First Abu Dhabi Bank P J S C : FAB 2022 ESG Report

2022

ESG REPORT

bankfab.com

About this Report

As the largest bank in the UAE, we are committed to taking a central role in working towards a sustainable future, combining both ambition and action to accelerate the shift towards positive change.

As part of this commitment, we publish an annual ESG report to be transparent in our activities, performance and approach across the Environmental, Social and Governance (ESG) areas for First Abu Dhabi Bank (FAB) Group. In this report, we also highlight future targets related to responsible banking, sustainable finance and climate-related actions we intend to take.

The information presented in this report reflects FAB Group activities for the 2022 calendar year (January 1 - December 31, 2022).

This ESG report is prepared in accordance with the Global Reporting Initiative (GRI) Standards 2021, and the Abu Dhabi Stock Exchange (ADX) ESG Disclosure Guidance requirements 2021 for Listed Companies in the UAE.

All reporting and performance data are limited to information for the owned and operated facilities of FAB Group and its subsidiaries, unless stated otherwise.

Greenhouse Gas (GHG) emissions scope 1,2, and 3 (excluding financed emissions). We have adopted the operational control approach to define our reporting boundary for emissions. Where properties are covered by FAB's consolidated financial statements but are leased to tenants, these emissions are not included in the Group or UAE GHG emissions calculations. All emissions are based on actual invoices information.

Additional information about FAB can be found on our website: https://www.bankfab.com/en-ae/about-fab/sustainability or for more information on FAB's ongoing ESG initiatives, please contact us at: [e-mail].

A Message

From Our Group CEO

We are fully committed to driving the sustainability agenda forward, while inspiring a positive and tangible change within the financial industry.

Welcome to FAB's 2022 Environmental, Social and Governance (ESG) report.

As a leader at the forefront of sustainable finance, FAB is proud of the work we are doing to transition towards a low carbon and equitable economy. Across the FAB Group, we are driving our sustainability agenda forward, while being a catalyst for positive and tangible change within the financial industry. Following

on from the launch of our Group ESG strategy, 2022 was a landmark year in our sustainability efforts, during which we made tremendous strides in realising our ambitions, in line with the UAE net zero 2050 strategic initiative.

Due to our efforts to support a low carbon future in the UAE

and abroad, the outstanding amount on our green bonds reached an all-time high of AED 8.08 bn (USD 2.2 bn) in December 2022, and we facilitated AED 33.4 bn (USD 9.1 bn) of sustainable finance during the year. This was a strong start to our latest target of USD 75 billion in sustainable finance by 2030, while the renewable energy transactions we facilitated are expected to contribute 2.3 gigawatts of clean power to the UAE's energy mix by 2024.

We became the first bank in the GCC to join the Net Zero Banking Alliance (NZBA) in 2021, and the first bank in the Middle East and North Africa (MENA) to join the Partnership for Carbon Accounting Financials (PCAF) in 2022. This commitment to greater transparency provides us with clear methodologies for measuring emissions associated with our financial activities, and ensures future investments pertain to the ideals of green financing.

FAB's individual momentum on sustainability is considerable. Our greater ambition is to act as a pacesetter for our industry, leading by example. By working together across our sector, sharing best practices, and searching for solutions together, we place ourselves in the strongest position to tackle the challenges that lie ahead. As the world's attention turns to the 28th session of the Conference of Parties (COP28) in the UAE, it will be more important than ever that our industry demonstrates clear and tangible action on climate change. As the largest bank in the UAE and a regional leader in sustainable finance, we don't take this responsibility lightly.

We believe that the green transition will benefit generations to come. With this in mind, we will continue implementing our ESG strategy and contributing to a more prosperous, sustainable future for our customers, while unlocking the potential of strategic partnerships to accelerate economic progress across the region.

Best regards,

A Message

From Our Group CSO

We are committed to using our strong leadership position to embed sustainable and responsible business values within the wider financial sector.

I am very pleased to introduce FAB's 2022 ESG report. This publication is a crucial component of the ongoing engagement with all our valued stakeholders. As FAB's Chief Sustainability Officer, I am delighted to share the progress we have made over the past year, and outline our commitments and ambitions for the future.

Sustainable and responsible business lies at the very heart of FAB. We are committed to using our strong leadership position to embed these values within the wider financial sector. In 2021, we set our sustainability foundations with the launch of a dedicated Group ESG strategy. In 2022, we leveraged those foundations and witnessed widespread improvements across several ESG factors. A successful path which I am particularly proud of, with multiple achievements, over such a short timeframe. We have harnessed meaningful progress across the three pillars of FAB's ESG strategy: transitioning to a low carbon future; capitalising on our social responsibility; and transforming our governance model.

In 2022, we continued our decarbonisation journey focusing on our financed and operational emissions. Using the PCAF standard, we calculated our financed emissions across our portfolio and defined targets for the three highest emitting sectors in our portfolio: Oil and Gas, Power Generation and Aviation. We continue to advance our journey to become net zero from our own operations by 2030, in support of this target, we have achieved

a 22% reduction in our scope 1 & 2 emissions per employee compared to our 2019 baseline.

We continue to establish ourselves as a leader in the green bond market and have facilitated sustainable projects worth AED 33.4 bn (USD 9.1 bn) in 2022. FAB cemented a leadership position within sustainable finance and recorded multiple collaborations and partnerships across a wide ESG scope. We have also committed to phase out thermal coal financing, in a net zero aligned timeline.

We have made strides in gender diversity, women now make up 21% of our senior leadership compared to 9% in 2020, meaning that we are on track to meet our 2030 target of 40% women in senior leadership. To further this commitment, we also became a signatory of the Gender Acceleration Pledge with the UAE's Gender Balance Council. To support our local community, we signed up to the 'Make It in the Emirates Initiative' by assuring that more than 80% of our procurement is sourced in the UAE.

To support the transformation of our governance model, we have established a Board Risk and ESG Committee (BRESGC), with a dedicated ESG mandate which introduced a wide range of ESG-related KPIs for the FAB Group. This governance structure will enable us to tackle future ESG risks and prepare us to tap the rising opportunities. A sustainability-driven ecosystem that is in line with our new ESG Risk Framework and updated Sustainable Finance Framework, grants us a strong and privileged position to adapt, innovate and pave the transition towards a more equitable low carbon economy that creates long-term value for the planet and its people.

As we look toward 2023, the UAE's 'Year of Sustainability' and hosting of COP28 both national and global attention will be on the UAE's sustainability and climate action journey. COP28 in the UAE, will be the first Global Stocktake to provide a comprehensive assessment of progress since adopting the Paris Agreement and determine critical actions moving forward. As the leading bank in the region, FAB is committed to supporting our clients and partners on their sustainability journeys.

Best regards,

Shargiil Bashir

Group Chief Sustainability Officer

Table

of Contents

1. ABOUT FAB	02
2. TRANSITIONING TO A LOW CARBON FUTURE	14
•	OUR NET ZERO JOURNEY	16
•	OWN OPERATIONS	17
•	FINANCED EMISSIONS	19
•	SUSTAINABLE LENDING AND INVESTING	23
3. CAPITALISING ON OUR SOCIAL RESPONSIBILITY	26
•	OUR PEOPLE	28
•	TALENT ATTRACTION AND RETENTION	28
•	LEARNING AND DEVELOPMENT (L&D)	29
•	EMPLOYEE WELLBEING	31
•	DIVERSITY AND INCLUSION (D&I)	33
•	HEALTH AND SAFETY OF OUR PEOPLE	36
•	OUR CUSTOMERS	37
4. TRANSFORMING OUR GOVERNANCE MODEL	44
•	OUR BOARD OF DIRECTORS	46
•	GROUP ESG RISK POLICY AND GROUP ESG RISK FRAMEWORK	47
•	BUSINESS CONTINUITY	50
•	BUSINESS ETHICS AND COMPLIANCE	51
•	DATA PRIVACY AND CYBERSECURITY	53
•	TAX TRANSPARENCY	53
•	DIGITALISATION AND INNOVATION	54
•	RELATED PARTY TRANSACTION	54
5. APPENDIX	55
•	APPENDIX A: DATA TABLES	56
•	APPENDIX B: GRI TABLES	62
•	APPENDIX C: SASB INDEX TABLE	66
•	APPENDIX D: GHG REPORTING BOUNDARY AND SCOPE	67
•	APPENDIX E: INDEPENDENT LIMITED ASSURANCE REPORT	68

1 ESG Report 2022