BIMB Sector Exposure Additionally, we have made significant progress in developing a process to incorporate climate and ESG risks into the credit rating of non-retail customers. We achieve this by assessing environmental, social, and governance risks through an ESG credit impact score. To determine a customer’s credit rating, we consider all relevant credit factors, as well as ESG considerations and sector-specific risk factors. ESG credit impact scores and a customer’s CCPT classification are the key drivers that reflect ESG impacts on BIMB’s non-retail portfolio. Having established this framework, BIMB is equipped to integrate ESG and climate performance into our credit risk assessments in the future. However, we will only implement the adjustment process fully when we have access to more accurate data and more comprehensive disclosures from companies. As the bank is in the process of implementing requirements for BNM’s Climate Risk Management and Scenario Analysis (CRMSA) Policy Document requirements, we will continue to refine our approach and there might be further changes to our application down the road. Financial Services Construction Real Estate Public Administration Water, Sewerage and Waste Electricity, Gas, Steam Supply Information and Communication Manufacturing Agriculture Wholesale and Retail Trade Others 13% 12% 8% 4% 6% 11% 5% 4% 4% 4% 29% Case Study: ESG Review and Action Plan for the Mining Sector BIMB conducted a detailed ESG review as part of the financing approval process of a company involved in mining activities in Peninsular Malaysia. As part of the review, requirements as stated in the approved Environmental Impact Assessment were assessed and the company’s action plans in terms of complying with environmental and social regulations were reviewed. The company was assessed as having sufficient controls on its health and safety and onsite operational manuals to control the impacts of its activities, and policy commitments endorsed by its senior management to adhere to best practices on environment and safety. As part of the Bank’s financing terms, the company was requested to prepare and endorse a sustainability policy approved by the senior management to provide stronger assurance on the company’s practices in terms of environmental and social impact. Integrated Report 2022 150 Good Governance
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