Oversea Chinese Banking : OCBC Sustainability Report 2021 (English) (6.9MB)

About This Report

We are focused on building a sustainable future by embedding responsible and sustainable business practices in everything we do.

Scope

OCBC Group's Sustainability Report covers the sustainability strategy, initiatives and performance of our operations in key markets, namely Singapore, Malaysia, Indonesia and Greater China. This report covers the financial year ending 31 December 2021.

The disclosures in this report are provided at a consolidated level, covering all operations except Great Eastern Holdings, unless otherwise stated. Great Eastern Holdings, a subsidiary of OCBC Group and a publicly listed company, publishes an independent Sustainability Report that provides detailed Environmental, Social and Governance (ESG) data concerning its operations. We recommend that this report should be read in conjunction with Great Eastern Holdings' sustainability disclosures for a full overview of our performance.

Where applicable, data from previous financial years are included for comparison. This is OCBC's first standalone Sustainability Report and should be read together with the OCBC Annual Report, which can be found here:www.ocbc.com/group/ investors/annual-report-and-agm.

Reporting Framework

This report is prepared in accordance with the Global Reporting Initiatives (GRI) Standards: Core Option and references the GRI G4 Financial Services Sector Disclosures. We adhere to theGRI principles in defining the report content as follows:

• • Stakeholder inclusiveness

• • Sustainability context

• • Materiality

• • Completeness

This Sustainability Report marks OCBC's first report aligned with the Sustainability Accounting Standards Board (SASB) for commercial banks.

It also includes the Bank's Communication of Progress (CoP) as a signatory to the United Nations Global Compact (UNGC) and its 10 Principles. Our sustainability report is prepared in accordance with the GRI, SASB and UNGC frameworks due to the global acceptance of these standards, which allow for comparability against global and local peers, and the communicating of relevant information to stakeholders on the Bank's ESG risks and opportunities.

This Sustainability Report has also been prepared in accordance with the Singapore Exchange Securities Trading Limited Mainboard Listing Rules 711A and 711B on Sustainability Reporting.

Data and External Assurance

To ensure the robustness and credibility of our ESG data, OCBC sought external assurance on selected indicators that are material to our operations this year. Our external assurance report is on page 49-50. We will continue to improve on our ESG disclosures and may expand the scope of the assurance.

About This	Board	2021 Key	Our Approach	Putting	Building a	Acting with	Valuing Our	Engaging	Contributions	GRI Content Index |	Assurance
Report	Statement	Achievements	to Sustainability	Customers	Sustainable	Integrity	People	Communities	to UN SDGs	SASB Index |	Statement
First	Future	UNGC Index

Board Statement

Advancing sustainability is central to OCBC's strategy. Building on our past efforts, in 2021, we reinforced and integrated ESG considerations in our operations and businesses, partnered our customers to manage transition on climate change, promoted environmental sustainability, expanded our programmes to upskill and expand our talent pool, and helped our communities. The Board is confident that meeting the broader ESG goals in our markets will deliver sustainable and progressive long-term value with meaningful impact for our customers, employees, and the communities in the years to come.

Driving Sustainability

The Board stepped up its oversight of the Group's overall sustainability agenda in 2021 by placing sustainability as central to OCBC's strategy formulation. Our Sustainability Strategy focuses on five pillars - Putting Customers First, Building a Sustainable Future, Acting with Integrity, Valuing our People and Engaging Communities - which encompass the 15 material Environmental, Social and Governance (ESG) factors. The Board determines the relevance and significance of the 15 ESG factors to the Bank's business operations and oversees the management and monitoring of these ESG factors. Additionally, these ESG factors contribute to meet six selected United Nations Sustainable Development Goals where we can make the greatest positive impact in our core markets.

The Board, through the Board Risk Management Committee, regularly reviews and approves the sustainability-related policies. Reinforcing the Board's commitment, a sustainability training programme was conducted in 2021 for members to keep abreast of the changing global landscape and sustainability trends.

Putting Customers First and Digital Transformation The digitalisation of financial services and the innovations based on digital technology are rapidly evolving, accelerated by safety considerations and need to reduce social interaction brought on bythe ongoing Covid-19 pandemic. Responding to an extended and also a more severe Covid-19 pandemic, we stepped up efforts to help our customers reduce social exposure and stay safe by enhancing our digital banking proposition. Customers' expectations for an efficient, frictionless, and convenient digital experience have also risen. As digital banking will significantly change the conduct of banking and finance and to continuously improve our customer experience, we allocated more resources to our digital platforms to simplify and enhance the banking experience while instilling trust. Notably, OCBC Singapore is the first bank in Southeast Asia to enable face verification for ATM banking transactions without the need for ATM cards.

In 2021, for every 10 new secured consumer loans, more than 6 were done digitally, and the volume of our digital secured loans were 3 times higher than a year ago. Almost all our new SME accounts are now opened digitally and after growing by about 40% from a year ago, our SME digital transaction volume was 6 times more than manual transactions.

We are mindful of the dangers and the heightened risks posed by fraud and scam incidences and have put in place robust cyber defence and monitoring capabilities to strengthen our internal IT system security and enhance the security of digital banking for our customers.

While our banking systems and digital banking platforms are safe and secure, the Bank will be placing greater efforts through more active communication programmes with our customers. Additional safeguards, including lengthening of cooling-off period before implementation of requests for key account changes to minimise the risk of customers falling prey to scams were implemented.

Building Human Capital and Valuing Our People The wellbeing and safety of our employees are paramount as Covid spread and turned more contagious in 2021. We stepped up our support to enable our employees to work effectively from home. Apart from enhanced safety measures, OCBC implemented several holistic wellness programmes to provide consistent and quality support, including the provision of Covid-19 Vaccination Support Programme to all employees.

To attract, retain, and develop our talent to ensure we are future-ready, we launched a suite of sustainability training modules for all 30,000 employees across the Group as part of OCBC's S$30 million commitment to talent development.

Board Statement

We started a talent development programme called FRANKpreneurs to empower graduates to impact the banking world of today and the future. The 16-week summer internship allows graduates to work in cross-divisional groups across OCBC to generate future-oriented solutions to meet real world challenges. A new travel app launched by OCBC in 2021 was a result of this programme.

At OCBC, we are committed to building an inclusive culture that embraces diversity, treats employees fairly and provides equal opportunities to all. We focus on maintaining a gender-equal workforce and strive to achieve 42% of leadership roles to be filled by women in 2022.

Advancing the Transition to a Low-carbon World During the year, we strengthened our 'Building a Sustainable Future' agenda with a new Climate Strategy. A 5-year roadmap outlining our ambition to accelerate sustainable transition in our markets was rolled out.

We are glad to report that we have achieved a significant milestone in our efforts to help customers transition to a low-carbon economy and exceeded our target of reaching a sustainable finance portfolio of S$25 billion by 2025 by achieving S$34 billion as of 2021. We also rolled out transition financing and expanded a wider range of offerings to provide credible solutions to our varied clients in allindustries, including those in hard-to-abate sectors. As a result, our green loans to SMEs have doubled under the SME Sustainable Finance Framework.

Since becoming a supporter to Task Force on Climate-related Financial Disclosures (TCFD) in 2019, the Bank has enhanced our understanding and management of the Bank's climate-related risks and opportunities, leading to the publishing of our first TCFD report in October 2021.

As part of our Climate Strategy, OCBC is committed to achieve carbon neutrality for our banking operational emissions in 2022.

This will be supported by a suite of environmental initiatives, including retrofitting our assets to improve energy efficiency, investing in low-carbon technologies and renewables, as well as developing a business travel policy to reduce business air travel. We are exploring investment in carbon credit-generating projects and pursuing responsible procurement of carbon offsets for our residual and unavoidable emissions.

To heighten global climate change awareness and challenges posed to businesses and society, OCBC launched a comprehensive climate survey to derive an Index score for Singaporeans. The purpose of the inaugural OCBC Climate Index is to serve as a starting point to raise awareness ofcarbon emissions and drive the adoption of environmentally sustainable practices among consumers and society at large.

Continuing Our Strong Engagements with Communities

Our sustainable goals include an active engagement and involvement of the development of the wider communities we serve. Building on the success from the first community shop a year ago, we supported a second community shop in 2021 to supply daily provisions to 1,000 needy families in Singapore and embarked on an ambitious 3-year educational programme for children from low-income families. In total, we supported nearly 200,000 individuals in 2021. We aim to support 1 million vulnerable individuals in our core markets by 2023.

Fostering Stewardship and Governance The Board is committed to ensuring OCBC's core foundations of sound ethics and conduct and strong governance be continuously reinforced. In 2021, the first OCBC Culture and Conduct Dashboard was holistically developed to measure ethics and good conduct, by monitoring whether we are meeting desired outcomes for our stakeholders. The dashboard draws attention to key areas of culture and employee conduct so that a strong tone from the top is set for the entire organisation.

Creating a Sustainable World Together

While the uncertainties arising from the ongoing pandemic carry risks to our businesses and operations, we are ever conscious of the need to build greater resilience by being more responsive to rapidly evolving challenges and opportunities. Our strong fundamentals in capital, enlarged capabilities in our human talent, and our robust risk management process will enable us to grow new opportunities as we help customers attain sustainability in their business while transitioning to a low-carbon future. As we progress into 2022, we will continuously explore new opportunities to strengthen and grow our franchise, and explore new frontiers that will contribute to and create sustainable long-term value for all our stakeholders.

Championing sustainable transformation through innovative and responsible financing solutions, deepening collaboration across the Group businesses and entities, and enhancing our talent pool are imperative for the successful execution of our operational plan. Through forging a "One Group" integrated approach, we are dedicated to supporting our customers, employees, and the communities holistically across our core markets to create a sustainable world together.

About This	Board	2021 Key	Our Approach	Putting	Building a	Acting with	Valuing Our	Engaging	Contributions	GRI Content Index |	Assurance
Report	Statement	Achievements	to Sustainability	Customers	Sustainable	Integrity	People	Communities	to UN SDGs	SASB Index |	Statement
First	Future	UNGC Index

2021 Key Achievements

Pillar 1: Putting Customers First

Best Branch Digitisation Implementation

awarded at The Asian Banker Financial Technology Innovation Awards 2021

Best Retail Bank, Singapore

awarded at The Digital Banker's Global Retail Banking Innovation Awards 2021

Number 1

in Customer Satisfaction Index of Singapore Survey

ASEAN SME Bank of the Year (for the 11th consecutive year)

awarded at Asian Banking & Finance Retail Banking Awards 2021

Pillar 2: Building a Sustainable Future

First bank in Southeast Asia to adopt the Poseidon Principles

a commitment to track, monitor and drive emissions reduction in our shipping portfolios

AA rating

for MSCI ESG Ratings Assessment

Achieved S$34 billion

in sustainable finance commitments, surpassing our S$25 billion by 2025 target

Published our first TCFD report

with insights on short- and long-term climate risks and opportunities

Pillar 3: Acting with Integrity

Corporate Excellence and Resilience Award

(Large-cap Category) awarded by the Business Times, the Institute of Singapore Chartered Accountants and the Singapore Institute of Directors

Runner up of the Singapore Corporate Governance Award (SCGA)

(Big Cap Category) awarded at the SIAS Investors' Choice Awards 2021

ASEAN's Top 20 Listed Companies

for Corporate Governance at the ASEAN Corporate Governance Scorecard Award

Pillar 5: Engaging Communities

S$3.2 million

donated and 275,552 individuals supported

United for Humanity Award

by Singapore Red Cross for supporting humanitarian aid in the fight against Covid-19 pandemic in China in 2021

Singapore Children's Society Gold Award

by Singapore Children's Society, which recognises our efforts and contributions towards helping children, youth, and families in need in 2021

Excellence in CSR Strategy Silver Award

by Human Resources Online Malaysia recognises our efforts and contributions towards helping the community in 2021