PT Bank CIMB Niaga: Sustainability Report 2021

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1. BUILDING SUSTAINABLE INDONESIA PT Bank CIMB Niaga Tbk 2021 Sustainability Report PT Bank CIMB Niaga Tbk supports Sustainable Development Goals
2. Disclaimer and Limitation of Liability This Sustainability Report contains operational , financial statements, projections and plans, strategy implementation, and CIMB Niaga’s policies and objectives, which are classified as forward-looking statements in the implementation of the law and applicable regulations, except for historical matters. These statements have the prospect of risk uncertainty and may result in actual developments being materially different from those reported. These prospective statements are made based on various assumptions regarding current conditions and predicted conditions future in the business environment in which the Bank conducts business activities. CIMB Niaga does not guarantee that documents whose validity has been confirmed will bring certain results as expected.
3. PT Bank CIMB Niaga Tbk Sustainability Report THE RISE OF INDONESIA #KEJARMIMPI We are determined to continuously provide support to our country in fulfilling our dreams, realizing every plan as well as contributing to the country with our aspirations, innovations, and creativity. Together we rise and build a more prosperous and advanced Indonesia. 3 2021
4. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Contents 5 Our Sustainability Approach 14 Forward Message from President DIrector 22 CIMB Niaga at a Glance 27 About this Report 38 We and Green Office 106 Independent Assurance Statement 43 We Together with Business Partners 110 Reference POJK 51 , GRI, SASB, SUSBA 44 Pillar 03 Corporate Social Responsibility 66 Pillar 1: Education 71 Pillar 2: Health and Community Well Being 72 Pillar 3: Economic Empowerment 74 Pillar 4: Climate and Environment Pillar 01 Pillar Sustainable Action Pillar Sustainable Business 52 Sustainable Finance 60 Responsible Banking We Together with Employees 04 Pillar Governance and Risk 02 05 Stakeholder Engagement and Advocacy 78 Sustainability Governance 81 Sustainability Risk Approach Framework 88 Sustainability Policy and Strategy Development 91 Sustainability Governance Based on TCFD 92 Ethical Business 4 96 Capacity Building for Sustainable Finance 99 Cerita Untuk Masa Depan 100 Forum Indonesia Bangkit (FIB) 101 Sustainability Champion 101 Stakeholder Engagement 105 Response to Feedback
5. PT Bank CIMB Niaga Tbk Sustainability Report OUR SUSTAINABILITY APPROACH [SUSBA 1.1.1.4] PT Bank CIMB Niaga Tbk (hereinafter referred to as ‘CIMB Niaga’ or ‘Bank’), as a subsidiary of the CIMB Group, has adopted the ‘Forward23+’ strategy, which incorporates sustainability issues as one of the main strategies in conducting business activities. CIMB CIMB Niaga has set strategies and targets to develop business innovations as well as low-carbon solutions for sustainable growth. Niaga has set strategies and targets to develop business innovations as well as low-carbon solutions for sustainable growth through our #SekarangUntukMasaDepan (#ThankYouFromTomorrow) commitment. This strategy is consistent with efforts to close funding gaps and meet market demand through financing and investment activities supporting our sustainability priorities. CIMB Niaga’s approach to integrating business with environmental, social, and governance (ESG) aspects, including the Sustainable Development Goals (SDGs), are guided by five key sustainability pillars (Sustainable Action, Sustainable Business, Corporate Social Responsibility, Governance & Risk, and Stakeholder Engagement & Advocacy). This year, in an effort to support sustainability practices, Bank has initiated sustainability-related Key Performance Indicators (KPI) for all employees. Bank has also submitted the 2019-2023 Sustainable Finance Action Plan (RAKB) to regulators as a roadmap for implementing Sustainable Finance. Sustainability Pillars Governance and Risk BANK OUR CLIENTS SOCIETY Sustainable Action Sustainable Business How we embed sustainability principles in all our business operations and processes to reduce our negative impact, such as carbon footprint and generate positive impact through our business How we responsibly generate profits, creating net positive impact through the products and services we provide, and by assisting and encouraging our customers and clients on their own sustainability journeys Corporate Social Responsibility How we use a portion of our profits to enhance and contribute towards sustainable long-term positive impacts in the communities around us 5 How we govern and report sustainability risks, including setting targets and tolerance levels, and how we organize and mobilise ourselves for best results Stakeholder Engagement and Advocacy How we champion, engage, build capability and capacity, raise awareness, and drive participation for sustainability, both internally and externally 2021
6. Sustainability Report PT Bank CIMB Niaga Tbk Sustainability Performance Sustainable Action 2021 2020 2019 156 ,850.33 156,798.74 191,422.71 21,528.65 33,880.84 37,160.69 857.58 - - 245,720 136,905 192,340 13,433 18,406 32,545 416 399 420 100% - - 3.11 3.07 3.14 Environmental Performance Energy for Electricity and Fuel (GJ) GHG Emission (Scope 1 + Scope 2) (tonnes CO2e) GHG Emission (Scope 3) (tonnes CO2e) Water (m3) Paper (Reams) Economic Performance Local Suppliers Suppliers Reviewed by Sustainability Due Diligence Social Performance Internal Customer Satisfaction Survey (Target >3) Note: Environmental performance data covering all branch offices in Indonesia, except paper usage data which only covers head offices. Sustainable Business Economic Performance Total Products and Services 194 274,467 280,943 310,787 [FN-CB-240a.1] 2021 2020 2019 2020 Total Assets (Rp billions) 3,643 2021 2020 2019 Net Profit 193 2019 195 Number of Sustainable Business Activities Category (KKUB) Products Micro, Small and Medium Enterprises Financing (MSME) 8 Rp20,595 billion 2020 2,011 4,099 2021 3 2019 - 2020 21,112 2019 23,136 Financing of Sustainable Business Activities Category (KKUB) Operating Income Rp45,069 billion Rp17,568 billion 2020 2020 50,120 2019 75,668 (Rp billions) 6 16,359 2019 16,825
7. PT Bank CIMB Niaga Tbk Sustainability Report Corporate Social Responsibility 2021 2020 2019 32 ,365 28,046 28,951 3,177 16,400 14,397 30,400 30,400 30,200 Social Performance Realization of CSR Fund Rp millions Qardhul Hasan Fund Rp millions Rp millions Rp millions Rp millions Rp millions Environmental Performance – Biodiversity Number of Bamboo (Accumulated) Governance and Risk Stakeholder Engagement and Advocacy Customer Complaints Resolved Percentage of Complaints (Whistleblowing) Investigated out of Total Complaints Received 27% 2020 30% 98% 2020 2019 34% 28% 3,220 Participants 3,554 2019 2019 99% Customer Loyalty - Net Promoter Score (NPS) Number of Anti-Fraud Training Participants 2020 99% 2020 2,829 24% 2019 18% Sustainable Finance Training for Board of Directors (Senior Executive) and Board of Commissioners 13 2020 7 4 2019 8 2021
8. 2021 Sustainability Report PT Bank CIMB Niaga Tbk [403-6][403-7][403-10] Bank formed the ‘Bank CIMB Niaga COVID-19 In 2021, Bank continued our Anti Mati Gaya Task Force’, which is comprised of leaders Program, which aims to instill a positive attitude in from Human Resources, Business Continuity employees and maintain engagement through Management, Operational Risk Management, relaxing and exciting activities during the Strategic Property pandemic and the new normal. The programs Management, and Compliance work unit. Procurement & Admin include promoting Mental and Physical Health, Evaluation of the COVID-19 Task Force’s effectivity Hobbies, is being held every two weeks. The evaluation’s Spirituality, Volunteering, and routine socialization findings are then communicated to the Board via an e-mail blast. CIMB Niaga also held a of Directors, who will follow up if there are any COVID-19 Vaccination Program in 2021 for critical issues that require immediate attention. approximately 57,000 employees, employees’ Furthermore, Bank also published COVID-19 families, and the general public in several cities Handling Guidelines to display government throughout Indonesia. Sharing Sessions, Competitions, health protocol policies and conduct routine field inspections. Bank has also introduced a flexible way of working named Hybrid Working Arrangement, or CIMB Niaga regulates employment, health, ‘HyWork’. The objectives are to promote a healthy and safety (OHS) policies to increase employee working environment, strengthen Bank’s image to productivity and quality of life, particularly attract and retain the best employees, increase during the COVID-19 pandemic. Apart from employee productivity and engagement, save providing a decent, safe, and comfortable work cost by optimizing work locations, and contribute environment for its employees, CIMB Niaga also to environmental sustainability. This initiative is maintains physical distancing in the workplace, a response to Bank’s employee survey, which distributes face masks and hand sanitizers, and resulted in 90% of respondents supporting a sprays disinfectants throughout the office on hybrid work mechanism. a routine basis. Additionally, clean restrooms, pantry rooms, lactation rooms, smoke detectors, fire extinguishers, places of worship, and vehicle parking areas are available in the offices. 8
9. PT Bank CIMB Niaga Tbk Sustainability Report Awards FIHRRST Best Corporate Emission IDX Channel Indonesia Sustainability Report Asia Sustainability Awards 2021 Innovation Award 2021 from a Public Reporting Awards Company Category : Category: Category: Category: • Reduction of • Asia’s Best Online Financial “A” Rating for 2020 Corporate Emissions Literacy Sustainability Sustainability Report in Banking Sector - Innovation Sustainability Report (Standalone) - Green Category Finalist • Transparency in • Asia’s Best Corporate Emissions Community Calculation in Reporting - Finalist Banking Sector - Gold Category 9 2021
10. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Our Support For The Sustainable Development Goals Sustainability Pillars Relevant SDGs Targets • 8.3 & 8.10 Encouraging and expanding access to banking & financial services, including the growth of micro, small and medium enterprise, and conducting financial literacy & inclusion programs. • 8.5 Provide decent work for all women and men, including youth and people with disabilities, and equal pay for work of equal value. Sustainable Action Sustainable Business • 9.3 Increase industrial and small-scale enterprise access to financial services, including affordable credit, and integrate them into value chains and markets. • 9.4 Improve infrastructure and industrial retrofits to be sustainable, with increased efficiency in resource use and better adoption of clean and environmentally friendly industrial technologies and processes. • 10.2 Empowerment and promotion of financial inclusion for all, regardless of age, gender, disability, race, ethnicity, origin, religion or economic ability or other status. • 10.c Increasing the use of financial services for workers. Corporate Social Responsibility • 12.6 Adopt sustainability practices and conduct annual sustainability reporting. • 12.8 Conduct sustainable lifestyle campaigns and support sustainable development. Governance & Risk • 13.2 Issuing Sustainability Policy & Sustainable Finance as an action to anticipate climate change. • 13.3 Carry out capacity building and sustainability literacy activities including climate change actions for both internal and external stakeholders. Stakeholders Engagement & Advocacy • 15.7 Have an exclusion list policy to end hunting and trade in protected flora and fauna species and address the demand and supply of illegal wildlife products. • 15.a To become a financial service institution that conserve and utilize biodiversity and ecosystems in a sustainable manner. • 16.4 Have an exclusion list policy to prohibit illicit financial and arms flow, strengthen recovery and return of stolen assets and combat all forms of organized crime. • 16.5 Have an Anticorruption Policy to reduce corruption and bribery in all its forms. • 16.6 Develop effective, accountable, and transparent institutions at all levels. 10
11. PT Bank CIMB Niaga Tbk Sustainability Report Sustainable Governance Approach On The Sustainable Development Goals (SDGs) In Reference To Global Investors For Sustainable Development (GISD) GOVERNANCE STRATEGY RISK MANAGEMENT 1. Bank recognizes that efforts to mitigate the impact of risks associated with the Sustainable Development Goals will be successful only if they are integrated into an effective governance framework. 2. Bank currently has a GCG & Sustainability Work Unit overseen by the Director Responsible for Sustainability. 3. This governance structure is one way of responding to Sustainable Development Goals issues and ensures that initiatives and actions aimed at achieving the Sustainable Development Goals can be implemented in the entire organization. 1. Bank has established and is operating a sustainability due diligence mechanism. 2. This due diligence covers both financing and non-financing activities. 3. Due diligence is exercised by taking into account various social and environmental aspects, including achieving the Sustainable Development Goals (SDGs). 4. Additionally, Bank has a strategy for identifying opportunities and challenges associated with the Sustainable Development Goals (SDGs). 1. Considering the risks associated with the Sustainable Development Goals when assessing financial and non-financial risks. 2. Strive to raise debtors’ awareness of achieving the Sustainable Development Goals (SDGs), reviewing and incorporating aspects of the SDGs into Sustainability Due Diligence. 3. Improving Bank’s internal, clients, and vendors literacy on sustainability risk and the Sustainable Development Goals. 4. Identifying potential risks associated with the Sustainable Development Goals. 5. Developing financing risk profile scenarios for the Sustainable Development Goals. 1. Identifying portfolios/debtor groups that have a positive impact and contribution to the achievement of the Sustainable Development Goals (SDGs). 2. Sustainability Due Diligence conducted on Bank’s financing portfolio. METRICS AND TARGET 11 2021
12. 2021 Sustainability Report Metrics PT Bank CIMB Niaga Tbk Sustainable Development Goals (SDGs) GHG emissions associated with financed companies and projects, using defined methodologies Contribution References Calculation of GHG emissions for financed companies and projects is still in the planning phase and will be carried out in stages. GISD (new) Bank has a sustainable investment portfolio in the form of a subscription of Green Sukuk issued by the Government of Indonesia, which amounted to US$75 million in 2018. GISD (new) Number of loans outstanding, value of loans outstanding (disaggregated by SME and microfinance borrowers) In 2021, Bank had MSME financing with an outstanding of Rp20.60 trillion to 22,604 debtors consisting of Rp18.71 trillion of SME financing and Rp1.89 trillion of microfinancing. HIPSO – FI01/02 Number and value of no-cost checking accounts to previously unbanked or under-banked customers As of 31 December 2021, there are 39,980 savings accounts for students that amounted to Rp8.41 billion from the financial inclusion and literacy program. Sustainability Report Loan to thermal coal mining and oil and gas exploration companies reached 1% of Bank’s total loans. Moreover, there was no new financing for thermal coal mining expansion activities. Sustainability Report KKUB financing in 2021 reached Rp 45.07 trillion distributed for more than 22,000 clients. GISD (new) Percentage of investment portfolios aligned with the Sustainable Development Investing (SDI) definition New and existing business activities (loans, investments, insurance) to thermal coal mining and oil and gas exploration companies Diverse Diverse Total and value of green and sustainability-linked financing A portfolio impact analysis is conducted to inform business strategy, with the process and output of this analysis confirmed and submitted in accordance with applicable guidelines Diverse 14% of Bank’s total loans are considered as having high sustainability risk. [201-2] UNEP FI Existence and implementation of systems of impact analysis and engagement of clients/investee companies Diverse Bank has established Sustainability Due Diligence for clients and business partners with sustainability requirements referring to international best practices. UNEP FI In 2021, Bank had 27,223 individual checking account clients valued at Rp1.86 trillion. IRIS+ Number of transactions and active users of checking accounts 12
13. PT Bank CIMB Niaga Tbk Sustainability Report Sustainable Development Goals (SDGs) Metrics Contribution References Total incentives offered to establish savings accounts Savings accounts for students under the financial literacy program reached 5,367 accounts with incentives valued at Rp541 million. IRIS+ Total and value of ESG-linked financing, where terms are contingent on sustainability performance Sustainable Finance Program with Rp332.3 billion financed to 3 clients in 2021. Sustainability Report Number of women-owned accounts in countries with significant gender disparities in financial inclusion There are 6,795 women-owned MSME accounts. GISD (new) SHARIA SUSTAINABLE DEVELOPMENT GOALS INITIATIVES Sharia Sustainable Development Goals Initiatives, or Abhipraya Project, which Sharia Business Unit initiated in 2020, has recorded several achievements. Abhipraya Project aims to support the acceleration of achieving the SDGs and sustainable economic growth and support the creation of a low carbon economy. Some of the achievements include: Sustainability Pillars Program SDGs Targets Description Sustainable Business Green Mortgage Bank has collaborated with 13 developers to socialize the concept of green housing and green mortgages. In 2021, the Green Mortgage Bank portfolio reached Rp85.32 billion. Sustainable Business Sustainabilitylinked Waqf Bank held 18 webinar sessions with Partners (Nadzhir) in relation to the Sustainability-linked Waqf program. The total value of waqf savings that supported the SDGs in 2021 reached Rp154.38 billion. Corporate Social Qardhul Hasan Responsibility Program In 2021, Qardhul Hasan Program distributed Rp3.18 billion to 169 activities that support the SDGs, including assistance to MSMEs affected by the pandemic, renovations for schools, and places of worship, and a resilient livestock program for communities impacted by the Mount Semeru eruption. 13 2021
14. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Message from Board of Directors [GRI 2-22] [SUSBA 1.1.1.3] CIMB Niaga is committed to fully supporting Indonesia’s GHG emission reduction targets through carbon neutrality in 2030, coal phase-out in 2040, and Net Zero in 2050. Dear Respected Stakeholders, Since 2020, the COVID-19 Pandemic continues to affect us, posing challenges and bringing unexpected changes. All parties, including CIMB Niaga, assisted one another in mitigating the pandemic’s impact through disciplined implementation of health protocols, vaccination programs, and loan/financing restructuring program for impacted clients. We endeavor to recover Indonesia’s health together and will continue to work tirelessly in achieving our dreams. The World Economic Forum’s January 2022 report states that, aside from the threat of the pandemic, environmental issues continue to be the primary risk to the global economy. Climate change impact, such as rainfall anomalies and extreme weather are the two most significant environmental risks. Numerous efforts have been made to address this condition, including reinforcing the commitment to reduce greenhouse gases (GHG), which was reiterated during the November 2021 United Nations (UN) Climate Change Conference (COP26). Subsequently, in October 2022, Indonesia will host the ‘G20 Leader Summit,’ which will include discussions on climate resilience. 14
15. PT Bank CIMB Niaga Tbk Sustainability Report In light of these developments , we at CIMB Niaga We are also committed to assist our clients impacted have consistently supported various initiatives, such by the COVID-19 pandemic by loan/financing as the implementation of a sustainable finance restructuring in accordance with the Government’s action plan (RAKB), raising awareness through program. We hope that by restructuring their loan/ regular training sessions, and supported sustainability- financing, clients will be able to endure and thrive, themed events such as ‘The Cooler Earth Sustainability thereby assisting the recovery of national economy. Summit’ by CIMB Group. We have also initiated the Furthermore, we have increased the availability adoption of guidelines developed by the Taskforce of alternative customer service networks, such as for Climate-related Financial Disclosure (TCFD) to digital lounges and mobile cash cars, as well as the assist us in conducting climate risk assessments, convenience and security of banking transactions including physical and transition risk. In addition, conducted through branchless banking channels. It there are other aspects taken into consideration, aims to minimize customer mobility, while maintaining such as Human Rights, changes in the land-use, and their convenience in doing banking transactions. biodiversity. While related to sustainable finance portfolio, we conduct environmental, social and COMMITMENTS AND STRATEGIES TOWARD governance (ESG) due diligence, as well as to learn SUSTAINABLE FINANCE more on implementing recent Indonesia’s Green We have implemented a strategy to implement Taxonomy. sustainable finance and to encourage our clients to join us in transitioning business as usual towards low- OUR RESPONSE TO CHALLENGES Adopting sustainable carbon economy. We, together with CIMB Group, business practices and are committed to achieve carbon neutral in 2030, financing poses various challenges. Not only health coal phase-out in 2040, and to achieve Net-Zero challenges, but economic challenges are also faced target in 2050. To that end, we have incorporated by all business sectors, including our clients. the Sustainability Pillars into all aspects of our business. In developing a sustainability strategy, we In #SolidLawanCovid have taken into account the Bank’s business movement to assist the government in mitigating 2020, we initiated the strategy, performance targets, financing portfolio, the impact of COVID-19 pandemic. We continued macroeconomic this movement in 2021, including by conducting a alignment with the Sustainable Development Goals COVID-19 vaccination program which held by CIMB (SDGs) as well as Indonesia’s Nationally Determined Niaga itself as well as part of the national “Gerakan Contribution (NDC) target. All Board of Directors and issues, and was Board of Commissioners members are involved in developing and monitoring the Bank’s sustainability by the Ministry of Health of the Republic of Indonesia strategies, which include an emphasis on ESG risks. Insan Perbankan” which global spearheaded by five national banks and supported Peduli initiative, conditions, and the Financial Services Authority (OJK). These are just a few of the collaborative efforts we are undertaking with stakeholders to improve the health and to recover the country. 15 2021
16. 2021 Sustainability Report PT Bank CIMB Niaga Tbk SUSTAINABILITY AND SUSTAINABLE FINANCE VALUES SUSTAINABILITY IMPLEMENTATION AND SUSTAINABLE We foster a culture of sustainability through our core FINANCE PERFORMANCE values of Customer Obsessed , High Performance, Economic activity increased in 2021 compared Integrity, Diversity and Inclusion, and Agility (CHIDA). to 2020. This situation is inextricably linked to the These values underpin a sustainability strategy that is Government’s support through economic stimulus focused on five pillars, including Sustainable Action, policies, the acceleration of vaccination programs, Sustainable Business, Corporate Social Responsibility, the management of COVID-19, and the National Governance & Risk Management, and Stakeholder Economic Recovery (PEN). On the other hand, we are Engagement & Advocacy. continuing to expand the role of banks in financing the nation’s economic growth. SUSTAINABILITY RISK MANAGEMENT We also manage risk at an operational level in In 2021, the Bank achieved net profit of Rp4.10 trillion. relation to ESG risk. To achieve optimal returns, we The total distribution of Bank’s financing reached utilize an Enterprise-Wide Risk Management (EWRM) Rp181.61 trillion and with the KKUB category receiving framework that is proactive and forward looking. By 25% of total financing. The biggest portion of KKUB aligning risk appetite with business strategy, EWRM financing is distributed to micro, small, and medium manages the risk of implementing sustainable enterprises (MSMEs) with Rp20.54 trillion. We also finance. This risk management involves all levels of launched several sustainable financial programs, the Board of Directors, senior management, and all namely Green Mortgage, Electric Motor X-tra, Solar employees, and is overseen directly by the Board of Panel Financing, Sustainability-linked Loan/Financing, Commissioners. and Sustainable Financing, to encourage customers in incorporating ESG factors into their operations. The rapid advancement of technology also requires The total distribution of this program reached Rp0.45 data resilience and security in order to combat trillion at the end of 2021. technological crimes, including the risk of cyberattack. In overcoming the issue, we have adopted In terms of operational performance, we are an system constantly striving to provide the best possible in accordance with ISO 27001:2013 and other information security management service to our customers. Throughout 2021, we international standards. The IT Security Work Unit, continued to improve our digital banking platform, under the supervision of the IT Director, is responsible which processed more than 325 million digital and for enforcing ISO 270001:2013 to ensure data and branchless banking transactions. It is estimated that transaction security, customer privacy, and solid 25,000 tonnes CO2e of GHG emissions have been digital infrastructure. avoided in 2021 based on the total number of digital banking transactions. Concurrently, we are also 16
17. PT Bank CIMB Niaga Tbk Sustainability Report committed to further developing the green banking HEALTHY THE NATION , RECOVER INDONESIA concept, which includes significantly reducing our We would like to express our heartfelt gratitude reliance on paper and our consumption of energy and appreciation to all Stakeholders who have and water in daily operations. collaborated with us and are committed to implementing sustainable practices and realizing a Bank has put a sustainability performance target to hopeful future. reduce GHG emissions intensity by 2% in 2021. Bank’s GHG emissions intensity in 2021 is 1.23 tonnes CO2e Let us continue to shape our dreams and for each billions Rupiah or 41% reduction. Details of accomplishments together through perseverance sustainable finance performance against its targets and consistency. are disclosed further in this Sustainability Report. Let us work together to serve Indonesia. Bank has received several awards for our sustainable Let us strengthen our spirits through excellent health. finance performance, such as Indonesia Green Award 2021, Emisi Korporasi 2021, and IDX Channel Let us realize our dreams of recovering our Nation. Anugerah Inovasi Indonesia 2021. CONTINUING BUSINESS AND SUSTAINABILITY #SekarangUntukMasaDepan PROSPECTS Accelerated technological advancements during Jakarta, 10 March 2022 COVID-19 has provided banks with new business Lani Darmawan opportunities and prospects. The shift in people’s lifestyles toward a cashless society has increased the attractiveness of digital-based banking services due to the ease of transactions. Sustainable financing is also a business opportunity and prospect for the Bank, though implementing it will take time and support from various parties. However, we believe that the business prospect from an ESG perspective will be a transformation of the business that enables it to compete successfully in both domestic and global markets. Additionally, the Government’s support and commitment to climate finance mobilization represent excellent opportunities for the future. All of these efforts align with the OJK Phase II Sustainable Finance Roadmap Plan for 2021-2025. 17 2021
18. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Board of Commissioners ’ Responsibility Statement for the 2021 Sustainability Report of PT Bank CIMB Niaga Tbk Board of Commissioners’ Responsibility Statement for the 2021 Sustainability Report of PT Bank CIMB Niaga Tbk We the undersigned, Board of Commissioners of PT Bank CIMB Niaga Tbk hereby declare that all information in the 2021 Sustainability Report of PT Bank CIMB Niaga Tbk is presented in its entirety, and we take full responsibility for the correctness of the contents of this Sustainability Report. This statement is made in all truthfulness. 10 March 2022 By the undersigned, Didi Syarifruddin Yahya President Commissioner Glenn Muhammad Surya Yusuf Vice President Commissioner (Independent) Sri Widowati Independent Commissioner Jeffrey Kairupan* Independent Commissioner Dato’ Abdul Rahman Ahmad Commissioner * Appointed as a Senior Independent Commissioner of the Bank through the Circular Resolution of the Board of Commissioners of CIMB Niaga No. 014/DEKOM/KP/VI/2019 dated 28 June 2019. 18 Vera Handajani Commissioner
19. PT Bank CIMB Niaga Tbk Sustainability Report Board of Directors ’ Responsibility Statement for the 2021 Sustainability Report of PT Bank CIMB Niaga Tbk Board of Directors’ Responsibility Statement for the 2021 Sustainability Report of PT Bank CIMB Niaga Tbk We the undersigned, Board of Directors of PT Bank CIMB Niaga Tbk hereby declare that all information in the 2021 Sustainability Report of PT Bank CIMB Niaga Tbk is presented in its entirety, and we take full responsibility for the correctness of the contents of this Sustainability Report. This statement is made in all truthfulness. 10 March 2022 By the undersigned, Lani Darmawan** President Director Lee Kai Kwong Director John Simon Director Pandji P. Djajanegara Director Tjioe Mei Tjuen Director Rusly Johannes* Director Joni Raini** Director * Effective upon obtaining OJK approval and/or fulfilled the requirements as determined in the OJK approval **Effective as of 9 March 2022 19 Fransiska Oei Director Henky Sulistyo** Director 2021
20. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Board of Commisioners Didi Syafruddin Yahya Glenn Muhammad Surya Yusuf Jeffrey Kairupan * President Commissioner Vice President Commissioner (Independent) Independent Commissioner Sri Widowati Dato’ Abdul Rahman Ahmad Vera Handajani Independent Commissioner Commissioner Commissioner Sharia Supervisory Board Prof. Dr. M. Quraish Shihab, MA Dr. Yulizar D. Sanrego, M.Ec Chairman Member Prof. Dr. Fathurrahman Djamil, MA Member * Appointed as a Senior Independent Commissioner of the Bank through the Circular Resolution of the Board of Commissioners of CIMB Niaga No. 014/DEKOM/KP/VI/2019 dated 28 June 2019. 20
21. PT Bank CIMB Niaga Tbk Sustainability Report Board of Directors Lani Darmawan ** Lee Kai Kwong John Simon President Director Director Director Pandji P. Djajanegara Fransiska Oei Tjioe Mei Tjuen Director Director Director Rusly Johannes* Joni Raini** Henky Sulistyo** Director Director Director * Effective upon obtaining OJK approval and/or fulfilled the requirements as determined in the OJK approval. **Effective as of 9 March 2022 21 2021
22. 2021 Sustainability Report PT Bank CIMB Niaga Tbk CIMB NIAGA At A Glance [GRI 2-1][GRI 2-6] Since 1955, we have passed several significant milestones in expanding our business to become a leading financial services provider. Today, we serve around 7 million customers in Indonesia through our 427 offices and e-channel networks. Legal Entity and Share Ownership Company Name PT Bank CIMB Niaga Tbk •Limited Liability Company •Listed on the Indonesia Stock Exchange (IDX) on 29 November 1989 •Stock and Bond Code: BNGA •Share Ownerships: Diagram Lingkaran 91.48% CIMB Group Sdn. Bhd 1.02% Date and Year of Establishment PT Commerce Kapital 7.50% 26 September 1955 Other Public Shareholders Legal Basis of Establishment Head Office Deed of establishment No. 90 before Raden Meester Soewandi, notary, dated 26 September 1955, amended by deed No. 9 dated 4 November 1955 before the same notary. Graha CIMB Niaga Jl. Jend Sudirman Kav. 58 Jakarta 12190, Indonesia Telp: (+62-21) 250 5252, 250 5353 Faks: (+62-21) 250 5205 E-mail Address Website www.cimbniaga.co.id •Corporate Secretary: corporate.secretary@cimbniaga.co.id •Sustainability: sustainability@cimbniaga.co.id •Investor Relations: Investor.relations@cimbniaga.co.id 22
23. PT Bank CIMB Niaga Tbk Sustainability Report SIGNIFICANT CHANGES TO CIMB NIAGA IN 2021 Financing Portfolio Based on Business Segment (Trillion Rp) [GRI 2-6] Changes were made in the Board of Commissioners and Board of [FN-CB-000.B] Directors composition in 2021. Detailed information 33.1% 2021 Total Corporate on these changes can be seen in the 2021 CIMB Niaga Annual Report. Additionally, Commercial as part of its commitment to low-carbon Emerging Business Banking (EBB) development, Bank closed down 24 branch offices in 2021. This initiative aims to maximize 37.5% 181.6 11.7% 17.7% Consumer digital transactions and digital banking, which is more environmentally friendly. 31.6% CREDIT PORTFOLIO BY SEGMENT 2020 [FS6] [FN-CB-410a.1] Total 174.8 CIMB Niaga provides banking services to individuals and businesses ranging 36.1% from small and medium-sized enterprises (SME) to 11.6% large corporations. In line with the economic 20.7% recovery in 2021, we saw a 3.9% increase in the loan portfolio in Indonesia, to Rp181.61 trillion. This accomplishment was balanced by 28.0% improvements to credit quality and expansion of the customer base, all of which were 37.1% 2019 achieved while adhering to the precautionary Total principle and through strict monitoring. Credit quality and collectability improvements were 11.0% reflected in the Non-Performing Loan (NPL) rate decline in 2021, indicating that lending to 194.3 23.9% productive businesses increased. Non-Performing Loan (NPL) Ratio [FN-CB-240a.2] 3.5% 2021 3.6% 2020 2.8% 2019 Detailed information on the Financing by Sector, Credit Quality, and Number of Customer can be found in the Economic Performance Appendix. 23 2021
24. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Sectors and Markets Served [GRI 2-6] CIMB Niaga offers consumer, small and medium-sized enterprises (SME), commercial, and corporate banking services. These services are supported by robust treasury and transaction banking capabilities, as well as a dependable branchless banking network. Additionally, CIMB Niaga offers sharia-compliant products and services via CIMB Niaga Sharia Business Unit. Bank is listed as having equity participation in its subsidiaries, including PT CIMB Niaga Auto Finance (CNAF), a finance company, and PT CIMB Niaga Sekuritas (CNS), a securities firm. Market Served East Kalimantan North Sumatra North Kalimantan Riau Central Kalimantan West Kalimantan Riau Island Bangka Belitung Island Aceh West Sumatra DKI Jakarta 427 Central Java South Sumatra Lampung Total Branch Offices E-channel network throughout Indonesia South Kalimantan Jambi 3,563 West Java DI Yogyakarta Banten East Java ATM 913 1 4 Cash Recycle Machine (CRM) Cash Deposit Machine (CDM) Multi Denom Machine (MDM) 24 Bali West Nusa Tengara
25. PT Bank CIMB Niaga Tbk Sustainability Report Emissions Footprint Aceh 367 .53 (tonnes CO2e) North Sumatra 511.52 Bangka Belitung Islands 33.14 Bali 1,336.67 West Nusa Tenggara 3.79 Lampung 23.63 West Sumatra 80.94 Banten 1,051.54 Riau 143.31 East Nusa Tenggara 34.78 West Java 1,894.04 Riau Islands 274.95 North Kalimantan 34.54 DKI Jakarta 10,766.82 Jambi 9.81 West Kalimantan 188.90 Central Java 1,453.11 Bengkulu - DI Yogyakarta 248.20 South Sumatra 90.59 Central Kalimantan 31.58 East Java 984.49 South Kalimantan 0.97 South Sulawesi 25.87 East Kalimantan 1,277.74 Southeast Sulawesi - Gorontalo - North Maluku - North Sulawesi 22.09 Maluku 603.20 West Sulawesi - West Papua - Central Sulawesi - Papua 34.90 North Sulawesi Papua Southeast Sulawesi Maluku South Sulawesi East Nusa Tengara 25 2021
26. 2021 Sustainability Report THE CIMB PT Bank CIMB Niaga Tbk NIAGA VALUES clear purpose VISION [SUSBA 1.1.1.1] Having a To be the Leading ASEAN Company and strong values has never been more these important challenging in MISSION times. We may adapt to change To provide universal banking services in Indonesia as a high-performing, institutionalized and integrated company located in ASEAN and key markets beyond, and to champion the acceleration of ASEAN integration and the region’s links to the rest of the world while remaining focused on the long-term picture we envisioned. Instilling the right behaviors and encouraging actions that are aligned with organizational values are essential. CORE VALUES: C CUSTOMER OBSESSED We are here for our customers, to ensure they’re happy and satisfied. H HIGH PERFORMANCE We always strive to go above and beyond in everything we do. I Key Behaviors 1. “Go the extra-mile to delight INTEGRITY We’re always honest, responsible, customers” and 2. “Respect each other, engage accountable in everything we do. Be vigilant, openly, and work together” be alert, be thorough. D 3. “Recognise each other’s efforts and always back each other up” DIVERSITY AND INCLUSION We believe everyone has something to contribute, regardless of race, gender or opinions. A AGILITY We must respond quickly to change and be problem solvers. 26
27. PT Bank CIMB Niaga Tbk Sustainability Report About The Report REPORT PROFILE [GRI 1] [GRI 2-3] [GRI 2-4] [GRI 2-5] [FN-CB-550A.1] [SUSBA 1.6.2.9] PT Bank CIMB Niaga Tbk (“CIMB Niaga” or “Bank”) prepares a Sustainability Report that includes information on Bank’s sustainability performance, including economic, social, and environmental aspects, and distributes it to all Stakeholders on an annual basis. This Sustainability Report is a continuation of the report published on 10 March 2021. This report contains no restatement of information. In addition, CIMB Niaga has not yet been identified under Global Systemically Important Bank (G-SIB) list. CIMB Niaga has reported the information cited in the GRI content index for the period 1 January until 31 December 2021 with reference to the GRI Standards. This Sustainability Report was prepared based on the following standards and frameworks: • Financial Services Authority Regulation (POJK) No. 51/POJK.03/2017 regarding the Implementation of Sustainable Finance and Preparation of Sustainability Reports • Reporting with reference to the GRI Standards 2021 and GRI-G4 financial sector supplement indicator • Financial Services sector of the Sustainability Accounting Standard Board (SASB) • The WWF Sustainable Banking Assessment (SUSBA) and the Sustainable Development Goals (SDGs) • Task Force on Climate-related Financial Disclosures (TCFD) • Global Investors for Sustainable Development (GISD) Alliance The report’s information and data on sustainability REPORTING SCOPE performance have been independently verified and [GRI 2-2] conform to the AA1000 standard. The verification The report contains information and data gathered process was conducted online on 17-18 February from CIMB Niaga’s Head Office and operational 2022. CIMB Niaga has ensured that there are no activities across Indonesia. Financial information conflicts of interest with any party and that the Board is derived from the audited and consolidated of Directors has approved the appointment of an financial statements of all CIMB Niaga work units independent party. and subsidiaries, specifically PT CIMB Niaga Auto Finance (CNAF) and PT CIMB Niaga Sekuritas (CNS). Meanwhile, employee data and electricity consumption are collected from CIMB Niaga work units and branch offices throughout Indonesia. 27 2021
28. Sustainability Report 2021 PT Bank CIMB Niaga Tbk REPORT CONTENT AND QUALITY DETERMINATION CIMB Niaga together with CIMB Group and external The Sustainability Report is guided by the following subject matter experts by adjusting issues and principles : accuracy, balance, clarity, comparison, performance relevant to CIMB Niaga. In addition, completeness, sustainability context, timeliness, and CIMB Niaga also receives input from several external verifiability. CIMB Niaga has also consulted with stakeholders such as investors and rating agencies stakeholders to determine the contents of the report. through investor and analyst meetings. So that on 17 November 2021, the Board of Directors of CIMB MATERIAL TOPICS PRIORITIZATION Niaga agreed to make adjustments to material [GRI 3-1] [GRI 3-2] [GRI 3-3] topics compared to the previous report, namely Material topic priority determination is carried out adding material topics regarding Climate Change to through a materiality assessment conducted by be a high priority. HIGH 1 Technology 2 Climate Change Sustainable Finance 3 4 Customer Experience MEDIUM LOW 10 Welfare, Health, and Safety 11 Organizational Culture 9 Sustainability Education and Participation 12 Sustainable Supply Chain 28 5 Governance 6 Financial Literacy, Inclusion, and Empowerment 7 Talent Attraction, Growth, and Retention 8 Diversity and Inclusion 13 Corporate Citizenship and Volunteerism
29. PT Bank CIMB Niaga Tbk Sustainability Report Boundaries and Management Approach for High Priority Material Topics Technology [GRI 3-1, 3-2, 3-3] Material Topic Boundaries Impact on Stakeholders Important Information Internal • Technology development • Policies for fair design and sale of financial products and services [FS15] • Approaches for dealing with data security risks • Shareholders • Employees External • Customers •Regulators Material Topic and its Importance for Company Sustainability Technology plays a critical role in quantifying and reporting digital trust and experience scores. Policies: • Strategy and Information Technology (IT) Organization • IT Systems Development • IT Operations • IT Communications Network • Information Security Performance Targets: Zero complaints regarding customer data privacy • IT Continuity • End-User Computing • Digital Banking • Use of IT Service Providers • IT Processes, Risks, and Compliance Achievement Strategies: • Training and workshops related to information and technology. • Utilizing technology efficiently, timely, and cost-effectively to produce quality, reliable, and safe banking products and services. Achievements: • Exploring CIMB Niaga technology landscape in terms of applications, infrastructure, IT service management, and organization to establish a foundation for mapping IT capabilities to operational models/frameworks used by leading companies. • Implement an API-First strategy to ensure a consistent, clear, and adaptable approach to API usage. • Continuation of the adoption of microservices architecture and cloud technology. • Process automation optimization through Robotic Process Automation (RPA) technology and testing automation. Conduct technology-based research to explore technologies relating to master data management, artificial intelligence/machine learning, cloud adoption expansion, cloud ecosystem & security, and Intelligent Security Operational Centers. Evaluation Method: Strengthening IT security capabilities and capacities to address IT security threats and mitigate digital risks. Responsible Directorate: Operations and Information Technology Directorate 29 2021
30. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Climate Change [GRI 3-1, 3-2, 3-3] Material Topic Boundaries Impact on Stakeholders Important Information • • • • Energy Use Paper Saving Water Management Waste Management Internal • Shareholders External • Local Communities Material Topic and its Importance for Company Sustainability Climate change is an important topic because it has the potential to affect economic and social aspects, as well as banking performance. Climate change may also affect physical risks, putting customers’ assets and ability to meet their obligations at risk. Policies: • Sustainability Policy No. M.08 • Smart Spending Policy • Green Office Policy Performance Targets: • Carbon neutral operations by 2030 for Scope 1 and 2 GHG Emissions • Net Zero Scope 1, 2, and 3 GHG Emissions by 2050 Achievement Strategies: • Monitor and evaluate activities and/or portfolios that have the potential to generate or contribute to GHG emissions under Scope 1, 2, and 3. • Conducting a study on the implementation of internal carbon pricing. • Implement energy-efficiency initiatives. Achievements: • Energy intensity was 8.93 GJ/Rp billions or a 7% decrease compared to 2020. • GHG Emissions Scope 1 and 2 intensity was 1.23 tonnes CO2e or decreased by 41% compared to 2020. • Water use intensity reached 13.99 m3/Rp billions. • Paper use intensity was 1.91 kg/Rp billions or a 27% decrease compared to 2020. Evaluation Method: GHG emissions reporting with initiatives to reduce GHG emissions in accordance with predefined sustainability performance targets. Responsible Directorate: Strategy, Finance & Strategic Procurement, and Admin Property Management (SPAPM) Directorate, specifically the SPAPM work unit and supported by all other work units. 30
31. PT Bank CIMB Niaga Tbk Sustainability Report Sustainable Finance [GRI 3-1, 3-2, 3-3] Material Topic Boundaries Impact on Stakeholders Important Information • Economic Performance [201-1][201-2][201-3][201-4] • Product Portfolio and Loan Quality [SUSBA 1.1.1.10] • Policies related to social and environmental components and their implementation in the Company’s business [FS1] • Percentage of the Company’s business portfolio according to banking sector for constrained individuals [FS6] • Approach for including ESG factors in credit analysis • ESG risk assessment and mitigation at portfolio level • Disclosure of ESG exposures and targets Internal • Shareholders • Employees External •Customers •Regulators Material Topic and its Importance for Company Sustainability Sustainable Finance is important for mapping Bank’s portfolio of products and services that can assist in achieving the SDGs, including climate change mitigation actions and the establishment of a low-carbon economic ecosystem. Policies: • Sustainability Policy No. M.08 and Sustainability Procedure No. M.08.P.01 • Sustainable Finance Policy No. M.10 and Sustainable Finance Procedure No. M.10.P.01 • High Sustainability Risk Sector List • Sector Guidance Performance Targets: • Plans to issue additional sector guidance for land-based sectors • Strive to increase sustainable finance portfolio • Strive to increase sustainability and sustainable finance literacies Achievement Strategies: • Bank conducts all aspects of due diligence related to a customer’s/prospective customer’s sustainability, including through Sustainability Due Diligence (SDD), Enhanced Sustainability Due Diligence (ESDD), and Sector Guidance. • Bank provides an Action Plan to customers/potential customers who do not meet Bank’s minimum sustainability requirements. • Bank continuously encourages customers/prospective customers to adopt and implement sector-specific best practices for sustainability. • Identify and classify Bank’s portfolio in terms of sustainability risks, categories of sustainable business activities, and categories of products and services with environmental, social, and sustainable impacts (Green Social Sustainable Impact Products and Services). Achievements: • The total financing portfolio in the category of sustainable business activities reached Rp45.07 trillion. • Rp170.56 billion MSMEs were financed through channeling, where 56% of funds were distributed to 1,305 women debtors (53% out of total MSME channeling debtors). • Rp6.7 trillion in total financed for sustainable palm oil (customers pursuing or have ISPO/RSPO certification). • Issuance of Sector Guidance for Coal, Oil & Gas, Forestry, and Construction, Real Estate, & Infrastructure sectors. Evaluation Method: Reviewing the findings of SDD and ESDD result in corporate banking financing. Responsible Directorate: Compliance, Corporate Affairs, and Legal Business Unit and Directorate, specifically the Good Corporate Governance & Sustainability Work Unit 31 2021
32. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Customer Experience [GRI 3-1, 3-2, 3-3] Material Topic Boundaries Impact on Stakeholders Important Information • Consumer Health and Safety • Customer Information Protection [418-1] • The financial value of products and services designed to support social welfare [FS7] Internal • Employees External •Customers •Regulators •Local Communities Material Topic and its Importance for Company Sustainability Customer experience reflects service satisfaction, making it a material topic that must be managed for its positive impact while mitigating its negative impact. Policies: • Bank Indonesia Regulation No. 22/20/PBI/2020 concerning Bank Indonesia Consumer Protection • Financial Services Authority (OJK) Regulation No. 18/POJK.07/2018 concerning Consumer Complaint Services in the Financial Services Sector • OJK Regulation No. 1/ POJK.07/2013 concerning Consumer Protection in the Financial Services Sector • Customer Protection Policy No. E.04 A.10 Performance Targets: • Reducing the number of complaints received by Bank • Improving customer experience by measuring Net Promoter Score (NPS) Achievement Strategies: • Provide various service channels, including branch offices, Digital Lounges, a 24/7 contact center, a website, e-mail: 14041@cimbniaga.co.id, a live chat feature, and social media accounts on Facebook,Twitter, and Instagram. • Improving the performance of the Customer Care Unit by enhancing the quality of customer complaint resolution. • Bank has set KPIs for products and services by measuring NPS. Achievements: • Customer Loyalty has increased compared to 2020 (2020: 24%, 2021: 28%). • 98% customer complaint resolution rate. • Bank has received fewer complaints. This decrease was attributed to the Customer Care work unit’s proactive role in coordinating the efforts of all front/middle/ back office units in providing solutions to customers. Additionally, Bank is constantly improving its process and system for resolving customer complaints. Evaluation Method: Conducting customer satisfaction surveys Responsible Directorate: Consumer Banking Directorate, specifically the Customer Care and Customer Experience Work Unit 32
33. PT Bank CIMB Niaga Tbk Sustainability Report Governance [GRI 3-1, 3-2, 3-3] Material Topic Boundaries Impact on Stakeholders Important Information •Anticorruption [205-1][205-2][205-3] • Audit scope and frequency with which social and environmental policies are implemented, as well as risk assessment procedures [FS9][SUSBA 1.4.1.8] Internal • Shareholders • Employees • Union External • Customers • Regulators • Investors •Suppliers Material Topic and its Importance for Company Sustainability Governance is the basis for all Bank performance, including the implementation of ESG aspects Policies: • Governance Policy No. M.12 • Anticorruption Policy No. M.11 • Anti-Money Laundering and Financing Policy No. C.02 Counter-Terrorism Performance Targets: • Embedding sustainability culture and incorporating sustainability principles into business processes. • ASEAN Asset Class Publicly Listed Companies Award in the ASEAN Corporate Governance Scorecard (ACGS). Achievement Strategies: • Establishment of a sustainability organization • Issuance of sustainability and sustainable finance policies and procedures • Adjustment of various charters and policies • Evaluation of governance implementation based on ACGS criteria • Certification of governance procedures in accordance with international standards, such as OECD and ISO Achievements: • Obtained the Golden Star Trophy from the 2021 TOP GRC (Governance, Risk, and Compliance) Awards, successfully obtaining the Top GRC #5 Stars award for 3 consecutive years. CIMB Niaga is rewarded as an excellent company in its systems, GCG infrastructure and implementation, risk management, and compliance. • Application of Artificial Intelligence (A.I.) by the Internal Audit Unit (SKAI). • Utilization of IT systems for the preparation and monitoring of legal credit documents, including the commencement of the use of e-signature in several Bank operational activities. • Electronically conducting the Extraordinary General Meeting of Shareholders (e-GMS) via the eASY.KSEI platform. Evaluation Method: Evaluation of Good Corporate Governance implementation using OJK and ACGS parameters. Responsible Directorate: Compliance, Corporate Affairs, and Legal Directorate, specifically the Good Corporate Governance & Sustainability Work Unit together with the Anti Fraud Management Work Unit 33 2021
34. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Financial Literacy , Inclusion, and Empowerment [GRI 3-1, 3-2, 3-3] Material Topic Boundaries Impact on Stakeholders Important Information Internal • Access points in low-populated or economically disadvantaged areas by type [FS13] • Initiatives to improve access to financial services for disadvantaged people [FS14] • Initiatives to improve financial literacy by type of beneficiary [FS16] • Shareholders • Employees External • Customers •Local Communities • Regulators • Investors Material Topic and its Importance for Company Sustainability Financial literacy, inclusion, and empowerment are vital elements in ensuring that Bank’s existence benefits the community Policies: • Presidential Regulation Number 59 of 2017 concerning Implementation of the Achievement of Sustainable Development Goals • Presidential Instruction, Financial Services Authority (OJK) Regulation, and OJK Circulars regarding literacy, education, and financial inclusion for the public • The National Strategy for Financial Inclusion (SNKI), which was inaugurated by the President of the Republic of Indonesia on December 7, 2020 • Financial Services Authority Regulation No. 51/POJK.03/2017 concerning the implementation of Sustainable Finance for Financial Services Institutions, Issuers, and Public Companies. The Sustainable Finance Action Plan (RAKB) contains commitments to conduct CSR activities that support the implementation of sustainable finance and the SDGs. • Financial Services Authority Regulation No. 76/POJK.07/2016 concerning Improving Financial Literacy and Inclusion in the Financial Services Sector for Consumers and/or the Community • Corporate Social Responsibility (CSR) Policy No. M.09 • Corporate Social Responsibility (CSR) Procedure No. M.09.P.01 Performance Targets: Increasing the number of participants in the Ayo Menabung dan Berbagi (AMDB), Tour de Bank (TDB), and Simpanan Pelajar (SimPel) programs. Achievement Strategies: • Ayo Menabung dan Berbagi (AMDB) program for students ranging from junior high schools (SMP), to high schools (SMA) or vocational high schools (SMK). • Tour de Bank (TDB) program, designed to expose elementary school children to banking activities in order to foster financial literacy and a culture of saving from an early age. • Simpanan Pelajar (SimPel) Program, which allows students to open a special student account that is not subject to administrative fees. • Financial literacy education through channels aimed at the younger generation, such as social media and schools. Achievements: • The 2021 pre- and post-test results indicate that participants’ understanding of banking has increased. • An increase in the number of schools and students participating in the AMDB and TDB program. Evaluation Method: An accountability program for the implementation of AMDB and TDB Responsible Directorate: Directorate of Compliance, Corporate Affairs, and Legal, specifically the Community Development Work Unit 34
35. PT Bank CIMB Niaga Tbk Sustainability Report 35 2021
36. 2021 Sustainability Report Pillar PT Bank CIMB Niaga Tbk 01 Sustainable Action CIMB Niaga implements various energy efficiency and carbon emission reduction initiatives that are guided by its Smart Spending Policy , Green Office, and environmentally friendly living culture. 36
37. PT Bank CIMB Niaga Tbk Sustainability Report 7 % Energy intensity from 2020 27% Paper use from 2020 41% GHG emissions intensity from 2020 100% Suppliers reviewed by Sustainability Due Diligence 3.11 Internal Customer Satisfaction Survey (Target >3) 37 2021
38. 2021 Sustainability Report PT Bank CIMB Niaga Tbk We and Green Office [SUSBA 1.6.2.7] In 2021, CIMB Group, including CIMB Niaga, is committed to a ‘carbon neutral’ target for Scope 1 and 2 GHG emissions for its operations by 2030 and a Net Zero target by 2050. Bank understands that the potential climate change risks can impact business activities and operations. CIMB Niaga adopts a holistic approach to climate change by implementing various energy efficiency and carbon reduction initiatives to mitigate these risks. These initiatives are based on the Smart Spending and Green Office policies as well as an environmentally friendly living culture. To meet the carbon neutral target, Bank has benefited from Green Office policy, which promotes energy efficiency, paper use reduction, and increased recycling of office and electronic waste. We strive to manage building facilities to the highest standards of sustainability. Bank also has Graha CIMB Niaga Building has been certified by implemented various measures to meet the 2021 the Singapore Building and Construction Authority emission reduction target, including maintaining (BCA) as a ‘Platinum’ green building. The building paper use, energy, and emissions calculations. In manager has also adhered to ISO 50001: 2018 for this Report, Bank has disclosed GHG emissions for Energy Management Systems. scopes 1, 2, and 3. This calculation was aimed to describe the overall condition of CIMB Niaga. 38
39. PT Bank CIMB Niaga Tbk Sustainability Report PAPER SAVING Bank has prioritized the development of digital internal memos , as well as optimizing multi-functional databases and digital banking to meet employees’ printer facilities for scanning and faxing, which can operational needs and make more convenient reduce the printing of the documents. In addition, transactions for customers. Paper use data in 2021 Bank continues to implement a number of digital indicates a decrease by 27%, or 12.4 tonnes CO2e banking initiatives, including optimizing e-channels (310 trees) compared to 2020. Assuming that each and mobile banking for customer transactions, tree can absorb 0.02 tonnes CO2e GHG emissions, converting the current account to e-statements, the potential GHG emissions avoided through this and implementing formless transactions to replace initiative can reach more than 6 tonnes CO2e. This transaction slips/forms with a validation site. In 2021, decrease reflects a result of several initiatives within Bank issued over 1.5 million electronic statements, Bank’s operations, including the digitization from which equates to a paperless conversion of 23.9 hardcopy into softcopy for documentation archives, tonnes of paper materials. Thus, the potential for report submissions, and meeting materials. The avoided GHG emissions is estimated to be 12 tonnes result was also supported by using recycled paper CO2e. for back-and-forth photocopying, letter drafts, and Description Unit 2021 2020 2019 Reams 13,433 18,046 32,545 Kg 33,608 46,015 81,363 Paper Procurement Costs Rp millions 419.22 776.69 1,263.32 Operating Income Rp billions 17,568 16,358 16,825 Kg/Rp billions 1.91 2.81 4.84 Volume of Paper Used Paper Usage Intensity Note: The calculation of paper usage includes activities at the head office. The volume of a ream of paper in kilograms is 1 ream = 2.5 kg 39 2021
40. Sustainability Report PT Bank CIMB Niaga Tbk WATER MANAGEMENT Bank utilizes water for operational purposes , including hygiene, sanitation, and ablution. Due to Bank’s office location, the majority of water is sourced from drinking water companies (PAM). Bank always socializes efficient water use campaigns. Used water is disposed of under the building management’s wastewater management system. The green building’s office is equipped with a system for reusing used water and rainwater via a sediment pond system. Water treated for irrigation and vehicle washing is reused, while water used for ablution is used for flushing toilets. 2021 Rp17,568 billion 2020 16,358 2019 67.34% 8.36 136,905 79.48% 11.43 192,340 13.99 245,720 2021 16,825 2021 2020 2019 2021 2020 2019 PAM Water Consumption Operating Income (m3) (Rp billions) 7.40% Water Use Intensity (m3/ Rp billions) Note: Water consumption for 2020 and 2021 was calculated in conjunction with building managers at the head office and 100% of branch offices. Meanwhile, 2019 water data covers only 90% of branch offices. All water used is PAM water. WASTE MANAGEMENT [306-1] [306-2] CIMB Niaga’s environmental stewardship is also demonstrated by collaborating with third parties to manage electronic waste (e-waste). Several branch offices have separated waste besides e-waste and have distributed them to Waste Banks. Bank’s operations do not result in waste generation in the form of Toxic and Hazardous Materials (B3) or significant spills. 40
41. PT Bank CIMB Niaga Tbk Sustainability Report ENERGY SAVING [302-1] Bank’s operations require electrical energy, which is the event of a power outage. Furthermore, Bank runs supplied by PLN (Persero) Tbk and accounts for the operational vehicles and cash mobile vehicles using majority of energy consumption. To ensure (near) zero fuel oil (gasoline and diesel). Bank has implemented downtime for technology-based information, Bank an energy efficiency strategy to manage its energy maintains a diesel-fueled generator as a backup in consumption throughout its operations. 7% Reduction Energy Saving Initiatives [302-4] in Bank’s energy intensity compared to 2020 as a result of energy efficiency and Work from Home (WFH) measures. Electricity Saving • Power outage of non-essential electrical equipment, such as lights, air conditioning, computers, and photocopiers, is not used outside of working hours. • Use of LED lights in all Bank offices within the Greater Jakarta area • Utilization of energy-saving features on computer equipment, such as a screen saver or power save mode. • Enhancing the efficiency of teleconference/video conference facilities for meetings. • Conducting a campaign to promote energy conservation. Fuel Saving • Perform routine maintenance and repair on operational vehicle equipment. • Monitoring and optimizing the use of operational vehicles and the shuttle car for transportation between branch offices. Energy by Source [302-1] [302-2] [302-3] Description – Non-Renewable Energy Unit 2021 2020 2019 PLN Electricity GJ 98,900.89 140,415.55 145,134.32 Diesel Generators GJ 898.22 1,505.52 4,223.61 Fuel Generators GJ 1,538.84 280.10 262.59 Diesel GJ 1,043.33 184.50 384.63 Fuel GJ 54,469.05 14,413.08 41,417.56 Total Energy Usage GJ 156,850.33 156,798.74 191,422.71 Operating Income Rp billions 17,568 16,358 16,825 8.93 9.58 11.38 Banking Support Activities Transportation Support Activities Energy Intensity GJ/Rp billions Note: The energy usage data covers all branch offices. Energy sourced by electricity and fuel oil were calculated based on payment invoices managed by the SPAPM Work Unit. Electricity energy conversion factor from KWh to GJ is 36 x 10-4; Gasoline energy conversion factor from L to GJ is 33 x 10-3 for petrol and 36 x 10-3 for diesel oil; Methodology used in conversion factor follows Ministry of Environment and Forestry (2017). 41 2021
42. Sustainability Report PT Bank CIMB Niaga Tbk GHG EMISSIONS FOOTPRINT [305-5] In 2021, Bank succeeded in reducing GHG emissions intensity by 41% from the initial target of 2%. Climate change is a significant issue in operational activities, where efforts are being made to reduce direct and indirect GHG emissions. Since 2018, Bank has been managing the environmental impact of its operations collectively and using a data-driven approach to calculate its annual carbon footprint. In 2021, Bank added a portion of Scope 3 GHG emissions, including those associated with employee business trips via land and air transportation and those associated with the CIMB Niaga Gunung Geulis Bumi Learning Center. Bank continues to monitor its GHG emissions and has set a target of Net Zero emissions by 2050. In 2021, Bank succeeded in reducing GHG emissions intensity by 41% from the initial target of 2%. GHG Emissions Reduction Targets Description Target Decrease in intensity (based on the 2019 baseline study) GHG (Scope 1 2021 2022 2023 2024 2% - - - - 12% 18% 24% Decrease in emissions (absolute) (based on the 2019 baseline & 2) study) GHG Emissions by Source (tonnes CO2e) [305-1] [305-2] [305-3] [305-4] Total GHG Emissions Scope 1 and 2 Equivalent to Other Gases Transportation – Fuel Generators – Diesel 77.66 13.73 28.63 3,964.48 1,049.04 3,014.54 66.86 112.06 314.38 112.00 20.39 19.11 tonnes CO2 e 17,307.65 32.685,62 33,784.04 tonnes CO2 e 21,528.65 33,880.84 37,160.69 17,568 16,358 16,825 1.23 2.07 2.21 679.30 - - 178.28 - - tonnes CO2 e Generators – Fuel PLN Electricity Total GHG Emissions (Scope 1 + Scope 2)) Operating Income GHG Emissions Intensity (Scope 1 + Scope 2) Rp billions tonnes CO2 e / Rp billions GHG Emissions Scope 3 Business Trip (Land and Air Transportation) CIMB Niaga Gunung Geulis Bumi Learning Center tonnes CO2 e Note: GHG emissions data were collected from almost all CIMB Niaga offices in Indonesia. The electricity emission conversion factor (2019 & 2020) was based on a modified method developed by the Ministry of Energy and Mineral Resources in 2016 totaled 8.38 x 10-4 tonnes CO2e/KWh. In 2021, the emissions factor method was adjusted to use a modified method developed by the Ministry of Energy and Mineral Resources in 2019, amounted to 6.3 x 10-4 tonnes CO2e/KWh. Additionally, the conversion factor for fuel oil (BBM) emissions is based on the Ministry of Environment and Forestry’s 2012 method, with 2.68 for diesel and 2.40 for gasoline. GHG Scope 3 calculation refers to EPA, “Emission Factors for Greenhouse Gas Inventories,” Table 8 Business Travel and Employee Commuting, March 9, 2018. Pillar 1 Appendix contains the calculation of GHG emissions for 2019-2021 using a modified methodology developed by Ministry of Energy and Mineral Resources (2016) and IPCC Guidelines for National Greenhouse Gas Inventories (2006). 42 2021 2020 2019 tonnes CH4 e 403 Scope 2 GHG Emissions tonnes CO2 e 2021 2020 2019 tonnes N2O e 114 Transportation – Diesel 37,161 Scope 1 GHG Emissions 442 2019 125 2020 33,881 2021 21,529 Unit 256 Description 72 2021 2021 2020 2019
43. PT Bank CIMB Niaga Tbk Sustainability Report We Together With Business Partners [GRI 2-6] [GRI 2-24] [204-1] [SUSBA 1.2.1.11] [SUSBA 1.3.2.1] PRIORITY FOR LOCAL BUSINESS PARTNERS The procurement process at CIMB Niaga is managed by the Strategic Procurement & Admin Property Management (SPAPM) Work Unit collaborates with other work units, including Legal, Finance, and Operational 2021 INDICATORS Risk Management. CIMB Niaga conducts the procurement based on a competitive bidding process, evaluating and observing business licenses, qualification assessment processes, and transparent governance. Furthermore, CIMB Niaga evaluates/monitors the implementation of sustainability through the Sustainability Due Diligence (SDD) process, which includes environmental management, workplace safety, adherence to responsibilities, and human rights in line with United Nations Guiding Principle (UNGP) in the workplace, and community empowerment for partners. This Total Partners 454 mechanism aims to ensure that all supply chain partners of CIMB Niaga adhere to applicable laws and regulations and sustainability principles. SDD was conducted on 32 new partners in 2021, and the results indicated that none of the new partners had environmental or social issues. Additionally, Bank has conducted sustainability practice training for 76 vendors. This Local Partners 92% training was designed to communicate sustainability best practices and assist Bank’s sustainable supply chain practices. Sustainability Training Bank CIMB Niaga prioritizes local vendors and partners, as stated in Goods and Services Procurement Policy No. E.03.01 and Goods and Services Procurement Procedure No. 03.01.P.01. Local partner is defined as a business partner who possesses an Indonesian identity. As many as 92% out of Bank’s partners are local partners who provide security personnel, sales and promotion, cleaning, and transportation services, among others. 43 76 vendors 2021
44. 2021 Sustainability Report PT Bank CIMB Niaga Tbk We Together with Employees EMPLOYMENT AND EMPLOYEE EQUALITY Bank CIMB Niaga operates in a manner that respects and upholds human rights . CIMB Niaga is committed to diversity in the workplace and ensures no practice in bonded labor (debt labor), child labor/underage workers, migrant workers, and human trafficking. Furthermore, Bank CIMB Niaga ensures equal opportunity for all employees regardless of ethnic origin, religion, race, intergroup, social status, gender, or any other discriminative factors that may constitute a violation of human rights. EMPLOYMENT POLICIES Human rights provisions are included in Sustainability Policy M.08 and Sustainable Finance Policy M.10. CIMB Niaga advanced its human rights studies in 2021 with the publication of a special document on Human Rights Policy. During Board of Commissioners and Board of Directors appointment, Bank takes into account diversity by considering each individual’s experience, educational background, gender, age, and independency. This is governed by Policy No. M.07 on Diversity in the Composition of the Board of Commissioners and Directors. 44 Bank is committed to treating all employees fairly, in accordance with Bank’s Code of Ethics and Conduct Policy No. A.07.01.
45. PT Bank CIMB Niaga Tbk Sustainability Report RESPECTING EMPLOYEE RIGHTS [GRI 2-30] [401-3] [410-1] CIMB Niaga provides freedom for employees to form Labor Unions. Labor Union activities may take place during working hours and may make use of Bank’s facilities. CIMB Niaga had four trade unions in 2021, representing employees at its head Freedom of assembly and association office and branch offices throughout Indonesia. The Labor Unions, in its capacity as employee representatives, and Bank Management review and update the Collective Labor Agreement (CLA) periodically. The CLA serves as a guideline for labor and industrial relations management and covers all employees (100%) of CIMB Niaga. Employees of CIMB Niaga work eight hours per day or 40 hours per week, excluding rest time. Employee working hours policies are governed by Article 17 of the CIMB Working hours Niaga CLA and are compliant with the Manpower Laws. CIMB Niaga conducts its recruitment process fairly and in accordance with Human Resources Compliance on Recruitment and Selection Policy No. A.02.01. Furthermore, Equality in the recruitment process the recruitment process is prioritized to ensure its transparency and free of corruption, collusion, and nepotism, as well as to ensure that no candidate is discriminated against on the basis of their background. CIMB Niaga strictly prohibits the employment of underage workers and child labor. CIMB Niaga also expects and urges its business partners to refrain from employing Underaged or child labor underage workers/child laborers through cooperation procedures and financing requirements for debtors. 45 2021
46. 2021 Sustainability Report PT Bank CIMB Niaga Tbk CIMB Niaga offers progressive annual leave and special leave for employees attending religious worship , unpaid leave, menstrual leave, maternity leave, and miscarriage leave for female employees. CIMB Niaga also provides male employees three days of Maternity leave permission leave if their legal wives give birth or miscarry. CIMB Niaga guarantees every female employee the right to three months of maternity leave and the opportunity to return to their original position or a similar position. Maternity leave is unaffected by the pandemic’s implementation of work-from-home policies and is calculated separately from annual leave. Furthermore, CIMB Niaga provides a comparable guarantee to employees who travel on pilgrimage. Maternity Leave 2021 Maternity Leave Male Female Employees entitled to maternity leave 284 272 Employees taking maternity leave 177 251 Employees who return to work after maternity leave 277 251 CIMB Niaga ensures that all security personnel understands how to handle various situations while still adhering to human rights principles. CIMB Niaga partners with third Human rights training for security personnel parties to provide security personnel with human rights training. In 2021, 1,014 security personnel (100%) received human rights training. 2021 INDICATORS [GRI 2-7] [405-1] Comparison of male and female employees 48.9% 51.1% Comparison of permanent and contract employees 89.0% Permanent employees 11.0% Contract employees 46 30% 32% Female representatives on Board of Commissioners and Directors Female representatives in senior management
47. PT Bank CIMB Niaga Tbk Sustainability Report ENSURING EMPLOYEE WELFARE The [GRI 2-19] [GRI 2-20] [GRI 2-21] [201-3] [404-2] [405-2] determines CIMB Niaga complies with all applicable laws and Commissioners and Board of Directors members regulations governing wage and remuneration based provisions. Bank pays salaries and benefits that Committee’s exceed regional and provincial minimum wages account the company’s performance, business size, (UMR and UMP). CIMB Niaga does not differentiate and the results of banking industry remuneration salary between male and female employees as survey. Furthermore, compensation for the Board of compensation is determined by the achievement of Directors and certain employees who are classified work objectives, scope, and risks. as Material Risk Takers is determined using a risk- General Meeting the on the of Shareholders compensation Nomination for and recommendation (GMS) Board of Remuneration and takes into based remuneration system. 1 : 38.5 4.5% Compensation ratio of highest-earning employee against median income employees Growth in median compensation employees 1.14 : 1 1.22 : 1 Entry-level employees compensation ratio against average Provincial Minimum Wage 1 : 22.1 115% 0.97 : 1 Median compensation growth ratio of all employees against the highestearning employees Compensation growth of highest-earning employees Lowest compensation ratio for male and female employees CIMB Niaga enrolls its employees in the BPJS Employment program, covering work-related accidents, old age, and death. CIMB Niaga contributes 6.24% to the BPJS Employment program, while the employee contributes 3%. CIMB Niaga has set aside Rp562.35 billion for pension benefits in 2021, including both defined benefit and defined contribution pension plans. Furthermore, Bank has a pension and other post-employment benefits liabilities of Rp767.40 billion. Independent actuary performed the allowance calculation for all permanent employees who are the participants. 47 2021
48. 2021 Sustainability Report PT Bank CIMB Niaga Tbk EMPLOYEE BENEFITS BASED ON EMPLOYMENT STATUS EMPLOYEE PERFORMANCE APPRAISAL [401-2] [404-3] [SUSBA 1.4.2.4] CIMB Niaga provides life insurance and health care Bank guarantees career development opportunities benefits, both for permanent and contract employees. to all employees (100%) regardless of ethnic origin, Retirement preparation is provided exclusively to religion, race, intergroup relations, social status, permanent employees through a retirement training gender, or any other factor that may constitute program agenda designed to assist employees in a violation of human rights. Career development preparing for the end of their service period while opportunities are practiced through a performance maintaining their ability to perform activities and appraisal mechanism that takes key performance generate benefits. Training covers psychological, indicators (KPIs) into account. Starting this year, one health, and financial preparation for the attendees. of the key performance indicators for the Board of 102 employees have participated in the retirement Directors and all employees is the achievement training program in 2021. of sustainability performance. One of the KPIs for the GCG & Sustainability Work Unit includes the assessment of sustainable finance performance targets. CIMB Niaga’s KPI assessment in 2021 reported that 1,393 employees received promotions. 48
49. PT Bank CIMB Niaga Tbk Sustainability Report EMPLOYEE HEALTH AND SAFETY [403-1] [403-2] [403-3] [403-4] [403-5] [403-6] [403-8] [403-9] CIMB Niaga has implemented an Occupational Health and Safety (OHS) Management System that is integrated with Bank’s employee health and safety management, as specified in the Collective Labor Agreement (CLA). OHS regulations are based on the following: • Law of the Republic of Indonesia No. 1 of 1970 concerning Occupational Safety and Health • Minister of Manpower Regulation No. 5 of 1996 concerning Occupational Health and Safety Management System • Employment Policy No. A.11.01 concerning Management of Employee Safety and Security Risks Occupational Accident Risk Management IN BUSINESS AREAS: Multi-story buildings, home offices, shophouses, and e-channel-based mobile working units • • • • Annual OHS training by building managers Annual training and education on evacuation from multi-story buildings Basic fire extinguisher use Victim rescue training from buildings participated by building security personnel OUTSIDE BUSINESS AREAS Travel to or from work, site field visits, and client visiting activities • All employees are provided with work accident insurance policies through BPJS Health and Employment. CIMB Niaga is committed to a zero-accident rate medical check-ups, health insurance, a clinic and target. In 2021, CIMB Niaga identified no work that lactation room at the head office, and BPJS Health poses a significant health risk and no workplace insurance. accidents. CIMB Niaga provides health benefits to permanent employees general health insurance, its permanent and contract employees, including eyeglasses, and dental insurance. Furthermore, Details of data or other supporting information relating to or referencing Pillar 1: Sustainable Action from the last three years can be accessed via the QR Code or can be found in Annual Report 2021. 49 CIMB Niaga provides 2021
50. 2021 Sustainability Report Pillar PT Bank CIMB Niaga Tbk 02 Sustainable Business CIMB Niaga implements Sustainable Finance Policy which forms the basis of Sector Guidances and the implementation of Sustainability Due Diligence . 50
51. PT Bank CIMB Niaga Tbk Sustainability Report 20 % Oil palm plantation financing portfolio that has or is in the process for ISPO and/or RSPO certification 25% Sustainable Business Activities Category (KKUB) Financing > 25.000 ton setara CO2 Potential Greenhouse Gases (GHG) emissions avoided through digital banking > 346.000 ton setara CO2 Greenhouse Gases (GHG) emissions avoided through Green Sukuk investments 28% Customer Loyalty (NPS) Financing Sector Guidance with environmental, social, and governance (ESG) aspects Oil Palm Plantation Coal Forestry 51 Oil and Gas Construction, Real Estate, and Infrastructure 2021
52. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Sustainable Finance SUSTAINABLE FINANCE IMPLEMENTATION according to the Sustainable Business Activities [FS9] [SUSBA 1.2.1.2] [SUSBA 1.2.2.1] [SUSBA 1.2.2.4] [SUSBA 1.3.1.3] Category (KKUB) and sustainability risk identification. [SUSBA 1.3.2.6] [SUSBA 1.4.1.8] [SUSBA 1.5.1.1] In 2022, the KKUB classification and identification of CIMB Niaga adheres to the Sustainable Finance Policy environmental, social, and governance (ESG) risks will and its procedures when implementing sustainable be applied to commercial banking segmentation. finance. This policy also serves as the foundation for developing Sector Guidances and implementing KKUB FINANCING Sustainability [SUSBA 1.5.1.3] Due Diligence (SDD) as well as Enhanced Sustainability Due Diligence (ESDD). In the CIMB Niaga has put several sectors that are the focus Sector Guidance, Bank supports debtors to reduce of KKUB financing targets, including the following: a) the negative impact or increase the positive impact oil palm plantations that have received or are in the of their operations in line with the objectives of the process of obtaining sustainability certification; b) Paris Agreement. In 2021, CIMB Niaga implemented environmentally friendly projects (green real estate/ a coverage audit conducted by the Internal Audit projects); and c) other sectors that contribute to Work Unit based on a comprehensive Risk-Based Audit climate change mitigation and adaptation actions, methodology and an internal control framework as well as supporting low-carbon development. that refers to the Committee of the Sponsoring In addition to KKUB financing, Bank also distributes Organizations of the Treadway Commission (COSO) financing for activities that support affordable – Internal Control Integrated Framework. housing (SDG 1 and 11) of Rp62.39 billion in 2021 and Rp66.83 billion in 2020. Currently, sustainable finance is adopted through corporate banking segmentation and financing portfolio studies. These studies categorize portfolios 52
53. PT Bank CIMB Niaga Tbk Sustainability Report Environmental and Social Sector Financing [FS11] Description Unit 2021 2020 2019 Support for the Sustainable Development Goals Number of Products that Meet the KKUB Criteria a. Funds Collection - Waqf Savings Rp millions 154,381 6,662.28 - b. Xtra Electric Motorbike Financing Rp millions 44 0 - c. Environmentally Friendly Vehicle Financing* Rp millions 28,053 11,635.83 - · Electric Cars Rp millions 14,392 3,485.08 - · Hybrid Cars Rp millions 13,661 8,150.75 - d. Green Mortgage Financing Rp millions 85,316 - - e. Sustainability-linked Loan/ Financing & Sustainable Finance Program Rp millions 332,331 - - Rp millions 45,068,614 50,119,835 75,668,439 US$ millions 75 75 75 % 25 28.68 41.82 Total Aset Produktif KKUB a Total KKUB Loans b. Total Non-KKUB Loans – Green Sukuk Investment** Percentage of KKUB Financing to Total Loans (%) * Financing by subsidiary, PT CIMB Niaga Auto Finance (CNAF); **The Government of Indonesia issued Global Green Sukuk, which are used to fund climate change mitigation and adaptation projects. GREEN BUILDING FINANCING Bank’s financing strategy includes a focus on environmentally friendly projects, such as green buildings. Currently, one corporate banking customer has been awarded the BCA Green Mark certificate. This certification demonstrates the company’s efforts to conserve water, improve environmental quality, and mitigate potential negative environmental impacts. In addition, individual consumers have benefited from the ‘Green Mortgage’ program, enabling them to purchase and own homes in development areas that have received green building certification from Green Building Council Indonesia (GBCI), such as EDGE or GREENSHIP. As of December 2021, financing for Green Mortgages reached Rp85.32 billion. 53 2021
54. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Composition and Quality of KKUB Loans [FS8] [SUSBA 1.6.2.1] No Sustainable Business Activities Category (KKUB) Non-MSME (Rp trilions) MSME (Rp trilions) Total (Rp trilions) NPL (%)* 1. Renewable Energy - - - - Energy Efficiency - - - - Pollution Prevention and Control 0.09 - 0.09 - Management of Natural Resources and Sustainable Land Use 6.15 0.02 6.17 1.61 Conservation of Land and Water Biodiversity 0.02 - 0.02 - Environmentally Friendly Transportation 1.63 - 1.63 - Sustainable Water and Wastewater Management 0.16 0.01 0.17 - - - - - Products that Help Conserve Resources and Contribute to Less Pollution 4.94 0.03 4.97 - Environmentally Friendly Buildings that Meet National, Regional, or International Recognized Standards/Certification 1.03 - 1.03 - Other Environmentally Friendly Business and/or Other Activities 10.45 - 10.45 - - 20.54 20.54 3.96 24.47 20.60 45.07 2. 3. 4. 5. 6. 7. 8. Climate Change Adaptation 9. 10. 11. 12. MSME Activities Total * NPL percentage (gross) is calculated based on the total portfolio of each KKUB. 54
55. PT Bank CIMB Niaga Tbk Sustainability Report KKUB FINANCING FOR OTHER LAND-BASED SECTORS [SUSBA 1.2.2.1] Bank believes that it is essential to continuously promote sustainability in various sectors, especially land-based sectors. The land-based sectors in question are frequently classified as Agriculture, Forestry, and Other LandUse (AFOLU). AFOLU sectors contribute significantly to GHG emissions. Bank has consistently favored climate mitigation actions in practicing sustainable financing for AFOLU sectors. In 2021, Bank’s financing portfolio identified ten customers in the AFOLU sectors with sustainability certifications, valued at Rp2.59 trillion. AFOLU sectors that have obtained sustainability certification are regarded to have implemented Good Agricultural Practices (GAP) and ‘Regenerative Agriculture’ practices to perform optimal and sustainable production. Sector Certification Total Debtors Total Financing (Rp trillions) Agriculture Organic - Rainforest Alliance (RA) 1 0.09 Fishery Best Aquaculture Practice Aquaculture Stewardship Council Good Agriculture Practice (Good Fish Breeding and Cultivation Method) 1 0.21 Forest Stewardship Council (FSC) Chain of Custody (COC) 1 0.15 Timber Legality Verification System (SVLK) 5 2.11 FSC COC & SVLK 2 0.03 Forestry 55 2021
56. 2021 Sustainability Report PT Bank CIMB Niaga Tbk FINANCING HIGH SUSTAINABILITY RISK SECTORS [FS12] [SUSBA 1.1.1.2][SUSBA 1.6.2.6] [FN-CB-410a.2] Bank has identified business activities with a relatively best practices are encouraged. The land-based high ESG risk in implementing sustainable finance. sectors covered by the Sector Guidance include Enhanced (ESDD) oil palm plantations, coal, oil and gas, forestry, Process is conducted periodically for all customers/ Sustainability Due Diligence construction, real estate, and infrastructure. The potential customers under sustainability high-risk implementation of the Sector Guidance allows sectors to measure the risks faced by Bank and Bank to conduct more quantifiable supervision in ensure the relevance of sustainability issues. mitigating ESG risks. Bank has not conducted a voting policy mechanism Bank has identified 14% of its total financing portfolio towards investment with ESG issues. However, Bank as having a high potential for ESG risk, which is has issued Sector Guidances outlining the minimum managed through the application of SDD, ESDD, and sustainability requirements that customers must meet, Sector Guidances. what is prohibited, and what aspects of sustainability KKUB FINANCING FOR OIL PALM PLANTATIONS [FS8] [SUSBA 1.2.1.4] [SUSBA 1.2.1.5] [SUSBA 1.2.1.13] [SUSBA 1.2.2.2] [SUSBA 1.2.2.3] [SUSBA 1.6.2.5] Oil palm plantations are one of the industries whose operations can impact the environment potentially cause deforestation. CIMB Niaga requires certification or is in the process of obtaining ISPO and/or RSPO certificates as a prerequisite. Bank continuously encourages customers with oil palm plantations to follow the No Deforestation, No Peat, and No Exploitation (NDPE) principles. Financing Based on ISPO, RSPO, and ISCC Certifications Total Debtors Financing Amount (Rp trillions) RSPO* and ISPO** 10 4.43 RSPO* 5 0.43 ISPO** 21 1.53 Certification Total Debtors Financing Amount (Rp trillions) In the ISPO process** 2 0.04 In the RSPO process* 7 0.31 ISCC*** 8 4.58 Certification RSPO = Roundtable Sustainable Palm Oil; ISPO = Indonesia Sustainable Palm Oil; ISCC = International Sustainability and Carbon Certification; *As per national interpretation of the RSPO Principles and Criteria (2018), oil palm plantations that have obtained an RSPO certificate have complied with the No Peat principle in the principles of No Deforestation, No Peat, and No Exploitation; **ISPO is an oil palm plantation sustainability standard that is applicable in Indonesia in accordance with applicable laws and regulations; ***ISCC is one of the leading certification systems for sustainability and greenhouse gas emissions. In July 2011, ISCC was recognized by the European Commission as one of the first certification schemes capable of demonstrating compliance with the EU’s Renewable Energy Directive (RED) requirements. According to scientific reports, the oil Sustainability Commitments for Oil Palm Customers palm sector and other land-based sectors, Commitment collectively referred to as Agriculture, Forestry, and Other Land Use (AFOLU), face a number of possible risks. These risks are classified into two categories, environmental and social, each of which addresses a different aspect, such as biodiversity, climate change, community, and indigenous peoples, as well Total Debtors Financing (Rp trillions) No Deforestation, No Peat, No Exploitation (NDPE) 15 4.86 Free, Prior, and Informed Consent (FPIC) 36 6.39 High Conservation Value (HCV) and/or High Carbon Stock (HCS) 15 4.86 as human rights and employment. 56
57. PT Bank CIMB Niaga Tbk Sustainability Report KKUB financing for coal mining and coal-fired power plants [SUSBA 1.2.1.3] [SUSBA 1.6.1.3] their energy mix. In addition, Bank continues to encourage debtors to adopt best sustainability practices in the sector and to adhere to Indonesia Green Taxonomy guidelines issued by Financial Services Authority (OJK). These sustainability best practices include the following: establishing a policy or code of ethics that prohibits all forms of bribery and corruption; establishing a transparent mechanism for all stakeholders to lodge complaints; establishing a gender equality policy in business To support the Government of Indonesia in ratifying processes; upgrading or repairing inefficient plants the Paris Agreement and achieving Net Zero target with high-efficiency and low-emissions technology; by 2050, Bank has already developed a Sector and monitoring and disclosing environmental and Guidance for sectors/industries identified as having social data regularly. high sustainability risks, including coal. Sector/industry identification is based on ESG, climate change, Subsequently, as part of the CIMB Group, which carbon emissions, biodiversity, and human rights is a signatory to the United Nations Principles for considerations. Responsible Banking (UN PRB) and the Collective Commitment on Climate Action (CCCA), CIMB Niaga Bank requires debtors of coal mining and coal-fired will contribute positively to the low carbon economy power plants companies to have Environmental by gradually reducing coal sector financing through Documents. Debtors of coal-fired power generation a phase-out plan in 2040. companies must also have a strategy for diversifying Sustainability Due Diligence Recapitulation [SUSBA 1.6.2.4] 48.0% 0.4% 51.6% 0.0% debtors from the AFOLU sectors recommended debtors from the AFOLU sectors not recommended debtors from nonAFOLU sectors recommended debtors from nonAFOLU sectors not recommended 57 2021
58. 2021 Sustainability Report PT Bank CIMB Niaga Tbk PROBLEMS , DEVELOPMENTS, AND EFFECTS OF SUSTAINABLE FINANCE IMPLEMENTATION [201-4] [FS14] [SUSBA 1.1.2.2] In 2021, CIMB Niaga did not utilize any financial assistance from the Government. However, CIMB Niaga strives to implement sustainable business and finance practices. CIMB Niaga has identified challenges to sustainable finance implementation in Indonesia, such as the following: a. Lack of understanding and competence of human capital in implementing sustainable finance. b. Lack of understanding from debtors of business activities that support SDGs, climate change mitigation and adaptation, as well as a low-carbon economy. c. Obstacles faced by several debtors in implementing Government policies, whether economic conditions, capacity, or other technical constraints. d. Low compliance toward applicable regulations. e. Risk from changes in regulations issued by Regulators and/or the Government. f. Relatively low number of green projects in Indonesia. The five pillars of sustainability, specifically on Sustainable Business (Pillar 2) and Stakeholder Engagement and Advocacy (Pillar 5), address the aforementioned issues in a variety of ways, including the following: a. Conducting internal training on Bank’s Sustainability Policy and Sustainable Finance Policy as they pertain to the industrial sectors on which Bank concentrates its efforts on. b. Educating customers about the benefits of sustainable finance. c. Educating stakeholders about Bank’s internal platform and electronic transactions. d. Contributing in focus group discussions with government institutions, regulators, and non-profit organizations, as well as serving as a speaker at seminars to convey recommendations regarding the transition to environmentally friendly and low-carbon industries, as well as their relationship to the more effective implementation of sustainable finance. e. Support banking access for people with disabilities telebanking service and assistance by security officers when conducting transactions at branch offices. 58
59. PT Bank CIMB Niaga Tbk Sustainability Report Sustainable finance is implemented through short- Despite term and long-term action plans that become priorities committed this challenge , in the 2019-2023 Sustainable Finance Action Plan assistance with loan restructuring and relaxation (RAKB). CIMB Niaga conducts periodic evaluations on under government programs, including debtors with challenges encountered in implementing the RAKB. KKUB-classified business activities, especially MSME. In 2021, the ongoing COVID-19 pandemic conditions Through this assistance, Bank can support debtors in required CIMB Niaga to continue restructuring and surviving and developing their businesses, as well as relaxing financing to carry out the RAKB 2021. contribute to the country’s economic recovery. to assisting CIMB Niaga debtors who remains require CREDIT RESTRUCTURING TO MINIMIZE THE IMPACT OF THE COVID-19 PANDEMIC [FN-CB-550a.2] The grant of this relaxation is part of a countercyclical policy on the impact of the COVID-19 virus’s spread that is carried out in accordance with operational guidelines that include the following: · POJK No.11/POJK.03/2020 concerning National Economic Stimulus, which regulates the criteria for debtors who are eligible for restructuring and stress testing the impact of restructuring on bank capital and liquidity. · Coordinating Minister for Economic Affairs Regulation No.8 of 2020 concerning Changes in Special Treatment for People’s Credit for Business Recipients Affected by the COVID-19 Virus Pandemic. CIMB Niaga operates in both business as usual and crisis conditions (stress tests) by monitoring a variety of liquidity indicators, including the minimum liquidity gap, the liquidity coverage ratio (LCR), and the net stable funding ratio (NSFR). These liquidity indicators are monitored in accordance with the liquidity risk management framework, which is designed to ensure that internal management and regulators are meeting the bare minimum requirements. 59 2021
60. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Responsible Banking FINANCIAL INCLUSION THROUGH MSME FINANCING Through this scheme , CIMB Niaga is able to channel [203-2] loans for Batumbu partners Batumbu’s platform. CIMB Niaga contributes to the growth of Micro, The debtors, in this case, are business actors in the Small, and Medium-Sized Enterprises (MSMEs) through MSMEs segment with financing in the form of invoice three financing products, namely working capital financing. financing, investment financing, and supply chain financing. MSMEs financing is distributed through As the name implies, Berdayakan Usaha Indonesia, two sub-segments, Emerging Business Banking (EBB) or Empowering Indonesian Businesses, Batumbu is banking and micro-linkage at commercial banking. committed to advancing the Indonesian MSMEs CIMB Niaga recorded Rp20.60 trillion in MSMEs business financing up until the end of 2021. consistent with Bank’s business growth strategy sector, which CIMB Niaga views as which will prioritize the MSMEs sector. This also reflects In 2021, CIMB Niaga partnered with PT Berdayakan the Government’s direction, as articulated by the Usaha Indonesia (Batumbu), a peer-to-peer lending President and OJK, to achieve a Macroprudential financial technology (fintech) company, through the Inclusive Financing Ratio (RPIM) of 30% out of total provision of a loan/financing channeling scheme. bank loans nationwide. Description of the two segments in MSMEs financing [FS13] Emerging Business Banking (EBB) Micro Linkage EBB is financing provided to small and medium-sized business actors located throughout Indonesia via a financing process or a direct approach strategy. Micro-Linkage is a form of indirect financing accomplished through a linkage program. Plasma Cooperatives, Rural Banks (BPR), Regional Development Banks (BPD), Employee Cooperatives (Kopkar), and other non-bank financial institutions are all examples of micro-linkage financing. Plasma Cooperatives are financed using the Plasma Core Pattern. Kopkar finances BPRs and BPDs by executing, channeling, partnering, or purchasing assets from end-users. Although CIMB Niaga has not explicitly targeted the micro-linkage service areas, Bank already has 248 micro-linkage partners spread across Indonesia. STRENGTHENING DIGITAL BANKING TO IMPROVE CONSUMER AND EBB SEGMENT SERVICES Technology is currently advancing at a phenomenal rate, including the rapid development of digital banking services. Gradually, customer transaction patterns have shifted toward a cashless society, which enables the acceleration of financial inclusion. At CIMB Niaga, technology implementation is evaluated directly by the work units headed by the Director of Operations and Information Technology. 60 CIMB Niaga continuously develops and updates its mobile and internet banking services to meet the evolving needs of its customers. CIMB Niaga offers digital banking services through OCTO Mobile, OCTO Clicks, and other E-channels.
61. PT Bank CIMB Niaga Tbk Sustainability Report Total Digital Platform Transactions 2021 Digital Transactions * 2020 2019 Financial Transactions Non-Financial Transactions Financial Transactions Non-Financial Transactions Financial Transactions Non-Financial Transactions OCTO Mobile 112,314,098 410,758,558 56,431,233 249,059,462 37,723,944 273,009,024 OCTO Clicks 20,872,720 314,536,432 17,325,817 280,844,402 19,792,885 310,768,814 Mobile Account 22,604,200 - 30,779,471 - 58,719,840 - BizChannel@CIMB 64,346,291 - 60,374,559 - 115,913,553 - ATM, CDM/MDM, and CRM 104,870,789 32,983,584 120,301,874 43,818,159 166,267,996 51,820,672 * CIMB Niaga provides digital banking services in the following forms: a) OCTO Mobile, formerly known as Go Mobile, a one-stop mobile financial solution that can handle all of a customer’s financial needs, from opening an account to reporting credit card bills; b) OCTO Clicks, formerly known as CIMB Clicks, which was developed to complement the digital portfolio for users with more complex transaction needs; and c) other E-channels, including Mobile Accounts (Rekening Ponsel), Automated Teller Machines (ATM), Electronic Data Capture (EDC), Cash Deposit Machines (CDM), Cash Recycle Machines (CRM), Multo Denom Machines (MDM), Digital Lounge, and BizChannel. INNOVATION AND DEVELOPMENT OF SUSTAINABLE FINANCE PRODUCTS/PROGRAMS [SUSBA 1.5.1.2] Sustainability-linked Loan/Financing (SLL) & Sustainable Financing The Sustainability-linked Loan/Financing (SLL) program is a financing program that provides incentives to customers who meet the sustainability performance target (SPT) as agreed prior to the program, while Sustainable Financing program is designed for CIMB Niaga financing customers who are involved in ESG-focused businesses. Waqf Savings Program (Tabungan iB Mapan Berhadiah Wakaf) Tabungan iB Mapan Wakaf with Mudharabah principle is a timesaving mechanism that utilizes a regular monthly deposit system in accordance with the customer’s chosen time period. Customers will receive a direct gift from Bank CIMB Niaga Syariah in the form of a Waqf program, which will be transferred directly to the Current Account of the Waqf Institution. This Waqf program is channeled to fund a well project supporting climate adaptation actions. Green Mortgage Bank offers a mortgage (KPR) facility for green-certified housing/ apartments on a national and international scale. 61 2021
62. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Solar Panel Financing Bank , in collaboration with PT Energi Indonesia Berkarya (SUNterra), provides a special offer to CIMB Niaga credit card holders when purchasing rooftop Solar Power Plant (PLTS). ‘EBB Green Recycle’ and ‘EBB Green Energy’ Programs In 2021, Bank launched two sustainability-focused financial solutions programs in the form of attractive interest rates targeted at customers engaged in product manufacturing/trading activities which directly involved in recycling materials and renewable energy. This program is available to EBB segment customers. This program, which covers all EBB areas in Indonesia, was launched at the end of 2021. PROTECTION OF CUSTOMER DATA SECURITY AND CIMB Niaga ensures that all products are 100% PRIVACY compliant with applicable laws and regulations, [416-1] [416-2] [418-1] [FS15] [FN-CB-230a.1] [FN-CB-230a.2] [FN_CB- including consumer protection regulations. CIMB 510a.1] Niaga also ensures product safety, including services Rapid technological advancements can potentially during financial literacy activities. In addition, CIMB increase the likelihood of cyber attacks and Niaga ensures the reliability of the information technological crimes. As a result, CIMB Niaga has provided to customers, including information about an IT Security Work Unit tasked with the responsibility product features, costs, benefits, and inherent risks. of ensuring data security and customer privacy, Authorized and accountable work units review all as well as safeguarding transactions and digital information provided to customers. Similarly, financial infrastructure against various cyberattack risks and literacy information is delivered via a learning big technological crimes. data platform powered by artificial intelligence and machine learning to share real-time and relevant CIMB Niaga is committed to guaranteeing and information. protecting customer and partner data confidentiality and security. All information is stored in a database In 2021, no Bank products or services were recalled that is accessible only to authorized individuals and or discontinued from marketing. Furthermore, CIMB is updated in accordance with Information Security Niaga has ensured that no customer complaints or Policy No. H.05. Acquisition of customer data or incidents of regulatory non-compliance were made information is permitted only in accordance with that resulted in fines or penalties, as well as warnings applicable laws and regulations, the Customer regarding violations of data security and privacy Protection Policy, and the Information Security and regulations, business competition, and data loss due Data Classification Policy. Furthermore, CIMB Niaga to data theft (cybercrime). does not tolerate any parties found to have abused customer data. 62
63. PT Bank CIMB Niaga Tbk Sustainability Report POST-IMPLEMENTATION REVIEW (PIR) for managing the customer experience during any Post-implementation review (PIR) is a process that interactions and transactions within Bank’s banking CIMB Niaga conducts through its responsible work services. units to ensure that the process of launching new products and activities is carried out according Each year, CIMB Niaga conducts a customer to management-approved proposals. Work units satisfaction survey to assess service delivery and responsible for launching new products and activities customer protection, as well as satisfaction level with must conduct PIR and ensure that all new products sustainable finance products and/or services. The and activities have been reviewed and evaluated annual survey examines products, service channels, for customer safety within 12 months. PIR is also and service quality to determine the Net Promoter implemented in accordance with Policy on New Score (NPS). Customer satisfaction level increased in Products and Activities No. B.04. 2021, with NPS values of 28%, 24%, and 18% in 2021, 2020, and 2019, respectively. CUSTOMER SATISFACTION AND COMPLAINTS RESOLUTION LEVEL CIMB [GRI 2-25] received in 2021, with CCU’s proactive role and CIMB Niaga has a Customer Care Work Unit (CCU) collaboration with the Customer Experience Work responsible for resolving any issues that may arise with Unit, Customer Service Work Unit, and all related work products, services, or data security. CCU will evaluate units. The 2021 CIMB Niaga Annual Report contains corrective actions and expedite the resolution of detailed information on customer complaints’ type customer complaints periodically to improve the and degree of resolution. Customers may lodge quality of customer complaint resolution. Bank also complaints in person at the office or via a variety of has a Customer Experience Work Unit responsible channels, including: Niaga has resolved 98% of complaints COMPLAINT CHANNELS • Contact Center: Phone: 14041 or +62 21 2997 8888 (International) E-mail: 14041@cimbniaga.co.id • Business Banking Contact Center: Phone: 14042 or +62 21 8065 5111 (International) • Live Chat at the CIMB Niaga website (www.cimbniaga.co.id) • CIMB Niaga Whistleblowing System Details of data or other supporting information relating to or referencing Pillar 2: Sustainable Business from the last three years can be accessed via the QR Code or can be found in Annual Report 2021. 63 2021
64. 2021 Sustainability Report Pillar PT Bank CIMB Niaga Tbk 03 Corporate Social Responsibility CIMB Niaga supports the achievement of Sustainable Development Goals and strives to have a positive impact in surrounding communities to achieve ‘no one left behind’. 64
65. PT Bank CIMB Niaga Tbk Sustainability Report > 1,120 students Accumulated CIMB Niaga Scholarship Recipients from 2006 to 2021 > 450 schools and > 57,900 students Accumulated AMDB activities from 2011 to 2021 > 230 schools and > 11,400 students Accumulated TDB activities from 2015 to 2021 > 33,000 beneficiaries Total CIMB Niaga Donations in 2021 > 39,900 accounts worth Rp8.40 billion Accumulated savings for students from 2017 to 2021 > 300 people Accumulated disability empowerment training participants from 2020 to 2021 > 4,000 tonnes CO2e Accumulated potential carbon absorption from bamboo planting until 2021 65 2021
66. 2021 Sustainability Report PT Bank CIMB Niaga Tbk CIMB Niaga contributes to the development of a one left behind ”. Bank also provides opportunities healthy and resilient community through all of its and incentives for employees and stakeholders operations as a cornerstone of a strong economic to act as agents of change. Bank’s support for the and social order. CIMB Niaga is committed to Sustainable Development Goals (SDGs) is prioritized addressing crucial issues, meeting the needs of around four pillars of Corporate Social Responsibility stakeholders, and making a positive impact on the (CSR), targeting SDG 4, 5, 8, 10, 13, and 15. surrounding community in order to ensure that “no 1.6.2.10] [SUSBA Pillar 1 Education Pillar 2 Public Health and Welfare Pillar 3 Economic Empowerment Pillar 4 Climate and Environment CSR focuses on expanding fair access to high-quality education, facilitating youth transitions into the workforce and society by improving financial literacy. CSR supports programs that prevent and communicate health, essential and affordable healthcare, medications, and medical supplies for the community. CSR supports programs that increase employability and access to decent work, job creation, and income generation. CSR supports innovative and small-scale climate change mitigation projects that strongly emphasize education and community engagement. Pillar 1: Education Realizing the Dream of the Nation’s Generation through Scholarship Programs 2021 Scholarship Recipients CIMB Niaga Scholarship Program embodies Bank’s responsibility that aims to improve quality education in Indonesia and prepare the next generation of outstanding individuals. The COVID-19 pandemic did not deter 50 University Students 16 Universities in Indonesia CIMB Niaga from returning and reigniting the students’ enthusiasm for further achievement. This scholarship award is consistent with CIMB Niaga’s brand promise of ‘Forward,’ and aspires to ‘Forward Your Dream.’ 66
67. PT Bank CIMB Niaga Tbk Sustainability Report Along with funding scholarships , Bank provides soft skills education ADITYA NUR PRASETYO to scholarship recipients through 2021 CIMB Niaga Scholarship Program Recipient Accounting Major - Universitas Brawijaya, Malang various educational programs such as the Be Smart Program, Through social media, I learned about the 2021 CIMB Niaga Scholarship Program, which was currently accepting applications. After completing the selection process, I was selected as one of the CIMB Niaga Scholarship Program recipients. the Dream Warrior Program, Financial Literacy Webinars, and other educational webinars such as public speaking and branding topics. I am grateful to have been awarded a scholarship after undergoing a rigorous application process and competing against over 26,000 other applicants. I hope that CIMB Niaga can reach a broader community through its CSR programs, as CIMB Niaga already possesses more than enough necessary capital to be the pioneer of progress in Indonesia. Scholarship recipients are also invited to participate during the Goes to Orphanage program. BUILDING A CULTURE OF SAVING AND INVESTING [FS7] [FS16] [FN-CB-240a.3] [FN-CB-240a.4] CIMB Niaga supports the Government in achieving its target of 90% financial inclusion by 2024 through financial literacy and inclusion program guided by the Financial Services Authority’s (OJK) Regulations, Corporate Social Responsibility Policy No. M.09 and Corporate Social Responsibility Procedure No. M.09.P.01. Ayo Menabung dan Berbagi (AMDB) and Tour De Bank (TDB) are two of these financial literacy and inclusion programs. on distance learning, the AMDB program was AYO MENABUNG DAN BERBAGI (AMDB) conducted online in 2021 through a dedicated AMDB Program is a financial literacy program for website that participants could access at any time the younger generation that provides presentations and from any location. Along with financial literacy, on the world of banking and financial planning In addition to financial literacy, AMDB also promotes to students in Junior High School (SMP), High awareness in social and environmental conservation School (SMA), and Vocational High School (SMK). activities through the collection of donations in the In accordance with the Government’s directive form of cash or used plastic bottles. 2021 2020 2019 7,250 7,451 5,217 85 69 38 Students Schools Students Schools Students Schools 67 Participant Understanding In 2021, the results of the pre and post-tests showed an increase in participants’ understanding of banking by 14%. 2021
68. 2021 Sustainability Report PT Bank CIMB Niaga Tbk TOUR DE BANK (TDB) TDB is one of CIMB Niaga’s programs to support OJK’s regulation on the Financial Literacy and Inclusion activity for Indonesian Students. TDB’s mission is to introduce elementary school students to banking tools and their various functions. Participants in the TDB are invited to tour branch offices and become acquainted with the operations of Tellers, Customer Service, Automated Teller Machines (ATM), and other Bank departments. In 2021, the TDB program was also conducted online through a dedicated website, in accordance with the Government’s directive on Distanced Learning. 2021 2020 2019 3,178 2,960 998 66 52 23 Students Schools Students Students Schools Schools Participant Understanding In 2021, the results of the pre and post-tests showed an increase in participants’ understanding of banking by 10%. SAVINGS FOR STUDENTS CIMB Niaga introduced various savings products and financial literacy programs for students, including AMDB and TDB. In 2021, CIMB Niaga opened 5,367 savings accounts for students totaling Rp541 million through the AMDB, TDB, and Community Link #JadiPeduli programs. 68
69. PT Bank CIMB Niaga Tbk Sustainability Report EDUCATION FOR EMPOWERMENT (#KEJARMIMPI GOES TO ORPHANAGE) [FN-CB-240a.4] In 2021, CIMB Niaga continued the #KejarMimpi Goes to Orphanage program while adhering to strict health protocols in six foundations located throughout several cities, including Padang, Jakarta, Yogyakarta, Pontianak, Makassar, and Bandung. #KejarMimpi Program Year #KejarMimpi Goes to School #KejarMimpi Goes to Orphanage Total Schools Total Students Total Cities Total Orphans 2021 - - 6 188 2020 - - 7 330 2019 9 1,212 - - PROVISION OF BANKING EDUCATION FACILITIES CIMB Niaga aims to improve the younger generation’s knowledge and skills in banking business activities by providing real-world experience through the procurement of Mini Banking Laboratorium devices at the Vocational University of Indonesia (UI) and a Bourse Game Laboratory at the UI Salemba Master of Management, as well as teaching staff. SEJUTA BUKU PROGRAM (ONE MILLION BOOKS) Sejuta Buku is an assistance program to provide students with knowledge and education books. In 2021, CIMB Niaga donated books in six cities, including Padang, Jakarta, Yogyakarta, Pontianak, Makassar, and Bandung. 69 2021
70. 2021 Sustainability Report PT Bank CIMB Niaga Tbk THE COMPLETE KAMPUS MERDEKA INTERN 17 ,266 [GRI 2-8] Kampus Merdeka is a comprehensive students registered for Kampus Meredeka career preparation program designed to develop Indonesia’s best generation. This program is part of the Ministry of Education, 93 Culture, Research, and Technology of the Republic of Indonesia’s Merdeka Belajar interns involved in 38 cross-directorate projects (Freedom to Learn) policy, which provides opportunities for students to develop their 41 talents and interests through direct exposure to the world of work as preparation for future careers. The internship program at universities in Java, Bali, and Kalimantan, as well as several cities in Eastern Indonesia, participated in the Kampus Merdeka program CIMB Niaga began on 23 August 2021 and ended on 22 February 2022. “In my opinion, the working “During my internship, I was “Throughout the project, environment at CIMB Niaga taught to always work with I was able to learn about is very pleasant and fun, the the team, to accept and various processes/work mentor is very kind, the tasks appreciate every input systems that laypeople like assigned are real, and the from the team, and to be me are unaware of.” mentor always respects the courageous enough to interns’ work.” communicate our ideas and thoughts to the team.” Brenda Putri Ramadhanty Bagas Julian Utomo Selvi Minarti Universitas Bina Nusantara – Perbanas Institute – Universitas Esa Unggul Marketing Communication Engineering Informatics – Universitas Esa Unggul – Culture – Communication System Analyst & Accounting Intern Programmer Intern Unit Sales & Contact Center Support Intern 70
71. PT Bank CIMB Niaga Tbk Sustainability Report Pillar 2 : Health and Community Well Being FOOD DONATIONS AND VACCINATION PROGRAM As part of CIMB Niaga’s contribution in tackling the impact of the COVID-19 pandemic in 2021, CIMB Niaga has donated to several communities directly. 5,320 People in vulnerable to COVID-19 have received food packages. 57,000 Employees, employees’ families, and the general public in several cities in Indonesia have received vaccinations. SHELTER RUMAH KITA The ‘Shelter Rumah Kita’ program is a joint effort between CIMB Niaga and the Embassy of the Republic of Indonesia (KBRI) to provide shelter/temporary housing for Indonesian citizens/migrant workers in Malaysia who require protection from the Indonesian Embassy due to certain reasons. DONATIONS FOR DISASTERS AND RELIGIOUS ACTIVITIES CIMB Niaga contributes financially to the improvement of public health and welfare. Some of the donations made in 2021 benefitted victims of natural disasters such as earthquakes, floods, and Mount Merapi’s eruption. In addition, Bank contributes to religious activities during Ramadan, Eid al-Adha, and Christmas. Bank’s donations reached 33,173 beneficiaries. 71 2021
72. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Pillar 3 : Economic Empowerment COMMUNITY LINK The Community Link program encourages community to actively improve community welfare and foster good synergy among employees and customers. COMMUNITY LINK PROGRAM #JADIPEDULI COMMUNITY LINK PROGRAM #JADINYATA Community Link #JadiPeduli is a program that Community Link #JadiNyata is a social program enables branch office employees to channel that engages customers and the community their ideas into community service. Due to in identifying and resolving social issues in the COVID-19 pandemic, the #JadiPeduli Indonesia in order to foster the development of Community Link program was implemented a more advanced Indonesia. Community Link online through the AMDB and TDB programs. #JadiNyata is a social program that engages In 2021, 75 branch offices and 1 Enabler customers and the community in identifying Unit participated in the Community Link and resolving social issues in Indonesia in #JadiPeduli program. order to foster the development of a more advanced Indonesia. In 2021, 623 participants took part in Community Link #JadiNyata. 72
73. PT Bank CIMB Niaga Tbk Sustainability Report EMPOWERMENT TRAINING FOR PEOPLE WITH DISABILITIES CIMB Niaga employs people with disabilities for our banking activities , ensuring equal opportunity for both the disabled and other employees. In accordance with POJK No. 1/POJK.07/2013, CIMB Niaga takes special care to provide various facilities for people with disabilities in order to foster an equal, safe, and comfortable work environment. Until the end of 2021, CIMB Niaga employed nine people with disabilities at Bank’s Contact Center. These individuals receive the same treatment as other employees and are measured based on their performance. In 2021, CIMB Niaga collaborated with ThisAble Enterprise to host a Barista Training for people with disabilities. This activity drew 20 participants and was conducted in two batches. Along with theoretical discussions about coffee and baristas, participants were allowed to complete a onemonth internship at Coffee Sunyi. Three trainees worked successfully as baristas, one worked in the hospitality sector, one worked in a mini cafe, one worked in the retail fashion sector, and 14 others aspired to become entrepreneurs. WOMEN EMPOWERMENT TRAINING In 2021, CIMB Niaga, in collaboration with the KEHATI Foundation, provided training to 26 mothers at Desa Nginamanu, Kecamatan Wolomeze, Kabupaten Ngada, Flores, Nusa Tenggara Timur as capacity building through bamboo weaving handicrafts. Participants received training from upstream to downstream in order to enable mothers to weave bamboo products such as flower pots and coffee packaging. It is hoped that the training will bring economic benefit for both the participants and the Desa Nginamanu community. 73 2021
74. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Pillar 4 : Climate and Environment CIMB Niaga ensures that no operational activity has an adverse effect on or disrupts biodiversity, including rare flora and fauna protected by the International Union for Conservation of Nature and Natural Resources (IUCN). This concern is addressed through the conservation of bamboo and other supporting activities that contribute to the preservation of local nature while also providing economic and environmental benefits. BAMBOO CONSERVATION Bamboo conservation activities aim to improve the through carbon absorption for more than 4,000 quality of groundwater absorption, prevent erosion tonnes CO2e. in the planting area, and increase the absorption of Greenhouse Gas (GHG) emissions. Potential carbon Since 2011, CIMB Niaga has partnered with the sequestration of planted bamboos will be evaluated Biodiversity Foundation (KEHATI) in its bamboo periodically. Potential carbon sequestration reached conservation activities, and until 2021, CIMB Niaga more than 1,700 tonnes CO2e, according to the has planted 30,400 bamboos, including Black results of the 2021 analysis. Cumulatively since 2019, Bamboo (Gigantochloa bamboo conservation program has been able to Bamboo (Gigantochloa nigrociliata (Buese) Kurz), contribute positively to climate mitigation action and Betung Bamboo (Dendrocalamus asper). atroviolacea), Tabah LIHAT KEBUNKU PROGRAM The Lihat Kebunku Program demonstrates CIMB Niaga’s commitment to environmental preservation. This program invites CIMB Niaga employees to participate in gardening activities at their homes as a means of preserving the environment and increasing productivity and self-relaxation during the COVID-19 pandemic. Michael Ridwan Sudiono Fruit Category yuni Windy Wahategory Andri Johannes le C Vegetab Ornamental Plants Category 74 Veronica Tania Medicina l Plants C Lie ategory
75. PT Bank CIMB Niaga Tbk Sustainability Report Realization of Corporate Social Responsibility (CSR) Fund Realization of CSR Fund (Rp millions) CSR Pillars 2021 2020 2019 8,329 10,146 17,236 14,593 7,211 1,662 Economic Empowerment 3,743 4,857 4,552 Climate & Environment 1,482 820 994 Others 4,218 5,013 4,507 32,365 28,046 28,951 Education Health & Community Well Being Total Realization of Qardhul Hasan Fund 2021 Rp3,177 million 2020 2019 Rp16,400 million Rp14,397 million Details of data or other supporting information relating to or referencing Pillar 3: Corporate Social Responsibility (CSR) from the last three years can be accessed via the QR Code or can be found in Annual Report 2021. 75 2021
76. 2021 Sustainability Report Pillar PT Bank CIMB Niaga Tbk 04 Governance and Risk Bank recognises the importance of sustainability risks associated with deforestation , human rights, waters, and marine issues, and thus the importance of Sustainability Due Diligence and Enhanced Sustainability Due Diligence processes, as well as the evaluation of Sector Guidances. 76
77. PT Bank CIMB Niaga Tbk Sustainability Report VISION For Sustainable Finance [SUSBA 1.1.1.1] To be the leading ASEAN company that embraces the harmony of economic, social, and environmental aspects. MISSION of Sustainable Finance Conduct sustainable business activities that results in continuous and integrated growth. 77 2021
78. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Sustainability Governance [GRI 2-9][GRI 2-11][GRI 2-12][GRI 2-13][SUSBA 1.4.1.7] Bank is aware of the global economic challenges the TCFD framework. This work unit is responsible for posed by climate change, particularly in Indonesia. mapping and classifying internal business activities in As a financial services provider, CIMB Niaga plays accordance with the risk posed by climate change. a vital role in climate mitigation and adaptation Furthermore, to mitigate the negative impacts and actions by developing governance that refers to the forms of adaptation actions associated with climate Task for Climate-related Financial Disclosure (TCFD) change, Bank will develop a strategy that includes to achieve Bank’s Net Zero 2050 target. CIMB Niaga risk profile adjustment for extreme climate-related has adjusted the scope of the Good Corporate events. Governance & Sustainability Work Unit by referring to SUSTAINABILITY GOVERNANCE BODY AT CIMB NIAGA [SUSBA 1.4.1.7] BOARD OF COMMISSIONERS AUDIT COMMITTEE NOMINATION AND REMUNERATION COMMITTEE RISK AND COMPLIANCE COMMITTEE PRESIDENT DIRECTOR DIRECTOR RESPONSIBLE FOR SUSTAINABILITY HEAD OF GOOD CORPORATE GOVERNANCE (GCG) AND SUSTAINABILITY SUSTAINABILITY SENIOR SPECIALIST GOOD CORPORATE GOVERNANCE (GCG) SPECIALIST SUSTAINABILITY BUSINESS PRACTICE SPECIALIST SUSTAINABILITY STRATEGY AND REPORTING SPECIALIST BUSINESS UNITS/ ENABLER UNITS BUSINESS UNITS/ ENABLER UNITS BUSINESS UNITS/ ENABLER UNITS BUSINESS UNITS/ ENABLER UNITS NOTE Supervision Implementation Good Corporate Governance Sub-Directorate (GCG and Sustainability) Supporting/Coordination Board of Directors Sustainability Work Unit 78
79. PT Bank CIMB Niaga Tbk Sustainability Report Board of Commissioners is the highest governance body , followed by President Director, Director of Compliance, Corporate Affairs, and Legal Director and Head of Good Corporate Governance & Sustainability, who supervises GCG and Sustainability Specialists. Board of Directors is responsible for implementing the principles of sustainable finance and ensuring its sustainability in economic, social, environmental, and governance aspects. Board of Directors is directly supervised by Board of Commissioners. Audit Committee assists Board of Commissioners in ensuring that Board of Directors adheres to sustainability principles at CIMB Niaga, per the Audit Committee Charter 2020. The development of Audit Committee Charter has also considered sustainability matters. Detailed explanation regarding the duties and responsibilities of the Audit Committee can be found in the Attachment to Pillar 4. DUTIES AND GOVERNANCE RESPONSIBILITIES BODY FOR OF THE HIGHEST SUSTAINABILITY AND SUSTAINABLE FINANCE • Approving Policies and Procedures related to [GRI 2-12] [GRI 2-13] [GRI 2-14] [GRI 2-19] [SUSBA 1.1.2.2] [SUSBA sustainability aspects and sustainable finance 1.4.1.2] [SUSBA1.4.1.6] [SUSBA 1.4.1.7] principles Corporate governance is the fundamental tenet of managing an organization with ethics, integrity, and • Preparing the RAKB to be submitted to OJK accountability in order to foster stakeholder trust. In after obtaining approval from the Board of addition, Bank already has Board of Commissioners Commissioners accommodated • Conducting sustainability matters in the duties and responsibilities sustainability of Board of Commissioners as well as Nomination finance Charter and 2019 which Remuneration has Committee Charter periodic reviews performance to and evaluate sustainable 2020, which has also considered sustainability matters in Compliance, Corporate Affairs, and Legal Director the committee duties and responsibilities related has duties and responsibilities for sustainable finance to nomination and remuneration of the Board of principles and sustainability implementation aspects Commissioners and the Board of Directors. Detailed within Bank, including the following: explanations regarding the duties and responsibilities • Leading the preparation of the Sustainable Finance Action Plan (RAKB) of the Board of Commissioners and the Nomination • Ensuring that the RAKB is aligned with the vision and Remuneration Committee can be found in Pillar and mission Attachment 4. • Coordinating, evaluating, and following up the Board of Directors duties and responsibilities in relation implementation of the RAKB periodically to sustainable finance principles and sustainability • Ensuring implementation aspects include the following: the implementation of adequate frameworks, policies, methodologies, procedures • Ensuring that the sustainability strategy is in line and/or controls to mitigate sustainability risks (e.g., with Bank’s overall strategy environmental and social risks, human rightsrelated risks, and climate change-related risks) 79 2021
80. 2021 Sustainability Report PT Bank CIMB Niaga Tbk • Supervising and ensuring the implementation of • Supervising the RAKB implementation for the sustainable activities/initiatives in line with Bank’s development of sustainable financial products/ strategy services, • Paying attention to and providing input on the capacity building, and internal adjustments by Bank sustainability report • Undertake initiatives implementation The duties and responsibilities of GCG & Sustainability of and supervise sustainability culture the and activities/initiatives in Bank’s internal environment Work Unit related to the sustainability implementation • Increasing awareness of sustainable finance and sustainable finance principles include the practices and culture in Bank following: • Ensuring • Proposing and ensuring that the vision and mission communications take place with stakeholders on the implementation of sustainable of sustainable finance is reviewed periodically and finance is in line with Bank’s vision and mission • Mapping business segments that have a climate • Developing the Sustainability and Sustainable change risk and categorizing financing to high, Finance policies medium, or low-risk groups. • Preparing the RAKB to be submitted to regulators Detailed description and disclosure of information regarding Corporate Governance; nomination and remuneration criteria for Board of Directors (BoD) and Board of Commissioners (BoC); authorities of the GMS; duties and responsibilities of Board of Directors and Board of Commissioners; as well as Audit Committee and Nomination and Remuneration Committee Charter are presented in Annual Report 2021, which is prepared separately from this Report but is complementary. [GRI 2-9] [GRI 2-10] [GRI 2-15] [GRI 2-17] [GRI 2-18] [GRI 2-19] [SUSBA 1.4.1.5] [SUSBA 1.4.1.6] [SUSBA 1.4.1.7] MANAGEMENT REVIEW OF SUSTAINABILITY conducts reviews of the RAKB provided by the Board PERFORMANCE of Directors, particularly on the results of sector [GRI 2-12] [GRI 2-13] [SUSBA 1.4.1.1] [SUSBA 1.4.1.2] [SUSBA 1.4.1.3] mapping and sustainable finance risks. Through this [SUSBA 1.4.1.6] [SUSBA 1.4.1.7] [SUSBA 1.4.2.1] evaluation process, the Board of Directors and the As mentioned in Board of Directors Charter, Board Board of Commissioners ensure the implementation of Directors is responsible for paying attention to of economic, social, environmental, and governance performance growth, and sustainable finance risk when developing a business strategy and carrying out mitigations have been carried out properly. During business activities consistent with sustainable banking 2021, there were no significant findings in the RAKB principles. CIMB Niaga’s entire Board of Directors implementation that needed to be communicated are responsible for Sustainable Finance Action Plan to the Board of Commissioners. the sustainability strategy, KKUB portfolio (RAKB) implementation. Compliance, Corporate Affairs, and Legal Director has been appointed as the In addition, Board of Directors is responsible for Director responsible for implementing the RAKB, as approving Sustainability Policy and Sustainable well as monitoring and evaluating its implementation. Finance Policy, as well as ensuring that the sustainability strategy is implemented effectively. Board of Directors Board of Directors submits the RAKB proposal for will periodically receive and evaluate KKUB portfolio input and approval from the Board of Commissioners. and sustainable risk management reports for each Board of Commissioners and/or Audit Committee business sector. 80
81. PT Bank CIMB Niaga Tbk Sustainability Report Sustainability Risk Approch Framework 1 2 Sustainable Finance Policy Sustainability Policy 3 Sustainability Integration in Bank ’s Policy Company Charter • Company Policy Manual • Board of Commissioners • Board of Directors • Audit Committee • Nomination and Remuneration Committee Operational Risk • Whistleblowing Policy • Anti-fraud Policy • Anticorruption Policy Risk and Credit Management Commercial Credit Policy Procurement, Admin, & Property Goods and Services Procurement Policy and Procedure Human Resources Company Code of Ethics and Conduct Finance Smart Spending Policy Exclusion List High Sustainability Risk Sector List Corporate Social Responsibility Policy Corporate Social Responsibility Policy 4 Sector Guidance Human Rights Policy Sustainability Scope Business Relations • Non-individual credit/financing customers • Bank Subsidiaries • Corporate Social Responsibility (CSR) partner or nonindividual beneficiary • Suppliers, vendors, merchants and non-individual outsourcing partners • Business Partners • Members of the Board of Commissioners, Sharia Supervisory Board, Board of Directors and Independent members of Bank’s Board of Commissioners Committee 81 Non-Individual Financing • Corporate banking segment • Commercial banking segment 2021
82. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Environmental Risk Approach KEY ENVIRONMENTAL AND SOCIAL CONSIDERATIONS FOR ASSESSING RISK [SUSBA 1.2.1.6][SUSBA 1.6.1.1] Bank understands that sustainability risks related to deforestation, human rights, waters, and marine issues are important issues. An assessment of these issues has been carried out in the SDD and ESDD processes including fulfillment to Sector Guidance. Sustainability Due Diligence Process evaluates material sustainability risks form two perspectives: The environmental and social risks that the customers and its operations are exposed to, due to considerations such as the nature of its activities, geographical location, supply chain and raw material production impacts, among others. A key aspect of consideration includes climaterelated physical and transition risks and mitigation actions that are being pursued The environmental and social risks arising from the financed activity. This includes specific project-related risks and related landscape impacts, and includes an assessment of the client’s sustainability commitments, policies, performance, track record, and reputation. 82
83. PT Bank CIMB Niaga Tbk Sustainability Report Environmental Risks Climate Change Business activities that may be impacted by climate change leading to business disruption and /or negative financial impacts in the future. This could include: • Physical risks such as floods, droughts and other extreme weather events, either impacting the business activity itself or via the supply chain; and • Transition risks in moving towards a low-carbon economy, such as regulatory changes, carbon pricing and shifting away from fossil fuels. Deforestation The risk arising from developments and other industrial activities on forested areas, including those designated as national or state reserves and high conservation value (HCV)/high carbon stock (HCS) areas as assessed by a credible technical assessor. Biodiversity Loss The risk arising from activities that occur within or near areas of high biodiversity that may impact endemic or endangered species of flora and fauna. Inland and Marine Environment The risk arising from activities that impact inland and marine ecosystems that may cause loss of biodiversity. Energy Use The risk arising from high or inefficient use of energy in the form of electricity and other energy sources. Water Scarcity The risk arising from activities conducted at areas of water scarcity and where developments could impact water availability through changes in the natural landscape. Waste and Pollution The risk arising from inadequate management of waste and by-products, leading to air, terrestrial, freshwater, brackish water and/or marine pollution. Social Risks Institutional Integrity Human Rights and Labour Issues Health and Safety Negative Impacts on Communities The risk arising from poor management practices that may result in non-fulfilment of sustainability policies and commitments and negative environmental and social impacts. The risk arising from activities impacting employees, including working conditions and benefits, fair wages, contractual agreements, tight to form associations, and provision of basic needs including housing, access to water, healthcare and education, among others. The risk arising from unsafe working conditions, including lack of provision of personal protective equipment, policies and procedures on workplace safety, and adequate medical coverage. The risk arising from activities that impact inhabited areas, including the Free, Prior and Informed Consent (FPIC) of communities impacted by business activities. 83 2021
84. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Social & Human Rights Risks Approach Human Rights Policy “Bank recognizes that all human rights principles and other matters related to human rights are inseparable and indivisible.” Human Rights Principles Several human rights principles (UN 2005) advanced by Bank include the following: a) are universal and cannot be revoked; b) are indivisible; c) are interdependent and interconnected; d) equality and non-discrimination; e) participation and inclusion; f) accountability and the rule of law. Along with these principles, Bank supports and strives to promote and uphold the United Nations Global Compact’s (UNGC) principles. Bank’s Respect for Various Aspects Employment Customers and non-individual business relations Community 1. Bank upholds fundamental labor rights and prioritizes equality without regard for ethnic origin, religion, race, gender, between groups, social status, or other discriminatory characteristics that have the potential to violate human rights. 2. Bank ensures that no child labor or forced labor is used in Bank’s internal labor practices or business relations. 1. Bank’s policies and procedures for financing activities, fundraising, investing, and other banking business activities are always guided by human rights principles. 2. Bank does not finance and/or conduct business with companies that violate human rights and/or are listed on the Exclusion List. 3. Bank performs sustainability due diligence on its customers and business relations in connection with funding activities such as fundraising, investing, and other banking business activities. 4. Bank pays attention to human rights and customer data security when developing facilities, products, and services. 1. Bank respects the rights and participation of the community and strives to prioritize local wisdom in its business activities. 2. Bank strives to promote and uphold the principle of Free, Prior, and Informed Consent (FPIC) when dealing with local and indigenous communities and peoples. Human Rights Mechanism [GRI 2-26] Bank has a Sustainability Due Diligence process to identify and assess risks associated with social and human rights issues affecting customers and business relations. Bank’s policy and Code of Ethics & Conduct ensure that no human rights violations occur during Bank’s operational activities and that a grievance mechanism is available in the event of a potential or actual violation of human rights. Bank is committed to responding promptly and appropriately whenever incidents of human rights violations occur in the course of Bank’s operational activities. Bank provides a complaint channel through a third-party-managed whistleblowing system (WBS). This is done to ensure the whistleblower’s protection and confidentiality, as well as the open disclosure of human rights violations. If there are instances of human rights violations, Bank will communicate openly with stakeholders about the progress of the case and its resolution via various communication channels, one of which is the Sustainability Report. 84
85. PT Bank CIMB Niaga Tbk Sustainability Report Climate Change Risk Approach [201-2] [SUSBA 1.1.1.5] [SUSBA 1.2.1.8] [SUSBA 1.2.2.2] [SUSBA 1.6.2.8] The impact of climate change risks affecting the economy, disrupting business processes, causing damage to assets, and resulting in a global decline in the quality and quantity of natural resources, agricultural products, and commodities. In response to these risks, Bank has developed its business strategy by incorporating the core elements of the Taskforce for Climate-related Financial Disclosure (TCFD). Throughout 2021, there were no disasters that affected business processes and threatened the health of CIMB Niaga employees. Bank has developed a “High Sustainability Risk Sector List” to manage climate change risks by identifying sectors that may be impacted by climate change, including agriculture, forestry, and other land use (AFOLU). The document was drafted using the scientific method and incorporated references from the latest international publications, including the Intergovernmental Panel on Climate Change (IPCC), United Nations Framework Convention on Climate Change (UNFCCC), and Science Based Target Initiative (SBTi). The findings of the study indicate the degree to which each sector is vulnerable to sustainability risks, such as climate change and water scarcity. Additionally, Bank continues to engage in dialogue with stakeholders, both internally and externally, by allocating funds to support sustainability literacy efforts, including those related to climate change. Up to the end of 2021, Bank allocated special budget funds for climate change adaptation and mitigation financing through the Sustainability-linked Loan/Financing and Sustainable Finance program schemes. 85 “Recognizing the risks of climate change, CIMB Group is one of the 38 members of UNEP FI, where CIMB Niaga, as part of CIMB Group, supports the collective commitment to Climate Action and aligns business strategies with the Paris Agreement goals target towards a low carbon economy.” 2021
86. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Climate Change Risk Approach - Transition And Physical Risk [SUSBA 1.6.1.2] Source of Risk Risk Category Transition Risk Type of Risk Policy and Legal Risk Examples of Potential Impacts Example of Risk • Policy and regulatory changes, e.g., GHG emission reduction policies including carbon taxation, outright banks on carbon-intensive activities. Lower corporate profitability (e.g., due to increase in energy prices) and increased legal action • Legal liabilities (e.g. class action on companies that cause haze pollution. Technology Risk • Accelerated obsolescence of higher emission technologies, replaced with new low-carbon technologies • Sudden rush of capital expenditures on unproven lowcarbon technologies Market risk • Shifts in customer preferences • Increases cost of raw materials or inputs, leading to higher production cost Corporate devaluation or premature asset write-downs (e.g., closure of coal-fired power plants due to lower cost of renewable energy) Lower household wealth and higher inflation (e.g., rising living costs due to carbon cost pass-through and lower corporate profitability) • Reduced valuation of assets such as fossil fuel reserves Reputational risk • Negative stakeholder perception, concern or feedback on carbon intensive sectors • Customers shunning brands that are perceived to be associated with contributing to the climate crisis Physical Risk Acute • Increased frequency and severity of extreme weather events such as floods and droughts Chronic • Long term shifts in weather patterns, including mean temperature, precipitation, and sea level 86 Rising public scrutiny on corporate’s unsustainable behaviors and potential drastic loss of customers, impaction profitability • Reduced, or complete loss of residential and commercial property values in affected areas, and increase in prices of property in higher elevations • Operational disruptions resulting in income loss (e.g., due to water shortages)
87. PT Bank CIMB Niaga Tbk Sustainability Report Climate Change Risk Approach - Risks Associated To Banking Industry Banking Industry Risk Related to Climate Change Risk type Examples of Risk Potential Time Horizon of Risk Credit Risk Impact on the repayment capacity of the customers , leading to a possible increase in the default rates Medium-(1-5 years) to long-term (>5 years) Market Risk High volatility and potential abrupt decline in the value of climate-Incompatible securities underwritten or held by Bank Medium-(1-5 years) to long-term (>5 years) Liquidity and Funding Risk • Inability of customers to repay their facilities as contracted, which in turn affects Bank’s Cash flow requirements Medium-(1-5 years) to long-term (>5 years) • Significant withdrawals of deposits from customers to fund capital expenditures in low-carbon technology or to recover from damages caused by extreme events Reputational Risk • Reputational repercussion due to Bank’s financing of carbon-intensive sectors such as coal Short-(<1 year), medium-(1-5 years) to long-term (>5 years) • Poor stakeholder confidence in Bank’s sustainability efforts and ability to manage its exposure to climaterelated risks Strategic Risk Losing competitiveness, market share, and attractiveness to investors due to inability to shift away from financing brown to green financing portfolios Medium-(1-5 years) to long-term (>5 years) Capital Risk Inadequate capital to cater for climate-related risks, which may result in the inability to absorb losses, maintain public confidence, and support the competitive growth of the business Medium-(1-5 years) to long-term (>5 years) Operational Risk Operational disruption caused by physical risk which can impact income loss Medium-(1-5 years) to long-term (>5 years) Legal Risk Risk due to lawsuits and/or weaknesses in the juridical aspect due to laws and regulations related to climate Medium-(1-5 years) to long-term (>5 years) Compliance Risk Inability for Bank to comply with regulations related to climate change and sustainable finance Short-(<1 year), medium-(1-5 years) to long-term (>5 years) Intra-Group Transaction Risk Risk due to the dependence of an entity, either directly or indirectly, on other entities in one Financial Conglomerate in the context of fulfilling written and unwritten agreement obligations, whether followed by a transfer of funds or not. This risk is related to the transitional risk Medium-(1-5 years) to long-term (>5 years) Rate of Return Risk Impact on Bank’s income due to changes in the rate of return or its volatility that may be caused by climate change Short-(<1 year), medium-(1-5 years) to long-term (>5 years) 87 2021
88. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Sustainability Policy and Strategy Development [GRI 2-23] [FS1] [SUSBA 1.2.1.14] [SUSBA 1.2.2.4] [SUSBA 1.3.2.6] As part of its commitment to advancing sustainability, Bank develops a Sustainability Policy and Procedure aligned with the five pillars of CIMB Niaga’s sustainability strategy and incorporates the sustainable finance vision and mission. These five sustainability pillars serve as the foundation for the 2030 sustainability work plan, which outlines the framework, strategy, and implementation approach for effective risk management. These risks encompass credit and noncredit risks, including financing, investment, procurement, and supply chain management. Sustainability Policy No. M.08 and Sustainability Sustainable Finance Policy No. M.10 and Sustainable Procedure No. M.08.P.01. Finance Procedure No. M.10.P.01. This policy and procedure have a fundamental The Sustainable Finance Policy serves as the impact on how Bank implements sustainability, foundation for Sustainable Business (Pillar 2). Bank particularly with regard to non-financial activities. supports this policy with two documents, the ‘Exclusion This policy covers business relations with the following List’ parties: Finance Procedure serves as a guide for performing a) Non-individual financing customers; and ‘Sector Corporate Social and Environmental Responsibility Sustainability Due Diligence’. This is one way in which (CSR) suppliers, Bank works to identify, quantify, monitor, and control vendors, merchants, and outsourcing partners; e) environmental, social, and governance (ESG) risks. Business Partners; and f) Members of the Board of The Sustainable Finance Policy and Procedure are Commissioners, Sharia Supervisory Board, Board of updated at least every two years, in line with Bank’s Directors, and Independent members of the Board of Manual Framework Policy. Non-individual Commissioners Committee. 88 and Sustainable ‘Sustainability d) Diligence’ The b) Bank subsidiaries; c) Non-individual partners in programs; Due Guidance’. ‘Enhanced
89. PT Bank CIMB Niaga Tbk Sustainability Report Sustainability Due Diligence Mechanism [GRI 2-16] [FS2] [FS3] [SUSBA 1.2.1.1] [SUSBA 1.2.1.10] [SUSBA 1.2.1.12] [SUSBA 1.2.1.13] [SUSBA 1.3.1.1] [SUSBA 1.3.1.2] [SUSBA 1.3.1.4] [SUSBA 1.3.1.5] [SUSBA 1.3.2.2] [SUSBA 1.3.2.3] [SUSBA 1.3.2.4] [SUSBA 1.3.2.5] 1 Sustainability Due Diligence (SDD) 2 Enhanced Sustainability Due Diligence (ESDD) 3 Recommendations based on sustainability aspects and Action Plan Sustainable finance risk rating Escalation of due diligence results Monitoring and evaluation 4 Credit/Financing decision based on sustainability considerations Mechanism 1 = SDD is performed by responding to a series of questions pertaining to environmental, social, and human rights issues. Inspections are also conducted on the Exclusion List, High Sustainability Risk Sector List, and the Sustainability Watchlist. Mechanism 2 = ESDD is used to dive deeper into environmental/social issues and/or other issues affecting sectors with a high risk of sustainability. Furthermore, inspections are conducted to ensure that the Sector Guidance criteria are fulfilled. Sector Guidance is Bank’s effort to support debtors/prospective debtors in increasing the positive impact of environmental/social aspects. Mechanism 3 = Bank may issue a recommendation in the form of a time-bound Action Plan that meets Bank’s sustainability criteria. Action Plan must be fulfilled by debtors/ potential debtors and cited in the credit agreement. The Executive Credit Committee (ECC), Board of Directors, and/or Board of Commissioners will receive reports on the recommendations and action plans issued, as well as the results of financing decisions. Bank will periodically monitor and evaluate all Action Plans that have been issued periodically during annual credit review. Mechanism 4 = Credit Approver makes all financing decisions in accordance with the authority of the financing limit, taking credit and sustainability considerations into account. The Executive Credit Committee (ECC), Board of Directors, and/or Board of Commissioners will receive reports on the outcomes of financing decisions and action plans issued. Detailed information relating to or referencing Exclusion List can be found via the following website link: https:// investor.cimbniaga.co.id/sustainability/home.html [SUSBA 1.2.1.7] 89 2021
90. 2021 Sustainability Report PT Bank CIMB Niaga Tbk SUSTAINABILITY RISK MANAGEMENT BUILDING A CULTURE OF SUSTAINABILITY [SUSBA 1.4.1.4] CIMB Niaga is engaged in various initiatives to To manage risk comprehensively, CIMB Niaga foster a culture of sustainability within Bank. This is adopts Enterprise-Wide Risk Management (EWRM) accomplished by amending and incorporating framework that is proactive and forward-looking in sustainability principles into Board of Commissioners nature to maximize returns. Risk is managed within and Board of Directors Charters, as well as Bank’s the EWRM framework by aligning risk appetite Code of Ethics and Conduct and other internal with business strategy. Effective governance has policies. Sustainability education has also been increased the four eyes principle mechanism and conducted transparency throughout the risk management sustainability-themed process. Risk management is ingrained in the Additionally, operational activities, culture, and decision-making Sustainability Policy and Sustainable Finance Policy processes of an organization. Risk management by conducting Sustainability Due Diligence on Bank’s applies the three lines of defense concept, which business activities. via e-mail CIMB blasts Niaga operational level. This also applies to the Board of Directors members, senior management, and employees at all levels. Complete information on risk management can be found in Annual Report CIMB Niaga 2021. organizing activities. implements includes environmental and social risks at daily 90 and employee Bank’s
91. PT Bank CIMB Niaga Tbk Sustainability Report Sustainability Governance Based on TCFD Governance 1 . Bank has formed GCG & Sustainability Work Unit supervised by the Director Responsible for Sustainability. 2. Bank implements the RAKB. 3. Bank has developed Sustainability Policy. 4. Bank conducts Sustainability Due Diligence process. 5. Studies on climaterelated opportunities and risks are submitted periodically to relevant parties in the Sustainability Governance Body. Strategy Risk Management Metrics and Target 1. Bank implements Sustainability Due Diligence mechanism. 2. Bank has a strategy for identifying climate change opportunities and challenges through an internal carbon pricing study and applying to the Green Climate Fund to become a Direct Access Entity Green Climate Fund (GCF) for Indonesia. 1. Including climate change risk as one of the considerations for assessing financial and non-financial risks. 2. Including aspects of climate change in the Sustainability Due Diligence. 3. Raising awareness of the risks of sustainability and climate change to Bank internally and debtors. 4. Identifying potential climate change-related risks in oil palm plantations through case studies. 5. Developing a financing risk profile scenario for the effects of climate change (climate scenario), such as Partnership for Carbon Accounting Financials (PCAF) methodology. 6. Monitoring and evaluating climate-related risks are submitted periodically to relevant parties in the Sustainability Governance Body. 1. Analysis of the Greenhouse Gas (GHG) emissions generated and their reduction targets. 2. Identifying portfolios/ groups of debtors that impact climate change through the GHG emissions generated. 3. Sustainability Due Diligence conducted on Bank’s portfolio. 4. CIMB Niaga, as part of CIMB Group, has committed to climate finance through: a. Net Zero in 2050 b. Coal financing phaseout in 2040 c. Increase sustainable financing to RM30 billion (~Rp101 trillion) by 2024 Description GHG (Scope 1 & 2) Description Climate adaptation action Target Intensity Reduction (absolute) (based on baseline study 2019) Target Debtor evaluation using the Sustainable Due Diligence mechanism with adjustments made to climate change aspects. 2021 2022 2023 2024 2% (emissions intensity) 12% 18% 24% 2021 Corporate Banking 91 2022 Corporate and Commercial Banking 2023 Corporate and Commercial Banking 2024 Corporate and Commercial Banking 2021
92. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Ethical Business CIMB Niaga has Code of Ethics and Conduct No . Anticorruption and anti-fraud apply to all parties, A.07.01 that serves as a guide for all CIMB Niaga including the Board of Commissioners, Board of personnel in regards to professional conduct and Directors, employees, and external parties who carrying out their responsibilities with the utmost work for and on behalf of Bank. Anticorruption and integrity. CIMB Niaga’s Code of Ethics and Conduct anti-fraud socialization were carried out through contains detailed information on CIMB Niaga’s email blasts, whistleblowing websites, electronic Annual Report 2021. communication with all vendors, and posters in Bank’s working areas. In 2021, Bank developed ANTICORRUPTION AND ANTI-FRAUD POLICY anticorruption, code of ethics, and anti-fraud training [205-1] [205-2] modules to increase employee awareness and attest Bank recognizes the important nature of to the adherence of employees to the Integrity Pact, anticorruption and anti-fraud policies, which are Code of Ethics, and Anticorruption Commitment. inextricably linked to financial transaction activities. To help achieve its goal of zero fraud, CIMB Niaga Throughout 2021, CIMB Niaga conducted anti-fraud developed a Declaration of Integrity Pact, Code of awareness training for 3,220 employees or 28.8% of Ethics, and Anticorruption Commitment, all of which total employees. Additionally, CIMB Niaga socialized are available on Bank’s website. On May 3, 2021, the the Anticorruption Policy via an e-mail blast to all Board of Commissioners and the Board of Directors employees (100%), including Board of Commissioners signed a declaration referencing the Anti-Fraud and Board of Directors members. Bank will conduct Policy, Employee Policy, and Anticorruption Policy. anticorruption policy training in the coming year, Bank has not yet assessed the operational area inviting senior management and business partners to associated with corruption risk in 2021. participate. Anti-fraud Awareness Training Participants [GRI 2-27] [205-2] [205-3] [FN-CB-510a.1] 2021 3,220 Employees 2020 3,554 Employees 92 2019 2,829 Employees
93. PT Bank CIMB Niaga Tbk Sustainability Report CIMB Niaga has established a dedicated Anti Fraud Case Resolution Fraud Management (AFM) Work Unit responsible for implementing an anti-fraud strategy in accordance with Bank Indonesia Circular Letter No.13/28/DPNP Year 2011 on the Implementation Total Cases Committed by Permanent Employees Internal Fraud Case 2021 2020 2019 of Anti-Fraud Strategy for Commercial Banks. Resolved 3 3 4 Based on the results of the AFM Work Unit’s In Bank’s Internal Settlement Process 2 3 0 corruption throughout 2021, five cases of fraud Not Yet Resolved 0 0 0 incidents were identified with a total loss of more than Rp100 million. However, none of the cases Followed up Through a Legal Process 0 0 1 were pursued through the legal system. The Total Frauds 5 6 5 evaluation on the prevention of fraud and results of follow-up reports submitted through the whistleblowing service system also contribute to Note: The table shows cases with a nominal value >Rp100 million. discovering fraud case findings. GRIEVANCE MECHANISM [GRI 2-26] [SUSBA 1.4.18] CIMB Niaga has established a whistleblowing system (WBS) administered by an independent and professional third party, namely PT Deloitte Advis Indonesia. The management of independent parties is carried out to ensure that the whistleblower’s protection and confidentiality are maintained and that violations can be reported more freely and without hesitation. The WBS policy is based on OJK Regulation No.39/POJK.03/2019, which requires commercial banks to implement an anti-fraud strategy. Additionally, Bank has an internal policy regarding the whistleblowing system, detailed in Whistleblowing Policy No. E.08. Internal and external parties can report any violation to CIMB Niaga through the following communication channels: TOTAL WHISTLEBLOWING REPORTS Communication Channels Managed by Internal CIMB Niaga 0878 296 52767 (O878 AYO LAPOR) ayo.lapor@cimbniaga.co.id RECEIVED AND HANDLED [FN-CB-510a.2] In 2021, the whistleblowing service received 133 reports, a decrease of 3.6% from 2020. Throughout 2021, Bank Communication Channels Managed by Independent Parties https://ayolapor.tipoffs.info ayolapor@tipoffs.info 14031 +62 822 113563636 +62 21 2856 5231 Ayo Lapor PO BOX 3331 JKP 10033 has completed 27% of investigations (36 reports), with 30 of those reports proving valid. CIMB Niaga Annual Report 2021 contains whistleblowing system, and APU & PPT. Pillar 4: Governance and Risk from the last three years can be accessed via 93 information on the complaint handling mechanism, Details of data or other supporting information relating to or referencing the QR Code or can be found in Annual Report 2021. comprehensive 2021
94. 2021 Sustainability Report Pillar PT Bank CIMB Niaga Tbk 05 Stakeholder Engagement and Advocacy CIMB Niaga initiates a “Sustainability Movement” by appointing a Sustainability Champion who represents each work unit or sub-directorate and is responsible for implementing sustainability activities in their work environment or takes on the role of a Person in Charge (PIC). 94
95. PT Bank CIMB Niaga Tbk Sustainability Report 100 % CIMB Niaga employees have attended sustainable finance training 12 External associations that have engaged with CIMB Niaga 100% Of Board of Commissioners and Board of Directors have participated in sustainable finance training > Rp146 billion Allocated funds for human capital development activities 95 2021
96. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Capacity Building for Sustainable Finance BUILDING PROFESSIONAL PEOPLE [404-1] Human capital development programs are designed CIMB Niaga invested Rp146.6 billion in human capital with learning development activities in 2021. Human Capital Return objectives in mind. Since the COVID-19 pandemic, each employee’s impact and on Investment (HC ROI) was 3.21 in 2021; this figure CIMB Niaga has converted several previously face- illustrates that every Rp1 invested in human capital to-face training sessions to a hybrid format (offline can benefit Rp3.21 for Bank. and online). Public courses, in-class learning, and e-learning are all used to deliver training. Total Education/Training Hours and Participants* 2021 Description Total Male Female 530,771 561,038 1,091,810 Total Employees Participating in Trainings 6,542 6,873 13,415 Average Training Hours per Employee 81.13 81.63 162.76 Total Training Hours *Includes employees who have resigned and total employees that have participated in several learning modules SUSTAINABLE FINANCE COMPETENCY BUILDING [GRI 2-17] [FS4] Throughout 2021, CIMB Niaga actively engaged members of the Board of Commissioners, the Board of Directors, and all employees in competency development activities, focusing on the implementation of sustainable finance and sustainability performance across economic, social, and environmental issues, as well as governance. Training related to sustainable finance and 7. Sustainability Now, Its not A Choice implementation of sustainability performance: 8. Greenhouse Gas (GHG) and Reporting 1. CIMB Expert Talk Series: Peat 9. Sustainability Training for Leaders & Senior 2. Deep Diving: Coal Management 3. Deep Diving: Sustainability-linked Loan 10. The Cooler Earth 2021 4. Green / Sustainability Energy 11. Refreshment Training on Sustainable Finance 5. Green Energy – Hydro & Solar Energy Procedure to Non-retail Credit Risk Management 6. Human Rights Risk Management and Implications Work Unit for Financial Institutions 96
97. PT Bank CIMB Niaga Tbk SUSTAINABLE Sustainability Report FINANCE ADVOCACY FOR STAKEHOLDERS [FS5] [FS10] [SUSBA 1.1.1.8] [SUSBA 1.5.1.4] Apart from internal competency development, CIMB Niaga actively participates in third-party training on sustainable finance, either as a participant or speaker. Among the activities is The Cooler Earth 2021, In 2021, The Cooler Earth Sustainability Summit was held again by CIMB Group under the theme Align, Act, Accelerate. CIMB Group also dedicated an entire day to youth, which was entirely curated by youth from CIMB Group’s The Complete Banker Program, as a platform to encourage and enable youth engagement for future generations. The Cooler Earth Sustainability Summit took place virtually for three days, with 71 speakers and 3,672 participants from various countries in attendance. which continues from the previous year’s summit. CIMB Group’s virtual event aims to bring together people from all over the world, including experts and stakeholders from various industries and customers and business partners, to discuss and share perspectives on how to create a more sustainable future. Throughout 2021, Bank has held discussions and advocated for sustainable solutions to six companies in nature-based sectors. CIMB Niaga’s Significant Roles as Organizer and Participant in Sustainable Finance Events [SUSBA 1.4.2.2] [SUSBA 1.4.2.3] [SUSBA 1.5.1.4] Event Name Organizer The Cooler Earth Sustainability Summit 2021 CIMB Group (Virtual Learning) Indonesia Green Taxonomy Financial Services Authority (OJK) Green / Sustainability Energy (USAID) USAID & CIMB Niaga Deep Diving – Coal & Deep Diving: Sustainability-linked Loan CIMB Group 97 2021
98. 2021 Sustainability Report PT Bank CIMB Niaga Tbk CIMB Niaga ’s Role as Speaker in Sustainable Finance Events Posisition Name Event Name Organizer President Director Tigor M. Siahaan* The JC3 Annual Flagship Conference: #FinanceForChange JC3 Malaysia Compliance, Corporate Affairs, and Legal Director Fransiska Oei Konsinyering Climate Related Disclosures Financial Services Authority (OJK) Compliance, Corporate Affairs, and Legal Director Fransiska Oei LPPI-RFI Foundation: How Indonesia’s Financial Institutions & Stakeholders Respond to Climate Related Financial Risks Indonesian Banking Development Institute (LPPI) Compliance, Corporate Affairs, and Legal Director Fransiska Oei GRI Cross-country Learning Session for Business: Climate Change, Gender Equality & Inclusion, Waste & Circular Economy, and OHS Global Reporting Initiative (GRI) Head of Good Corporate Governance & Sustainability Lina Launch of The Study of 2020 Sustainability Reports of Public Companies in Indonesia Foundation for International Human Rights Reporting Standards (FIHRSST) Head of Good Corporate Governance & Sustainability Lina Direct Accredited Entity (DAE) Nomination FGD – Green Climate Fund (GCF) Ministry of Finance Sustainability Senior Specialist Leo Mualim Sustainability Festival: Mainstreaming Good Sustainability Practices. Aicon Global Indonesia working together with Trisakti Sustainability Center (TSC) and SR Asia Indonesia Sustainability Senior Specialist Leo Mualim People for Peat Business Workshop - Exploring Innovative Financing Models for Sustainable Businesses in Indonesia and ASEAN People for Peat (funded by European Union) *Resigned effectively on 17 December 2021 EXTERNAL INITIATIVES AND ASSOCIATION MEMBERSHIPS [GRI 2-28] [FS10] [SUSBA 1.1.2.1] [SUSBA 1.1.2.2] CIMB Niaga is an active participant in various external initiatives and associations. Currently, Bank is involved in 12 organizations, with Rp1 billion spent in membership fees and dues in 2021. 98
99. PT Bank CIMB Niaga Tbk Sustainability Report Cerita Untuk Masa Depan [413-1] In 2021, CIMB Niaga launched its Cerita untuk Masa Depan (Stories for the Future) Talkshow program. This program demonstrates CIMB Niaga’s commitment to the Sustainable Development Goals (SDGs). The program aims to engage all Indonesians in safeguarding sustainable community economic welfare, improving social life through environmental stewardship, and promoting inclusive development and the implementation of governance capable of enhancing the quality of life from generation to generation. 99 2021
100. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Forum Indonesia Bangkit (FIB) In 2021, CIMB Niaga hosted a series of webinars titled “Forum Indonesia Bangkit” (FIB) (Indonesia Rises Forum) for the first time, inviting experts and business actors in their fields to participate. FORUM INDONESIA BANGKIT VOLUME 1 The first series, or FIB Volume 1, was held on 6 A p r i l 2021, with the theme “Health Sector Strategy f Accelerating Economic Recovery,” and was opened by o r the Vice President of the Republic of Indonesia as Keynote Speaker and attended by the Minister of Health of the Republic of Indonesia, President Director of PT Sumber Alfaria Trijaya (Alfamart) Tbk, CEO of PT Siloam International Tbk, and Managing Director of Sinar Mas Land as speakers. This webinar drew 9,020 participants who viewed it live via Zoom a n d YouTube. FORUM INDONESIA BANGKIT VOLUME 2 FIB Volume 2 took place on 15 July 2021 with the theme “Proudly Made in Indonesia - Awakening the National Economy through Local Creative Industries.” FIB Volume 2 featured speakers including the Minister of Trade of the Republic of Indonesia, the Minister of Tourism and Creative Economy of the Republic of Indonesia, President Commissioner of PT Paragon Technology & Innovation Tbk, Founder of Erigo, and Actresses and Film Producers. This webinar drew 17,018 participants who viewed it live via Zoom and YouTube. FORUM INDONESIA BANGKIT VOLUME 3 FIB Volume 3 was also presented as a webinar commemorating CIMB Niaga’s 66th anniversary. FIB Volume 3 was held on 29 September 2021 with the theme “Optimism for Economic Recovery,” and was opened by the Coordinating Minister for the Economy of the Republic of Indonesia as Keynote Speaker, and also included the Minister of Finance of the Republic of Indonesia, the Minister of Investment of the Republic of Indonesia, the Chairman of KADIN, represented by the Deputy Chairman of KADIN, Chairman of Garuda Food and DAW Group, and CEO of GoTo as Speakers. This webinar drew a total of 28,413 live viewers via Zoom and YouTube. 100
101. PT Bank CIMB Niaga Tbk Sustainability Report Sustainability Champion In keeping with the spirit of CIMB Niaga ’s “Sustainability Movement,” Bank has appointed a Sustainability Champion in each work unit. Sustainability Champions are CIMB Niaga employees who represent each work unit or directorate and, as Person in Charge (PIC), are responsible for implementing sustainability activities in their work environment. Roles and Responsibilities of a Sustainability Champion Initiate sustainability initiatives in each work unit Roles and Forward any responsibilities of information related a Sustainability to sustainability in Champion their respective work units Be active and participate in sustainability activities at CIMB Niaga Provide updates regarding sustainability activities Act as Liaison for the GCG & Support the preparation of Sustainability work unit and the Sustainability Report coordinate sustainabilityrelated activities Stakeholder Engagement [SUSBA 1.1.1.7] CIMB Niaga identifies stakeholder engagement through proximity and power-based approaches that have the ability to influence and are influenced by Bank. Stakeholder engagement encompasses environmental, social, and governance (ESG) information, as well as economics related to sustainability and sustainable finance implementation. 101 2021
102. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Identification of Stakeholder Needs and Approach [GRI 2-29] [SUSBA 1.1.1.9] CUSTOMERS Topic Frequency of Approach Engagement Method 1. COVID-19 Pandemic 2. Banking financial transaction security 3. Clear and transparent education and information on banking products and services 4. Banking facilities and ease of access 5. Settlement of customer complaints in accordance with the Service Level Agreement (SLA) 6. Credit relaxation Call center services, branch offices, phone banking, websites, and social media (Facebook, Instagram, and Twitter) Any time Customer satisfaction surveys and internal surveys Annually by Bank External assessment of customer satisfaction Annually by each surveyor Information from website and frontliners As needed Frequency of Approach 1. Implementing health protocols throughout the year during the COVID-19 pandemic. 2. Receiving customer grievance/ complaints 3. Identifying customer satisfaction and the necessary improvement aspects 4. Customer-related assessments by external parties 5. Banking finance education on banking products 6. Bank prepared a credit relaxation mechanism in response to the COVID-19 pandemic SHAREHOLDERS/INVESTORS Topic . COVID-19 Pandemic 1 2. Financial and non-financial performance updates 3. Important activities/events, for example, CSR activities. 4. Report of year-end financial and non-financial performance 5. Appointment of a public accounting firm 6. Use of company profits 7. Changes in the Board of Commissioners, Board of Directors, and Sharia Supervisory Board composition 8. Determination of salary or honorarium, bonuses, and other allowances for the Board of Commissioners, Board of Directors, and Sharia Supervisory Board Engagement Method Frequency of Approach • Performance • Analyst meeting Quarterly Public expose At least once a year Reporting to the Indonesian Stock Exchange (IDX) As per IDX regulations General Meeting of Shareholders At least once a year 102 Company Response 1. Implementing health protocols throughout the year during the COVID-19 pandemic. 2. Presenting the Company’s organizational performance 3. Reporting year-end performance
103. PT Bank CIMB Niaga Tbk Sustainability Report REGULATORS Frequency of Approach Topic Engagement Method 1 . Compliance with laws and regulations 2. The precautionary principle in conventional and sharia banking operations and services 3. Sustainable Finance 1. Submission of Bank’s Business Plan (RBB) and its realization to Bank Indonesia and the Financial Services Authority (OJK) 2. Submission of the RAKB to OJK 3. Reporting sharia compliance to the National Sharia Board 4. Other reports in accordance with applicable provisions to regulators 1. Twice a year 2. As per OJK regulations Company Response 1. Reporting the Company’s plans and achievements in accordance with the laws and regulations 2. Reporting degree of compliance toward sharia principles SUPPLIERS Topic Frequency of Approach Engagement Method 1. Mutually beneficial relationships with suppliers 2. Fair and transparent procurement process for goods and services 3. Sustainable supply chain practices Policy dissemination and sustainability-related capacity building At least once a year Company Response Expanding cooperation with partners in Bank’s procurement of goods and services EMPLOYEES Topic Engagement Method Frequency of Approach Company Response 1. COVID-19 Pandemic 2. Employee Rights 3. Equal career development opportunities 4. Recruitment process 5. Company performance updates 6. A valuable and enjoyable working experience 1. Internal Media (HRInfo, e-Manual, Digital Portrait Magazine) 2. Town Hall 1. Whenever there is information that needs to be conveyed to employees 2. Whenever policy changes occur 1. Employee Engagement Survey (EES) 2. Internal Customer Satisfaction (ICS) 1. Twice a year 2. Annually 1. Implementing health protocols throughout the year during the COVID-19 pandemic. 2. Disseminating employment policies and strategies 3. Identifying employee satisfaction and expectations 103 2021
104. 2021 Sustainability Report PT Bank CIMB Niaga Tbk LOCAL COMMUNITIES Topic Engagement Method Frequency of Approach 1 . Organizing programs 2. Development and empowerment of a society that can provide added value to the community 3. Measuring the impact of activities on the beneficiaries 1. Discussion with beneficiaries 2. Meetings and discussions with Foundations or consultants as community development partners 1. Conducted during the initiation, implementation, and supervision of a program 2. Ad hoc, whenever an urgency arises that needs to be communicated Company Response 1. Providing solutions to issues that arise 2. Conducting field visits to community program beneficiaries LABOR UNIONS Topic . Employee management policies 1 2. Employee issues that have been submitted to the Labor Union as the employees’ representative organization 3. Organizing industrial relations in the Company 4. Discussion on the Collective Labor Agreement (CLA) 5. Input from the Labor Union’s management on management issues involving the rights and obligations of employees and the Company Engagement Method Meetings and discussions Frequency of Approach 1. As needed 2. In 2021, there were six meetings with the Labor Union to discuss good working relationships Company Response 1. Accommodating and identifying proposals and inputs from the Labor Union 2. Communicating in the event of an industrial relations dispute 3. Conducting formal and informal approaches, as well as developing a cooperative concept between management and labor unions, in order to foster harmonious industrial relations Details of data or other supporting information relating to or referencing Pillar 5: Stakeholder Engagement and Advocacy from the last three years can be accessed via the QR Code or can be found in Annual Report 2021. 104
105. PT Bank CIMB Niaga Tbk Sustainability Report Response to Feedback [GRI 2-3] CIMB Niaga received feedback from stakeholders, change through the TCFD Framework and the including CIMB Group, customers, academics, non- issuance of a Sustainability-linked Loan/Financing profit organizations, investors, and independent and Sustainable Finance program. Furthermore, we insurers We make numerous efforts to increase awareness, share, appreciate your submission in order to help us on the 2020 sustainability report. and educate about sustainability, all of which are improve the quality of the 2021 sustainability report. detailed in this sustainability report. We responded to the feedback by including climate Similarly, we welcome input, criticism, and suggestions change mitigation performance and improving for the 2021 Sustainability Report from you via: sustainable finance products. We address climate GCG & Sustainability Work Unit E-mail: sustainability@cimbniaga.co.id Completing the feedback form: https://investor.cimbniaga.co.id/sr_feedback_form.html 105 2021
106. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Independent Assurance Statement [2-5] Pernyataan Independen Assuror Independent Assurance Statement Independent Assurance Statement The 2021 Sustainability Report of PT Bank CIMB Niaga Tbk Number : 05/000-174/II/2022/SR-Asia/Indonesia Assurance Type Assurance Level Reporting Standards : Type 1 and Type 2 for the specific topic of climate change : Moderate : GRI Standard 2021 Consolidated, GRI G4 FS (FSSS), SASB Commercial Bank, SUSBA, TCFD, and GISD : Sustainable Finance Regulation POJK No.51/2017 (Indonesia) Reporting Regulation Dear stakeholders, This is an Independent Assurance Statement (“the Statement”) that describes the results of assurance work performed by Social Responsibility Asia (“SR Asia”) on the data, information, and disclosures in the 2021 Sustainability Report (“the Report”) of PT Bank CIMB Niaga Tbk (“the Bank” or “the Reporting Organization”). Listed in the Indonesia Stock Exchange (IDX), the Reporting Organization is a commercial bank and a subsidiary of CIMB Malaysia operating in Indonesia that is required to publish a sustainability report annually. The Report that has been evaluated by SR Asia presents the efforts of the Bank in managing its sustainability commitment and performance from January 1st to December 31st, 2021. Intended User and Purpose The purpose of this Statement is to provide our assessment results to the stakeholders based on the assurance standards, as well as the applicable domestic reporting regulation and the international reporting standards used as references in drafting the Report content. This Statement contains our findings and recommendations regarding the data, information, and disclosures in the Report against the AA1000AS v3 Assurance Standard and particular sustainability reporting principles, standards, and regulations. The assurance work was carried out as per the agreed scope, mechanism, and procedures by the Management1 following the globally accepted standards and best practices with some limitations and assumptions applied. We DO NOT recommend any parties to interpret or conclude the Bank’s sustainability or its whole performance merely based on this Statement or the Report. Responsibilities Our responsibilities to the Management are to evaluate the Report content, come up with findings and recommendations, and issue the Statement. The Management has its sole responsibility for the presentation of data, information, and disclosures in the Report content. SR Asia is only responsible to deliver assurance work, NOT an audit, by following the Non-Disclosure Agreement and the Assurance Engagement Agreement. Except for the Management, we assume having NO responsibilities or accountabilities for any claims to any other individuals or organizations. Therefore, any parties who depend on the Report and this Statement shall bear and manage their risks. Independence, Impartiality, and Competency In all assurance works, SR Asia confirms NO relationships between the assurance experts and the clients that can 1 “Management” refers to the management of the reporting organization SR Asia Independent Assurance Statement, version 2022, page 1 of 4 106
107. PT Bank CIMB Niaga Tbk Sustainability Report influence their independence and impartiality to conduct the assessment and generate the Statements . SR Asia experts are mandated to follow a particular assurance protocol and professional ethical code of conduct to ensure their objectivity and integrity. We carried out a pre-engagement assessment before the assurance work was taken to verify the risks of engagement as well as the independence and impartiality of experts. The Assurance Team members are familiar with ISO 26000 and AA1000 AccountAbility standards and principles, and also have experience in sustainability and integrated report drafting and assessment based on various reporting regulations, standards, and principles, such as POJK 51 regulation as well as GRI, SUSBA, and SASB standards. Type and Level of Assurance Service 1. 2. Type 1 assurance on the Report content and specifically Type 2 assurance was applied on the climate change topic concerning the AA1000 Assurance Standard v3 and AA1000APS (2018) AccountAbility Principles. A moderate level of assurance procedure on the Report content and evidence, where the risks of information and conclusions of the Report being error is reduced, not to very low, but not zero. Scope and Limitation of Assurance Service 1. 2. 3. 4. 5. 6. SR Asia excludes financial data, information, and figures in the Report content in the scope of assurance work. It is assumed that the Bank, or independent parties, or other parties associated with the Bank, have verified and/or audited any data and information related to financial statements Data and information in the Report for the period of January 1st to December 31st, 2021. Topics in the Report content that have been identified by the Bank as “highly material”: technology; climate change; sustainable finance; customer experience; governance; financial literacy, inclusion, and empowerment. Assessment of data, information, and disclosures including the mechanism, process, and control system under Type 2 assurance mechanism and procedures on climate change topic. Adherence to the following reporting principles, standards, and regulations: a) Regulation of Indonesia Financial Service Authority No.51/POJK.03/2017 on the Application of Sustainable Finance to Financial Services Institution, Issuer, and Publicly Listed Companies (“POJK 51”); b) Consolidated set of GRI Sustainability Reporting Standards 2021 (GRI Universal Standards) issued by the Global Reporting Initiative and its GRI G4 Financial Services Sector Disclosure (GRI-G4 FS or FSSS); c) Sustainability Accounting Standard for Commercial Bank (FN-CB) issued by the Sustainability Accounting Standard Board (SASB); d) Sustainable Banking Assessment (SUSBA) issued by World Wildlife Funds (WWF); e) Global Investors for Sustainable Development (GISD) issued by the Global Investors for Sustainable Development (GISD) Alliance; and f) Task Force on Climate-Related Financial Disclosures (TCFD) created by the Financial Stability Board (FSB). Evaluation of publicly disclosed information, system, and process of the Bank to ensure adherence of the Report content to the reporting principles. Exclusion 1. 2. 3. Assessment against the regulations, indicators, standards, guidelines, and principles other than those indicated in the Statement. Expression of opinion, belief, expectation, advertisement, and future planning of the Bank as indicated in the Report content. Financial performance data and information as presented in the Bank’s financial statements and documents, other than those mentioned in the Report. SR Asia Independent Assurance Statement, version 2022, page 2 of 4 107 2021
108. 2021 Sustainability Report 4 . 5. PT Bank CIMB Niaga Tbk Topics, data, and information outside the reporting period, or in the public domain not covered in the reporting period, other than those mentioned under the defining materiality section and discussion on defining Report content. Stakeholders’ engagement that might be taken by the Bank in developing the Report. Methodology 1. 2. 3. 4. 5. 6. 7. 8. 9. SR Asia assigned several experts to engage as the Assurance Team members in Indonesia. The Assurance Team conducted the pre-engagement protocol to identify the risks of engagement and potential factors that could negatively influence the independence and impartiality of the Assurance Team. In a kick-off meeting, the Assurance Team presented to the Bank the assurance methods and approaches, as well as the scope of analysis, time plan, and various essential aspects to be evaluated in the assurance work. The Assurance Team conducted a preliminary analysis of the Report draft submitted by the Bank. Through online meetings, the Assurance Team shared the results of the initial analysis with the Management and verified the disclosures in the Report content against the regulation, standards, principles, and indicators of AA1000AS v3, AA1000AP (2018), GRI Standards ad FSSS, POJK 51, SUSBA, GISD, and TCFD. The Assurance Team verified evidence documents and traced back the data, information, and disclosures in the Report. The Bank incorporated recommendations in the draft Report and released the final Report content. The Assurance Team prepared the Statement and sent it to the SR Asia International Director for review and approval. The Assurance Team submitted the Statement to the Bank and prepared a Management Letter presenting all aspects seen, recorded, and observed during the assurance work to the Management of the Bank for further improvement of sustainability processes. Adherence to AA1000AP (2018) and GRI Standards Inclusivity – The presentation of the stakeholder groups in the Report is inclusive. The Bank has also committed to being accountable for the impacts of its decisions and activities. As indicated in the Report content, the Bank has implemented various approaches and methods in stakeholder engagement managed by different functions and units. Competencies and resources have also been well allocated by the Bank and sufficient for stakeholder engagement. Materiality – At a certain level, the identification and presentation of material topics in the Report are adequate. The six material topics recognized as “highly material” by the Reporting Organization can explain its sustainability context as a financial service institution. However, in the future, the Bank needs to perform material testing documented as evidence for the next sustainability report. Responsiveness – In general, the Bank has sufficiently developed and communicated responses with stakeholders. The Bank has managed responses by considering the needs and concerns as well as expectations of the stakeholders. Nevertheless, no evidence is found that the Bank has considered the relationship between maturity, impact, and prioritization of a topic and the appropriateness of the response. Impact – As assurance work is taken, we have concluded that the Report presents sufficiently the data, information, and disclosures regarding the impacts of the Bank on the economy, society, and environment. The Bank also has implemented various processes to manage both actual and potential impacts. SR Asia Independent Assurance Statement, version 2022, page 3 of 4 108
109. PT Bank CIMB Niaga Tbk Sustainability Report Statement of Use : “Reference to the GRI Standards” – Our Assurance Team has assessed the Report content against the GRI requirements for reporting to the GRI Standards. We concluded that the Report has met the three requirements; publish a GRI Content Index; provide a statement of use; and notify GRI. GRI Standards Principles – As the assurance work and procedures are taken, the sustainability reporting principles (accuracy, balance, clarity, comparability, completeness, sustainability context, timeliness, and verifiability) are well applied in the Report content. During the assurance process, the Management also provided sufficient evidence documents and supporting data and information. Type 2 Assurance – The Bank has started developing mechanisms, processes, and control systems related to carbon emissions inventory and reduction. Policies, mechanisms, and procedures related to climate change are already in place and well implemented. The Bank is going to set its carbon emission baseline and develop the climate change and transition strategies for the period up to 2050, as the Bank will phase out the coal mining and coal power plant funding from its portfolio up to that year. Nevertheless, the Bank is expected to engage an external party to monitor, evaluate, and validate the initiative, and also to encourage the debtors to reduce carbon emissions from business operations and publicly disclose their achievements. Recommendation 1. 2. To carry out materiality testing documented as the evidence and basis for identifying material topics with clear and justified criteria and thresholds. To engage an external independent party in monitoring, evaluating, and validating the climate and transition strategies following the globally accepted management system, standards, and best practices. The assurance provider, Jakarta, 26th of February 2022 Birendra Raturi International Director Social Responsibility Asia Dr.Semerdanta Pusaka Country Director for Indonesia Social Responsibility Asia Social Responsibility Asia (SR Asia) International 4F-CS-25, Ansal Plaza, Vaishali, Ghaziabad (NCR Region Delhi), Uttar Pradesh 201010, INDIA Landline / Mobile: +91-120-4103023; +91-120-6452020 / +91-9810059109 E-mail: info@sr-asia.org, Website: www.sr-asia.org Indonesia PT Sejahtera Rambah Asia, #1607 Splendor Tower, Soho Pancoran, Jl. MT Haryono Kav.2-3, Jakarta 12810, INDONESIA Landline: +62-21-5010 1504, E-mail: services@srasia-indo.com, Website: www.srasia-indo.com SR Asia Independent Assurance Statement, version 2022, page 4 of 4 109 2021
110. 2021 Sustainability Report PT Bank CIMB Niaga Tbk POJK No .51/POJK.03/2017 Reference, GRI Standards Content Index, Sustainability Accounting Standard Board (SASB), and Sustainable Banking Assessment (SUSBA) POJK No.51/POJK.03/2017 No Disclosure 1 Elaboration on Sustainability Strategy 2 Summary of Sustainability Aspect Performance 3 Page Number 5 a.Economic aspects: 1) Quantity of products or services offered; 2) Revenue or sales; 3) Net profit or loss; 4) Environmental-friendly products; and 5) Engagement of local stakeholders concerning the Sustainable Finance business process; 6 b.Environmental Aspects: 1) Energy consumption (including electricity and water); 2) Total emission reductions (in case of FSI, Issuer and Publicly Listed Company whose business process directly relates to environment); 3) Reduction of waste and effluents (waste entering the environment) achieved (in case of FSI, Issuer and Publicly Listed Company whose business process directly relates to environment); or 4) Biodiversity conservation (in case of FSI, Issuer and Publicly Listed Company whose business process directly relates to environment); 6-7 c.Social Aspects: A description of the positive and negative impacts out of Sustainable Finance application on community and environment (including people, regions, and funds) 7 Brief Company Profile: a. Vision, mission, and values of sustainability 26 b. Name, address, telephone number, fax number, e-mail adress, and website/web, as well as branch and/or representative offices 22 c.Enterprise scale: 1) Total assets or asset capitalization, and total liabilities (in millions of rupiah); 2) The number of employees by gender, position, age, education, and employment status; 3) Shareholding percentage (public and government); and 4) Operational area 22, 24-25, Appendix d. Short description on products, services, and business activities; e. Membership in association; 24 Appendix f. Significant changes, such as those relating to branch office closure or opening and ownership structure. 110 23
111. PT Bank CIMB Niaga Tbk No 4 5 Sustainability Report Disclosure Description on Board of Directors a .Policy to respond to challenges in meeting the sustainability strategy, that must cover at least the following: 1) Elaboration the Company’s sustainability values 2) Elaboration on the Company’s responses towards issues concerning to the implementation of Sustainable Finance; 3) Elaboration on commitment of Company leadership in achieving Sustainable Finance application; 4) Achievement of Sustainable Finance application performance ;and 5) Challenges in Sustainable Finance application performance achievement; 14-16 b. Application of Sustainable Finance: 1) Achievement of Sustainable Finance application (economic, social, and environmental) against targets; and 2) Elaboration on achievements and challenges including notable events during the reporting period (in case FSI required to make Sustainable Finance Action Plan); 16-17 c. Target achievement strategy: 1) Risk management due to the application of Sustainable Finance related to economic, social and environmental aspects; 2) Utilization of business opportunities and prospects; and 3) Description on economic, social and environmental external situations that have the potential to affect the Company’s sustainability 17 Sustainability governance includes a. Description of tasks performed by Board of Directors and Board of Commissioners, employees, officers and/or work units who are responsible for the implementation of Sustainable Finance 79-80 b. Development of Board of Directors’ competencies, Board of Commissioners, employees, officers and/or work units responsible for implementing Sustainable Finance. 96 c. Elaboration on procedure that Company applies in identifying, measuring, monitoring and controlling risks for the implementation of Sustainable Finance related to economic, social and environmental aspects, including the role of the Board of Directors and the Board of Commissioners in managing, conducting periodic reviews, and analyzing the effectiveness of the Company’s risk management process. 81-87 d. Description on stakeholders that includes: 1) Stakeholder involvement based on management assessment results. 2) The approach used by the Company in involving stakeholders in the application of Sustainable Finance. 101-104 e. Problems faced, progress, and influence to the implementation of Sustainable Finance. 6 Page Number 58 Sustainable performance: a. Elaboration on sustainable culture development activities in the Company b. Description of economic performance: 1) Comparison of targets to performance of production, portfolio, financing targets, or investments, revenue as well as profit and loss 2) Comparison of target to performance of portfolio, financing target, or investments in financial instruments or projects in line with the implementation of Sustainable Finance. 111 90 Appendix 2021
112. 2021 Sustainability Report No 7 PT Bank CIMB Niaga Tbk Disclosure Page Number c . Social performance: 1) The Company’s commitment to provide services for equal products and / or services to consumers. 2) Employment: a) Equality of employment opportunities and the presence or absence of forced labor and child labor; b) Percentage of permanent employee remuneration at the lowest level of the regional minimum wage; c) Decent and safe work environment; and d) Training and development of employee skills. 3)Community: a) Information on operational activities or area producing positive and negative impacts on local community including financial literacy and inclusion; b) Mechanism of community complaints and number of community complaints received and acted upon; and c) CSER relatable to supports to sustainable development objectives including community empowerment programme activity achievements. 44, 47, 49, 60-63, 66-73, Appendix d. Environmental Performance: 1) Environmental costs that incur; 2) Description on the use of environmentally friendly materials such as material of recyclable type; and 3) Description on the use of energy, at least include: a) Amount and intensity of energy consumed; and b) Efforts and achievement made for energy efficiency including the use of renewable energy sources; 38, 41, 53-57, 62 e. Environmental Performance for Companies whose business processes are directly related to the environment: 1) The performance under point d above; 2) Information on operational activities or areas producing positive and negative impacts on the surrounding environment, especially efforts to increase the carrying capacity of ecosystems; 3) Biodiversity, including at least: a) Impacts from operational areas close to or in conservation areas or that contain biodiversity; and b) Biodiversity conservation business carried run, including protection of flora or fauna species; 4)Emissions, including at least: a) Amount and intensity of emissions produced by type; and b) Efforts and achievement of emission reductions; 5) Waste and effluent, including at least: a) Amount of waste and effluent produced by type; b) Waste and effluent management mechanisms; and c) Spillover that occur (if any); and 6) Number and content of environmental complaints received and resolved. 38-42, 54, 74 f. Sustainable Finance product and/or service development responsibility at least include: 1) Sustainable Finance product and/or service innovation and development 2) Number and percentage of products and services having undergone safety test for customers; 3) Positive and negative impacts caused by Sustainable Financial products and/or services and the distribution process, as well as mitigation undertaken to mitigate negative impacts; 4) Number of products recalled and the reasons; or 5) Customer satisfaction survey of Sustainable Financial products and/or services. 53-57, 61-62 Written verification from independent parties (if any) 112 106
113. PT Bank CIMB Niaga Tbk Sustainability Report Index Standard GRI GRI Index Disclosure Location Statement of Use PT Bank CIMB Niaga Tbk has reported the information cited in this GRI content index for the period 1 January until 31 December 2021 with reference to the GRI Standards . GRI 1 Used GRI 1: Foundation 2021 GRI 2: General Disclosures 2021 2-1 Organizational details 22 2-2 Entities included in the organization’s sustainability reporting 27 2-3 Reporting period, frequency and contact point 2-4 Restatement of information 27 2-5 External assurance 27 2-6 Activities, value chain and other business relationship 2-7 Employees 2-8 Workers who are not employees 2-9 Governance structure and composition 78 2-10 Nomination and selection of the highest governance body 80 2-11 Chair of the highest governance body 78 2-12 Role of the highest governance body in overseeing the management of impacts 78-80 2-13 Delegation of responsibility for managing impacts 78-80 2-14 Role of the highest governance body in sustainability reporting 79-80 2-15 Conflict of interest 80 2-16 Communication of critical concerns 89 2-17 Collective knowledge of the highest governance body 96 2-18 Evaluation of the performance of the highest governance body 80 2-19 Remuneration policies 2-20 Process to determine remuneration 47 2-21 Annual total compensation ratio 47 2-22 Statement on sustainable development strategy 2-23 Policy commitments 88 2-24 Embedding policy commitments 43 2-25 Process to remediate negative impacts 63 2-26 Mechanisms for seeking advice and raising concerns 2-27 Compliance with laws and regulations 2-28 Membership associations 2-29 Approach to stakeholder engagement 102 2-30 Collective bargaining agreements 45 27&105 22-24, 43 46 113 70, Appendix 47, 79-80 14, 47 84, 93 92 98, Appendix 2021
114. 2021 Sustainability Report PT Bank CIMB Niaga Tbk GRI Index Disclosure Location HIGH Technology GRI 3 : Material Topics 2021 3-1 Process to determine material topics 28-29 3-2 List of material topics 28-29 3-3 Management of material topics 28-29 3-1 Process to determine material topics 28, 30 3-2 List of material topics 28, 30 3-3 Management of material topics 28, 30 Climate Change GRI 3: Material Topics 2021 GRI 302: Energy GRI 305: Emissions GRI 306: Waste 2020 302-1 Energy consumption within the organization 41 302-2 Energy consumption outside the organization 41 302-3 Energy Intensity 41 302-4 Reduction of energy consumption 41 305-1 Direct (Scope 1) GHG emissions 42 305-2 Energy indirect (Scope 2) GHG emissions 42 305-3 Other indirect (Scope 2) GHG emissions 42 305-4 GHG emissions intensity 42 305-5 Reduction of GHG emissions 42 306-1 Waste generation and significant waste-related impacts 40 306-2 Management of significant waste-related impacts 40 3-1 Process to determine material topics 31 3-2 List of material topics 31 3-3 Management of material topics 31 Sustainable Finance GRI 3: Material Topics 2021 GRI 201: Economic Performance 2016 201-1 Direct economic value generated and distributed 31, Appendix 201-2 Financial implications and other risks and opportunities due to climate change 201-3 Defined benefit plan obligations and other retirement plans 31, 47 201-4 Financial assistance received from government 31,58 12, 31, 85 Customer Experience GRI 3: Material Topics 2021 GRI 418: Customer Privacy 2016 3-1 Process to determine material topics 32 3-2 List of material topics 32 3-3 Management of material topics 32 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data 114 32, 62
115. PT Bank CIMB Niaga Tbk Sustainability Report GRI Index Disclosure Location Governance GRI 3 : Material Topics 2021 GRI 205: Anti-corruption 2016 3-1 Process to determine material topics 33 3-2 List of material topics 33 3-3 Management of material topics 33 205-1 Operations assessed for risks related to corruption 92 205-2 Communication and training about anti-corruption policies and procedures 92 205-3 Confirmed incidents of corruption and actions taken 92 Financial Literacy, Inclusion, and Empowerment GRI 3: Material Topics 2021 3-1 Process to determine material topics 34 3-2 List of material topics 34 3-3 Management of material topics 34 MEDIUM Talent Attraction, Growth, and Retention GRI 404: Training and Education 2016 404-1 Average hours of training per year per employee 404-2 Programs for upgrading assistance programs 404-3 Percentage of employees receiving regular performance and career development reviews 405-1 Diversity of governance bodies and employees 46 405-2 Ratio of basic salary and remuneration of women to men 47 employee skills and 96, Appendix transition 47 48, Appendix Diversity and Inclusion GRI 405: Diversity and Equal Opportunities 2016 Sustainability Education and Participation Health, Safety, and Wellbeing GRI 403: Occupational Health and Safety 2018 403-1 Occupational health and safety management system 403-2 Hazard identification, risk assessment, and incident investigation 49 403-3 Occupational health services 49 403-4 Worker participation, consultation, and communication on occupational health and safety 49 403-5 Worker training on occupational health and safety 49 403-6 Promotion of worker health 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships 8 403-8 Workers covered by an occupational health and safety management system 49 403-9 Work-related injuries 49 403-10 Work-related ill health 8 115 8, 49 8, 49 2021
116. 2021 Sustainability Report PT Bank CIMB Niaga Tbk GRI Index Disclosure Location LOW Corporate Culture Sustainable Supply Chain GRI 204 : Procurement Practices 2016 204-1 Proportion of spending on local suppliers 43 Corporate Citizenship and Volunteerism GRI 413: Local Communities 2016 413-1 Operations with local community engagement, impact assessments, and development programs 99 GRI G4 Financial Service Sector Supplement GRI G4 Financial Service Sector Supplement Disclosure Page Number FS1 Policies with specific environmental and social components applied to business lines 31, 88 FS2 Procedures for assessing and screening environmental and social risks in business lines 89 FS3 Processes for monitoring clients’ implementation of and compliance with environmental and social requirements included in agreements or transactions 89 FS4 Process(es) for improving staff competency to implement the environmental and social policies and procedures as applied to business lines 96 FS5 Interactions with clients/ investees/business partners regarding environmental and social risks and opportunities 97 FS6 Percentage of the portfolio for business lines by specific region, size (e.g. micro/sme/ large) and by sector 23, 31, Appendix FS7 Monetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 32, 67 FS8 Monetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 54, 56 FS9 Coverage and frequency of audits to assess implementation of environmental and social policies and risk assessment procedures 33, 52 FS10 Percentage and number of companies held in the institution’s portfolio with which the reporting organization has interacted on environmental or social issues 97-98, Appendix FS11 Percentage of assets subject to positive and negative environmental or social screening 53 FS12 Voting policy(ies) applied to environmental or social issues for shares over which the reporting organization holds the right to vote shares or advises on voting 56 FS13 Access points in low-populated or economically disadvantaged areas by type 34, 60 FS14 Initiatives to improve access to financial services for disadvantaged people 34, 58 FS15 Policies for the fair design and sale of financial products and services 29, 62 FS16 Initiatives to enhance financial literacy by type of beneficiary 34, 67 116
117. PT Bank CIMB Niaga Tbk Sustainability Report Sustainability Accounting Standard Board (SASB) – Financial Sector Code Disclosure Page Number FN-CB-000.A 1) Number and (2) value of checking and savings accounts by segment: (a) personal and (b) small business Appendix FN-CB-000.B (1) Number and (2) value of loans by segment: (a) personal and (b) small business 23 FN-CB-230.a.1 (1) Number of data breaches, (2) percentage involving personally identifiable information (PII), (3) number of account holders affected 62 FN-CB-230.a.2 Description of approach to identifying and addressing data security risks 62 Data Security Financial Inclusion & Capacity Building FN-CB-240.a.1 1) Number and (2) amount of past due and nonaccrual loans qualified to programs designed to promote small business and community development 6 FN-CB-240.a.2 (1) Number and (2) amount of past due and nonaccrual loans qualified to programs designed to promote small business and community development 23, Appendix FN-CB-240.a.3 Number of no-cost retail checking accounts provided to previously unbanked or underbanked customers 67 FN-CB-240.a.4 Number of participants in financial literacy initiatives for unbanked, underbanked, or underserved customers 67, 69 Incorporation of Environmental, Social, and Governance Factors in Credit Analysis FN-CB-410.a.1 Commercial and industrial credit exposure, by industry 23, Appendix FN-CB-410.a.2 Description of approach to incorporation of environmental, social, and governance (ESG) factors in credit analysis 56 FN-CB-510.a.1 Total amount of monetary losses as a result of legal proceedings associated with fraud, insider trading, anti-trust, anti-competitive behavior, market manipulation, malpractice, or other related financial industry laws or regulations 92 FN-CB-510.a.2 Description of whistleblower policies and procedures 93 Business Ethics Systemic Risk Management FN-CB-550.a.1 Global Systemically Important Bank (G-SIB) score, by category 27 FN-CB-550.a.2 Description of approach to incorporation of environmental, social, and governance (ESG) factors in credit analysis into capital adequacy planning, long-term corporate strategy, and other business activities 59 117 2021
118. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Sustainable Banking Assessment (SUSBA) Page Number Disclosure 1) Purpose - Sustainability Strategy and Stakeholder Engagement 1.1.1.1 Is there a clear reference to sustainability in the bank's strategy and long-term vision? 26, 77 1.1.1.2 Does the bank clearly recognise that its ESG footprint extends to its business activities and portfolio? 56 1.1.1.3 Does the leadership statement make reference to the integration of ESG factors in the bank’s business strategy? 14 1.1.1.4 Is there a clear reference to sustainable development goals (SDGs) in the bank's strategy or vision? 5 1.1.1.5 Does the bank explicitly acknowledge the societal and economic risks associated with climate change? 85 1.1.1.7 Does the bank disclose the types of stakeholders it engages with on ESG issues? 101 1.1.1.8 Does the bank engage with civil society and/or non-governmental organisations to understand the ESG impacts of its business activities? 97 1.1.1.9 Does the bank disclose the frequency and mode of communication with stakeholders? 102 1.1.1.10 Has the bank identified responsible financing/lending and/or other key E&S issues as material 31 2) Purpose - Participation in Sustainable Finance Initiatives 1.1.2.1 Does the bank participate in relevant commitment-based sustainable finance initiatives such as RSPO, PRB, EP, SBTi, or SBEFP? 98, Appendix 1.1.2.2 Does the bank engage with regulators and policy makers on ESG integration and/or sustainable finance topics? 58, 79, 98, Appendix 3) Policies - Public Statements on Specific ESG Issues 1.2.1.1 Does the bank have exclusionary principles covering activities the bank will not support, taking into account ESG considerations? 89 1.2.1.2 Does the bank require clients highly exposed to climate-related risks to develop a mitigation plan and ultimately align their activities to the objectives of the Paris Agreement? 52 1.2.1.3 Does the bank prohibit the financing of new coal-fired power plant projects? 57 1.2.1.4 Does the bank acknowledge biodiversity loss and/or deforestation risks in its clients' activities? 56 1.2.1.5 Does the bank require clients in sectors highly exposed to deforestation (e.g. soft commodities, infrastructure, extractives industry) to adopt "no deforestation" commitments? 56 1.2.1.6 Does the bank recognise negative impacts on the marine environment as risks in client's activities? 82 1.2.1.7 Does the bank have a commitment not to provide financial products and services to projects or companies located in, or having negative impacts on, UNESCO World Heritage Sites? 89 1.2.1.8 Does the bank recognize water risks (flooding, scarcity, and pollution) as risks in its clients' activities? 85 118
119. PT Bank CIMB Niaga Tbk Sustainability Report Page Number Disclosure 1 .2.1.10 Does the bank recognize human rights risks, including those related to local communities, in its clients’ activities? 89 1.2.1.11 Does the bank require clients to commit to respecting human rights, in line with the UN Guiding Principles on Business and Human Rights? 43 1.2.1.12 Does the bank recognize labour rights violations as a risk across all sectors? 89 1.2.1.13 Does the bank require clients to adhere to international labour standards as outlined by the ILO Fundamental Conventions? 56, 89 1.2.1.14 Are the bank’s E&S requirements applicable to financial products and services beyond lending (i.e. capital markets, advisory)? 88 4) Policies - Public Statement on Specific Sectors 1.2.2.1 Does the bank have sector policies or sector-specific requirements for environmentally or socially sensitive industries, e.g. agri commodities, energy, oil & gas, mining, seafood, infrastructure? 52, 55 1.2.2.2 Does the bank disclose its requirements/policies for environmentally or socially sensitive sectors? 56, 85 1.2.2.3 Do the bank's E&S policies include minimum requirements or recommendations based on internationally recognized standards for best E&S practices (e.g. IFC Performance Standards, RSPO, FSC, etc.)? 56 1.2.2.4 Does the bank periodically review its E&S policies or stated that last date of review was within the past 2 years? 52, 88 5) Processes - Assessing ESG Risks in Client & Transaction Approvals 1.3.1.1 Does the bank use standardized frameworks for E&S due diligence (e.g. tools, checklists, questionnaires, external data providers) when reviewing clients or transactions subject to its policies? 89 1.3.1.2 Does the bank assess its clients’ capacity, commitment, and track record as part of its E&S due diligence process? 89 1.3.1.3 As part of the approval process, does the bank classify its clients and transactions based on E&S risk assessment? 52 1.3.1.4 Is there an escalation mechanism for more complex or controversial cases? 89 1.3.1.5 Do the E&S risk assessment outcomes influence transaction and client acceptance decisions? 89 6) Processes - Client Monitoring and Engagement 1.3.2.1 Does the bank seek the inclusion of clauses (e.g. covenants, representations & warranties) related to E&S issues in the loan documentation for bilateral and syndicated credit facilities? 43 1.3.2.2 Does the bank require clients that are not fully compliant with its E&S policies to develop and implement time-bound action plans? 89 1.3.2.3 Does the bank monitor its client’s compliance with the agreed E&S action plan? 89 119 2021
120. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Page Number Disclosure 1 .3.2.4 Does the bank perform periodic review or state how frequent it reviews its clients' profiles on E&S? 89 1.3.2.5 Does the bank disclose the process to address non-compliance of existing clients with the bank's policies or with pre-agreed E&S action plans? 89 1.3.2.6 Does the bank periodically review its internal E&S procedures or stated that the last date of review was within the past 2 years? 52, 88 7) People - Responsibilities for ESG 1.4.1.1 Is senior management responsible for the implementation of the bank’s ESG strategy? 80 1.4.1.2 Do senior management's responsibilities include management of climate change risks and opportunities relevant to the bank's activities? 79-80 1.4.1.3 Does the bank describe the roles and responsibilities of the various departments, committees or teams involved in developing and implementing its E&S policies? 80 1.4.1.4 Has the bank put in place an internal control system with three lines of defence to manage E&S issues? 90 1.4.1.5 Do the terms of reference of the Nominating committee include sustainability-related criteria for the appointment of new Board members? 80 1.4.1.6 Do the terms of reference of the Remuneration committee include sustainability-related criteria for the assessment of performance and remuneration levels for senior management? 79-80 1.4.1.7 Do the terms of reference of the Audit committee require sustainability-related matters to be included in internal control and audit processes? 78-80 1.4.1.8 Does the bank implement periodic audits to assess implementation of E&S policies and procedures? 33, 52 8) People - Staff E&S Training and Performance Evaluation 1.4.2.1 Does the bank have a dedicated ESG team to implement E&S policies and procedures? 80 1.4.2.2 Does the bank train its staff on E&S policies and implementation processes? 97 1.4.2.3 Does the bank provide specific training for its senior management, covering sustainability issues? 97 1.4.2.4 Are sustainability-related criteria part of the staff appraisal process and/or integrated into KPIs for its staff? 48 9) Products - ESG Integration in Products and Services 1.5.1.1 Does the bank proactively identify clients in environmentally or socially sensitive sectors to support them in reducing negative or enhancing positive impacts? 52 1.5.1.2 Does the bank offer specific financial products and services (e.g. green bonds, sustainabilitylinked loans, impact financing) that support the mitigation of E&S issues, e.g. climate change, water scarcity and pollution, deforestation? 61 1.5.1.3 Does the bank allocate specific pools of capital or set targets to increase the share of its financing that supports activities with a positive environmental or social impact? 52 1.5.1.4 Does the bank hold client outreach events to raise awareness and share on good E&S practices (e.g. through joint workshops)? 97 120
121. PT Bank CIMB Niaga Tbk Sustainability Report Page Number Disclosure 10 ) Products - ESG Integration in Products and Services 1.6.1.1 Does the bank periodically review its portfolio exposure to E&S risks (e.g. deforestation, water scarcity, or human rights violations)? 82 1.6.1.2 Does the bank periodically review its portfolio exposure to climate-related physical and/or transition risks, using scenario analysis, and disclose the results and methodology used? 86 1.6.1.3 Does the bank have a strategy to manage and mitigate climate-related risks across its portfolio (e.g. energy sector)? 57 11) Portfolio - Disclosure of ESG Risk Exposure and Targets 1.6.2.1 Does the bank disclose its credit exposure by industry sector? 1.6.2.4 Does the bank disclose statistics on the implementation of its E&S policies (e.g. number of transactions assessed, escalated, approved, declined, approved with conditions)? 57 1.6.2.5 Does the bank disclose the percentage of its soft commodities clients that have time-bound plans to achieve full certification of their operations against credible, multi-stakeholder sustainability standards? 56 1.6.2.6 Does the bank disclose the percentage of clients or total credit exposure covered by its E&S policies on sensitive sectors? 56 1.6.2.7 Does the bank have targets in place to reduce the negative E&S impacts associated with its business activities? 38 1.6.2.8 Does the bank set or commit to set science-based targets to align its portfolio with the objectives of the Paris Agreement? 85 1.6.2.9 Does the bank conduct external assurance of its ESG-related disclosures? 27 1.6.2.10 Does the bank disclose the positive and negative impacts associated with its business activities [based on widely-accepted impact reporting frameworks?] 66 Notes: Appendix can be accessed via QR code 121 54, Appendix 2021
122. 2021 Sustainability Report PT Bank CIMB Niaga Tbk A Minimalist , Efficient, and Environmental Friendly Report Design Approach We try to present a report that not only considers effective communication to readers, but also considers various things, such as the choice of typeface and design style environmentally friendly typeface can optimize pages usage when conveying information, but also provide aesthetically look and ease of reading In addition, through a simple design and concise information will reduce number of pages therefore, reducing the carbon footprint Simple Not using complicated terminology Congested Full of information Short Not wordy Straightforward Firm, unambiguous Clear Easy to understand 122
123. PT Bank CIMB Niaga Tbk Sustainability Report Minimize Environmental Impact on This Impact on This Report Issuance We have made great efforts to reduce the environmental impact caused by the various publication processes of this Report . However , you can also help us reduce our environmental impact. Did you know that every second a forest of the size of football field is cut down? Thus, we encouraged your participation to prevent and reduce it. Play your part by downloading the digital version of this Report. Physical form of this Report is printed using recycled paper obtained through the supply chain sustainable and has been certified Forest Stewardship Council. 123 2021
124. 2021 Sustainability Report PT Bank CIMB Niaga Tbk Corporate Secretary Graha CIMB Niaga Jl . Jend. Sudirman Kav. 58 Jakarta 12190, Indonesia Tel. : (62-21) 250 5252, 250 5353 Fax. : (62-21) 250 5205 E-mail : corporate.secretary@cimbniaga.co.id Facebook Twitter Instagram YouTube LinkedIn : CIMB Indonesia : @CIMBNiaga : cimb_niaga : CIMB Niaga : CIMB Niaga www.cimbniaga.co.id