Customers that are subjected to the ESG due diligence process are prioritised based on the following factors: •• Exposure to sectors with relatively high environmental or social impact including power generation, mining, oil & gas, forestry, palm oil, heavy manufacturing, water supply, and others deemed high risk at time of customer onboarding. •• High materiality to the Bank in terms of financing exposure (RM value). •• Extreme outliers i.e., companies that score in the top or bottom 10% of customers based on the ESG scoring. •• Companies with known or detected ESG-related controversies or grievances in the last 12 months. The following is a summary of the key data and metrics used to validate the ESG performance of our business customers: Entity Information: Customer Disclosures: Sustainability reports, roadmaps, strategy, action plans, ESG-related press releases, media statements, announcements Main operating locations: The company’s headquarters and main areas of operations i.e., factories, plantations, sites, facilities Nature of business: The main and subsidiary economic activities or sectors the company is involved in Project being financed: Applicable if the financing is for a specific project by the company i.e., a new manufacturing facility or new development Controversies and grievances in last 12 months: Any involvement by the company in issues including environmental, social, or governancerelated negative coverage. Information on this is obtained through online searches on specialised ESG news providers, general media, social media, financial news outlets, and others. Financing Type and Amount: Overview of the company’s financing facilities with BIMB including financing type and RM value. Overview of ESG risks and controls: Governance License to operate: Does the company have the necessary government and/or regulatory approvals required to carry out business activities, especially those related to environmentally and socially sensitive aspects, i.e., plantations, construction, mining, oil & gas, forestry, and others. ESG Policies: Does the company have policy commitments to monitor and mitigate ESG-related risks, i.e., safety and health, waste management, biodiversity, community impacts, etc. Certifications & Standards: Does the company possess general or industry-specific certifications? Examples include RSPO, CIDB, FSC, PEFC, ISO, OHSAS, etc. Social Health and Safety: Does the company have systems and controls to ensure workplace safety and health? Labour: Does the company have systems and controls to ensure labour standards are upheld i.e., on minimum wages, working hours, no forced, bonded or child labour? Community Impacts: Does the company have systems and controls to monitor and mitigate impacts of the operations on nearby communities? Integrated Report 2022 148 Good Governance
RkJQdWJsaXNoZXIy NDgzMzc=