Bank’s sustainability framework

Bank’s Sustainability Framework

Sustainability is embedded within the Bank’s strategy and business model in recognition that environmental, social and governance considerations increasingly influence long-term financial performance, institutional resilience and stakeholder trust. Rather than being treated as a parallel initiative, sustainability is integrated into how the Bank mobilises funds, allocates capital, manages risk and operates its organisation.

The Bank’s Sustainability Framework (Figure 14 below) provides a clear and structured architecture for this integration. It aligns closely with the Bank’s Business Model for sustainable value creation and is applied across the entire value chain - from upstream funding and inputs, through internal operations and risk management processes, to downstream products, services and societal outcomes. Through this approach, it reflects the Bank’s responsible stewardship of, and enduring impact on, the six capitals: Financial, Manufactured, Intellectual, Human, Social & Relationship and Natural.

At its core, the Framework is anchored in the Bank’s purpose: to be a responsible financial services provider by enabling and empowering people, enterprises and communities towards environmentally responsible, socially inclusive and economically enriching growth. This purpose guides strategic direction, portfolio choices and operational priorities, ensuring that commercial performance and responsible conduct reinforce one another.

The Three Pillars of the Framework

The Sustainability Framework is organised around three interconnected pillars. Together, they demonstrate how sustainability is embedded across financing activities, internal governance and societal engagement. The sections that follow elaborate in detail on each of these pillars, followed by the Bank’s inaugural SLFRS Sustainability-related Financial Disclosures, which present a structured account of governance, strategy, risk management and performance metrics.

Sustainable banking

Sustainable banking reflects the integration of sustainability into the Bank’s core intermediation function. It encompasses responsible financing, financial inclusion and sustainable products and services.

Under this pillar, sustainability considerations are embedded into lending, investment and portfolio management decisions alongside financial risk and return assessments. Capital is directed towards environmentally responsible, socially inclusive and economically productive sectors, while disciplined underwriting standards safeguard asset quality and balance sheet strength.

By aligning portfolio growth with sustainability priorities, the Bank enhances long-term franchise value, strengthens funding resilience and supports stable economic development.

Responsible organisation

Responsible organisation focuses on how the Bank conducts its own operations and governs itself across the value chain. It recognises that sustainable performance is underpinned by strong internal systems, ethical conduct and operational discipline.

This pillar encompasses governance oversight, compliance frameworks, anti-bribery and anti-corruption controls, conduct risk management, employee wellbeing, diversity and inclusion, capability development and sustainable resource management across facilities and procurement.

Through structured policies, clearly defined accountability lines and effective internal controls, the Bank fosters a culture of integrity and prudence. Environmental stewardship within operations, digital enablement and responsible supply chain practices further strengthen operational resilience and institutional credibility.

Community engagement

Community engagement represents the Bank’s commitment to contributing to broader social and environmental progress beyond its direct commercial activities.

Delivered primarily through the Commercial Bank CSR Trust, this pillar adopts a structured and outcome-oriented approach, focusing on long-term initiatives in education, healthcare, environmental conservation and inclusive livelihoods. Programmes are designed to build capacity, strengthen community resilience and deliver measurable impact rather than short-term interventions.

By aligning community initiatives with national development priorities and emerging societal needs, the Bank reinforces its role as a responsible corporate citizen while supporting inclusive and sustainable growth.

Governance and Enablers

The effectiveness of the Sustainability Framework is reinforced by clearly defined governance structures that ensure accountability, coordination and oversight across all three pillars. Board-level supervision provides strategic direction, while management committees coordinate implementation, monitor progress and escalate emerging issues where necessary.

This governance architecture underpins the Bank’s SLFRS Sustainability-related Financial Disclosures (Refer Governance section on SLFRS Sustainability-related Financial Disclosures), which articulate in detail how sustainability considerations are governed, integrated into strategy and monitored through defined performance metrics. The disclosures should therefore be read in conjunction with this Framework, as they translate its structure into standards-aligned reporting.

Operational consistency is supported by established policies and systems, including the Environmental and Social Management System (ESMS), the Group Social and Environmental Policy and the Green Financing Policy. These instruments ensure that sustainability considerations are embedded into credit evaluation, operational practices, procurement decisions and stakeholder engagement processes across the organisation.

Through this structured and governance-led approach, the Sustainability Framework ensures that sustainability is embedded within strategy, operations and oversight – strengthening resilience, enhancing stakeholder confidence and supporting disciplined, long-term value creation.

Resilience and risk mitigation

Resilience is a core feature of the Bank’s business model, reflecting our responsibility to safeguard depositor funds, maintain confidence and continue financial intermediation through economic cycles. We therefore maintain strong capital and liquidity buffers, apply forward-looking stress testing and, where relevant, scenario analysis, and actively manage concentration and funding risks through disciplined balance sheet management. Credit resilience is supported through robust underwriting, early warning and portfolio monitoring, with remediation actions taken where risk indicators deteriorate. In 2025, this framework was further strengthened by embedding CRROs into risk identification, assessment and monitoring across the value chain, supporting prudent capital allocation, risk appetite calibration and risk-informed decision-making as SRROs evolve. (Refer SLFRS Sustainability-related Financial Disclosures – Risk Management section).