B. Vendor Sustainability Questionnaire To assess our vendors' adherence to ESG principles and enhance our collective sustainability efforts. Objective: In a significant step towards sustainable procurement, Bank Islam introduced the Vendor Sustainability Questionnaire. This initiative is part of our broader commitment to integrate ESG practices deeply into our operations. The questionnaire serves a dual purpose: 1. Assesses vendors’ engagement with ESG values and sustainable procurement. 2. Incorporates a feedback mechanism to continuously refine and improve this initiative based on vendor insights. The questionnaire is designed to cover several critical areas: • Governance: This section evaluates vendors on their governance policies, including health and safety standards, adherence to codes of conduct, compliance with regulatory requirements, and possession of relevant certifications. It aims to ensure that our vendors operate with integrity and accountability. • Environment: We assess vendors on environmental stewardship, focusing on their waste management protocols, efforts to preserve biodiversity, strategies to reduce carbon emissions, and approaches to addressing climate change. This section highlights the importance of environmental responsibility in our supply chain. • Social Responsibility: This part of the questionnaire examines vendors' commitment to social ethics, including adherence to fair labour standards such as minimum wage laws, safe working conditions, and non-discriminatory practices. It reflects our dedication to promoting social welfare and equity in our business practices. The Vendor Sustainability Questionnaire helps Bank Islam to assess vendors’ sustainability practices. What We Did: 2. Advancing Ethical and Sustainable Sourcing Our efforts to refine sourcing practices include the introduction of ESG screening and supplier clustering. This strategy underscores our commitment to ensuring our operations are aligned with sustainable finance principles. Overall Performance In 2023, overall spending increased. We allocated a significant portion of this increase to local suppliers. We are continuously optimising procurement practices to ensure value while maintaining our commitment to supporting local businesses. 2020 2021 2022 2023 Spending on local suppliers (RM) 218,048,965 211,936,288 159,900,318 206,025,159 Total spending (RM) 226,475,095 235,322,945 173,208,144 234,948,542 Proportion of spending on local suppliers (%) 96% 90% 92% 88% The Vision for the Future The Bank is dedicated to upholding the highest standards of ESG practices and looks forward to the continuous support and collaboration of our stakeholders as we progress toward a more sustainable future. 154 Bank Islam Malaysia Berhad ◆ Integrated Annual Report 2023 Governance
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