Commercial Bank PSQC/The

Back

# Commercial Bank Establishes Sustainable Finance Framework

Commercial Bank's Sustainable Finance Working Group is responsible for evaluating and selecting projects in line with the eligibility criteria. Commercial Bank has a process in place that evaluates the environmental and social risks associated with the eligible projects. Sustainalytics considers the project selection process in line with market practice. [...] The Sustainable Finance Working Group will be responsible for the management and allocation of proceeds and will track the proceeds using a Sustainable Finance Register. Commercial Bank intends to allocate the proceeds in full within 24 months of issuance. Pending full allocation, proceeds will be invested in cash or cash equivalents. This is in line with market practice.

At Board-level, oversight of the Bank's sustainability strategy and performance is the responsibility of the Board Remuneration, Nomination and Governance Committee (BRNGC). This Sustainability Report is approved by the Sustainability Committee, BRNGC and the Board. [...] Commercial Bank has a Management-level Sustainability Committee. Responsibilities include: - Reviewing and recommending for approval of the BRNGC, the Bank's sustainability strategy and commitments; - Assessing the Bank's sustainability related risks and opportunities (including climate change) and mitigations / opportunities; - Recommending priority sustainability-related initiatives for implementation within the Bank, with accountable working groups; and - Monitoring the Bank's sustainability performance against the Bank's sustainability strategy including oversight of the impact with external stakeholders. The Sustainability Committee is chaired by Commercial Bank's Executive General Manager (EGM) Chief Risk Officer. As sustainability is an integral part of our corporate strategy, EGM-level representatives from across Commercial Bank's strategic business units sit on the Sustainability Committee. [...] During 2022, the Bank has put in place a detailed methodology that identifies and measures ESG Risks associated with our customers while carrying out lending and investment activities. This methodology also includes a score that enables decision makers to understand a customer's absolute contribution to our internal ESG criteria as well as relative ranking vis-à-vis the Bank's portfolio of customers. The Bank considers exposure to any risks, including ESG risk, at both a lending/investment portfolio and an individual customer/issuer level. At the customer level, ESG risk is assessed on a case-by-case basis as part of the credit / investment risk assessment and due diligence process. The ESG risk assessment is associated with the activities that the Bank directly finances, as well as the indirect risks that we may be exposed to, through other activities a client/issuer may undertake as part of their overall business strategy. The ESG due diligence is an annual process and will review large clients and assess potential ESG risks associated with their business as part of annual credit review of the accounts. Below are the key guiding principles that the Bank wants to achieve as part of its ESG Framework: - identify relevant legislation and regulatory requirements and assess a customer's/issuer's compliance with these requirements - assess how our customers/issuers manage environmental, social and governance risks - consider the impact of changes in legislation and regulations on a customer's/issuer's business - consider the impact of changes in societal expectations on a customer's/issuer's business and the reputation risk that may be associated with a customer/issuer, and - assess the risk of liability for environmental issues being transferred to the Group entity. The ESG Risk Assessment covers each of the Bank's business segments and has put in place sector wise key ESG Risks to review environmental risk which is directly or indirectly impacting the agriculture resource, biodiversity, energy use, forestry, natural resources/ materials also will be conducted wherever applicable. The ESG Scorecard segments customers into the following categories as a benchmark for ongoing monitoring and future assessments: - Low - Customer/Issuer with minimal or no adverse social, environmental & governance impacts or risks - Medium - Customer/Issuer with potential limited adverse Governance, environmental and social risks and/or impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures - High - Customer/Issuer with significant potential adverse social, environmental & governance impacts or risks that are diverse, irreversible or unprecedented The ESG Risk Assessment Criteria is approved by Sustainability Committee, Management Risk Committee, Board Risk and Compliance Committee and Board Remuneration, Nomination and Governance Committee.

Back

# Commercial Bank Establishes Sustainable Finance Framework

At Board-level, oversight of the Bank's sustainability strategy and performance is the responsibility of the Board Remuneration, Nomination and Governance Committee ("BRNGC").

Commercial Bank has a Management-level Sustainability Committee. Responsibilities include:

• Reviewing and recommending for approval of the BRNGC, the Bank's sustainability strategy and commitments;

• Assessing the Bank's sustainability related risks and opportunities (including climate change) and mitigations / opportunities;

• Recommending priority sustainability-related initiatives for implementation within the Bank, with accountable working groups; and

• Monitoring the Bank's sustainability performance against the Bank's sustainability strategy including oversight of the impact with external stakeholders.

The Sustainability Committee is chaired by Commercial Bank's Executive General Manager (EGM) Chief Risk Officer. As sustainability is an integral part of our corporate strategy, EGM-level representatives from across Commercial Bank's strategic business units sit on the Sustainability Committee.

The Corporate Affairs Department shall disclose the Bank's Insiders list to QFMA, QSE and EDAA before 31 December each year, at the beginning of each fiscal year, before 30 June each year, and when the Insider list is amended during the year. [...] The Compliance Department shall maintain a record of dealings in Bank shares by Insiders, their Relatives and Companies, as made by Insiders disclosed using the Insider Trades Disclosure Form. [...] The Compliance Department shall provide to the Board of Directors for their review, an annual insider trading report in accordance with the Corporate Governance disclosure requirements. [...] The Bank shall disclose in the Annual Corporate Governance Report compliance with applicable insider trading regulations as per QFMA Corporate Governance Code Article 8.

At Board-level, oversight of the Bank's sustainability strategy and performance is the responsibility of the Board Remuneration, Nomination and Governance Committee (BRNGC). This Sustainability Report is approved by the Sustainability Committee, BRNGC and the Board. Commercial Bank has a Management-level Sustainability Committee. Responsibilities include: - Reviewing and recommending for approval of the BRNGC, the Bank's sustainability strategy and commitments; - Assessing the Bank's sustainability related risks and opportunities (including climate change) and mitigations / opportunities; - Recommending priority sustainability-related initiatives for implementation within the Bank, with accountable working groups; and - Monitoring the Bank's sustainability performance against the Bank's sustainability strategy including oversight of the impact with external stakeholders. The Sustainability Committee is chaired by Commercial Bank's Executive General Manager (EGM) Chief Risk Officer. As sustainability is an integral part of our corporate strategy, EGM-level representatives from across Commercial Bank's strategic business units sit on the Sustainability Committee. [...] During 2022, the Bank has put in place a detailed methodology that identifies and measures ESG Risks associated with our customers while carrying out lending and investment activities. This methodology also includes a score that enables decision makers to understand a customer's absolute contribution to our internal ESG criteria as well as relative ranking vis-à-vis the Bank's portfolio of customers. The Bank considers exposure to any risks, including ESG risk, at both a lending/investment portfolio and an individual customer/issuer level. At the customer level, ESG risk is assessed on a case-by-case basis as part of the credit / investment risk assessment and due diligence process. The ESG risk assessment is associated with the activities that the Bank directly finances, as well as the indirect risks that we may be exposed to, through other activities a client/issuer may undertake as part of their overall business strategy. The ESG due diligence is an annual process and will review large clients and assess potential ESG risks associated with their business as part of annual credit review of the accounts. Below are the key guiding principles that the Bank wants to achieve as part of its ESG Framework: - identify relevant legislation and regulatory requirements and assess a customer's/issuer's compliance with these requirements - assess how our customers/issuers manage environmental, social and governance risks - consider the impact of changes in legislation and regulations on a customer's/issuer's business - consider the impact of changes in societal expectations on a customer's/issuer's business and the reputation risk that may be associated with a customer/issuer, and - assess the risk of liability for environmental issues being transferred to the Group entity. The ESG Risk Assessment covers each of the Bank's business segments and has put in place sector wise key ESG Risks to review environmental risk which is directly or indirectly impacting the agriculture resource, biodiversity, energy use, forestry, natural resources/ materials also will be conducted wherever applicable. The ESG Scorecard segments customers into the following categories as a benchmark for ongoing monitoring and future assessments: - Low - Customer/Issuer with minimal or no adverse social, environmental & governance impacts or risks - Medium - Customer/Issuer with potential limited adverse Governance, environmental and social risks and/or impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures - High - Customer/Issuer with significant potential adverse social, environmental & governance impacts or risks that are diverse, irreversible or unprecedented The ESG Risk Assessment Criteria is approved by Sustainability Committee, Management Risk Committee, Board Risk and Compliance Committee and Board Remuneration, Nomination and Governance Committee.