Since the launch of our three-year sustainability roadmap in 2023, we have reached the half-way mark of embedding sustainability across the Bank’s value chain.
Our sustainability efforts in 2024 were very much focused on developing our comprehensive environmental action plan with targeted initiatives and processes aimed at reducing the impact of our operations and financing activities. Launched recently, the plan to reduce the environmental impact of our operations is being implemented and tangible benefits are expected to begin materialising in the second half of 2025.
Another key focal point was addressing the environmental impact of the financing provided to clients. To do so, we finalised our Client ESG Risk Assessment methodology helping us to incorporate client ESG risk into our lending process. We also developed an Industry Environmental Risk Rating approach that allows us to evaluate environmental risk at the portfolio level. These new initiatives enable us to better support our clients in their decarbonisation journey thanks to a deeper understanding of their environmental and social risks, their mitigations plans and therefore, their growth opportunities. Strengthening our capability will be a critical enabler to successfully implementing these new processes and frameworks. With this in mind, we also launched a global training programme to strengthen our business teams’ capability and client engagement. These initiatives align with our simplified approach to embed sustainability into existing workflows and look to scale by building in-house capability.
Effective governance is a key driver of any successful sustainability strategy and typically the lead indicator of senior management’s commitment to measure, manage and mitigate its environmental and social impact. We have already incorporated sustainability into the governance structure at Group level and set up a Sustainability Steering Committee to oversee the progress of the strategy. Additionally, the Group ESG Risk Standard has recently defined how ESG risk is managed under the Bank’s risk management framework.
We are further strengthening our governance structure by setting up the Sustainable Finance Forum, which will report directly to the Sustainability Steering Committee. The Forum will meet quarterly and provides oversight of the Sustainable Finance Framework (SFF), including sustainable finance products, the management and verification of sustainable assets and liabilities and the review of the Annual Sustainable Finance.
With our three-year environmental reduction programme for our operations already under way, a future area of focus is measuring and managing the environmental impact of our suppliers. To face this challenge we are evaluating the benefits of implementing a group-wide procurement system. This initiative aims to enhance our analysis and understanding of our supply chain, foster closer engagement, facilitate vendor ESG assessments and ultimately minimise the environmental impact of our suppliers.
There are five closely related initiatives that together will provide us with a valuable platform to support our clients’ transition strategies and, in turn, help us manage and mitigate our Scope 3 financed emissions. The first three initiatives will also greatly deepen our understanding of environmental risk at the client and portfolio level.
The social agenda of our sustainability strategy is a critical pillar. We consider our employees as our most valuable asset and we are constantly working to deliver more learning and development programmes to allow employees to build rewarding careers within Bank ABC. At the same time, we recognise the vital role the Bank plays in developing and supporting its communities. To this end, we established a dedicated working group to develop a clear action plan focussed on strengthening our approach to D,E&I. In parallel, we will undertake a review of our Corporate Social Responsibility (CSR) strategy to ensure the investments we make in our communities deliver on our objectives and generate meaningful, measurable impact.
The north star of our sustainability strategy is clearly defined by our mission statement and the three overarching objectives that will guide and set our direction of travel beyond 2026. Our strategy will continue to focus on reducing the environmental impact of our operations, suppliers and financing, ensure we are ‘fit for purpose’ to support our clients’ transition strategies and generate positive value for our stakeholders.
Future action plans will be strongly informed by the data and insights gathered through current initiatives, allowing us to continuously refine our frameworks, processes, resources and capabilities. Technological developments are likely to be a powerful enabler driving innovation in client solutions and improving operational efficiency. Capturing the maximum long-term value will entail ingraining sustainability into the DNA of the organisation and into everyday decision-making so that it becomes business as usual. At the same time, we recognise that lasting success will require collective action achieved through close collaboration with our clients, policymakers and communities. This collaborative approach will help us to direct capital where it is most needed, and shape a more sustainable, inclusive future.