Phase 2: Planned Expansion of ESG Risk Framework By Q3 2022, BIMB will incorporate more details into its Framework, including the development of ESG Scorecards and further implementation of portfolio profiling and stress testing. IDENTIFYING AND ASSESSING CLIMATE AND ESG RISK BIMB has undertaken a set of gap assessments through its engagement with knowledge partners internally, and through external responses to regulators, investors and by participating in recognised sustainability benchmarks and indices. Through these assessments, BIMB has determined certain areas where risk management systems and controls are currently being developed and improved upon. Due Diligence of Customers BIMB performs due diligence of business financing as part of pilot initiatives in line with BIMB’s ESG Risk Framework that is currently in development. These due diligence assessments are carried out to determine environmental, social and governance risk related to new and existing customers that may affect the bank in terms of climate and sustainability impact. Customers that are subjected to the ESG due diligence process are prioritised based on the following factors: Exposure to sectors with relatively high environmental or social impact including power generation, mining, oil & gas, forestry, palm oil, heavy manufacturing, water supply, and others deemed high risk at time of customer onboarding. High materiality to the Bank in terms of financing exposure (RM value) Extreme outliers i.e. companies that score in the top or bottom 10% of customers based on the ESG scoring Companies with known or detected ESGrelated controversies or grievances in the last 12 months BANK I SLAM MALAYS IA BERHAD 114 SUSTAINABLE FINANCE
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