Sustainability Risk Governance

Sustainability Risk Governance

Sustainability Risk Management

Since 2019, Sustainability Risks have already been incorporated into our overall Risk Management Framework, where an enterprise view of all the risks that are material to the Bank is taken and acted on by Management of the Bank, with oversight provided by the Board of Directors and the delegated Committees of the Bank.

 

Our sustainability strategic priorities are set by the Board of Directors, which is responsible for ensuring sound governance and effective oversight of the Bank’s Sustainability Strategy. The Board of Directors delegates the review of management’s implementation of the Bank’s Sustainability strategy to the Board Risk Management Committee (“BRMC”).

 

The Sustainability Committee and Sustainability Working Committee are responsible for implementing the Sustainability strategies, and in managing and mitigating identified ESG risks which includes physical and transition risks. Management provides periodic reporting to the BRMC on execution statuses as well as the results attained. This is coordinated and monitored by the Sustainability department and the Sustainability Risk department.

 

Climate Change Risk and Opportunities

The Bank is exposed to three (3) climate change risks (Physical, Transition and Liability Risk) spreading across most key assets of the Bank. Within these climate change risk categories, we have identified a number of risk factors which we monitor over the short (0-5 years), medium (6-10 years) and long-term (10 years >) horizon.

 

climate change risks

Although Climate Change presents its risks, the Bank has introduced initiatives that mitigates and adapts to these risks, which allow the Bank to tap potential opportunities. The opportunity areas identified include resource efficiency, the adoption of low-emission energy sources, development of new green products and services, access to new markets and further strengthening of the Bank’s resiliency against risks in general.

 

Based on the TCFD recommendations, we have conducted a preliminary qualitative assessment of climate change risks and opportunities and their potential positive financing, business and operational impact. We are also part of the BNM JC3 Sub-committee where we participate in developing the TCFD Application Guide for Malaysian Financial Institutions.

 

Hong Leong Bank Group Sustainability Risk Governance Framework

The Bank’s Sustainability Risk Governance Framework was developed to address Environmental, Social and Governance (“ESG”) risks that may arise as we implemented our business strategies, policies and initiatives. The Bank is guided by the Framework in taking pragmatic steps to ensure it delivers sustainable value to our stakeholders whilst creating positive impact to the communities and environments we operate in. The Framework discussed herein provides a structured approach towards identifying, evaluating, monitoring, mitigating and reporting of ESG risks. We hope to improve transparency in our practices and policies, and in improving dialogue with our various stakeholders.

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