PT Bank Central Asia Tbk : Sustainability Report

Live to Engage

2021 sustainabilit y report

pt bank central asia tbk

Contents

2 Board of Directors' Message

6 Sustainability Performance Achievements

18 Sustainability Aspects Highlights

21 Sustainability Strategy and Sustainable Development Goals

26 Sustainability Report Overview

BCA and Sustainability

36 BCA at a glance

1. Sustainability Culture
2. Sustainability Governance

45 Sustainable Finance Implementation

TOGETHER TO IMPLEMENT RESPONSIBLE BANKING

52 Economic Performance and Green Portfolio

60 Climate-related Financial Risk

60 Responsibility for Financial Products and/or Services

62 Togetherness to Serve

1. Technology and Digitization for Sustainability
2. Service Access and Affordability
3. Customer Data Security and Privacy

72 Corruption and Fraud Prevention

TOGETHER TO DEVELOP A SUSTAINABILITY CULTURE

78 Fair Operations

1. Supply Chain
2. Respecting and Protecting Employees

86 Employee Competency Development

1. Paying Attention to Employee Welfare
2. Decent and Safe Work Environment

91 Respecting Human Rights

93 BCA's Response to Climate Change

96 Towards Environmentally Friendly or Low Carbon Footprint Operations

96 Agent of Change

98 Energy Management and Reducing Carbon Footprint

1. Waste and Water Consumption Management
2. Environment & Biodiversity Preservation

103 Environmental Complaints

Together to Create Value

108 Community Development and Empowerment

112 Quality Education to Boost Young Generation Competitiveness

118 Financial Literacy & Inclusion

120 Archipelago Culture Preservation

122 Public Health

125 Natural Disaster Relief

1. Approval Page
2. Assurance Independent Statement

132 POJK, GRI, SASB AND SUSBA INDICES

138 Feedback Form

BCA is committed to implementing sustainability principles that support the business and ESG aspects alignment. During the ongoing pandemic, a new, all-digital lifestyle has become the foundation of the national economy and banking. We responded to this development by improving our digital-based banking services capabilities, and thereby contributed to the national economic recovery. At the same time, we have ensured the digital transaction data is protected with layered IT security to mitigate the risk of cybercrime. We have also implemented "green initiatives" in our operational activities covering digitizing work processes to implementing green offices. This initiatives contribute to save energy and paper usage in banking transactions and operations.

BCA will continue to focus on developing its Sustainable Finance portfolios, including loans to the MSME sector that is continuing to grow positively. BCA has become one of the pioneer in financing new renewable energy to eco-efficient products. BCA has taken

a shared role and responsibility for controlling the COVID-19 pandemic through the community empowerment program. We support the Government's vaccination program through vaccination centers for employees, employees' families, and the wider community. In compliance with government regulations, BCA has adapted our Work from Home policy and promoted Banking from Home. BCA is consistently providing assistance and capability-building in 12 "BCA Assisted Villages", enabling the rural communities to create a better village economic growth.

Overall, increased mobility, economic recovery, as well as various innovation and collaboration, are actual togetherness with our stakeholders. Collaborate and act together, Live to Engage.

Sustainability Aspects Highlight

BCA and Sustainability

Board of Directors' Message[102-14, 102-15]

On our 64th anniversary in 2021, BCA strengthens its commitment to improve Environmental, Social and Governance (ESG) performance and deliver a positive impact for all stakeholders. Through online and offline activities or "hybrid now", we are endeavoring to be better by taking action, innovation and collaboration with stakeholders and be impactful on the economic, environmental and social aspects.

Dear respected stakeholders,

We have faced many challenges together during the COVID-19 pandemic. We have made every effort to maintain our health, conduct vaccination programs, remain disciplined in following health protocols, as well as inspire and provide added value to the communities and the surrounding environment. These are all relevant to the true meaning of 'Sustainability'.

After the UN Climate Summit COP26 in Glasgow at the end of 2021, where Indonesia was chosen as the G20 Presidency for 2022, environmental, social and governance (ESG) issues are being discussed more intensively now. With Indonesia's prestigious role, all of us must be ready to fully support the country's efforts to develop a low- carbon economy. All stakeholders must now pay greater attention to our ESG performance, and that includes the banking industry. We have seen that the transitioning process from "business as usual" to "a low-carbon economy" has already begun and is continuing gradually. To support this movement, we at BCA are ready to make the necessary changes in line with the directives and support from the Government, and all other segments in the business world.

Jahja Setiaatmadja

President Director

2 2021 Sustainability Report PT Bank Central Asia Tbk

Together to Implement Responsible Banking	Together to Develop a Sustainability Culture	Together to Create Value

Review and Sustainability Value

The pandemic is still impacting economic performance, but it has started to slowly improved. In the banking sector, a very significant change in people's behavior has encouraged a massive and aggressive increase in digital banking. This acceleration is a key fundamental for banks to maintain their sustainability value.

BCA's sustainability value in running its business is its commitment to complying with all Government regulations, consistently innovating relevant products and services to the latest needs, all following low-carbon economic processes. This sustainability integrates the economic, environmental and social added values. To deliver our sustainability value in line with the Sustainable Development Goals (SDGs), we continue to improve our ESG assessments, engagement and shared values, and implementing good governance.

In line with the Company's strategy, BCA supports 9 top priorities amongst the 17 SDGs. BCA's commitment of Sustainable Finance achievements involves implementing a strategy and policy in line with the 3 BCA Sustainability Pillars including Responsible Banking, Sustainability Culture, and Social Value Creation.

Sustainable Finance Implementation Challenges

We pay great attention to Sustainable Finance implementation developments and analyze the business challenges, opportunities, and prospects and their impact on our stakeholders. Sustainability is a long journey that we are taking together with our stakeholders. Internally, BCA is continuing to educate and improve its employees' understanding of the Sustainable Finance principles. 97% of our employees of our employees participated in mandatory Sustainable Finance e-learning in 2021. We maintain close communication and engagement with our debtors to improve the quality of our ESG, and have gained relevant business certificates, namely RSPO/ ISPO certification, which increased by 17.9% to 66 this year. We are committed to continue balancing the business and sustainability aspects in a prudent manner, especially during this current transition period. Our view on the social and economic aspects is to focus on what is needed in a balanced way in Indonesia, which is still a developing nation, amid the intense environmental issues.

Environmental damage can influence negative impacts on economic and social performance, including the quality of human life. The environmental damage, such as extreme climate change, and environmental degradation will also influence on agriculture, water,

soil and air pollution, as well as marine ecosystems. All of these conditions may affect the economic and social aspects of the surrounding community. Awareness of environmental damage, and the increasingly real impact of climate change, encourages us to change and protect the environment together.

Therefore, the ESG management and performance in our operational and business activities are aligned with Corporate Sustainability Pillars and Culture. Many challenges still lay ahead in implementing ESG, however, we believe that engagement with all stakeholders will significantly bring positive results.

One of the biggest challenges for the bank has related to technology. Digitalization has impacted all economic, social, and environmental performances and this has the potential to affect sustainability. These rapid changes have resulted in an increase in technological crime meaning that strengthening confidential data security systems has become key to preventing cybercrime. We appreciate the support of the Government and all our customers in monitoring all technology-based digital banking security activities together.

The use of technology continues to be improved in financial literacy which includes banking access. Data security awareness and the use of technology is a challenge and requires us to carry out continuous education and dissemination with all stakeholders.

In addition, we have begun to map the sustainable financing portfolio, as well as internally improve green banking. We have started ESG assessments for every disbursed loan and have developed ESG-based products as part of our business strategy. We involve all stakeholders to provide the understanding and to implement sustainability efforts consistently in order to overcome the challenges in the implementation of Sustainable Finance.

Sustainable Finance Implementation Risk Management

To implement Sustainable Finance, BCA has established a Sustainable Finance Action Plan (SFAP), which is submitted annually to the Financial Services Authority (OJK). The SFAP will support our ESG performance, including the environmental aspect that poses a major risk to sustainability. The greatest concern in the environmental aspect is the negative impact of extreme climate change. We have responded to this by managing our internal activities and increasing our internal capacity, including greenhouse gas (GHG) emissions reduction via energy savings, green building certification, as well as other environmental initiatives.

2021 Sustainability Report PT Bank Central Asia Tbk

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