In developing a framework for managing ESG risk, we engaged with recognised partners to implement a range of activities to better provide clarity on our ESG risk exposures and determine the most effective ways to monitor and mitigate these risks. In 2021, we completed Phase 1 of key activities in implementing the ESG risk framework. By utilising the gap assessments conducted internally and through our engagement with external stakeholders including investors, NGOs, civil society and specialised subject matter experts, we have identified the key ESG risks in our internal operations and those that arise from external customers and vendors. CONVERGING SHARIAH VALUES AND ESG Since 2018, the Value-based Intermediation (“VBI”) checklist has been used to guide our businesses and operations on the broad compliance of activities that covers Shariah principles, environmental impact, workforce equality and corporate governance during the credit evaluation for on-boarding of financing and also used annual review of existing financing. The VBI checklist for preliminary financing assessment covers broad compliance to: • Our businesses and operations are to adhere strictly the principles and values of Shariah where we do not engage in activities that are related to weapons, liquor and gambling. • Focus on minimising environmental impact through our businesses, as well as promoting activities that lead to environmental awareness and conservation. • Workforce equality that ensures a conducive working environment and fair opportunities for all employees. • Ethical activities that promote our values and the trust of our stakeholders. • Complete non-participation in non-ethical activities such as human trafficking and child labour, and those that result in adverse labour relations. • Corporate Governance that ensures the integrity of our businesses and operations. 01 03 04 05 06 02 SUSTAINABILITY STRATEGY BANK I SLAM MALAYS IA BERHAD 110
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