|Principle 5: Governance & Culture|Col2|---|---| |We will implement our commitment to these Principles through effective governance and a culture of responsible banking|| |5.1 Governance Structure for Implementation of the Principles Does your bank have a governance system in place that incorporates the PRB? ☒ Yes ☐ In progress ☐ No Please describe the relevant governance structures, policies and procedures your bank has in place/is planning to put in place to manage significant positive and negative (potential) impacts and support the effective implementation of the Principles. This includes information about • which committee has responsibility over the sustainability strategy as well as targets approval and monitoring (including information about the highest level of governance the PRB is subjected to), • details about the chair of the committee and the process and frequency for the board having oversight of PRB implementation (including remedial action in the event of targets or milestones not being achieved or unexpected negative impacts being detected), as well as • remuneration practices linked to sustainability targets.|| |Response We have established Sustainability Workgroup, which is presided by the Chief Financial Officer and has the participation on the managing directors responsible for the main departments from the bank. This Workgroup was defined by the board and upper management, and it is responsable for: 1) Monitoring the progress towards the established goals based on positive and negative impacts from the portfolio. 2) Monitor the development of the initatives of our Sustanability Strategy. 3) Coordinate and implement the ESMS. The objective of the ESMS is to identify risks of the financed activities engaged by clients during the credit origination process. The Workgroup gathers twice a year to monitor the development of each of the responsabilities mentioned before.|Links and references Integrated Annual Report 2022| |5.2 Promoting a culture of responsible banking: Describe the initiatives and measures of your bank to foster a culture of responsible banking among its employees (e.g., capacity building, e-learning, sustainability trainings for client- facing roles, inclusion in remuneration structures and performance management and leadership communication, amongst others).|| --NEW-PAGE-- |Response For the establishment of the Environmental and Social Management System "ESMS" we have involved different business departments in the Sustainability Workgroup. In the near future, we will design an ESG training plan for the personnel with help from a specialized independent third party. Information about sustainability and the progress of our initiatives will be constantly communicated internally to all employees. Additionally, all the outcomes from the Sustainability Workgroup will be communicated to the Risk Committee, which in turn will communicate them to the Board of Directors.|Links and references| |---|---| |5.3 Policies and due diligence processes Does your bank have policies in place that address environmental and social risks within your portfolio?13 Please describe. Please describe what due diligence processes your bank has installed to identify and manage environmental and social risks associated with your portfolio. This can include aspects such as identification of significant/salient risks, environmental and social risks mitigation and definition of action plans, monitoring and reporting on risks and any existing grievance mechanism, as well as the governance structures you have in place to oversee these risks.|| |Response We are currently implementing an ESMS framework to address the environmental and social evaluation of our loans, as first step towards a due dilligence process that involves ESG risks. This framework has a double purpose, first for us to identify the environmental and social risks related to the potential loan. But also, for our clients and potential clients, who will recieve a series of recommendations to improve their score.|Links and references Integrated Annual Report 2022| |Self-assessment summary Does the CEO or other C-suite officers have regular oversight over the implementation of the Principles through the bank's governance system? ☒ Yes ☐ No Does the governance system entail structures to oversee PRB implementation (e.g. incl. impact analysis and target setting, actions to achieve these targets and processes of remedial action in the event targets/milestones are not achieved or unexpected neg. impacts are detected)? ☒ Yes ☐ No||