SUSTAINABILITY

REPORT

OVERVIEW

About Public Bank Group's Sustainability Report 2023

154

Sustainability Framework

155

Key Sustainability Milestones

156

2023 Highlights

157

APPROACH TO SUSTAINABILITY

Progress towards Sustainability Commitments

160

Sustainability Governance

163

Stakeholder Engagement

164

Materiality Assessment

169

DELIVERING SUSTAINABLE IMPACT

Theme 1: Protecting the Environment

170

Theme 2: Proficient Employees

184

Theme 3: Prosperous Customers and Communities

195

Theme 4: Principled Conduct

213

DISCLOSURES ALIGNED WITH TCFD

Governance

225

Strategy

227

Managing the Resultant Risks Manifesting from Climate Change

231

Metrics and Targets

238

APPENDICES

Performance Data

239

Bursa Malaysia ESG Reporting Platform Performance Data Table

257

GRI Content Index

261

Limited Assurance Report

273

SUSTAINABILITY REPORT

OVERVIEW

ABOUT

PUBLIC BANK GROUP'S

SUSTAINABILITY REPORT 2023

The Public Bank Group's Sustainability Report ("the Report") communicates the Group's approach to embracing and embedding sustainability into its strategic directions and operations. This Report highlights the Group's sustainability performance across all three dimensions, namely Environmental, Social and Governance ("ESG"), as well as initiatives in response to the matters that are most material to the Group and its key stakeholders.

This Sustainability Report covers the reporting period from 1 January 2023 to 31 December 2023, unless stated otherwise. The reporting scope covers information pertaining to the Public Bank Group's main business operations and activities across entities in Asia, including:

  • Public Bank Berhad ("Public Bank") - Banking;
  • Public Islamic Bank Berhad ("Public Islamic Bank") - Islamic Banking;
  • Public Investment Bank Berhad ("Public Investment Bank") - Investment Banking;
  • Public Mutual Berhad ("Public Mutual") - Sale and Management of Unit Trust Funds and Private Retirement Schemes;
  • Public Financial Holdings Limited (Hong Kong) ("PFHL") - Banking and Finance;
  • Cambodian Public Bank Plc ("Campu Bank") - Banking; and
  • Public Bank Vietnam Limited ("Public Bank Vietnam") - Banking.

This Report is approved by the Board of Directors of Public Bank, and is prepared in line with:

Bursa Malaysia's Main

Securities Commissions'

Global Reporting Initiative

Task Force on

Market Listing

Malaysian Code on

("GRI") Standard

Climate-Related Financial

Requirements and

Corporate Governance

Disclosures ("TCFD")

Sustainability Reporting

recommendations

Guide (3rd Edition)

STATEMENT OF ASSURANCE

In strengthening the credibility of this Sustainability Report, selected sustainability indicators in the Report has been subjected to an independent assurance by KPMG PLT ("KPMG") in accordance with International Standard on Assurance Engagements ("ISAE") 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information and has been approved by the Board of Directors of Public Bank. The Subject Matter, Scope and Conclusion can be found in KPMG's Limited Assurance Report set out on page 273.

POINT OF CONTACT

Should there be any comments, submit your feedback and enquiries to: sustainability@publicbank.com.my.

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Public Bank Berhad | 2023 Integrated Annual Report

SUSTAINABILITY FRAMEWORK

The Public Bank Group's Sustainability Framework comprises four strategic themes - Protecting the Environment, Proficient Employees, Prosperous Customers and Communities, and Principled Conduct - which guide the Group's approach towards creating positive impact through 17 material matters. Through a strategic review of the framework during the year, the Group set a forward-looking strategy and roadmap with tangible targets to better align with the Group's business direction. The Sustainability Framework focuses on contributing towards 12 of the United Nations Sustainable Development Goals ("UN SDGs").

Corporate Mission

To sustain the position of being the most efficient, profitable and respected premier financial institution in Malaysia

Sustainability Purpose

Embracing Sustainability

Sustainability Themes and Material Matters

Protecting

Proficient

Prosperous Customers

Principled

the Environment

Employees

and Communities

Conduct

Climate Change Resilience

Diversity and Inclusion

Responsible Lending

Data Privacy and

Practices

Cybersecurity

Carbon Emissions

Employee Engagement and

Financial Inclusion and

Governance and Business

Development

Resource Management

Accessibility

Ethics

Sustainable Finance

Human and Labour Rights

Customer Satisfaction

Transparency and Trust

Sustainable Supply Chain

Community Empowerment

Risk Management

Digital Transformation

Sustainability Strategies

Environmental

Social

Governance

• Contributing towards a low

• Customer centric technology

• Upholding risk and compliance

carbon economy

• Financial Inclusion

management

  • Empowering employee and commitments

Aligned UN SDGs

b Sustainai il ty o Rep rt

Bank For The People

155

SUSTAINABILITY REPORT

OVERVIEW

KEY SUSTAINABILITY

MILESTONES

Pre-2020

2020

2021

2022

2023

Admitted as a constituent of FTSE4Good Bursa Malaysia Index (since 2015)

Established the

Sustainability

Management

Committee

Published the first Sustainability Statement (since 2016)

Completed Menara Public Bank 2 in 2017, the Group's first green certified building

Established the ESG Exclusion List

Public Islamic Bank launched preferential rates for financing of energy efficient vehicles and solar panels

Developed the

Public Bank Group

Anti-Bribery and

Anti-Corruption

Policy

Committed to achieving Carbon Neutral by 2030 (Scope 1 and Scope 2) and Net Zero Carbon by 2050

Set up the Sustainability Management Task Force

Developed the Public Bank Group Climate-Related Risk Management Policy, and Policy on Risk Acceptance Criteria on Environmental, Social and Governance ("ESG RAC Policy")

Established Sectoral RAC for Palm Oil sector

Formed the Board

Sustainability

Management

Committee

Established Sectoral RAC for Construction and Infrastructure sector

Committed to No Deforestation, No New Peat and No Exploitation ("NDPE")

Developed the

Diversity, Equality

and Inclusion Policy

Established the

Sustainability

Framework

Developed the

Public Bank Group

Climate-Related

Strategy Policy

Developed General RAC for Non SMEs and Sectoral RAC for Real Estate sector

Developed the

Sustainable Finance

Framework, and

Sustainable

Products and

Services Guideline

Established the

Public Bank Group

ESG Statement

Signed up as Partnership for Carbon Accounting Financials signatory

Inaugural Scope 3 financed emissions disclosures

156

Public Bank Berhad | 2023 Integrated Annual Report

2023 HIGHLIGHTS

b Sustainai il ty o Rep rt

Theme 1:

Protecting the Environment

Theme 2:

Proficient

Employees

Theme 3:

Prosperous

Customers and

Communities

Theme 4:

Principled Conduct

2,684 tCO2e

reduction

Mobilised

achieved for

RM53.91

Scope 1, Scope

billion

2 and Scope 3

of sustainable

carbon

finance

emissions

since 2020

Over

Achieved more

RM52 million

than

spent on

one million

total training

training and

hours

development

Approved and

Over

accepted more

than RM7 billion

RM1.2 million

of affordable

spent on the

homes

community

financing

since 2020

RM2.35 billion

Zero incidents of

of income tax paid

corruption

in 2023

Developed

Climate-Related

Strategy

Policy

48.8% female representation in senior management

Net Promoter

Score

improved to

+61

100% of

Malaysian banking entities conducted

corruption- related risk assessment

Developed

Sustainable

Finance

Framework, and

Sustainable

Products and

Services Guideline

Zero incidents of

human rights

violation

Improved over

one million individuals' lives since 2021

Over 32,000

enrolments in

cyber

awareness

education

initiatives for

employees

Awards and Recognitions

Constituent in FTSE4Good

Bursa Malaysia Index (since

"AA rating"

Gold Award

2015), FTSE4Good ASEAN5

Index, FTSE4Good Emerging

since 2015

since 2019

Index and FTSE4Good

All World index

AA

Bank For The People

157

Ensuring

Sustainable Tomorrow

for All

At Public Bank, our commitment to sustainability is unwavering. We actively champion projects that benefit our customers and have a positive impact on the environment and society. We take pride in supporting initiatives that reduce carbon footprint, promote clean energy, and encourage responsible business practices, reflecting our belief in a more eco-friendly and sustainable future.

SUSTAINABILITY REPORT

APPROACH TO SUSTAINABILITY

PROGRESS TOWARDS

SUSTAINABILITY COMMITMENTS

The Public Bank Group has set sustainability commitments to drive progress in its sustainability journey. This includes achieving Net Zero Carbon by 2050 and mobilising RM100 billion of sustainable finance by 2030. The sustainability commitments are underpinned by four overarching targets for each of the strategic sustainability themes.

Protecting

Sub-targets

Progress in 2023

the Environment

Overarching Target:

• Achieve Carbon Neutral position

• Scope 1 and Scope 2:

(Scope 1 and Scope 2) by 2030

- 2023 Total carbon emissions: 64,063 tCO2e

Net Zero Carbon by 2050

- 2023 Emission intensity: 3.2 tCO2e/full-time

Material Matters:

employee ("FTE")

• Scope 1, Scope 2 and Scope 3:

- 2023 Total carbon emissions: 87,223 tCO2e

Climate Change Resilience

- 2023 Emission intensity: 4.4 tCO2e/FTE

Carbon Emissions

• Achieve a minimum of 25% of

• Menara Public Bank 2 is certified Leadership

Resource Management

building gross floor area ("GFA")

in Energy and Environmental Design ("LEED")

operating under green building

Gold, equivalent to 24% of Malaysia's main

Sustainable Finance

criteria by 2030

buildings GFA

• Achieve a minimum 30% reduction

• Reduced 2% of total energy consumption

Sustainable Supply Chain

in energy consumed from baseline

from 2022

by 2030

• Inaugural purchase of green electricity

UN SDGs Supported:

totalling 650MWh

• Achieve a minimum 30% reduction

• Total water consumption: 479,193 m3

in water consumption from baseline

• Water intensity: 24.2 m3/FTE

by 2030

• Mobilise RM100 billion of

• Mobilised RM53.91 billion of sustainable

sustainable finance by 2030

finance since 2020, which includes key

financing portfolio such as:

* The sustainable finance target was

- RM38.36 billion of energy efficienct vehicle

revised from RM48 billion by 2025

financing

- RM7.56 billion of affordable homes

financing

- RM5.22 billion of corporate loans

- RM1.98 billion under Green Financing

Facilities

• Set portfolio emissions reduction

• Formalised commitment as PCAF signatory

targets aligned with the Paris

• Established Scope 3 financed emissions

Agreement and 1.5°C global

inventory for five asset classes

warming trajectory

  • 100% of suppliers and vendors to acknowledge the Public Bank Group Vendor Code of Conduct by 2025
  • Enhanced the Public Bank Group Vendor Code of Conduct and to be communicated to all suppliers and vendors in 2024

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Public Bank Berhad | 2023 Integrated Annual Report

Proficient Employees

Overarching Target:

Develop and invest in talent

to build a future ready

workforce

Material Matters:

Diversity and Inclusion

Employee Engagement

and Development

Human and Labour Rights

b Sustainai il ty o Rep rt

Sub-targets

Progress in 2023

• Maintain a minimum of 45.0%

• Achieved 48.8% female representation at

female representation at Senior

Senior Management level

Management level

• Achieve a minimum of two hours

• On average, employees have completed 1.7

ESG related training per year for all

hours of ESG related training

employees from 2024

• Establish a Sustainability Centre of

• Key resources and subject matter experts

Excellence ("COE") to support

are being identified to establish the COE

internal and client transition by

2024

UN SDGs Supported:

Prosperous Customers

Sub-targets

Progress in 2023

and Communities

Overarching Target:

• Improve lives of 1.5 million

• Over one million individuals' lives improved

Improve financial accessibility

individuals through inclusive finance

since 2021

and well-being of society

by 2025 starting from 2021

Material Matters:

• Achieve a minimum of 50,000

• More than RM1.2 million spent on the

volunteer hours by 2025 and

community

Responsible Lending

RM10 million spent on communities

• Developing employee volunteer strategy and

Practices

by 2030

approach

Financial Inclusion and

Accessibility

Customer Satisfaction

Community Empowerment

Digital Transformation

UN SDGs Supported:

Bank For The People

161

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Public Bank Bhd published this content on 17 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 April 2024 10:03:28 UTC.