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Bank Rakyat Sustainability Framework and Policy

SUSTAINABILITY AT BANK RAKYAT

Defining Sustainability

Sustainability refers to the management of an organisation’s environmental, social and governance (ESG) impacts to create meaningful value for an organisation and its stakeholders. Economic impacts tend to be strongly intertwined with environmental and/or social impacts.

Additionally, for the financial sector, there is an added layer to the meaning of sustainability, whereby the management of an organisation’s impacts must be underpinned by robust sustainability governance.

For these reasons, external guidance for the financial sector has simplified the definition of sustainability. Sustainability is defined around the three factors of Environment, Social and Governance (ESG):

Environmental:Covers how organisations impact and are impacted by environmental matters such as biodiversity, climate change and waste management. Within environmental matters, there is particular emphasis placed on climate change mitigation. This is exemplified globally by the growing number of companies making disclosures in line with the recommendations of the Task Force for Climate-related Financial Disclosures (TCFD), and more locally by the release of the Bank Negara Malaysia (BNM) Climate Change and Principle-based Taxonomy (CCPT).

Social: Includes an organisation’s impact on local communities and the broader society, an organisation’s management of human capital matters, as well as an organisation’s treatment of any relationship with its customers. These are key internal and external stakeholder groups for all organisations. Hence, it is crucial that organisations ensure that appropriate steps are taken to manage relations with these stakeholder groups.

Governance:Focuses on how an organisation is controlled and directed, robust sustainability governance and systems of internal control are necessary to manage an organisation’s environmental, social, and economic impacts.

Sustainability therefore means doing business in a manner that generates meaningful, positive impact for an organisation and its stakeholders.

Bank Rakyat Sustainability Vision and Mission

Bank Rakyat’s Sustainability Vision and Mission establishes the Bank’s long-term, overarching sustainability aspiration.

Being the largest Islamic cooperative Bank in Malaysia, Bank Rakyat aims to integrate Environment, Social and Governance (ESG) considerations into the Bank’s business activities. The Bank shall demonstrate its commitment to sustainability by mobilising its resources towards sustainable development objectives and by creating lasting positive impact for the Bank’s stakeholders. Bank Rakyat’s Sustainability Vision and Mission are as below:

Sustainability Vision

To Build a Sustainable Future for the Bank and its stakeholders.

Sustainability Mission

Structure of the Bank Rakyat Sustainability Framework and Policy

The Bank Rakyat Sustainability Framework and Policy supports the Bank’s Sustainability Vision of Building a Sustainable Future for the Bank and its Stakeholders.

The Bank’s overarching ambition of Building a Sustainable Future is supported by three key pillars, which span across Environment, Economic and Social considerations, as listed below. These three pillars are aligned to the Bank’s Sustainability Mission:

• Driving Socioeconomic Development for the Nation

For Malaysia to become a sustainable and inclusive nation, there is a pressing need to reduce socioeconomic inequalities and lend support to marginalised communities. Bank Rakyat remains committed to empowering individuals and uplifting communities, giving them the knowledge, capabilities and resources, they need to thrive and flourish.

By nurturing entrepreneurs, promoting financial literacy, enhancing the customer experience, promoting access to finance and encouraging the development of communities across Malaysia, Bank Rakyat aims to not only enable inclusive socioeconomic development, but build a more sustainable future for all.

• Accelerating the Green Transition

To achieve sustainable development objectives, it is important to systemically transform the financial sector, so that it supports positive green and social outcomes. There is a need to embrace digitalisation, enhance access to finance, improve the customer experience, realign business with the ultimate goal of safeguarding the environment.

With these changes, the financial sector will become more sustainable and will play a critical role in protecting environmental health and addressing climate change.

• Strengthening Our Internal Foundations

At the heart of Bank Rakyat’s journey of sustainable transformation lies our commitment to developing, nurturing and supporting our workforce. We will continue to invest in our human capital, ensuring that our talent is equipped with the skills and knowledge they need to progress in their careers and support the Bank’s strategic ambitions.

We aim to cultivate a culture of continuous learning and high performance, both of which will ensure that our workforce is capable of addressing current and future social, economic and environmental needs.

Underlying the Bank’s Sustainability Vision and Mission is a commitment to Embodying Shariah Leadership. Adherence to Shariah principles is a critical aspect of the Bank’s culture and this has been reflected in the Bank Rakyat Sustainability Framework and Policy. The Bank shall ensure that its sustainability initiatives are grounded in Shariah compliance.

At the core of the Bank Rakyat Sustainability Framework is the Bank’s corporate vision and mission. The corporate vision and mission are included in the Bank Rakyat Sustainability Framework to highlight the integration of sustainability into the Bank’s business operations. By aligning Bank Rakyat’s corporate vision and mission with its sustainability vision and mission, the Bank shall be able to transform into a sustainable financial institution.

The concept of Embodying Shariah Leadership forms the foundation of the Bank Rakyat Sustainability Framework, cross cutting all three pillars and contributing towards the Bank’s vision of Building a Sustainable Future.

The bedrock underpinning the Bank’s sustainability efforts is our commitment to Islamic principles. By Embodying Shariah Leadership and ensuring that Shariah principles remain deeply embedded within our culture, practices and products, Bank Rakyat strives to usher in a more equitable, just and sustainable Malaysia.