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This document outlines Ujjivan Small Finance Bank's approach to strengthening environmental, social and governance (ESG) integration. It details the key activities the bank has undertaken, including a materiality assessment, benchmarking against peers, and assessments against the Dow Jones Sustainability Index and EY's Sustainable by Design framework. It establishes six pillars for the bank's ESG framework: sustainable operations, empowering communities, responsible finance, customer centricity, human capital, and effective governance. Under each pillar, focus areas and goals are defined for the short, medium and long term to guide the bank's sustainability strategy and reporting.

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Road to Sustainability Leadership Strengthening ESG Integration Ujjivan Small Finance Bank Limited
Page 2 Contents 1 Executive Summary 2 Key ‘Takeaways’ 3 Building the ‘Framework’ 4 Way Forward ‘To Do’
Page 3 Our Approach Strengthening & Integrating ESG Materiality Assessment DJSI Gap Assessment Maturity Assessment Sustainability Strategy ‘Sustainability Report’ in accordance to GRI Standards A Sustainability Strategy that is fully integrated with business strategy, global best practices and that supports in institutionalizing ESG programs & initiatives across the business ‘BRSR’ as per provisions of SEBI LODR 1 2 3 4 6 7 5 Communication Campaign 9 Data Management 8
Page 4 S. No. Activities Status Brief Update 1. Materiality Assessment Completed • 177 stakeholders engaged i.e., 161 internal and 16 external • Materiality matrix developed 2. Gap Assessment [ Benchmarking ] Completed • Benchmarking completed using EY’s SbD criteria • Four banks i.e. AU, IndusInd, HDFC & Cholamandalam 3. DJSI Assessment Completed • Gap assessment conducted as per DJSI methodology • Actions items identified under short, mid and long term 4. ESG Strategy and Roadmap In Progress • Focus areas identified and ESG framework devised • Long-term and short-term goals defined across focus areas • Signoffs to be obtained for respective focus areas • Implementation plan to be developed 5. Data Management In Progress • Environment data collection template shared • ESG dashboard (MIS) to be developed post finalization of goals / targets / implementation plan 6. Effective Governance In Progress • Policies identified for updation / development • OHS policy drafted; Sustainability, CoC, HR in progress • Multi-tier governance to be developed 7. Capacity Building In Progress • 1 workshop and 1 flyer released • Other programs scheduled and to be taken subsequently 8. Drafting of BRSR Completed • Maiden BRSR drafted and finalized 9. Drafting of Sustainability Report In Progress • Data collection has been initiated; Draft report to be in place by end of August Status Overview Activities and Update
Page 5 Page 5 Key ‘Takeaways’ 2
Page 6 Key ‘Takeaways’ Strengthening Disclosures - ‘BRSR’ Essential Indicators Leadership Indicators Section & Principle Total Essential Leadership Remarks Section A: General Disclosures 24/24 24/24 - - Section B: Management & Process Disclosures 9/12 9/12 - • Relevant Certifications (such as ISO, SA 8000, BIS) • Setting up specific goals and targets and tracking respective performance Section C: P1 - Ethical Business Practices 8/9 7/7 1/2 • Awareness and training programs for value chain partners Section C: P2 – Product Stewardship 9/9 4/4 5/5 • Process for safely reclaim of products for reusing, recycling and disposing at the end of life Section C: P3 – Employee Well-being 16/21 12/15 4/6 • Equal opportunity policy • Strengthened Health and Safety Management System • Reporting carried out only for permanent employees • Health & Safety Audits / Assessments within organization and value chain partners Section C: P4 – Stakeholder Engagement 5/5 2/2 3/3 - Section C: P5 – Human Rights 10/15 7/10 3/5 • Human Rights Audits/Assessments within organization and value chain partners • Human Rights due diligence across operations Section C: P6 – Environment 16/21 9/12 7/9 • Implementation of Renewable energy • Monitoring freshwater consumption • GHG Accounting (Scope 1, Scope 2 and Scope 3) and air emissions • Policy and Management for all types of waste (including e-waste) • Third party assurance • Assessment of value chain partners with respect to environmental parameters Section C: P7 – Public policy 2/3 2/2 0/1 • Undertaking public policy advocacy Section C: P8 – Inclusive Growth 6/10 3/4 3/6 • Increase sourcing from SMEs and local suppliers • Impact assessments for CSR initiatives Section C: P9 - Customer Focus 11/11 6/6 5/5 • Cyber security policy formulation (currently the bank has “Data Privacy” policy) 116/140 85/98 31/42
Page 7 Key ‘Takeaways’ Defining ‘Materiality Assessment’ CV To identify and prioritize aspects that are of relevance and significance to stakeholder and business 136 Employees 18 Department SPOC’s 5 NGOs 2 Investors 7 Customers Engaged 170+ Internal & External Stakeholder through various mediums 7 Leadership & Sr Mgmt. 2 Suppliers [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANG E] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] 0.80 1.00 1.20 1.40 1.60 1.80 2.00 0.30 0.50 0.70 0.90 1.10 1.30 1.50 1.70 1.90 2.10 STAKEHOLDER INFLUENCE IMPACT ON USFB Materiality Matrix Responsible Finance Sustainable Operations Key Themes Empowering Communities Effective Governance Governance Social Environment
Page 8 Key ‘Takeaways’ Maturity Assessment – ‘EY’s SbD’ Cholamandalam HDFC Reactive Progressive Proactive Transformative 0 1 2 3 4 Ujjivan IndusInd AU Bank 2.89 2.79 3.56 1.51 1.27 To assess & understand current state scenario against EY’s Sustainable by Design Framework’s 15 aspects Key takeaways have been identified and bucketed under short-term (i.e., 0 – 3 months), mid-term (4 – 12 months) and long-term (1 year & beyond)  Short-term: Multilevel sustainability governance mechanism, materiality assessment; sustainability framework with identified focus areas, goals, objectives & targets, Strengthen internal data management & monitoring mechanism; Strengthen policies & SOPs from ESG Standpoint  Mid-term: Develop sustainability communication plan (internal & external stakeholders), Sustainability Microsite, Integration of ESG aspects into due diligence process / supplier onboarding, Explore various global forums to be Signatory (UNGC), Participation in leading ESG Indices, Disclosure in alignment with frameworks like TCFD and Develop Policies (related to sustainable sourcing & Human Capital Development)  Long-term: Sustainable-linked Financial Products – Adding greener credentials (funding green initiatives such as CNG vehicles, Green Fixed Deposits), External Assurance for sustainability disclosures, Disclose Product Sustainability Index/Metrics externally (annually). 2.17
Page 9 Key ‘Takeaways’ Maturity Assessment – S&P Global CSA To access the current state with respect to DJSI requirement and to list out opportunities to strengthen the system 1. Materiality: Assessment of material issues, Reporting as public disclosure and linking to management incentives 2. Sustainability Strategy: Define focus areas & commitment across Environment / Social aspects 3. Integrating ESG criteria in retail banking and its products & services: Public statement that bank incorporates ESG aspects into credit / lending business, public evidence / disclosure, Customer / Client Due Diligence / Know your customer (KYC) process, public evidence that bank is engaged with clients on ESG related risks and opportunities and public evidence that bank applies exclusion in credit / lending business 4. Policy: Anti-bribery policy, Group-wide tax policy, Anti-crime policy and Human rights policy, OHS policy, Board diversity (to be enhanced covering race & cultural background). All policy listed to be in public domain. Training also to be provided on Anti-crime policy (training can be provided for other policies as well as this helps in embedding ESG commitment across) 5. Disclosure: Standalone sustainability report / integrated report to be in place covering aspects (all E,S,G) that require public disclosure
Page 10 Maturity Assessment Sector Trends Globally Material Aspects ESG Indices Responsible Finance Risk & Crisis Management Talent extraction and retention Human Capital development Corporate Governance Responsible Finance Corporate Social Responsibility Governance & Ethics Decarbonization Strategy Alignment to Global Frameworks Financial Inclusion Diversity & Inclusion Transparency & Disclosure Sustainability Strategy Governance Risk Management Disclosures Data Privacy & Cybersecurity Risk Management Sustainable Strategy Goals & Objectives Branding & communication Responsible Finance Responsible Supply Chain Social Aspects Corporate Social Responsibility Resource efficient process Data Privacy & Cybersecurity Digital Transformation Assurance Metrices & Indices Digital Transformation Customer Experience Sustainable Finance Decarbonization Strategy Employee wellbeing Compliance Human Capital Development Responsible Finance Data Privacy & Cybersecurity Digital Transformation Transparency & Disclosures Consumer Financial Protection Stakeholder Engagement Customer relationship Financial Inclusion Risk Management ESG Framework Key ‘Takeaways’ Maturity Assessment – S&P Global CSA
Page 11 Page 11 Building the ‘Framework’ 3
Page 12 Ujjivan SFB’s ESG story shall rest on the performanc e perspectives Purpose Building the ‘Framework’ Fundamentals – Performance Perspectives
Page 13 Building the ‘Framework’ ESG Framework – ‘SIX’ Pillars ESG FRAMEWORK Sustainable Operations Empowering Communities Responsible Finance Customer Centricity Human Capital To provide financial services to the unserved and underserved customers and transform to a responsible mass market bank, building a sustainable tomorrow Digital Transformation Stakeholder Engagement Transparency & Disclosure Effective Governance 1. Sustainable by Ops. 2. Sustainable by Design 1. Corporate Social Responsibility 1. Talent Mgmt. 2. DEI 3. Human Rights 4. Health, Safety and Wellness 1. Governance 2. Risk Mgmt. 3. Data Privacy & Cyber Security 4. Ethics & Compliance 1. Customer Relationship Management 1. Green Finance & Inclusive Finance
Page 14 Building the ‘Framework’ Pillar 1 – Sustainable Operations for more details click on the respective aspect ‘TWO’ FOCUS AREAS Sustainable operations refer to the strategic integration of environmentally conscious practices within an organization's day-to-day activities and processes, aiming to minimize environmental impact, optimize resource utilization, and contribute to long-term social and environmental well-being. Sustainable by Operations Sustainable by Design Establish and drive sustainable practices across built environment with an objective to minimize resource usage and associated impact– Emissions, Waste & Water Environmentally conscious or responsible built space, purposefully designed to reduce the overall environment footprint during & after construction phase
Page 15 Building the ‘Framework’ Pillar 1 – Sustainable Operations – Sustainable by Operations [ 1 / 2 ] • Streamline monthly monitoring and establish accounting across environment KPIs (energy, emissions, waste, water) • Continue the rigour of data reporting and monitoring mechanism through automation process • Identify relevant Scope 3 emissions categories & sources • Explore the feasibility of Scope 3 emissions accounting in alignment with GHG Protocol FY24 FY25 FY 26 Environment Monitoring Mechanism Sustainable by Operations* Responsible Waste Management • Identify & categorize the wastes • Prepare an inventory of the waste • Handle and dispose in adherence to the laid down regulatory requirements • Waste handling vendor contracts to be in place • Guidelines in place on waste handling, storage and disposal • Continue the rigour of waste management handling across operations • Explore and implement waste reduction / reusing options • Achieve “Zero waste to landfill” status • Retain Zero waste to landfill status Energy / Emissions/ Water • Explore opportunities for resource optimization (energy & water) • Renewable energy options to be explored especially for branches where consumption is minimum • Conduct Energy audit to identify energy saving opportunities. • 100% offices to be equipped with Energy efficient lighting systems to conserve energy • 100% employees will be provided training on energy and water conservation practices through awareness campaigns, training programs etc • SOP to be defined for Resource optimization and renewable alternatives as default across operations. • Install Renewable energy (Solar PV) for selected offices • Implement energy audit findings (applicable ones) across operations and measure the energy reduction achieved, • Achieve 5% reduction in power consumption compared to FY’23 • Achieve 10% reduction in power consumption compared to FY’23 • Explore opportunities to reduce Scope 3 emissions, which are emission intensive (Ex: Employee commutation, Business travel etc.) Goal 2030 20% reduction in Power consumption Target 2028 15% reduction in Power consumption Target 2026 10% reduction in Power consumption *Goals and targets are w.r.t to FY’2023 baseline Focus Area SPOC Ms. Almas Fatima, National Manager Admin & Infrastructure Dept
Page 16 Building the ‘Framework’ Pillar 1 – Sustainable Operations – Sustainable by Design [ 2 / 2 ] • Develop guidelines on sustainable green design concepts such as energy efficient fittings, alternate materials in accordance with global frameworks • Define KPIs scoring mechanism • Address the gaps/opportunity areas basis the pilot assessment. • Automation of Internal processes : Moving towards manual to automated process for processes (Ex: digital invoices, Digital employee visiting cards, dual printing, and digital application forms) • Implement GREEN building guidelines for selected office and declare it as a “Model Green branch“ • Review and update the guidelines as per the learning’s from “model Green branch” • Explore the feasibility of obtaining IGBC certification (Green building) for selected office location • 20% automation of Internal process across 100% offices and reduce paper consumption by 20% • Certification of select branches in alignment with national standards - IGBC • 50% automation of Internal process across 100% offices and reduce paper consumption by 50% FY24 FY25 FY 26 Green Branches / Offices Sustainable by Design Goal 2030 10% of total office area (Ujjivan offices) to achieve ‘Green Building’ certification Target 2028 5% of total office area (Ujjivan offices) to achieve ‘Green Building’ certification Target 2026 One select office as “GREEN Building” certified Focus Area SPOC Ms. Almas Fatima, National Manager Admin & Infrastructure Dept
Page 17 Building the ‘Framework’ Pillar 2 – Empowering Communities for more details click on the respective aspect ‘ONE’ FOCUS AREA Creating a more equitable and inclusive society by delivering holistic sustainable values across the communities we operate. Corporate Social Responsibility Supporting essential workers and vulnerable sections of society through focused interventions like education, skilling, healthcare
Page 18 • 100% adherence to process changes introduced • Increase Chhote Kadam project's impact on lives by at least 10% compared to the previous FY (excluding COVID support activities). E.g., 10% increase in livelihood program impact, targeting at least 50% beneficiaries with enhanced income • 20% increase in Cleanliness drive coverage (by area) • Include 10% more aspirational districts in the program • Minimum 20% increase green cover through Ujjivan's CSR initiatives • % of employees contributing in CSR activities through volunteering increased by at least 5% • Impact assessment for all thematic areas with 10% increase in sample size year on year • Feasibility for water conservation measures for community to be explored Lives impacted through Chhote Kadam project to be increased by at least 10% more than previous FY (non- COVID support activities). • 20% increase in Cleanliness drive coverage (by area) • Include 10% more aspirational districts in the program • Minimum 20% increase green cover through Ujjivan's CSR initiatives ( from the previous year ) • % of employees contributing in CSR activities through volunteering increased by at least 5% from the previous FY • Impact assessment for all thematic areas with 10% increase in sample size year on year Lives impacted through Chhote Kadam project to be increased by at least 10% more than previous FY (non- COVID support activities). • 20% increase in Cleanliness drive coverage (by area) • Include 10% more aspirational districts in the program • Minimum 20% increase green cover through Ujjivan's CSR initiatives • % of employees contributing in CSR activities through volunteering increased by at least 5% • Impact assessment for all thematic areas with 10% increase in sample size year on year • Explore the feasibility on Renewable energy offset programs FY24 FY25 FY 26 Project Activities Goal 2030 Disclose the social value through Social Return on Investment study Target 2028 1. Atleast 10,00,000.of lives impacted 2. Atelast 25%.of women beneficiaries 3. Atleast 2000 of beneficiaries are Persons with Disability 4. Minimum of 3000 of saplings planted 5. Initiate SROI study Target 2026 1. At least 8,00,000 lives impacted 2. At least 1500 beneficiaries are Persons with Disability 3. At least 2000 saplings planted Corporate Social Responsibility PROCESSES: • Standardization of all processes /SOPs, RFP/proposal formats etc Logical framework & KPIs developed for 100% long-term projects and included as annexures in MoUs • Baseline & endline assessment for at least 70% of education, healthcare & behaviour change projects Building the ‘Framework’ Pillar 2 – Empowering Communities – Corporate Social Responsibility Focus Area SPOC: Ms. Srividhya Durairajan, Manager – CSR Social Service Department
Page 19 Building the ‘Framework’ Pillar 3 – Human Capital for more details click on the respective aspect ‘FOUR’ FOCUS AREAS Human capital is a critical aspect, ensuring fair and respectful treatment of employees, providing opportunities for growth and development, promoting diversity and inclusion, creating a safe and healthy work environment, and attracting and retaining top talent. Talent Management Diversity, Equity & Inclusion Human Rights Companies are evaluated on their workforce talent requirements and their ability to attract, retain, and develop a highly skilled workforce. Culture of inclusion and belonging for everyone in an organization irrespective of gender, ethnicity, race, religion, etc. Rights inherent to all human beings, regardless of race, sex, nationality, ethnicity, language, religion, or any other status. Health, Safety and Wellbeing Promoting resilient and transformative culture where workplace allows people to perform and develop in a safe and healthy ecosystem
Page 20 Building the ‘Framework’ Pillar 3 – Human Capital – Talent Management [ 1 / 4 ] • Increase Training Hours per Employee - from 29 Hours to 30.5 Hours • Creating ESG awareness as part of new employee orientation • Increase the participation % through E-learning modules • Increase Training Hours per Employee- from 30.5 Hours to 32 Hours • Enable Global learning platform for self learning • Increase Training Hours per Employee - from 32 Hours to 34 Hours • Provide learning grant for individual development areas FY24 FY25 FY 26 Learning & Development Talent Management Talent attraction and retention • Achieve talent retention rate through: o Job Rotation policy for key roles o Career development programs o Sabbatical Leave for individuals o Introduction of work life balance policy o Ensuring employee avail mandatory leave to create work life balance across all levels (>60%) o Disclose total Employee turnover rate with a breakdown of Age, Gender, Management level and Race • Control voluntary employee attrition rate up to 25% • Achieve talent retention rate through: o Ensuring eligible employee avail mandatory leave to create work life balance across all levels (>70%) o Implement policies and employee support programs such as Work from home (WFH) working options • Control voluntary employee attrition rate up to 25% • Achieve talent retention rate through: o Ensuring eligible employee avail mandatory leave to create work life balance across all levels (>80%) o Track the usage of People Analytics for Strategic Workforce Planning by: o Identifying current workforce skills gaps o Identifying flight risks to improve retention • Control voluntary employee attrition rate up to 25% Goal 2030 -- Target 2028 -- Target 2026 34 hours per employee training Focus Area SPOC Ms. Shini Ashok, National Manager – Learning & Talent Management HR Department
Page 21 Building the ‘Framework’ Pillar 3 – Human Capital – Diversity, Equity & Inclusion [ 2 / 4 ] • Achieve *gender diversity upto 22%. o Introduction of “Unpause” model to welcome women with a career break o Develop Diversity policy and communicate across the organization o Conduct training on gender neutrality for supervisors for facilitating non-discrimination awareness against married or pregnant women • Achieve gender diversity upto 24%. o Identification of “women only” position in agreement with the HODs to drive women hiring in their respective departments o Derive action plan for hiring women/ disabled/ marginalised o Introduce reward scheme for referring women in leadership role • Achieve gender diversity upto 26%. o Conduct “women only” hiring campaigns o Recognise teams, managers and leaders for driving DE&I FY24 FY25 FY 26 DE&I Diversity, Equity & Inclusion Goal 2030 -- Target 2028 Achieve gender diversity upto 30% Target 2026 Achieve gender diversity upto 26% Focus Area SPOC Manas Satapathy, National Manager – Talent Acquisition HR Department *Gender diversity specified above, refers to women workforce only
Page 22 Building the ‘Framework’ Pillar 3 – Human Capital – Human rights [ 3 / 4 ] FY24 FY25 FY 26 Human Rights Goal 2030 - Target 2028 Completion of the remediation actions of the identified risk areas. Target 2026 Complete implementation of the HRDD • Develop the human rights policy and communicate across relevant stakeholders • Develop a human rights due diligence framework and identification of the potential risks and impact of the same. • Conduct due diligence process to proactively identify potential impacts and risk relating to respecting human rights • Report on human rights mitigation and remediation activities • Implement processes to mitigate human rights risks • Number of sites with mitigation plans • Type of remediation actions taken Human Rights Focus Area SPOC Prasanna Venkatesen, National Manager – HR operations HR Department
Page 23 Building the ‘Framework’ Pillar 3 – Human Capital – Health, Safety and Wellbeing [ 4 / 4 ] • Develop OHS management system • Program Deployment (e.g., Ergonomics, healthy lifestyle, health talks by experts, fitness programs, defensive driving etc.,) • Conduct accident investigation & preventive action at Ujjivan office locations • Conduct electrical safety audit across Ujjivan offices. • Road safety focused program to be rolled out across operations focussing more on field staff • Monitor the accident rate at Ujjivan office locations • Conduct employee Survey and develop Employee Wellness Index FY24 FY25 FY 26 Employee Overall Wellness Initiatives Health, Safety & Wellbeing Goal 2030 Zero Accidents – Ujjivan office locations Target 2028 Target 2026 Focus Area SPOC Manjunath V, Lead – Payroll & Compliance HR Department
Page 24 Building the ‘Framework’ Pillar 4 – Effective Governance for more details click on the respective aspect ‘FOUR’ FOCUS AREAS This pillar extends far beyond compliance focusing on enabling robust governance, transparency and establishing a conducive environment ensuring no compromise on Organization ethics and values amidst dynamic externalities. Data Privacy & Cyber Security Governance Ethics & Compliance Risk Management Due to the current trend of digitization, it is crucial that access to network, IT systems and data is assured at all times eliminating threat to confidential data and customer privacy in terms of data theft & loss This pillar evaluates the impact companies' corporate governance and business ethics practices have on investors. The companies are assessed on all Governance Key Issues, including Ownership & Control, Board, Pay, Accounting, Business Ethics, and Tax Transparency. An ongoing process of monitoring and assessing systems to ensure they comply with regulatory and industry requirements Assessment and management of the risks associated with climate change/extreme weather and its impacts
Page 25 Building the ‘Framework’ Pillar 4 – Effective Governance – Data Privacy and Cyber Security [ 1 / 4 ]  Align policies and procedures with global standards like ISO 27001:2022 (inclusive of business contingency plan, incident response procedures and periodic testing)  Obtaining ISO 27001:2022 Certification  Ensuring Sustenance of ISO 27001:2022 certification  Implementation of data Privacy Framework as per Indian Privacy Law  Assessment in place to ensure alignment with ISO 27001:2022  Indian Privacy Law Compliance  Strengthen the security posture of the Bank to continue to remain Cyber Attack/ Breach Free. FY24 FY25 FY 26 Privacy and Information Security Management Data Privacy & Cyber Security Goal 2030 Zero Data Security Breaches Target 2028 Target 2026 Focus Area SPOC Mr. Shailesh Tiwari, Cyber Governance Manager Information Security Risk Department
Page 26 Building the ‘Framework’ Pillar 4 – Effective Governance – Governance [ 2 / 4 ]  Design a multi-tier ESG governance structure  Develop roles and responsibilities for each position  Increase the Board Independence further from the current 66%  Continuous review and update of governance structure  Further increase in board diversity ratio  To continue to adhere to highest standards of governance to ensure 100% compliance FY24 FY25 FY 26 Governance Structure Governance Goal 2030 Robust Governance Structure, beyond compliance Target 2028 Target 2026 Focus Area SPOC Kshama Algure, Assistant Company Secretary Corporate Secretary Department
Page 27 Building the ‘Framework’ Pillar 4 – Effective Governance – Ethics & Compliance [ 3 / 4 ] Identify, review and develop areas requiring policy as per ESG trends/external requirements.  100% implementation of policies developed in FY'24  Regular review and update of policies at set frequencies Regularly update policies at set frequencies FY24 FY25 FY 26 Business Ethics ‘Programs and initiatives identified. However, no Goal / Target defined for the same’ Ethics & Compliance Compliance Management  Automation of Contract Management that reduces turnaround time in execution of contracts and streamlines the contract management system.  Implement Litigation Management Software that eases monitoring of cases involving the Bank. Digitisation of stamping through external vendor to avoid storage of physical stamp papers. Continue advisory in the best interest of Bank and mitigate legal risks to avoid any fines, penal actions by statutory authorities against the Bank. Focus Area SPOC Kshama Algure, Assistant Company Secretary Ms. Megha, Manager - Legal Corporate Secretary Department & Legal Team
Page 28 Building the ‘Framework’ Pillar 4 – Effective Governance – Risk Management [ 4 / 4 ] • Risk management education for non-executive directors • Enhance disclosure on risk management practices (risk governance policy, risk training programs) • Disclosure in accordance with TCFD requirements • Develop a framework for ESG aspects in credit/lending business  Integrating climate related risk in the risk management process as per global frameworks • Focused training throughout the organization on risk management principles • Inclusion of Risk management criteria in the HR review process for all employees • *Due diligence process to identify risk & impact relating to human rights • Assessment of potential human rights issues across business activities FY24 FY25 FY 26 Risk & Crisis Management Risk Management Goal 2030 Achieve transformative stage in the risk maturity ladder Target 2028 - Target 2026 Focus Area SPOC Rakesh Kalyanram, Lead - Risk Risk Management Team *This point is included in HR goals as well
Page 29 Building the ‘Framework’ Pillar 5 – Customer Centricity for more details click on the respective aspect ‘ONE’ FOCUS AREA Customer centricity is an organizational approach that places the customer at the core of business operations, emphasizing the development and maintenance of strong customer relationships through effective communication, personalized services, and a deep understanding of customer needs and preferences. Customer Relationship Management Manage customers and better understand their needs in order to provide the right solutions in a timely manner
Page 30 Building the ‘Framework’ Pillar 5 – Customer Centricity – Customer Relationship Management • Launch of new services (video banking, virtual relationship manager, digital support team) to promote hassle free banking experience • Design, Digitisation and Review of ongoing C-SAT surveys • Increase facilities of Straight through process through phone banking from 18 existing process to 80+ • 5 point improvement from previous bank level service index levels (FY23 as the base year) • Capacity building for 100% Branch front end staff on Aajeevan - Life event based banking • Double the fulfilment of customer Service & Deliverable requests, from current 16%, through IB/MB/Phone Banking and other digital channels by enabling self-service modules • Continuous review and monitoring of customer feedback and surveys such as mystery shopping, External C-SAT survey • Conduct need based surveys annually to understand the customer requirement. • 5 point improvement from previous bank level service index levels (FY24 as the base year) • Achieve levels of 150% of SR fulfilment through IB/MB/Phone Banking and other digital channels (FY25 as the base year) • 5 point improvement from previous bank level service index levels (FY25 as the base year) FY24 FY25 FY 26 Customer Relationship Management Customer Relationship Management Goal 2030 Top quartile in Customer Satisfaction Survey Target 2028 Upper side of 3rd quartile in Customer Satisfaction Survey Target 2026 Lower side of 3rd quartile in Customer Satisfaction Survey Focus Area SPOCs • Mr. Deepak Shivprakash Khetan, National Manager- Investor Relations, Financial Planning & Strategy; • Ms. Apoorva Padmanabh, Manager- Service Quality Compliance; • Mr. Sriram Srinivasan- Digital Banking; • Mr. Zubair Ullah, Head- Digital Channels; • Mr. Tahir Khan, National Manager- Procurement
Page 31 Building the ‘Framework’ Pillar 6 – Responsible Finance for more details click on the respective aspect Green Finance Inclusive Finance ‘TWO’ FOCUS AREAS An approach that focusses on financial solutions that creates positive environment impact; and also focus on fostering inclusive baking ecosystem i.e., improving access, increasing usage, enhancing quality Green financing is to increase level of financial flows to sustainable development priorities Equality of opportunities to access financial services. It refers to a process by which individuals and businesses can access appropriate, affordable, and timely financial products and services.
Page 32 Building the ‘Framework’ Pillar 6 – Responsible Finance – Green Finance [ 1 / 2 ]  Conduct market survey and identify the requirements of green products  Develop criteria for Green products/responsible finance.  Identify responsible finance products (ex: lending for rain water harvesting, Biogas plant, EV & CNG vehicle, Solar water heater, ECO friendly buildings, Solar PV, composting facility etc).  Develop KPIs on Green products outreach (e.g. no. of beneficiaries, GHG emission reduction, reduction in fresh water withdrawal etc.) • Roll out the pilot product and monitor the impact created across defined KPIs. • Basis the pilot product, relook the criteria. • Set goals and targets against the KPIs for evaluation. • Launch of green products portfolio. • Measure the KPIs to assess the performance against the targets. • Communicate the performance both externally and internally at fixed intervals (external assurance). • Explore options releasing Green bonds/green deposits, Sustainability linked loans. FY24 FY25 FY 26 Green Finance Green Finance Goal 2030 xx% revenue from green product portfolio Target 2028 xx% revenue from green product portfolio Target 2026 Devise criteria for Green Finance Focus Area SPOC To be nominated Business Team
Page 33 Building the ‘Framework’ Pillar 6 – Responsible Finance – Inclusive Finance [ 2 / 2 ] • Simplifying loan application processes making it easier for small businesses & individuals to access financing • Develop Strategy to provide financial services for aspiring entrepreneurs/ MSME enterprises in rural areas. • Explore and define an action plan to expand the micro-finance portfolio in Tier 2 & Tier 3 cities. • Digital solutions and literacy programs to streamline transactions in the micro-finance sector. • Basis strategy, release financial products in the market to support entrepreneurs/ MSME enterprises. • Collaborate with funds, foundations and development finance Institutions to support projects in sectors like agriculture, micro-finance, health care etc. FY24 FY25 FY 26 Inclusive Finance Inclusive Finance Goal 2030 Expanding reach & impact Target 2028 - Target 2026 - Focus Area SPOC To be nominated Business Team
Page 34 Building the ‘Framework’ Aspects Cutting Across for more details click on the respective aspect ‘THREE’ FOCUS AREAS A comprehensive approach that encompasses transparent and effective communication practices within an organization, involving proactively sharing relevant and accurate information with stakeholders in a timely manner, promoting open dialogue, and fostering meaningful engagement both with internal and external stakeholders. Digital transformation takes a customer-driven, digital-first approach to all aspects of a business, from its business models to customer experiences to processes and operations. Transparency & Disclosures Stakeholder Engagement Digital Transformation Ensuring data completeness, accountability and data transparency to all relevant stakeholders and available in a timely manner. Focus on engaging with internal and external stakeholders and creating value for them Integration of digital technology throughout all aspects of an organization, results in significant changes to how the organization functions and delivers benefits to its clients
Page 35 Building the ‘Framework’ Aspects Cutting Across – Transparency & Disclosures [ 1 / 3 ] • Dedicated webpage on sustainability to display the activities under ESG domain • In addition to the Sustainability Report and BRSR, TCFD two pager to be appended to existing Sustainability Report • Continue the rigour on Sustainability Report in alignment with GRI Standard, BRSR and TCFD • External assurance as per ISAE 3000 and AA 1000 AS (2008) Standards • Integrated reporting in alignment with global frameworks like GRI/TCFD/IIRC FY24 FY25 FY 26 Reporting framework Disclosures ESG Indices • Internal assessment and readiness towards S&P Global CSA (DJSI) to reach ~40 score* • Maiden S&P Global CSA (DJSI) assessment • Continue to participate on S&P Global CSA (DJSI) assessment Goal 2030 Aspire to reach top quartile on S&P Global CSA (DJSI) Target 2028 60 score on S&P Global CSA (DJSI) Target 2026 - Focus Area SPOC D Srividhya, Manager, CSR Kshama Algure, Assistant Company Secretary Social Service Department and Corporate Secretary Team *Above is an indicative score as the DJSI questionnaire gets updated annually
Page 36 Building the ‘Framework’ Aspects Cutting Across – Stakeholder Engagement [ 2 / 3 ] FY24 FY25 FY 26 Stakeholder Engagement Goal 2030 100% digital invoices from vendors with spend of Rs. 1 Cr or higher Target 2028 - Target 2026 Top quartile across all stakeholder group satisfaction surveys  Quarterly engagement with investors - 5 among top 15  Quarterly engagement with Sell-side analyst (minimum 5 nos.)  Quarterly engagement with investors - 7 among top 15  Quarterly engagement with Sell-side analyst (minimum 7 nos.)  Quarterly engagement with investors - 10 among top 15  Quarterly engagement with Sell-side analyst (minimum 8 nos.) Investors  Develop and incorporate ESG requirements in the contracts/agreements executed with vendors through vendor Code of Conduct  Develop SoP for vendor assessment and capture the scores as part of the vendor assessment  Conduct capacity building on vendor code of conduct and assessment for strategic vendor partners  Shift to digital invoices to cover 50% vendors with spend of Rs. 1 Cr or higher  Involve and engage with strategic vendors (50%) to implement eco-friendly initiatives  Shift to digital invoices to cover 80% vendors with spend of Rs. 1 Cr or higher Vendors Focus Area SPOCs • Mr. Deepak Shivprakash Khetan, National Manager- Investor Relations, Financial Planning & Strategy; • Ms. Apoorva Padmanabh, Manager- Service Quality Compliance; • Mr. Sriram Srinivasan- Digital Banking; • Mr. Zubair Ullah, Head- Digital Channels; • Mr. Tahir Khan, National Manager- Procurement
Page 37 Building the ‘Framework’ Aspects Cutting Across – Digital Transformation [ 3 / 3 ]  Implement new digital solutions such as end-to-end Digital Fixed Deposit, Digital Savings/Current Account, personalised banking services using video banking solutions  Bringing 35 lakhs+ customers into digital banking space and achieve digital transactions (volume) of 35 crores by including 12 lakh+ new users on any one of the digital platform  Bringing 50 lakhs+ customers into digital banking space and achieve digital transactions (volume) of 50 crores by including 15 lakh+ new users on any one of the digital platform  Bringing 65 lakhs+ customers into digital banking space and achieve digital transactions (volume) of 75 crores by including 18 lakh+ new users on any one of the digital platform  100% digitalisation for Asset & Liability business and Digital Lending Solutions, thereby moving towards paper less banking services FY24 FY25 FY 26 Digital Transformation Digital Transformation Goal 2030 Bringing 1 crore customers into digital banking space and achieve digital transactions (volume) of 100 crores. Target 2028 - Target 2026 Bringing 65 lakhs+ customers into digital banking space and achieve digital transactions (volume) of 75 crores. Focus Area SPOCs • Mr. Sriram Srinivasan- Digital Banking; • Mr. Zubair Ullah, Head- Digital Channels; Digital Banking Dept
Page 38 Building the ‘Framework’ ESG Framework – ‘SIX’ Pillars ESG FRAMEWORK To provide financial services to the unserved and underserved customers and transform to a responsible mass market bank, building a sustainable tomorrow Digital Transformation Stakeholder Engagement Transparency & Disclosure 6 Pillars 13 Goals 16 Focus Areas
Page 39 Page 39 Way Forward ‘To Do’ 4
Page 40 Way Forward ‘To Do’ Action Items # Activity 1 Co-develop implementation plan for the first year activities for all aspects (comprising Gantt Chart & MIS) 2 Develop multi-tier ESG Governance mechanism 3 Draft maiden Sustainability report in accordance with GRI standards
Page 41 Thank you Page 41
Page 42 Maturity Scale : Summary (1/4) Page 42 S. No. Aspect USFB- maturity Justification for current state Actions required for moving towards the transformative stage 1 Governance Progressive  Committees in place for CSR, IT Strategy, Audit, Stakeholders Engagement, Risk Management  ESG is not a part of any committee  CSR policy in place  No policy established for EHS  Sustainability governance structure with a steering committee supported by a cross-functional team should be formally institutionalized  Steering committee to monitor progress on ESG goals and KPIs periodically 2 Risk Management Reactive  Business risks identified and disclosed in Annual Report  No ESG risks identified  Recognise risks related to safety/ EHS, climate change and social issues and integrate them into Enterprise Risk Management (ERM) framework 3 Strategic Direction Reactive  No sustainability strategy in place  CSR thematic areas identified  Sustainability strategy covering the entire value chain to be formulated  Periodic materiality assessments to be carried out via stakeholder engagements  Progress against the defined strategy to be monitored and disclosed. 4 Goals & Objectives Reactive  No goals specific to ESG in place  Specific goals and targets to be set for all material topics across operations and value chain  Goals and targets to be aligned with global frameworks such as the Sustainable Development Goals (SDGs)  The progress and achievement of goals and targets should be externally communicated Reactive Progressive Proactive Transformative Low High
Page 43 Maturity Scale : Summary (2/4) Page 43 S. No. Aspect USFB - Current maturity Justification for current state Actions required for moving towards the transformative 5 Branding & Communication Reactive  Webpage is limited to CSR only  No microsite related to sustainability  Dedicate ESG into company’s purpose and develop a separate microsite for ESG  Engage with external stakeholders regularly on ESG through social media, thought leadership, among others 6 Responsible Finance/ Progressive  Water and Sanitation loans are provided  Plans in pipeline to include other green products  Sustainability linked products should be introduced.  Develop and communicate ESG metrics to measure the environmental and social KPIs of the associated products/services 7 Responsible Supply Chain Progressive  Internal Audits are carried out  Procurement from local suppliers  Vendor code of conduct is not available  Develop Vendor Code of Conduct including ESG aspects and communicated to all suppliers  Regular supplier assessments can be conducted for key suppliers and the results to be communicated externally  Supplier engagement program should be in place and achievements / success stories to be disclosed publicly 8 Social Aspects Progressive  Employee benefits such as medical insurance, flexible working hours, group term and accident insurance, maternity and paternity benefits, etc. are provided  Engagement with employees through satisfaction surveys  Dedicated DE&I policy is not developed  OHS management system not in place  SA8000 certification can be pursued  ESG integrated employee programs and communications can be introduced  DE&I Policy to be developed and goal setting, monitoring and disclosure of KPIs to be done  Develop OHS management systems- establish protocols. Reactive Progressive Proactive Transformative Low High
Page 44 Maturity Scale : Summary (3/4) Page 44 S. No. Aspect USFB - Current maturity Justification for current state Actions required for moving towards the transformative stage 9 Corporate Social Responsibility Progressive  CSR Policy in place  Focus areas are: Public Amenities, Health & Hygiene, Promoting Education, Social Welfare, etc,  Due diligence to be carried out across programs/NGO partners  Assessment of CSR projects and analysis of the impacts to be carried out 10 Resource Efficient Processes & Practices Progressive  Sustainability initiatives adopted in pockets  Monitoring for Scope 1 and Scope 2 emissions  Energy & emissions related short-term, mid-term and long-term targets/milestones to be identified  Communicate performance both externally and internally at regular intervals 11 Digital Transformation Proactive  USFB has a Digital Banking team to drive the central digital strategy.  The drivers of this initiative are digital innovation, application programming interface (API) banking, fintech engagements & partnerships, robotic process automation, artificial intelligence, digital lending, payments, digital marketing and data analytics & insights  Enhance digital experience for the customers and workforce. 12 Data privacy and cybersecurity Proactive  Risk team oversees the IT risk functions.  Privacy Policy is available to all employees across Head Office, Data Centres and Branch Offices  IBA – Banking Technology Award 2021 Best IT Risk & Cyber Security Initiatives (amongst SFB / Payments Bank)  Compliance and Certifications towards ISO 27001. Reactive Progressive Proactive Transformative Low High
Page 45 Maturity Scale : Summary (4/4) S. No. Aspect USFB - Current maturity Justification for current state Actions required for moving towards the transformative stage 13 Disclosures Reactive  Disclosure targets limited to Business Responsibility Report (BRR)  Data collection for disclosures is manually driven and applied across all operations  Minimum monitoring activities are performed  Disclosures like ESG reports to be developed in alignment with global frameworks like GRI/TCFD/IIRC  IT tools should be leveraged to automate the data collection process for reporting 14 Assurance Reactive  No sustainability disclosure in place to obtain assurance  External assurance to be obtained- International Standard for Assurance Engagements (ISAE) 3000, Accountability Assurance Standard (AA100 AS) ; 15 Metrices and Indices Reactive  No system in place to disclose on ESG Indices  Leading ESG indices to be adopted as per DJSI/MSCI/FTSE, etc. Reactive Progressive Proactive Transformative Low High
Page 46 46 Activities phased out basis the feasibility of implementation and bucketed into three time periods Long: 80 - 85 Medium: 50 - 60 Short : 35 - 45 • Sustainability Strategy & Roadmap with defined goals and targets • Sustainability Governance mechanism & policies (update / develop - board diversity, OHS, tax policy) • Accounting & Disclosures in public domain quantitative data (including energy, water, waste, social aspects) • Executive compensation linked to material aspects • Employee engagement survey to be conducted and reported • OHS Mgmt. Systems – risks, hazards, targets, training & reporting • Climate strategy & TCFD Disclosure in alignment with the four pillar recommendations • Climate related risks to be aligned with mgmt. incentives • ESG aspects to be included in customer due diligence • Signatory to UNGC • Human rights due diligence, mitigation & remediation • Financial inclusion measurement, impact and valuation • Financial inclusion performance 3rd party verification • Sustainability disclosure 3rd party assurance • Enhancement of performance across ESG aspects High Medium Low Score Impact Levers S&P Global CSA Gap Assessment Areas of Focus & Prioritization
Page 47 Building the ‘Framework’ Pillar 1 – Sustainable Operations – Sustainable by Operations [ 1 / 2 ] Sustainable by Operations Establish and drive sustainable practices across built environment with an objective to minimize resource usage and also impact associated – Emissions, Waste & Water Key waste mgmt. measures: • Introduce digital visiting cards since FY22 • Replaced single use plastic bottles with refillable glass bottles at all offices • Responsible usage of compressed wood modulars in all offices • E-waste generated disposed only through authorised entities & recyclers • Procure e-devices only from certified manufacturers that comply with regulations on hazardous substances’ disposal The Govt. notified various rules for Plastic Waste Management, e-Waste Management, Construction and Demolition Waste Management, Metals Recycling etc. Formed 11 committees, led by the concerned line ministries & comprising officials from MoEFCC, NITI Aayog, domain experts, academics and industry representatives for 11 focus areas The committees will prepare comprehensive action plans for transitioning from a linear to a circular economy in their respective focus areas India Driving Transition from Linear to Circular Economy
Page 48 Building the ‘Framework’ Pillar 1 – Sustainable Operations – Sustainable by Design [ 2 / 2 ] Sustainable by Design Environmentally conscious or responsible built space, which is purposefully designed to reduce the overall environment footprint during & after its construction phase Key sustainable workspace initiatives: • Recycle old furniture & utilise only certified green- wood furnishings • Afforestation Strategy: Focused on enhancing green cover in offices & beyond its periphery • Insulation in offices to reduce heat at workplaces to reduce energy consumption • Adopted energy-efficient systems by installing LEDs in offices, branches & outlets • Natural ventilation through modern architectural designs • Variable Refrigerant Flow (VRF) & Variable Refrigerant Volume (VRV) systems are integrated & installed in the ACs in all Offices • Responsible usage of compressed wood modulars in AU’s offices which are environmentally benign, reusable, & recyclable. LEED Gold certified offices in Mumbai and Bhubaneswar. In addition, new buildings in Mohali, Kolkata Palava and Mumbai (Maharashtra) premises are being constructed to meet IGBC Gold certification standards.
Page 49 Corporate Social Responsibility Supporting essential workers and vulnerable sections of society through focused interventions like education, skilling, healthcare Building the ‘Framework’ Pillar 2 – Empowering Communities – Corporate Social Responsibility [ 1 / 1 ]
Page 50 Building the ‘Framework’ Pillar 3 – Human Capital – Talent Management [ 1 / 4 ] Talent Management Companies are evaluated on their workforce talent requirements and their ability to attract, retain, and develop a highly skilled workforce.
Page 51 Building the ‘Framework’ Pillar 3 – Human Capital – Diversity, Equity & Inclusion [ 2 / 4 ] Diversity, Equity & Inclusion Culture of inclusion and belonging for everyone in an organization irrespective of gender, ethnicity, race, religion, etc.
Page 52 Building the ‘Framework’ Pillar 3 – Human Capital – Human Rights [ 3 / 4 ] Human Rights Rights inherent to all human beings, regardless of race, sex, nationality, ethnicity, language, religion, or any other status.
Page 53 Building the ‘Framework’ Pillar 3 – Human Capital – Health, Safety and Wellbeing [ 4 / 4 ] Health, Safety & Wellbeing Promoting resilient and transformative culture where workplace allows people to perform and develop in a safe and healthy ecosystem FY2021-22 was again a very challenging year for the entire nation and the global economy in particular, due to repeated waves of COVID-19 pandemic, global conflicts & ensuing economic disruptions. One of the key focus areas of the Human Resources function during the financial year was to enable employee well-being and also ensure business continuity for superior customer service.
Page 54 Building the ‘Framework’ Pillar 4 – Effective Governance – Data Privacy and Cyber Security [ 1 / 4 ] Data Privacy & Cyber Security Due to the current trend of digitization, it is crucial that access to network, IT systems and data is assured at all times eliminating threat to confidential data and customer privacy in terms of data theft & loss Data Privacy & Cyber Security
Page 55 Building the ‘Framework’ Pillar 4 – Effective Governance – Governance [ 2 / 4 ] Governance This pillar evaluates the impact companies' corporate governance and business ethics practices have on investors. The companies are assessed on all Governance Key Issues, including Ownership & Control, Board, Pay, Accounting, Business Ethics, and Tax Transparency.
Page 56 Building the ‘Framework’ Pillar 4 – Effective Governance – Ethics & Compliance [ 3 / 4 ] Ethics & Compliance An ongoing process of monitoring and assessing systems to ensure they comply with regulatory and industry requirements UK • FCA is consulting on corporate disclosure of climate risks and is focusing on ‘greenwashing’ • TCFD mandated for companies listed on premium exchange from January 1, 2021 and to extend to all UK companies by 2025 • Social value legislation and climate legislation for procurement • Non-Financial Reporting Directive – expected to cover 50k entities • EU Taxonomy for Sustainable Activities Hong Kong • The Securities & Futures Commission announced its Strategic Framework for Green Finance in 2018, with a focus on climate-related disclosure and the integration of ESG into investment processes by asset managers Germany • Bafin published guidance in December 2019 on how FS firms should manage sustainability risks, with a focus on climate Singapore • Monetary Authority of Singapore - exploring ways to incorporate climate-related risks • SGX introduced sustainability on a “comply-or- explain” basis to its listing rules. • SGX is aligning its disclosure requirements in line with TCFD Australia • Australian Securities & Investments Commission - disclosure provisions to climate-related risks, reflecting TCFD recommendations India • SEBI introduced Business Responsibility and Sustainability Reporting (BRSR) regulations. • It will be mandatory for top 1000 listed companies (by net-worth) from FY23 (voluntary from FY22) United States • US Senate - ESG Disclosure Simplification Act of 2021 • SEC Announces Enforcement Task Force Focused on Climate and ESG Issues • SEC requests Public input on Climate Disclosures Europe Union • Sustainable Finance Action Plan • Sustainable Finance Disclosure Regulations Switzerland • Mandates Climate Reporting for public companies, banks and insurance entities over a threshold – aligned with TCFD
Page 57 Building the ‘Framework’ Pillar 4 – Effective Governance – Risk Management [ 4 / 4 ] Risk & Crisis Management Assessment and management of the risks associated with climate change/extreme weather and its impacts
Page 58 Building the ‘Framework’ Pillar 5 – Customer Centricity – Customer Relationship Management [ 1 / 1 ] Customer Relationship Management Manage customers and better understand their needs in order to provide the right solutions in a timely manner • Customer-centric approach • Seamless, easy, fast & transparent service • Continuous client interaction by using both digital and non-digital channels • More than 70% of client requests in March 2022 were raised through digital channels and overall 95% of the requests got resolved within one day
Page 59 Building the ‘Framework’ Pillar 6 – Responsible Finance – Green Finance [ 1 / 2 ] Green Finance Green financing is to increase level of financial flows to sustainable development priorities • In 2017, the State Bank of India (SBI) launched a green bond worth ₹1,000 crore (US$125 million). The proceeds from the bond were used to finance renewable energy projects • In 2018, HDFC Bank launched a green loan scheme worth ₹5,000 crore (US$625 million). The scheme is designed to finance energy efficiency projects in commercial buildings • In 2019, ICICI Bank launched a sustainable investment fund worth ₹1,000 crore (US$125 million). The fund invests in companies that are working to promote sustainable development
Page 60 Building the ‘Framework’ Pillar 6 – Responsible Finance – Inclusive Finance [ 2 / 2 ] Inclusive Finance Availability and equality of opportunities to access financial services. It refers to a process by which individuals and businesses can access appropriate, affordable, and timely financial products and services. Improving Access Improving Usage Enhancing Quality Financial Inclusion 31% branches in unbanked rural centres 1,93,000+ customers provided financial services under Jan Dhan Yojana 600+ financial literacy camps at rural branches Digital Inclusion 39,000+ AU 0101 registration in unbanked rural centres 40,000+ UPI transacting customers in unbanked rural centres 20,000+ merchants onboarded on UPI QR codes in unbanked rural centers
Page 61 Building the ‘Framework’ Aspects Cutting Across – Transparency & Disclosures [ 1 / 3 ] Transparency & Disclosures Ensuring data completeness, accountability and data transparency to all relevant stakeholders and available in a timely manner. Disclosures- India BRSR is mandatory for the top 1000 listed entities ESG investing to tackle the risk of greenwashing including mandating ESG schemes to invest at least 65% of AUM Core BRSR mandates 49 parameters for ESG reporting Reasonable assurance made mandatory under core BRSR
Page 62 Building the ‘Framework’ Aspects Cutting Across – Stakeholder Engagement [ 2 / 3 ] Stakeholder Engagement Focus on engaging with internal and external stakeholders and creating value for them
Page 63 Building the ‘Framework’ Aspects Cutting Across – Digital Transformation [ 3 / 3 ] Digital Transformation Integration of digital technology throughout all aspects of an organization, results in significant changes to how the organization functions and delivers benefits to its clients

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ESG Framework.pptx

  • 1.
    Road to SustainabilityLeadership Strengthening ESG Integration Ujjivan Small Finance Bank Limited
  • 2.
    Page 2 Contents 1 ExecutiveSummary 2 Key ‘Takeaways’ 3 Building the ‘Framework’ 4 Way Forward ‘To Do’
  • 3.
    Page 3 Our Approach Strengthening& Integrating ESG Materiality Assessment DJSI Gap Assessment Maturity Assessment Sustainability Strategy ‘Sustainability Report’ in accordance to GRI Standards A Sustainability Strategy that is fully integrated with business strategy, global best practices and that supports in institutionalizing ESG programs & initiatives across the business ‘BRSR’ as per provisions of SEBI LODR 1 2 3 4 6 7 5 Communication Campaign 9 Data Management 8
  • 4.
    Page 4 S. No.Activities Status Brief Update 1. Materiality Assessment Completed • 177 stakeholders engaged i.e., 161 internal and 16 external • Materiality matrix developed 2. Gap Assessment [ Benchmarking ] Completed • Benchmarking completed using EY’s SbD criteria • Four banks i.e. AU, IndusInd, HDFC & Cholamandalam 3. DJSI Assessment Completed • Gap assessment conducted as per DJSI methodology • Actions items identified under short, mid and long term 4. ESG Strategy and Roadmap In Progress • Focus areas identified and ESG framework devised • Long-term and short-term goals defined across focus areas • Signoffs to be obtained for respective focus areas • Implementation plan to be developed 5. Data Management In Progress • Environment data collection template shared • ESG dashboard (MIS) to be developed post finalization of goals / targets / implementation plan 6. Effective Governance In Progress • Policies identified for updation / development • OHS policy drafted; Sustainability, CoC, HR in progress • Multi-tier governance to be developed 7. Capacity Building In Progress • 1 workshop and 1 flyer released • Other programs scheduled and to be taken subsequently 8. Drafting of BRSR Completed • Maiden BRSR drafted and finalized 9. Drafting of Sustainability Report In Progress • Data collection has been initiated; Draft report to be in place by end of August Status Overview Activities and Update
  • 5.
    Page 5 Page 5 Key‘Takeaways’ 2
  • 6.
    Page 6 Key ‘Takeaways’ StrengtheningDisclosures - ‘BRSR’ Essential Indicators Leadership Indicators Section & Principle Total Essential Leadership Remarks Section A: General Disclosures 24/24 24/24 - - Section B: Management & Process Disclosures 9/12 9/12 - • Relevant Certifications (such as ISO, SA 8000, BIS) • Setting up specific goals and targets and tracking respective performance Section C: P1 - Ethical Business Practices 8/9 7/7 1/2 • Awareness and training programs for value chain partners Section C: P2 – Product Stewardship 9/9 4/4 5/5 • Process for safely reclaim of products for reusing, recycling and disposing at the end of life Section C: P3 – Employee Well-being 16/21 12/15 4/6 • Equal opportunity policy • Strengthened Health and Safety Management System • Reporting carried out only for permanent employees • Health & Safety Audits / Assessments within organization and value chain partners Section C: P4 – Stakeholder Engagement 5/5 2/2 3/3 - Section C: P5 – Human Rights 10/15 7/10 3/5 • Human Rights Audits/Assessments within organization and value chain partners • Human Rights due diligence across operations Section C: P6 – Environment 16/21 9/12 7/9 • Implementation of Renewable energy • Monitoring freshwater consumption • GHG Accounting (Scope 1, Scope 2 and Scope 3) and air emissions • Policy and Management for all types of waste (including e-waste) • Third party assurance • Assessment of value chain partners with respect to environmental parameters Section C: P7 – Public policy 2/3 2/2 0/1 • Undertaking public policy advocacy Section C: P8 – Inclusive Growth 6/10 3/4 3/6 • Increase sourcing from SMEs and local suppliers • Impact assessments for CSR initiatives Section C: P9 - Customer Focus 11/11 6/6 5/5 • Cyber security policy formulation (currently the bank has “Data Privacy” policy) 116/140 85/98 31/42
  • 7.
    Page 7 Key ‘Takeaways’ Defining‘Materiality Assessment’ CV To identify and prioritize aspects that are of relevance and significance to stakeholder and business 136 Employees 18 Department SPOC’s 5 NGOs 2 Investors 7 Customers Engaged 170+ Internal & External Stakeholder through various mediums 7 Leadership & Sr Mgmt. 2 Suppliers [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANG E] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] 0.80 1.00 1.20 1.40 1.60 1.80 2.00 0.30 0.50 0.70 0.90 1.10 1.30 1.50 1.70 1.90 2.10 STAKEHOLDER INFLUENCE IMPACT ON USFB Materiality Matrix Responsible Finance Sustainable Operations Key Themes Empowering Communities Effective Governance Governance Social Environment
  • 8.
    Page 8 Key ‘Takeaways’ MaturityAssessment – ‘EY’s SbD’ Cholamandalam HDFC Reactive Progressive Proactive Transformative 0 1 2 3 4 Ujjivan IndusInd AU Bank 2.89 2.79 3.56 1.51 1.27 To assess & understand current state scenario against EY’s Sustainable by Design Framework’s 15 aspects Key takeaways have been identified and bucketed under short-term (i.e., 0 – 3 months), mid-term (4 – 12 months) and long-term (1 year & beyond)  Short-term: Multilevel sustainability governance mechanism, materiality assessment; sustainability framework with identified focus areas, goals, objectives & targets, Strengthen internal data management & monitoring mechanism; Strengthen policies & SOPs from ESG Standpoint  Mid-term: Develop sustainability communication plan (internal & external stakeholders), Sustainability Microsite, Integration of ESG aspects into due diligence process / supplier onboarding, Explore various global forums to be Signatory (UNGC), Participation in leading ESG Indices, Disclosure in alignment with frameworks like TCFD and Develop Policies (related to sustainable sourcing & Human Capital Development)  Long-term: Sustainable-linked Financial Products – Adding greener credentials (funding green initiatives such as CNG vehicles, Green Fixed Deposits), External Assurance for sustainability disclosures, Disclose Product Sustainability Index/Metrics externally (annually). 2.17
  • 9.
    Page 9 Key ‘Takeaways’ MaturityAssessment – S&P Global CSA To access the current state with respect to DJSI requirement and to list out opportunities to strengthen the system 1. Materiality: Assessment of material issues, Reporting as public disclosure and linking to management incentives 2. Sustainability Strategy: Define focus areas & commitment across Environment / Social aspects 3. Integrating ESG criteria in retail banking and its products & services: Public statement that bank incorporates ESG aspects into credit / lending business, public evidence / disclosure, Customer / Client Due Diligence / Know your customer (KYC) process, public evidence that bank is engaged with clients on ESG related risks and opportunities and public evidence that bank applies exclusion in credit / lending business 4. Policy: Anti-bribery policy, Group-wide tax policy, Anti-crime policy and Human rights policy, OHS policy, Board diversity (to be enhanced covering race & cultural background). All policy listed to be in public domain. Training also to be provided on Anti-crime policy (training can be provided for other policies as well as this helps in embedding ESG commitment across) 5. Disclosure: Standalone sustainability report / integrated report to be in place covering aspects (all E,S,G) that require public disclosure
  • 10.
    Page 10 Maturity AssessmentSector Trends Globally Material Aspects ESG Indices Responsible Finance Risk & Crisis Management Talent extraction and retention Human Capital development Corporate Governance Responsible Finance Corporate Social Responsibility Governance & Ethics Decarbonization Strategy Alignment to Global Frameworks Financial Inclusion Diversity & Inclusion Transparency & Disclosure Sustainability Strategy Governance Risk Management Disclosures Data Privacy & Cybersecurity Risk Management Sustainable Strategy Goals & Objectives Branding & communication Responsible Finance Responsible Supply Chain Social Aspects Corporate Social Responsibility Resource efficient process Data Privacy & Cybersecurity Digital Transformation Assurance Metrices & Indices Digital Transformation Customer Experience Sustainable Finance Decarbonization Strategy Employee wellbeing Compliance Human Capital Development Responsible Finance Data Privacy & Cybersecurity Digital Transformation Transparency & Disclosures Consumer Financial Protection Stakeholder Engagement Customer relationship Financial Inclusion Risk Management ESG Framework Key ‘Takeaways’ Maturity Assessment – S&P Global CSA
  • 11.
    Page 11 Page 11 Buildingthe ‘Framework’ 3
  • 12.
    Page 12 Ujjivan SFB’s ESGstory shall rest on the performanc e perspectives Purpose Building the ‘Framework’ Fundamentals – Performance Perspectives
  • 13.
    Page 13 Building the‘Framework’ ESG Framework – ‘SIX’ Pillars ESG FRAMEWORK Sustainable Operations Empowering Communities Responsible Finance Customer Centricity Human Capital To provide financial services to the unserved and underserved customers and transform to a responsible mass market bank, building a sustainable tomorrow Digital Transformation Stakeholder Engagement Transparency & Disclosure Effective Governance 1. Sustainable by Ops. 2. Sustainable by Design 1. Corporate Social Responsibility 1. Talent Mgmt. 2. DEI 3. Human Rights 4. Health, Safety and Wellness 1. Governance 2. Risk Mgmt. 3. Data Privacy & Cyber Security 4. Ethics & Compliance 1. Customer Relationship Management 1. Green Finance & Inclusive Finance
  • 14.
    Page 14 Building the‘Framework’ Pillar 1 – Sustainable Operations for more details click on the respective aspect ‘TWO’ FOCUS AREAS Sustainable operations refer to the strategic integration of environmentally conscious practices within an organization's day-to-day activities and processes, aiming to minimize environmental impact, optimize resource utilization, and contribute to long-term social and environmental well-being. Sustainable by Operations Sustainable by Design Establish and drive sustainable practices across built environment with an objective to minimize resource usage and associated impact– Emissions, Waste & Water Environmentally conscious or responsible built space, purposefully designed to reduce the overall environment footprint during & after construction phase
  • 15.
    Page 15 Building the‘Framework’ Pillar 1 – Sustainable Operations – Sustainable by Operations [ 1 / 2 ] • Streamline monthly monitoring and establish accounting across environment KPIs (energy, emissions, waste, water) • Continue the rigour of data reporting and monitoring mechanism through automation process • Identify relevant Scope 3 emissions categories & sources • Explore the feasibility of Scope 3 emissions accounting in alignment with GHG Protocol FY24 FY25 FY 26 Environment Monitoring Mechanism Sustainable by Operations* Responsible Waste Management • Identify & categorize the wastes • Prepare an inventory of the waste • Handle and dispose in adherence to the laid down regulatory requirements • Waste handling vendor contracts to be in place • Guidelines in place on waste handling, storage and disposal • Continue the rigour of waste management handling across operations • Explore and implement waste reduction / reusing options • Achieve “Zero waste to landfill” status • Retain Zero waste to landfill status Energy / Emissions/ Water • Explore opportunities for resource optimization (energy & water) • Renewable energy options to be explored especially for branches where consumption is minimum • Conduct Energy audit to identify energy saving opportunities. • 100% offices to be equipped with Energy efficient lighting systems to conserve energy • 100% employees will be provided training on energy and water conservation practices through awareness campaigns, training programs etc • SOP to be defined for Resource optimization and renewable alternatives as default across operations. • Install Renewable energy (Solar PV) for selected offices • Implement energy audit findings (applicable ones) across operations and measure the energy reduction achieved, • Achieve 5% reduction in power consumption compared to FY’23 • Achieve 10% reduction in power consumption compared to FY’23 • Explore opportunities to reduce Scope 3 emissions, which are emission intensive (Ex: Employee commutation, Business travel etc.) Goal 2030 20% reduction in Power consumption Target 2028 15% reduction in Power consumption Target 2026 10% reduction in Power consumption *Goals and targets are w.r.t to FY’2023 baseline Focus Area SPOC Ms. Almas Fatima, National Manager Admin & Infrastructure Dept
  • 16.
    Page 16 Building the‘Framework’ Pillar 1 – Sustainable Operations – Sustainable by Design [ 2 / 2 ] • Develop guidelines on sustainable green design concepts such as energy efficient fittings, alternate materials in accordance with global frameworks • Define KPIs scoring mechanism • Address the gaps/opportunity areas basis the pilot assessment. • Automation of Internal processes : Moving towards manual to automated process for processes (Ex: digital invoices, Digital employee visiting cards, dual printing, and digital application forms) • Implement GREEN building guidelines for selected office and declare it as a “Model Green branch“ • Review and update the guidelines as per the learning’s from “model Green branch” • Explore the feasibility of obtaining IGBC certification (Green building) for selected office location • 20% automation of Internal process across 100% offices and reduce paper consumption by 20% • Certification of select branches in alignment with national standards - IGBC • 50% automation of Internal process across 100% offices and reduce paper consumption by 50% FY24 FY25 FY 26 Green Branches / Offices Sustainable by Design Goal 2030 10% of total office area (Ujjivan offices) to achieve ‘Green Building’ certification Target 2028 5% of total office area (Ujjivan offices) to achieve ‘Green Building’ certification Target 2026 One select office as “GREEN Building” certified Focus Area SPOC Ms. Almas Fatima, National Manager Admin & Infrastructure Dept
  • 17.
    Page 17 Building the‘Framework’ Pillar 2 – Empowering Communities for more details click on the respective aspect ‘ONE’ FOCUS AREA Creating a more equitable and inclusive society by delivering holistic sustainable values across the communities we operate. Corporate Social Responsibility Supporting essential workers and vulnerable sections of society through focused interventions like education, skilling, healthcare
  • 18.
    Page 18 • 100%adherence to process changes introduced • Increase Chhote Kadam project's impact on lives by at least 10% compared to the previous FY (excluding COVID support activities). E.g., 10% increase in livelihood program impact, targeting at least 50% beneficiaries with enhanced income • 20% increase in Cleanliness drive coverage (by area) • Include 10% more aspirational districts in the program • Minimum 20% increase green cover through Ujjivan's CSR initiatives • % of employees contributing in CSR activities through volunteering increased by at least 5% • Impact assessment for all thematic areas with 10% increase in sample size year on year • Feasibility for water conservation measures for community to be explored Lives impacted through Chhote Kadam project to be increased by at least 10% more than previous FY (non- COVID support activities). • 20% increase in Cleanliness drive coverage (by area) • Include 10% more aspirational districts in the program • Minimum 20% increase green cover through Ujjivan's CSR initiatives ( from the previous year ) • % of employees contributing in CSR activities through volunteering increased by at least 5% from the previous FY • Impact assessment for all thematic areas with 10% increase in sample size year on year Lives impacted through Chhote Kadam project to be increased by at least 10% more than previous FY (non- COVID support activities). • 20% increase in Cleanliness drive coverage (by area) • Include 10% more aspirational districts in the program • Minimum 20% increase green cover through Ujjivan's CSR initiatives • % of employees contributing in CSR activities through volunteering increased by at least 5% • Impact assessment for all thematic areas with 10% increase in sample size year on year • Explore the feasibility on Renewable energy offset programs FY24 FY25 FY 26 Project Activities Goal 2030 Disclose the social value through Social Return on Investment study Target 2028 1. Atleast 10,00,000.of lives impacted 2. Atelast 25%.of women beneficiaries 3. Atleast 2000 of beneficiaries are Persons with Disability 4. Minimum of 3000 of saplings planted 5. Initiate SROI study Target 2026 1. At least 8,00,000 lives impacted 2. At least 1500 beneficiaries are Persons with Disability 3. At least 2000 saplings planted Corporate Social Responsibility PROCESSES: • Standardization of all processes /SOPs, RFP/proposal formats etc Logical framework & KPIs developed for 100% long-term projects and included as annexures in MoUs • Baseline & endline assessment for at least 70% of education, healthcare & behaviour change projects Building the ‘Framework’ Pillar 2 – Empowering Communities – Corporate Social Responsibility Focus Area SPOC: Ms. Srividhya Durairajan, Manager – CSR Social Service Department
  • 19.
    Page 19 Building the‘Framework’ Pillar 3 – Human Capital for more details click on the respective aspect ‘FOUR’ FOCUS AREAS Human capital is a critical aspect, ensuring fair and respectful treatment of employees, providing opportunities for growth and development, promoting diversity and inclusion, creating a safe and healthy work environment, and attracting and retaining top talent. Talent Management Diversity, Equity & Inclusion Human Rights Companies are evaluated on their workforce talent requirements and their ability to attract, retain, and develop a highly skilled workforce. Culture of inclusion and belonging for everyone in an organization irrespective of gender, ethnicity, race, religion, etc. Rights inherent to all human beings, regardless of race, sex, nationality, ethnicity, language, religion, or any other status. Health, Safety and Wellbeing Promoting resilient and transformative culture where workplace allows people to perform and develop in a safe and healthy ecosystem
  • 20.
    Page 20 Building the‘Framework’ Pillar 3 – Human Capital – Talent Management [ 1 / 4 ] • Increase Training Hours per Employee - from 29 Hours to 30.5 Hours • Creating ESG awareness as part of new employee orientation • Increase the participation % through E-learning modules • Increase Training Hours per Employee- from 30.5 Hours to 32 Hours • Enable Global learning platform for self learning • Increase Training Hours per Employee - from 32 Hours to 34 Hours • Provide learning grant for individual development areas FY24 FY25 FY 26 Learning & Development Talent Management Talent attraction and retention • Achieve talent retention rate through: o Job Rotation policy for key roles o Career development programs o Sabbatical Leave for individuals o Introduction of work life balance policy o Ensuring employee avail mandatory leave to create work life balance across all levels (>60%) o Disclose total Employee turnover rate with a breakdown of Age, Gender, Management level and Race • Control voluntary employee attrition rate up to 25% • Achieve talent retention rate through: o Ensuring eligible employee avail mandatory leave to create work life balance across all levels (>70%) o Implement policies and employee support programs such as Work from home (WFH) working options • Control voluntary employee attrition rate up to 25% • Achieve talent retention rate through: o Ensuring eligible employee avail mandatory leave to create work life balance across all levels (>80%) o Track the usage of People Analytics for Strategic Workforce Planning by: o Identifying current workforce skills gaps o Identifying flight risks to improve retention • Control voluntary employee attrition rate up to 25% Goal 2030 -- Target 2028 -- Target 2026 34 hours per employee training Focus Area SPOC Ms. Shini Ashok, National Manager – Learning & Talent Management HR Department
  • 21.
    Page 21 Building the‘Framework’ Pillar 3 – Human Capital – Diversity, Equity & Inclusion [ 2 / 4 ] • Achieve *gender diversity upto 22%. o Introduction of “Unpause” model to welcome women with a career break o Develop Diversity policy and communicate across the organization o Conduct training on gender neutrality for supervisors for facilitating non-discrimination awareness against married or pregnant women • Achieve gender diversity upto 24%. o Identification of “women only” position in agreement with the HODs to drive women hiring in their respective departments o Derive action plan for hiring women/ disabled/ marginalised o Introduce reward scheme for referring women in leadership role • Achieve gender diversity upto 26%. o Conduct “women only” hiring campaigns o Recognise teams, managers and leaders for driving DE&I FY24 FY25 FY 26 DE&I Diversity, Equity & Inclusion Goal 2030 -- Target 2028 Achieve gender diversity upto 30% Target 2026 Achieve gender diversity upto 26% Focus Area SPOC Manas Satapathy, National Manager – Talent Acquisition HR Department *Gender diversity specified above, refers to women workforce only
  • 22.
    Page 22 Building the‘Framework’ Pillar 3 – Human Capital – Human rights [ 3 / 4 ] FY24 FY25 FY 26 Human Rights Goal 2030 - Target 2028 Completion of the remediation actions of the identified risk areas. Target 2026 Complete implementation of the HRDD • Develop the human rights policy and communicate across relevant stakeholders • Develop a human rights due diligence framework and identification of the potential risks and impact of the same. • Conduct due diligence process to proactively identify potential impacts and risk relating to respecting human rights • Report on human rights mitigation and remediation activities • Implement processes to mitigate human rights risks • Number of sites with mitigation plans • Type of remediation actions taken Human Rights Focus Area SPOC Prasanna Venkatesen, National Manager – HR operations HR Department
  • 23.
    Page 23 Building the‘Framework’ Pillar 3 – Human Capital – Health, Safety and Wellbeing [ 4 / 4 ] • Develop OHS management system • Program Deployment (e.g., Ergonomics, healthy lifestyle, health talks by experts, fitness programs, defensive driving etc.,) • Conduct accident investigation & preventive action at Ujjivan office locations • Conduct electrical safety audit across Ujjivan offices. • Road safety focused program to be rolled out across operations focussing more on field staff • Monitor the accident rate at Ujjivan office locations • Conduct employee Survey and develop Employee Wellness Index FY24 FY25 FY 26 Employee Overall Wellness Initiatives Health, Safety & Wellbeing Goal 2030 Zero Accidents – Ujjivan office locations Target 2028 Target 2026 Focus Area SPOC Manjunath V, Lead – Payroll & Compliance HR Department
  • 24.
    Page 24 Building the‘Framework’ Pillar 4 – Effective Governance for more details click on the respective aspect ‘FOUR’ FOCUS AREAS This pillar extends far beyond compliance focusing on enabling robust governance, transparency and establishing a conducive environment ensuring no compromise on Organization ethics and values amidst dynamic externalities. Data Privacy & Cyber Security Governance Ethics & Compliance Risk Management Due to the current trend of digitization, it is crucial that access to network, IT systems and data is assured at all times eliminating threat to confidential data and customer privacy in terms of data theft & loss This pillar evaluates the impact companies' corporate governance and business ethics practices have on investors. The companies are assessed on all Governance Key Issues, including Ownership & Control, Board, Pay, Accounting, Business Ethics, and Tax Transparency. An ongoing process of monitoring and assessing systems to ensure they comply with regulatory and industry requirements Assessment and management of the risks associated with climate change/extreme weather and its impacts
  • 25.
    Page 25 Building the‘Framework’ Pillar 4 – Effective Governance – Data Privacy and Cyber Security [ 1 / 4 ]  Align policies and procedures with global standards like ISO 27001:2022 (inclusive of business contingency plan, incident response procedures and periodic testing)  Obtaining ISO 27001:2022 Certification  Ensuring Sustenance of ISO 27001:2022 certification  Implementation of data Privacy Framework as per Indian Privacy Law  Assessment in place to ensure alignment with ISO 27001:2022  Indian Privacy Law Compliance  Strengthen the security posture of the Bank to continue to remain Cyber Attack/ Breach Free. FY24 FY25 FY 26 Privacy and Information Security Management Data Privacy & Cyber Security Goal 2030 Zero Data Security Breaches Target 2028 Target 2026 Focus Area SPOC Mr. Shailesh Tiwari, Cyber Governance Manager Information Security Risk Department
  • 26.
    Page 26 Building the‘Framework’ Pillar 4 – Effective Governance – Governance [ 2 / 4 ]  Design a multi-tier ESG governance structure  Develop roles and responsibilities for each position  Increase the Board Independence further from the current 66%  Continuous review and update of governance structure  Further increase in board diversity ratio  To continue to adhere to highest standards of governance to ensure 100% compliance FY24 FY25 FY 26 Governance Structure Governance Goal 2030 Robust Governance Structure, beyond compliance Target 2028 Target 2026 Focus Area SPOC Kshama Algure, Assistant Company Secretary Corporate Secretary Department
  • 27.
    Page 27 Building the‘Framework’ Pillar 4 – Effective Governance – Ethics & Compliance [ 3 / 4 ] Identify, review and develop areas requiring policy as per ESG trends/external requirements.  100% implementation of policies developed in FY'24  Regular review and update of policies at set frequencies Regularly update policies at set frequencies FY24 FY25 FY 26 Business Ethics ‘Programs and initiatives identified. However, no Goal / Target defined for the same’ Ethics & Compliance Compliance Management  Automation of Contract Management that reduces turnaround time in execution of contracts and streamlines the contract management system.  Implement Litigation Management Software that eases monitoring of cases involving the Bank. Digitisation of stamping through external vendor to avoid storage of physical stamp papers. Continue advisory in the best interest of Bank and mitigate legal risks to avoid any fines, penal actions by statutory authorities against the Bank. Focus Area SPOC Kshama Algure, Assistant Company Secretary Ms. Megha, Manager - Legal Corporate Secretary Department & Legal Team
  • 28.
    Page 28 Building the‘Framework’ Pillar 4 – Effective Governance – Risk Management [ 4 / 4 ] • Risk management education for non-executive directors • Enhance disclosure on risk management practices (risk governance policy, risk training programs) • Disclosure in accordance with TCFD requirements • Develop a framework for ESG aspects in credit/lending business  Integrating climate related risk in the risk management process as per global frameworks • Focused training throughout the organization on risk management principles • Inclusion of Risk management criteria in the HR review process for all employees • *Due diligence process to identify risk & impact relating to human rights • Assessment of potential human rights issues across business activities FY24 FY25 FY 26 Risk & Crisis Management Risk Management Goal 2030 Achieve transformative stage in the risk maturity ladder Target 2028 - Target 2026 Focus Area SPOC Rakesh Kalyanram, Lead - Risk Risk Management Team *This point is included in HR goals as well
  • 29.
    Page 29 Building the‘Framework’ Pillar 5 – Customer Centricity for more details click on the respective aspect ‘ONE’ FOCUS AREA Customer centricity is an organizational approach that places the customer at the core of business operations, emphasizing the development and maintenance of strong customer relationships through effective communication, personalized services, and a deep understanding of customer needs and preferences. Customer Relationship Management Manage customers and better understand their needs in order to provide the right solutions in a timely manner
  • 30.
    Page 30 Building the‘Framework’ Pillar 5 – Customer Centricity – Customer Relationship Management • Launch of new services (video banking, virtual relationship manager, digital support team) to promote hassle free banking experience • Design, Digitisation and Review of ongoing C-SAT surveys • Increase facilities of Straight through process through phone banking from 18 existing process to 80+ • 5 point improvement from previous bank level service index levels (FY23 as the base year) • Capacity building for 100% Branch front end staff on Aajeevan - Life event based banking • Double the fulfilment of customer Service & Deliverable requests, from current 16%, through IB/MB/Phone Banking and other digital channels by enabling self-service modules • Continuous review and monitoring of customer feedback and surveys such as mystery shopping, External C-SAT survey • Conduct need based surveys annually to understand the customer requirement. • 5 point improvement from previous bank level service index levels (FY24 as the base year) • Achieve levels of 150% of SR fulfilment through IB/MB/Phone Banking and other digital channels (FY25 as the base year) • 5 point improvement from previous bank level service index levels (FY25 as the base year) FY24 FY25 FY 26 Customer Relationship Management Customer Relationship Management Goal 2030 Top quartile in Customer Satisfaction Survey Target 2028 Upper side of 3rd quartile in Customer Satisfaction Survey Target 2026 Lower side of 3rd quartile in Customer Satisfaction Survey Focus Area SPOCs • Mr. Deepak Shivprakash Khetan, National Manager- Investor Relations, Financial Planning & Strategy; • Ms. Apoorva Padmanabh, Manager- Service Quality Compliance; • Mr. Sriram Srinivasan- Digital Banking; • Mr. Zubair Ullah, Head- Digital Channels; • Mr. Tahir Khan, National Manager- Procurement
  • 31.
    Page 31 Building the‘Framework’ Pillar 6 – Responsible Finance for more details click on the respective aspect Green Finance Inclusive Finance ‘TWO’ FOCUS AREAS An approach that focusses on financial solutions that creates positive environment impact; and also focus on fostering inclusive baking ecosystem i.e., improving access, increasing usage, enhancing quality Green financing is to increase level of financial flows to sustainable development priorities Equality of opportunities to access financial services. It refers to a process by which individuals and businesses can access appropriate, affordable, and timely financial products and services.
  • 32.
    Page 32 Building the‘Framework’ Pillar 6 – Responsible Finance – Green Finance [ 1 / 2 ]  Conduct market survey and identify the requirements of green products  Develop criteria for Green products/responsible finance.  Identify responsible finance products (ex: lending for rain water harvesting, Biogas plant, EV & CNG vehicle, Solar water heater, ECO friendly buildings, Solar PV, composting facility etc).  Develop KPIs on Green products outreach (e.g. no. of beneficiaries, GHG emission reduction, reduction in fresh water withdrawal etc.) • Roll out the pilot product and monitor the impact created across defined KPIs. • Basis the pilot product, relook the criteria. • Set goals and targets against the KPIs for evaluation. • Launch of green products portfolio. • Measure the KPIs to assess the performance against the targets. • Communicate the performance both externally and internally at fixed intervals (external assurance). • Explore options releasing Green bonds/green deposits, Sustainability linked loans. FY24 FY25 FY 26 Green Finance Green Finance Goal 2030 xx% revenue from green product portfolio Target 2028 xx% revenue from green product portfolio Target 2026 Devise criteria for Green Finance Focus Area SPOC To be nominated Business Team
  • 33.
    Page 33 Building the‘Framework’ Pillar 6 – Responsible Finance – Inclusive Finance [ 2 / 2 ] • Simplifying loan application processes making it easier for small businesses & individuals to access financing • Develop Strategy to provide financial services for aspiring entrepreneurs/ MSME enterprises in rural areas. • Explore and define an action plan to expand the micro-finance portfolio in Tier 2 & Tier 3 cities. • Digital solutions and literacy programs to streamline transactions in the micro-finance sector. • Basis strategy, release financial products in the market to support entrepreneurs/ MSME enterprises. • Collaborate with funds, foundations and development finance Institutions to support projects in sectors like agriculture, micro-finance, health care etc. FY24 FY25 FY 26 Inclusive Finance Inclusive Finance Goal 2030 Expanding reach & impact Target 2028 - Target 2026 - Focus Area SPOC To be nominated Business Team
  • 34.
    Page 34 Building the‘Framework’ Aspects Cutting Across for more details click on the respective aspect ‘THREE’ FOCUS AREAS A comprehensive approach that encompasses transparent and effective communication practices within an organization, involving proactively sharing relevant and accurate information with stakeholders in a timely manner, promoting open dialogue, and fostering meaningful engagement both with internal and external stakeholders. Digital transformation takes a customer-driven, digital-first approach to all aspects of a business, from its business models to customer experiences to processes and operations. Transparency & Disclosures Stakeholder Engagement Digital Transformation Ensuring data completeness, accountability and data transparency to all relevant stakeholders and available in a timely manner. Focus on engaging with internal and external stakeholders and creating value for them Integration of digital technology throughout all aspects of an organization, results in significant changes to how the organization functions and delivers benefits to its clients
  • 35.
    Page 35 Building the‘Framework’ Aspects Cutting Across – Transparency & Disclosures [ 1 / 3 ] • Dedicated webpage on sustainability to display the activities under ESG domain • In addition to the Sustainability Report and BRSR, TCFD two pager to be appended to existing Sustainability Report • Continue the rigour on Sustainability Report in alignment with GRI Standard, BRSR and TCFD • External assurance as per ISAE 3000 and AA 1000 AS (2008) Standards • Integrated reporting in alignment with global frameworks like GRI/TCFD/IIRC FY24 FY25 FY 26 Reporting framework Disclosures ESG Indices • Internal assessment and readiness towards S&P Global CSA (DJSI) to reach ~40 score* • Maiden S&P Global CSA (DJSI) assessment • Continue to participate on S&P Global CSA (DJSI) assessment Goal 2030 Aspire to reach top quartile on S&P Global CSA (DJSI) Target 2028 60 score on S&P Global CSA (DJSI) Target 2026 - Focus Area SPOC D Srividhya, Manager, CSR Kshama Algure, Assistant Company Secretary Social Service Department and Corporate Secretary Team *Above is an indicative score as the DJSI questionnaire gets updated annually
  • 36.
    Page 36 Building the‘Framework’ Aspects Cutting Across – Stakeholder Engagement [ 2 / 3 ] FY24 FY25 FY 26 Stakeholder Engagement Goal 2030 100% digital invoices from vendors with spend of Rs. 1 Cr or higher Target 2028 - Target 2026 Top quartile across all stakeholder group satisfaction surveys  Quarterly engagement with investors - 5 among top 15  Quarterly engagement with Sell-side analyst (minimum 5 nos.)  Quarterly engagement with investors - 7 among top 15  Quarterly engagement with Sell-side analyst (minimum 7 nos.)  Quarterly engagement with investors - 10 among top 15  Quarterly engagement with Sell-side analyst (minimum 8 nos.) Investors  Develop and incorporate ESG requirements in the contracts/agreements executed with vendors through vendor Code of Conduct  Develop SoP for vendor assessment and capture the scores as part of the vendor assessment  Conduct capacity building on vendor code of conduct and assessment for strategic vendor partners  Shift to digital invoices to cover 50% vendors with spend of Rs. 1 Cr or higher  Involve and engage with strategic vendors (50%) to implement eco-friendly initiatives  Shift to digital invoices to cover 80% vendors with spend of Rs. 1 Cr or higher Vendors Focus Area SPOCs • Mr. Deepak Shivprakash Khetan, National Manager- Investor Relations, Financial Planning & Strategy; • Ms. Apoorva Padmanabh, Manager- Service Quality Compliance; • Mr. Sriram Srinivasan- Digital Banking; • Mr. Zubair Ullah, Head- Digital Channels; • Mr. Tahir Khan, National Manager- Procurement
  • 37.
    Page 37 Building the‘Framework’ Aspects Cutting Across – Digital Transformation [ 3 / 3 ]  Implement new digital solutions such as end-to-end Digital Fixed Deposit, Digital Savings/Current Account, personalised banking services using video banking solutions  Bringing 35 lakhs+ customers into digital banking space and achieve digital transactions (volume) of 35 crores by including 12 lakh+ new users on any one of the digital platform  Bringing 50 lakhs+ customers into digital banking space and achieve digital transactions (volume) of 50 crores by including 15 lakh+ new users on any one of the digital platform  Bringing 65 lakhs+ customers into digital banking space and achieve digital transactions (volume) of 75 crores by including 18 lakh+ new users on any one of the digital platform  100% digitalisation for Asset & Liability business and Digital Lending Solutions, thereby moving towards paper less banking services FY24 FY25 FY 26 Digital Transformation Digital Transformation Goal 2030 Bringing 1 crore customers into digital banking space and achieve digital transactions (volume) of 100 crores. Target 2028 - Target 2026 Bringing 65 lakhs+ customers into digital banking space and achieve digital transactions (volume) of 75 crores. Focus Area SPOCs • Mr. Sriram Srinivasan- Digital Banking; • Mr. Zubair Ullah, Head- Digital Channels; Digital Banking Dept
  • 38.
    Page 38 Building the‘Framework’ ESG Framework – ‘SIX’ Pillars ESG FRAMEWORK To provide financial services to the unserved and underserved customers and transform to a responsible mass market bank, building a sustainable tomorrow Digital Transformation Stakeholder Engagement Transparency & Disclosure 6 Pillars 13 Goals 16 Focus Areas
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    Page 39 Page 39 WayForward ‘To Do’ 4
  • 40.
    Page 40 Way Forward‘To Do’ Action Items # Activity 1 Co-develop implementation plan for the first year activities for all aspects (comprising Gantt Chart & MIS) 2 Develop multi-tier ESG Governance mechanism 3 Draft maiden Sustainability report in accordance with GRI standards
  • 41.
  • 42.
    Page 42 Maturity Scale: Summary (1/4) Page 42 S. No. Aspect USFB- maturity Justification for current state Actions required for moving towards the transformative stage 1 Governance Progressive  Committees in place for CSR, IT Strategy, Audit, Stakeholders Engagement, Risk Management  ESG is not a part of any committee  CSR policy in place  No policy established for EHS  Sustainability governance structure with a steering committee supported by a cross-functional team should be formally institutionalized  Steering committee to monitor progress on ESG goals and KPIs periodically 2 Risk Management Reactive  Business risks identified and disclosed in Annual Report  No ESG risks identified  Recognise risks related to safety/ EHS, climate change and social issues and integrate them into Enterprise Risk Management (ERM) framework 3 Strategic Direction Reactive  No sustainability strategy in place  CSR thematic areas identified  Sustainability strategy covering the entire value chain to be formulated  Periodic materiality assessments to be carried out via stakeholder engagements  Progress against the defined strategy to be monitored and disclosed. 4 Goals & Objectives Reactive  No goals specific to ESG in place  Specific goals and targets to be set for all material topics across operations and value chain  Goals and targets to be aligned with global frameworks such as the Sustainable Development Goals (SDGs)  The progress and achievement of goals and targets should be externally communicated Reactive Progressive Proactive Transformative Low High
  • 43.
    Page 43 Maturity Scale: Summary (2/4) Page 43 S. No. Aspect USFB - Current maturity Justification for current state Actions required for moving towards the transformative 5 Branding & Communication Reactive  Webpage is limited to CSR only  No microsite related to sustainability  Dedicate ESG into company’s purpose and develop a separate microsite for ESG  Engage with external stakeholders regularly on ESG through social media, thought leadership, among others 6 Responsible Finance/ Progressive  Water and Sanitation loans are provided  Plans in pipeline to include other green products  Sustainability linked products should be introduced.  Develop and communicate ESG metrics to measure the environmental and social KPIs of the associated products/services 7 Responsible Supply Chain Progressive  Internal Audits are carried out  Procurement from local suppliers  Vendor code of conduct is not available  Develop Vendor Code of Conduct including ESG aspects and communicated to all suppliers  Regular supplier assessments can be conducted for key suppliers and the results to be communicated externally  Supplier engagement program should be in place and achievements / success stories to be disclosed publicly 8 Social Aspects Progressive  Employee benefits such as medical insurance, flexible working hours, group term and accident insurance, maternity and paternity benefits, etc. are provided  Engagement with employees through satisfaction surveys  Dedicated DE&I policy is not developed  OHS management system not in place  SA8000 certification can be pursued  ESG integrated employee programs and communications can be introduced  DE&I Policy to be developed and goal setting, monitoring and disclosure of KPIs to be done  Develop OHS management systems- establish protocols. Reactive Progressive Proactive Transformative Low High
  • 44.
    Page 44 Maturity Scale: Summary (3/4) Page 44 S. No. Aspect USFB - Current maturity Justification for current state Actions required for moving towards the transformative stage 9 Corporate Social Responsibility Progressive  CSR Policy in place  Focus areas are: Public Amenities, Health & Hygiene, Promoting Education, Social Welfare, etc,  Due diligence to be carried out across programs/NGO partners  Assessment of CSR projects and analysis of the impacts to be carried out 10 Resource Efficient Processes & Practices Progressive  Sustainability initiatives adopted in pockets  Monitoring for Scope 1 and Scope 2 emissions  Energy & emissions related short-term, mid-term and long-term targets/milestones to be identified  Communicate performance both externally and internally at regular intervals 11 Digital Transformation Proactive  USFB has a Digital Banking team to drive the central digital strategy.  The drivers of this initiative are digital innovation, application programming interface (API) banking, fintech engagements & partnerships, robotic process automation, artificial intelligence, digital lending, payments, digital marketing and data analytics & insights  Enhance digital experience for the customers and workforce. 12 Data privacy and cybersecurity Proactive  Risk team oversees the IT risk functions.  Privacy Policy is available to all employees across Head Office, Data Centres and Branch Offices  IBA – Banking Technology Award 2021 Best IT Risk & Cyber Security Initiatives (amongst SFB / Payments Bank)  Compliance and Certifications towards ISO 27001. Reactive Progressive Proactive Transformative Low High
  • 45.
    Page 45 Maturity Scale: Summary (4/4) S. No. Aspect USFB - Current maturity Justification for current state Actions required for moving towards the transformative stage 13 Disclosures Reactive  Disclosure targets limited to Business Responsibility Report (BRR)  Data collection for disclosures is manually driven and applied across all operations  Minimum monitoring activities are performed  Disclosures like ESG reports to be developed in alignment with global frameworks like GRI/TCFD/IIRC  IT tools should be leveraged to automate the data collection process for reporting 14 Assurance Reactive  No sustainability disclosure in place to obtain assurance  External assurance to be obtained- International Standard for Assurance Engagements (ISAE) 3000, Accountability Assurance Standard (AA100 AS) ; 15 Metrices and Indices Reactive  No system in place to disclose on ESG Indices  Leading ESG indices to be adopted as per DJSI/MSCI/FTSE, etc. Reactive Progressive Proactive Transformative Low High
  • 46.
    Page 46 46 Activities phasedout basis the feasibility of implementation and bucketed into three time periods Long: 80 - 85 Medium: 50 - 60 Short : 35 - 45 • Sustainability Strategy & Roadmap with defined goals and targets • Sustainability Governance mechanism & policies (update / develop - board diversity, OHS, tax policy) • Accounting & Disclosures in public domain quantitative data (including energy, water, waste, social aspects) • Executive compensation linked to material aspects • Employee engagement survey to be conducted and reported • OHS Mgmt. Systems – risks, hazards, targets, training & reporting • Climate strategy & TCFD Disclosure in alignment with the four pillar recommendations • Climate related risks to be aligned with mgmt. incentives • ESG aspects to be included in customer due diligence • Signatory to UNGC • Human rights due diligence, mitigation & remediation • Financial inclusion measurement, impact and valuation • Financial inclusion performance 3rd party verification • Sustainability disclosure 3rd party assurance • Enhancement of performance across ESG aspects High Medium Low Score Impact Levers S&P Global CSA Gap Assessment Areas of Focus & Prioritization
  • 47.
    Page 47 Building the‘Framework’ Pillar 1 – Sustainable Operations – Sustainable by Operations [ 1 / 2 ] Sustainable by Operations Establish and drive sustainable practices across built environment with an objective to minimize resource usage and also impact associated – Emissions, Waste & Water Key waste mgmt. measures: • Introduce digital visiting cards since FY22 • Replaced single use plastic bottles with refillable glass bottles at all offices • Responsible usage of compressed wood modulars in all offices • E-waste generated disposed only through authorised entities & recyclers • Procure e-devices only from certified manufacturers that comply with regulations on hazardous substances’ disposal The Govt. notified various rules for Plastic Waste Management, e-Waste Management, Construction and Demolition Waste Management, Metals Recycling etc. Formed 11 committees, led by the concerned line ministries & comprising officials from MoEFCC, NITI Aayog, domain experts, academics and industry representatives for 11 focus areas The committees will prepare comprehensive action plans for transitioning from a linear to a circular economy in their respective focus areas India Driving Transition from Linear to Circular Economy
  • 48.
    Page 48 Building the‘Framework’ Pillar 1 – Sustainable Operations – Sustainable by Design [ 2 / 2 ] Sustainable by Design Environmentally conscious or responsible built space, which is purposefully designed to reduce the overall environment footprint during & after its construction phase Key sustainable workspace initiatives: • Recycle old furniture & utilise only certified green- wood furnishings • Afforestation Strategy: Focused on enhancing green cover in offices & beyond its periphery • Insulation in offices to reduce heat at workplaces to reduce energy consumption • Adopted energy-efficient systems by installing LEDs in offices, branches & outlets • Natural ventilation through modern architectural designs • Variable Refrigerant Flow (VRF) & Variable Refrigerant Volume (VRV) systems are integrated & installed in the ACs in all Offices • Responsible usage of compressed wood modulars in AU’s offices which are environmentally benign, reusable, & recyclable. LEED Gold certified offices in Mumbai and Bhubaneswar. In addition, new buildings in Mohali, Kolkata Palava and Mumbai (Maharashtra) premises are being constructed to meet IGBC Gold certification standards.
  • 49.
    Page 49 Corporate Social Responsibility Supportingessential workers and vulnerable sections of society through focused interventions like education, skilling, healthcare Building the ‘Framework’ Pillar 2 – Empowering Communities – Corporate Social Responsibility [ 1 / 1 ]
  • 50.
    Page 50 Building the‘Framework’ Pillar 3 – Human Capital – Talent Management [ 1 / 4 ] Talent Management Companies are evaluated on their workforce talent requirements and their ability to attract, retain, and develop a highly skilled workforce.
  • 51.
    Page 51 Building the‘Framework’ Pillar 3 – Human Capital – Diversity, Equity & Inclusion [ 2 / 4 ] Diversity, Equity & Inclusion Culture of inclusion and belonging for everyone in an organization irrespective of gender, ethnicity, race, religion, etc.
  • 52.
    Page 52 Building the‘Framework’ Pillar 3 – Human Capital – Human Rights [ 3 / 4 ] Human Rights Rights inherent to all human beings, regardless of race, sex, nationality, ethnicity, language, religion, or any other status.
  • 53.
    Page 53 Building the‘Framework’ Pillar 3 – Human Capital – Health, Safety and Wellbeing [ 4 / 4 ] Health, Safety & Wellbeing Promoting resilient and transformative culture where workplace allows people to perform and develop in a safe and healthy ecosystem FY2021-22 was again a very challenging year for the entire nation and the global economy in particular, due to repeated waves of COVID-19 pandemic, global conflicts & ensuing economic disruptions. One of the key focus areas of the Human Resources function during the financial year was to enable employee well-being and also ensure business continuity for superior customer service.
  • 54.
    Page 54 Building the‘Framework’ Pillar 4 – Effective Governance – Data Privacy and Cyber Security [ 1 / 4 ] Data Privacy & Cyber Security Due to the current trend of digitization, it is crucial that access to network, IT systems and data is assured at all times eliminating threat to confidential data and customer privacy in terms of data theft & loss Data Privacy & Cyber Security
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    Page 55 Building the‘Framework’ Pillar 4 – Effective Governance – Governance [ 2 / 4 ] Governance This pillar evaluates the impact companies' corporate governance and business ethics practices have on investors. The companies are assessed on all Governance Key Issues, including Ownership & Control, Board, Pay, Accounting, Business Ethics, and Tax Transparency.
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    Page 56 Building the‘Framework’ Pillar 4 – Effective Governance – Ethics & Compliance [ 3 / 4 ] Ethics & Compliance An ongoing process of monitoring and assessing systems to ensure they comply with regulatory and industry requirements UK • FCA is consulting on corporate disclosure of climate risks and is focusing on ‘greenwashing’ • TCFD mandated for companies listed on premium exchange from January 1, 2021 and to extend to all UK companies by 2025 • Social value legislation and climate legislation for procurement • Non-Financial Reporting Directive – expected to cover 50k entities • EU Taxonomy for Sustainable Activities Hong Kong • The Securities & Futures Commission announced its Strategic Framework for Green Finance in 2018, with a focus on climate-related disclosure and the integration of ESG into investment processes by asset managers Germany • Bafin published guidance in December 2019 on how FS firms should manage sustainability risks, with a focus on climate Singapore • Monetary Authority of Singapore - exploring ways to incorporate climate-related risks • SGX introduced sustainability on a “comply-or- explain” basis to its listing rules. • SGX is aligning its disclosure requirements in line with TCFD Australia • Australian Securities & Investments Commission - disclosure provisions to climate-related risks, reflecting TCFD recommendations India • SEBI introduced Business Responsibility and Sustainability Reporting (BRSR) regulations. • It will be mandatory for top 1000 listed companies (by net-worth) from FY23 (voluntary from FY22) United States • US Senate - ESG Disclosure Simplification Act of 2021 • SEC Announces Enforcement Task Force Focused on Climate and ESG Issues • SEC requests Public input on Climate Disclosures Europe Union • Sustainable Finance Action Plan • Sustainable Finance Disclosure Regulations Switzerland • Mandates Climate Reporting for public companies, banks and insurance entities over a threshold – aligned with TCFD
  • 57.
    Page 57 Building the‘Framework’ Pillar 4 – Effective Governance – Risk Management [ 4 / 4 ] Risk & Crisis Management Assessment and management of the risks associated with climate change/extreme weather and its impacts
  • 58.
    Page 58 Building the‘Framework’ Pillar 5 – Customer Centricity – Customer Relationship Management [ 1 / 1 ] Customer Relationship Management Manage customers and better understand their needs in order to provide the right solutions in a timely manner • Customer-centric approach • Seamless, easy, fast & transparent service • Continuous client interaction by using both digital and non-digital channels • More than 70% of client requests in March 2022 were raised through digital channels and overall 95% of the requests got resolved within one day
  • 59.
    Page 59 Building the‘Framework’ Pillar 6 – Responsible Finance – Green Finance [ 1 / 2 ] Green Finance Green financing is to increase level of financial flows to sustainable development priorities • In 2017, the State Bank of India (SBI) launched a green bond worth ₹1,000 crore (US$125 million). The proceeds from the bond were used to finance renewable energy projects • In 2018, HDFC Bank launched a green loan scheme worth ₹5,000 crore (US$625 million). The scheme is designed to finance energy efficiency projects in commercial buildings • In 2019, ICICI Bank launched a sustainable investment fund worth ₹1,000 crore (US$125 million). The fund invests in companies that are working to promote sustainable development
  • 60.
    Page 60 Building the‘Framework’ Pillar 6 – Responsible Finance – Inclusive Finance [ 2 / 2 ] Inclusive Finance Availability and equality of opportunities to access financial services. It refers to a process by which individuals and businesses can access appropriate, affordable, and timely financial products and services. Improving Access Improving Usage Enhancing Quality Financial Inclusion 31% branches in unbanked rural centres 1,93,000+ customers provided financial services under Jan Dhan Yojana 600+ financial literacy camps at rural branches Digital Inclusion 39,000+ AU 0101 registration in unbanked rural centres 40,000+ UPI transacting customers in unbanked rural centres 20,000+ merchants onboarded on UPI QR codes in unbanked rural centers
  • 61.
    Page 61 Building the‘Framework’ Aspects Cutting Across – Transparency & Disclosures [ 1 / 3 ] Transparency & Disclosures Ensuring data completeness, accountability and data transparency to all relevant stakeholders and available in a timely manner. Disclosures- India BRSR is mandatory for the top 1000 listed entities ESG investing to tackle the risk of greenwashing including mandating ESG schemes to invest at least 65% of AUM Core BRSR mandates 49 parameters for ESG reporting Reasonable assurance made mandatory under core BRSR
  • 62.
    Page 62 Building the‘Framework’ Aspects Cutting Across – Stakeholder Engagement [ 2 / 3 ] Stakeholder Engagement Focus on engaging with internal and external stakeholders and creating value for them
  • 63.
    Page 63 Building the‘Framework’ Aspects Cutting Across – Digital Transformation [ 3 / 3 ] Digital Transformation Integration of digital technology throughout all aspects of an organization, results in significant changes to how the organization functions and delivers benefits to its clients