors potential risks to its stakeholders and communities, ensures respect for biodiversity as well as protects critical habitats, the Bank requires a social and environmental impact review for a transaction to proceed through the Bank’s existing exception- based loan approval process. Every transaction is unique and as such requires a customized review. Front line staff, including credit and lending teams work with corporate responsibility to review the transaction and potential social, environmental and reputational impacts. Documentation may be requested as part of this process to determine the borrower’s track record, commitment, policies and procedures in place to minimize, manage, mitigate and monitor social and environmental impacts. Generally, transactions that pose significant reputational risks or that will irrevocably harm the environment, stakeholders or a community will not be recommended for approval.
      • Prohibited Businesses: Sectors that pose the highest risk for negative social, environmental, reputational and financial impacts are listed as prohibited businesses. This includes, but is not limited to, transactions with the manufacture of ammunition, firearms, small arms and ordnance accessories. 
    • Business unit leaders are responsible for the ESG and social responsibility performance within their areas as outlined in the company's Responsible & Sustainable Business Policy. All employees receive training and those working in the lending, credit, underwriting and operations teams receive additional education on ESG risks as well as the company's Responsible & Sustainable Business Area of its Loan, Deposit and Investment policies.
  • Responsible & Sustainable Business Deposit & Investment Policies- In addition to our policies governing our lending activities, Berkshire adopted similar policies and processes in its Deposit and Investment Policies. The Company will not invest in companies in the fossil fuel and firearms industries as well as those with a history of materially negative environmental impacts. This helps ensure we are proactively mitigating social, environmental, and reputational risks within all areas of business, protecting the long-term sustainability of our communities and business.
To learn more about our performance on Environmental, Social and Governance matters along with how we are addressing climate change, view our most recent Corporate Responsibility Report.

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