Agricultural Bank of China Ltd

The Bank formulated measures for environmental and social risk management for its credit businesses, and clarified full-coverage, classified management and whole-process control of environmental and social risks. The environmental and social risk management was included into the Bank's credit management system, and was embedded into all processes of due diligence, review, approval, credit use management and post-lending management, with whole-process control executed. [...] The Bank conducted due diligence for environmental and social risks, and informed the credit business decision-making with results therefrom. Customers were subjected to differentiated management measures by their degree of potential environmental and social risks. The Bank strictly implemented the "one vote veto" rule, and turned down customers and projects that are non-ecologically friendly. The Bank signed letters of commitment with key customers concerning the responsibility of environmental and social risks, aiming to enhance risk management and control capabilities through contract constraints. [...] Huzhou Branch in Zhejiang Province integrated the ESG scoring system created by the government into its greenness judgment standard system. In routine due diligence, customer managers retrieve an enterprise's ESG score in advance and complete due diligence on its environmental and social risks according to requirements. The dynamic monitoring on enterprises' ESG scores allows timely downgrading of score when an enterprise is found to have illegalities or irregularities actions such as environmental pollution, thus strengthening the Bank's control over enterprise risks.

###### Discussion and Analysis

##### County Area Banking Business
###### Management Structure and Management Mechanism
We provide customers in County Areas with comprehensive financial services through all our branch outlets in
counties and county-level cities (i.e. County Areas) in China. We refer to such business as the County Area Banking
Business or Sannong Banking Business. During the reporting period, actively following our strategic positioning of
serving Sannong to promote businesses in County Areas, we promoted the Sannong services and financial poverty
alleviation steadily, continued to improve the mechanism and policy system of the County Area Banking Division, and
practically enhanced the innovation of Sannong products and development of channels, with our service capabilities
and market competitiveness steadily enhanced.
**_Management Structure_**

###### Management Structure Chart of County Area Banking Division[1]

Board of Supervisors Board of Directors

County Area Banking Business and
Inclusive Finance Development
Committee of the Board of Directors

Senior Management

Head Office Level

County Area Banking Division
and Inclusive Finance Division
Management Committee

Chief Officer of County
Area Banking Business

Technology and - Rural Vitalization Banking Dept./County Area Policy and Banking

Innovation Dept./Office of County Area Banking & Inclusive Finance

Product

Division Management Committee

Innovation Committee

- County Area Corporate Banking Dept.

- Rural Households Banking Dept.

Special Committee of
Sannong and Inclusive

- County Area Banking/Inclusive Finance Human Resources Management Center

Product Innovation

- County Area Banking/Inclusive Finance Accounting and Assessment Center

- County Area Banking/Inclusive Finance Capital and Fund Management Center

- County Area Banking/Inclusive Finance Risk Management Center

- County Area Banking/Inclusive Finance Credit Management Center

- County Area Banking/Inclusive Finance Credit Approval Center

- County Area Banking/Inclusive Finance Channel Management Center

- County Area Banking/Inclusive Finance Internet Finance Management Center

Branch and Sub-branch Level

Tier-1 Branch County Area

Tier-1 Branch Management

Banking Sub-division

Tier-2 Branch County Area

Tier-2 Branch Management

Banking Sub-division

County Area County Area Sub-branch
Sub-branch Management /County-level Banking Sub-division

_1_ _We decided to establish the Rural Vitalization Banking Department which shared the same office with the County_
_Area Policy and Banking Innovation Department to thoroughly implemen

The Board of Directors is responsible for designing ESG strategies and objectives, and regularly assessing the implementation of relevant risk policies and strategies. The Strategic Planning and Sustainable Development Committee assists the Board in the formulation and assessment of ESG strategy and objectives. The County Area Banking Business and Inclusive Finance Development Committee, the Risk Management and Consumers' Interests Protection Committee and the Related Party Transactions Management Committee are responsible for reviewing core ESG topics. Under the Senior Management, the Green Finance/Carbon Peaking and Neutrality Committee, Consumers' Interests Protection Committee, County Area Banking and Inclusive Finance Division Management Committee and other special committees are accountable for the management of ESG issues. [...] The Bank promotes ESG construction on the basis of corporate governance. It specifies the ESG governance responsibilities of the Board and relevant special committees; incorporates ESG work into the work report and priorities of the Board; reports the ESG work done to the Board and the Strategic Planning and Sustainable Development Committee; and expands the scope of key ESG issues considered or reported step by step, thus giving full play to the Board's leading role in strategic planning and decision making.

The Board of Directors (Board) is responsible for designing ESG strategies and objectives and regularly assessing the implementation of relevant risk policies and strategies. The Strategic Planning and Sustainable Development Committee of the Board reviews the Bank's sustainable development strategies and objectives as well as the Bank's ESG-related reports, regularly evaluates the implementation of sustainable development strategies and the development of green finance, and makes recommendations to the Board. The County Area Banking Business and Inclusive Finance Development Committee, the Risk Management and Consumers' Interests Protection Committee, and the Related Party Transactions Management Committee are responsible for reviewing core ESG topics and making recommendations to the Board. The Senior Management promotes the building of the ESG system. Under the Senior Management, the Green Finance/Carbon Peaking and Neutrality Committee, the Consumers' Interests Protection Committee, and the County Area Banking and Inclusive Finance Division Management Committee are set up to manage ESG topics.