COMMUNICATION ON PROGRESS 2020

STATEMENT OF CONTINUED SUPPORT BY CHIEF EXECUTIVE OFFICER

May 25, 2021

To our stakeholders:

I am pleased to confirm that BRAC Limited reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to sharing this information with our stakeholders using our primary channels of communication.

Sincerely yours,

______Selim RF Hussain Managing Director and CEO Our Vision

BRAC Bank’s vision is to build a profitable and socially responsible financial institution focused on markets and businesses demonstrating growth potential. Ultimately, this will assist in making an equitable, enlightened, healthy, democratic, and poverty-free a reality. ABOUT BRAC BANK

BRAC Bank embarked on its unique journey in performance, discipline, quality, innovation, and 2001 that would eventually become a focus on continual learning. momentous step in democratizing access to institutional finance amongst small businesses. BRAC Bank is also Bangladesh’s sole Its visionary founder, the late Sir Fazle Hasan representative in the Global Alliance for Banking Abed KCMG, realized that though Bangladesh’s on Values (GABV). GABV comprises 55 financial small and medium enterprise (SME) businesses institutions and 12 strategic partners operating were generating growth and creating in countries across Asia, Africa, Australia, Latin employment, yet they were overlooked by the America, North America, and Europe. traditional banking system as they did not fit the As a performance-driven bank, we believe we standard credit parameters. have a responsibility across our arch of influence Identifying the immense opportunity to get – from the people we work with to the lives we banking to the unbanked and a tremendous touch. With such a legacy, BRAC Bank has today route to serve the nation, BRAC Bank stepped grown into a dominant player in the financial forward to help the SME entrepreneurs mobilize services industry of Bangladesh. It has 187 formal credit. At present, BRAC Bank’s branches, 17 Premium Banking lounges, 372 pioneering SME Finance practice is among the ATMs, 89 CDMs, and 456 SME Unit Offices largest in the country, with its asset portfolio located across the country. With a team of growing at a 24% CAGR over the past five years. 7,800+ employees, the bank caters to more than 1.07 million customers through its diverse Today, BRAC Bank is one of the leading range of banking solutions in the SME, retail, Bangladeshi Development finance institutions, and wholesale sectors. aligning with its primary purpose of promoting economic development and advancing the At BRAC Bank, our focus on sustainability is growth of regional integration through finance. driven by our underlying emphasis on the 3P Our development position and strategy are philosophy of – people, planet, and prosperity. aligned with Bangladesh’s developmental Guided by the principles of this philosophy, our objectives, the Sustainable Development Goals conduct is anchored on creating a holistic (SDGs). Our mandates, as well as to conduct, are impact that benefits all constituents of our guided by our value framework that emphasizes stakeholder ecosystem. As a mission-driven adherence to good behavior, ethics, and bank, we prefer to work for the welfare of our governance and stresses the facets of people and society. RESPONDING TO COVID-19 Our mobilisation efforts

The COVID-19 pandemic has been diseases like the novel coronavirus. It has unprecedented, changing our lives indeed been a wake-up call for all of us and dramatically and drastically and affecting us as a leading financial services institution of in ways many of us could not have imagined. Bangladesh and a member of the Global Despite a global paradigm shift due to the Alliance for Banking on Values (GABV), we outbreak, BRAC Bank’s commitment to will continue to harvest responsible financial providing bespoke solutions and excellent for sustainable society. service to our clients remains unwavering. With a view to limit the economic damage “Leading the Change” is our motto for our inflicted by the coronavirus, the outbreak Annual Report 2020, reflecting our mind set necessitated the Government to respond at since the onset of the pandemic, where unprecedented scale to not just protect smart, agile and adaptable thinking has public health, but livelihoods and the allowed us to excel during this time, even as national economy too. Thus, as part of the our external environment has faced massive recovery/rescue efforts, the country’s disruption. central bank launched considerable fiscal The pandemic has brought to the fore the stimulus packages in 2020, amounting to urgent attention to future-proof the business about 2.5% of the national GDP. against the three major threats of climate As a swift and effective re-pivot, BRAC Bank change, biodiversity loss and rampant initiated a number of key measures in the exploitation of natural diseases. As COVID- shortest possible time to counter the threats 19 has exposed, increasing forfeiture of of the pandemic, and one of the major biodiversity due to unchecked expansion of initiatives in this regard comprised the human activities has created man-animal constitution of four committees: conflict, thus increasing the risk of zoonotic

BRAC Bank’s COVID-19 committee

Central Quick Regional Quick Response Team at Response Team at MANCOM level Regional Level Responding to COVID COVID Warden (for Health & Safety departments to monitor Committee for H&S daily H&S matters matters Key safety measures embraced during COVID-19

Compulsory use of hand Disinfection of office Mandatory use of face sanitizers for all premises and vehicles on masks across all BRAC employees a regular basis Bank premises

Postponement of all Roster and work from Rigorous enforcement of domestic/international home for 60 per cent of social distancing across travel and internal events the bank’s employees all branches

Infrared thermometer at Disinfection of shoes Placement of plexiglass entry point of head office while entering office barriers between branch and branches premises employees and customer

Provisions for wash Special transportation Arrangement for overnight basins for promoting arrangement for staff stay at guesthouse for regular hand washing convenience and safety staff residing far areas

Initiatives by Branch Banking:

We intended to reduce customer footfall in etc. We even increased the cash withdrawal our branches and encourage them to use limit for our customers so that it allows us to our alternate channels like Internet Banking ensure health and safety at our branches for for fund transfer, bill payments; ATMs for the customers as well as for our employees. cash withdrawal; CDMs for cash deposits, We kept our operations minimal during the care measures and air filtration systems at government declared general holidays and the office premises. We launched an internal kept several branches closed following platform to accumulate data from each of directives and instructions of the central our employees and support staffers bank and local authorities. regarding their health and track vulnerability whether they were exposed to or in contact Our website had to be updated regularly on with any COVID positive person at their home which branches were open and which were or neighborhood. It helped us to maintain a closed. We also send frequent SMS safe work environment for those who had to notifications to our customers updating come to work physically. them on branches and encouraging them to use the alternate banking channels. We had Besides, we also enabled VPN connectivity also sent SMS on different health tips and for more than 1,000 employees. More than the do’s and don’ts. 50 per cent of our employees availed work from home facility. Employees were also We were one of the first few to ensure engaged in rostering duty to ensure safety at social distancing inside our branches work. They were also granted pandemic through the marking of decals at appropriate leave when required. distances. All our employees and customers had to wear a mask and sanitize hands for entering the branches and other premises. We also introduced doorstep services for the delivery of cards and documents of our customers. To transform the business for adopting to “new normal” practices, we initiated a comprehensive Pandemic Management Strategy and BCP (business continuity plan) to ensure operational sustenance within the ambit of all health and safety guidelines. We invested substantively in IT-based health

Customer Centricity

BRAC Bank has around 3.2 lakh customers offered the voluntary moratorium via the across its retail, SME, and corporate banking 24/7 call centre as well as the sales, functions. As a customer-centric bank, we branch, and collection teams. We also ensured their comfort and convenience offered customer queries related to loan during the general holidays and beyond. services through our call centre and RLP. We also ensured urgent or severe loan-related BRAC Bank was one of the first banks to customer services through special initiatives, offer a moratorium to the customers on all including loan closure, etc. categories of loans. All the customers were For the credit cardholders, we enabled the request execution mechanism for customers facility to top-up their bKash wallet using to avoid branch visits and deployed our their credit cards, rolled out emergency extra premium banking staffers in branches Travel Quota (TQ) endorsement facilities and comprising those scheduled to work as a facilitated additional contributions on top of replacement of BSSOs. donated amount to three charitable For our employee banking customers, we organizations. We also launched several simplified the salary disbursement process campaigns to promote alternate payment and facilitated the salary disbursement to channels and introduced cash-back ensure faster credit into respective bank campaigns to promote online transactions. accounts. We also activated 24/7 alternate credit card bill payment channels. Our women baking segment, TARA, had organized several webinars for the TARA For deposit customers, we eased their customers to extend support to them with banking needs by enabling FD/DPS closure strategies for business realignment during requests from their registered emails to peak pandemic. We also shared relevant circumvent their branch visits and enabled articles, information, tips, and awareness dormant account activation through messages with all TARA customers on requests from registered emails. precautions during the adverse situation due We collaborated with multiple exchange to COVID-19. houses to support non-resident As a pioneer of SME , to send money conveniently to BRAC Bank has always been regarded as the their home. We also gave them, stuck most pro-SME bank in the country. As so, we abroad due to lockdown, access to internet extended full support to our SME customers, banking from abroad, and get the OTP on especially with regards to the stimulus their international mobile numbers so that packages declared by the government. they can transfer funds back to home. We prioritized handling of all customer queries, BRAC Bank was one of the three banks to sanction screening problems, and issues have completed the disbursement process related to accounting credit. We also of the BDT 200 billion stimulus fund for the continued the facilitation of urgent loan- cottage, micro, small and medium related customer service through special enterprises (CMSMEs). We disbursed BDT initiatives like loan closure. 11.85 billion to 12,669 CMSMEs across the country. It took only six months for BRAC For our premium banking customers, we Bank to complete the massive disbursement shifted the traffic to alternate banking target of BDT 11 billion. channels, especially our 24/7 call centre to avail premium access in the queuing Considering the performance, Bangladesh facilities. We deployed an F1 services team Bank had allotted an additional BDT 2 billion to provide doorstep banking solutions (non- to BRAC Bank for disbursement. cash only) during transaction hours. We also designed an email-based BEFTN/RTGS Contributing to the society to fight the COVID-19 outbreak

The year 2020 was extraordinary for cardholders to Bidyanondo Foundation using everyone. The outbreak of COVID-19 turned BRAC Bank credit card. our world upside down. People and society We also contributed 6,000 sets of CE- experienced things they have never certified Personal Protective Equipment encountered in years. As a values-based (PPEs) to Bangabandhu Sheikh Mujib Bangladeshi bank, BRAC Bank stood by the Medical University. people in many forms to help the nation fight against the outbreak of COVID-19. We gave 6,000 pieces of N95 masks to Medical College Hospital, around From the very initial days of the COVID-19 1,000 pieces of imported face shields to the outbreak, we started communicating with Dhaka Metropolitan Police, and safety our customers and employees on ways to equipment including reusable PPEs, masks, prevent the spread of coronavirus. We also hand sanitizers, and disinfected spray took safety measures for both customers machines to Rangpur City Corporation. and employees in the limited number of branches out of the 187 branches. We We provided a specialized freezing van to proactively reduced customer footfall at our Anjuman Mufidul Islam, a voluntary non- branches to comply with the directives of profit organization, for the safe handling of . We also ensured enough bodies of the deceased persons with cash in all our ATMs across the country and suspected or confirmed COVID-19, and 200 encouraged customers to avoid coming to sets of PPEs for the Anjuman staff who were branches and use our alternate banking engaged in the burial process. channels. These were part of the bank’s efforts to We contributed BDT 50 million to the Prime protect the country’s brave frontline health Minister’s Relief and Welfare fund to workers fighting the COVID-19 pandemic at overcome the situation of potential the initial stage of the coronavirus outbreak coronavirus pandemic. when there was an insufficiency of protective gear in the market. Our employees also joined the fight against COVID-19 and made a financial contribution BRAC Bank also contributed 1,045 blankets of BDT 17.3 million from their salary of April to Muktijoddha Sangsad in Fulbari, Dinajpur, 2020 to BRAC’s “COVID-19: Emergency food and Jamia Madania Sunni Dakhil Madrassa assistance” fund that provided food in Brahmanbaria. assistance to daily wage earners and the Our women banking solution, TARA, ultra-poor across the country. introduced a special campaign on digital We contributed BDT 5 million to Bidyanondo healthcare for its TARA customers. Under the Foundation that provided food to around campaign, a TARA customer could avail of 10,500 families in remote locations across the TARA digital healthcare package free of the country. A family of five got food supply cost for 12 months upon opening a TARA for at least 10 days through this initiative. To Flexi DPS. engage our customers, we announced to add 10 per cent (maximum of taka 1,000) for every donation made by our credit DESCRIPTION OF ACTIONS Corporate citizenship

The interconnectedness between a healthy agenda. That’s the reason why we have set natural world and a prosperous society was ambitious new targets for improving the thrown into sharp focus in 2020 by the novel health of our planet and contributing to a coronavirus (COVID-19) pandemic. Thus, by fairer and more socially-inclusive world protecting nature and improving health and through responsible finance. And we’re livelihoods, we believe we will have a positive encouraging others such as our business impact on the planet, on people and, partners and customers to take bold and ultimately, on our own business. undaunted steps, since only through working together can we make sustainable living Tackling climate change, public health and more commonplace. As a bank we believe social inequality have long been at the heart we owe a green, clean and thriving natural of BRAC Bank’s sustainability and citizenship environment to our future generations.

1 BRAC Bank’s CSR objectives 2

To achieve the

Social and financial Creating shared values inclusion among the stakeholders

We embrace the principles of:

At BRAC Bank, corporate social responsibility lives and livelihoods. Through his vision and (CSR) and citizenship is embedded deep in focus he pioneered the establishment of a our value system. Our focus on people and commercial institution with a social inclusion planet go hand-in-hand in our pursuit of a agenda, and thus BRAC Bank today remains commercial profit. Late Sir Fazle Hasan as a deeply public-facing bank that Abed, KCMG, founded the bank with a vision embodies and advances the socio- of financial inclusion; of bringing the commercial aspirations of the people of the unbanked grassroots, especially the SMEs, country. into the formal folds of banking to transform BRAC Bank's underlying citizenship focus is aligned with the ‘3Ps’ (People, Planet, Profit) philosophy, which is enshrined in the vision articulated by our late founder Chairman and instilled in everyone across the organisation. Thus, our commitment to sustainability and ownership of the social transformation manifesto is premised in the knowledge that economically, environmentally and socially responsible business practices are imperative to the long-term well- being of our stakeholders and our business. In line with our deep focus on embracing a humanistic approach in banking, our efforts to instil sustainability into our business are guided by the needs of those we serve, including our customers, our environment, our workforce and our community. Our CSR strategy thus reflects our broader purpose of sustainable development of our society and our stakeholders, which means having policies and procedures in place that integrate social, environmental, ethical, human rights and even consumer concerns woven into the fabric of our business operations and core strategy, all in well-knit collaboration with our stakeholders. Committed to embracing the best practices in institutional citizenship, we also abide by the Bangladesh Bank guidelines to allocate our CSR investments into areas where we can have a deeper, more meaningful and longer-lasting impact, including health, education and climate change, etc. At the bank, our overall aim under CSR is to achieve a positive and enduring impact on society as a whole, while maximising shared value creation for stakeholders associated both directly and indirectly with the bank. We thus prioritise a long-term focus with medium-term pursuits, looking at fostering a sustainable impact on the people and society. HUMAN RIGHTS Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights;

Principle 2: make sure that they are not complicit in human rights abuses. BRAC Bank is fully committed to upholding fulfilment for such rights as effective the principles of human rights through its elimination of child labor and modern business activities and services. Through slavery; elimination of all forms of racial and rigorous due diligence, we pledge to avoid gender discrimination; and the realization of infringing the rights of others, and to take a workplace which positively empowers its steps to avoid negative human rights impact employees and people of the broader world resulting from our work. This includes taking without discrimination on the basis of steps towards respect, protection and gender, physical ability.

7,740 95.18% No. of employees Retention ratio

BDT 6,427mn 6 years Avg. organizational age Salaries and allowances

12.64% Women in our workforce All figures pertain to those of 2020

At BRAC Bank, our human resources meets the requirements of our local objective is to support and drive a high- customers. performance culture leading to better Further, we have implemented best-in-class business outcomes delivered by a cadre of talent development programmes and truly engaged employees. We also foster an platforms for high potential co-workers. We inclusive working environment, anchored on also encourage self and external learning to fairness and meritocracy, adhering to the foster excellence in innovation, talent and internationally proclaimed human rights. performance. Our human resources strategy continues to We have in place a ‘SHE Policy’ (Sexual focus on core human capital priorities, Harassment Eradication) that ensures that supporting business in response to a our employees have the right to protect challenging environment of increasing themselves from inappropriate behaviors competition, cost pressure, digital and that they may raise flag at any transformation and regulatory compliance. discrepancies or violation of rights. The aim is to create an environment that Our ‘Code of Conduct’ is an all-embracing after the coronavirus pandemic has guideline for the employees that helps them upended lives and livelihoods on a mass to understand the fundamental conducts of scale. We believe banking remains key to the workplace and to differentiate between stimulate economic activity, job creation and what is “ACCEPTABLE” and what is “NOT”. small business empowerment, while also Moreover, that Code of Conduct is signed by uphold human rights through helping raise the employees to ensure that they are the standards of living amongst marginalized abiding by the bank’s norms and standards. communities. We also have in place an E&S safeguard Our CSR investment approach is linked to policy as well as a credit policy that includes our aspiration of developing high-impact an exclusion. According to that exclusion list, social programs that upholds human rights financing in racist and anti-democratic standards. As one of the largest financial media activities, production or trade in any institutions of Bangladesh, we deploy our product or activity deemed illegal under host resources to make a difference to the country laws or regulations or international communities in which we operate, both conventions and agreements etc. are through our institutional capabilities as well strongly prohibited. as by encouraging our employees to volunteer their time, skills, ideas and efforts Our CSR programmes ensures that we invest across our social service activities. heavily in areas to promote human rights, Importantly, our social investments prioritize such as health and education. We are long-term projects that have alignment with committed to achieving accelerated the SDGs and also guidelines from our economic growth in Bangladesh, especially central bank.

We support BRAC Limb and Brace Centre (BLBC) to provide artificial limbs to the During the pandemic, we underprivileged, free of charge. In 2020, ensured that our BRAC Bank contributed BDT 1 million that assisted BLBC to support 189 physically- employees can work from challenged people with appropriate home or in roster. We appliances and training. regularly communicated We also contributed 50,000 pieces of blankets to the Prime Minister’s Relief and with them on the ‘dos’ and Welfare Fund in 2020 for the ‘don’ts’ developed and underprivileged across the country for guided by BRAC to prevent ensuring good health during winter. rumors, ignorance and Every year, we organize a fundraiser marathon for humanity and to promote good misconceptions that would health. Our employees contribute in this derail the fight against fund, raising charity where the bank makes coronavirus. an equal contribution to double the fund value. In 2020, the marathon, dubbed ‘Dour’, was organized in February before the country was hit by the novel coronavirus. For Dour 2020, employees raised a fund of address Zero Hunger, Quality Education, BDT 3.45 million and the bank doubled it to Reduced Inequality, and Good Health And BDT 6.9 million by contributing an equal Wellbeing. amount from its CSR Fund. We were honored to have provided financial The entire fund was donated to charitable support to Taramon Bibi, Bir Protik. She lived organizations working for social welfare. The a life of infamy, having to fight against organizations that received the funds were poverty for her survival in her liberated Sufia Khatun Foundation, Kidney Foundation homeland despite being a freedom fighter. Sylhet, Society for Welfare of Autistic Children, Kristi, Deepshikha School, Spreeha BRAC Bank was committed to give her a Bangladesh Foundation, Moyeen monthly allowance to support her for the rest Foundation, Changing Diabetes in Children of life. Sadly, the noble freedom fighter (CDIC) Programme of BIRDEM Hospital, and passed away on December 01, 2018. As per Child and Old Age Care. her request, BRAC Bank continued to provide monthly financial assistance to her husband, We provided financial assistance of BDT 1.2 Abdul Mozid till his death in August 2020. million to support the underprivileged children of Mama Bari Trust in 2019-20 to

Giving back to the society through education

Education forms the foundation of a nation. in Bangladesh. As a public educational We prioritize education, aligned with our institution, the university provides affordable vision of literacy and education-driven and accessible higher education to students. awareness among the masses. We aim to Yet, several financially-challenged students extend support to educational initiatives in find it difficult to pursue education at the order to realize the potential of students with university. In 2020, BRAC Bank provided exceptional intellect on a meritocratic basis. scholarships to 250 students to enable We have invested over 40 per cent of our them to pursue higher studies at the CSR budget in education alone over the last university. Hailing from remote and often few years. underprivileged parts of the country, these students regard the scholarship as a The BRAC Bank-Prothom Alo Trust Adamya tremendous enabler and even a lifeline for Medhabi Scholarship was introduced in them to fulfil their aspirations in learning 2010 to assist meritorious students of and, eventually, for a better life. financially-challenged families to fulfill their pursuit of higher education. Every year, 50 We also provide financial support to meritorious students from disadvantaged meritorious students from financially- families who achieve GPA 5 at SSC-level are challenged circumstances to enable them to accepted into the programme. Changing pursue higher education at BRAC University. lives of nearly 1,000 students over the past Each year, 10 undergraduate students avail 10 years, a total of 212 students received of this scholarship programme that covers the scholarship in 2020. the full spectrum of their requirements – from tuition fees to living expenses. The The University of Dhaka is the oldest and programme duration comprises a period of amongst the top-notch learning institutions four years. LABOUR RIGHTS Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

Principle 4: the elimination of all forms of forced and compulsory labor;

Principle 5: the effective abolition of child labour;

Principle 6: the elimination of discrimination in respect of employment and occupation. As part of our ethical business practices, we importance of effective recognition of the continuously encourage our employees and rights, prohibition of forced labor etc. They work towards creating a healthy, ethical, are major part of the policy that includes supportive and collaborative work following fundamental sections like no environment for our employees to realize forced or child labor, leave management, their full potential - both professionally and bonus, staff loan for house or transport, end personally as well as discouraging labor of service bonus etc. malpractice including child labor and forced labor while financing any. In this regard, the policies and strategies are in place to In addition to monetary support labor related to UNGC principles. compensation, health and Our Credit Policy has an exclusion list that supports prohibition of financing in activities other benefits are also related to forced labor or child labor. In both available to our employees cases, BRAC Bank follows local laws/regulations as well as the defined and their family members to issues as addressed by the ILO Fundamental confirm a better lifestyle. Human Rights Conventions (Minimum Age Convention C138, Art. 2). Our talent acquisition strategy continues to Our Environmental & Social Safeguard Policy recruit individuals who demonstrate the right 2019 endorses UNGC principle for labor skills and behavior. Correct attitude and standard and accordingly ensures any aptitude are of prime importance that grievance mechanism for both internal and enables us to hire the best talent who external stakeholders. eventually enrich our human capital and We believe that ensuring the occupational achieve Bank’s goal. Once recruited every health and workplace safety of our opportunity is given to employees to succeed employees, visitors, service users and all and build a long-term career in one of the relevant persons is the key essential to its largest financial institutions of the country. motto: people, planet and prosperity. Hence, Our compensation system is designed to a Fire Safety Management Plan has been reflect competitive and fair remuneration created to ensure a safe and healthy packages for our employees who deliver the working environment for all. vision, strategy and expectations set by the Our procurement policy provides the utmost Board. Thus, we seek to foster a culture that transparency while selecting or engaging champions performance and creates a with third parties/suppliers for business linkage between merit and pay. purposes. Our new Performance Management System Our HR Policy enables us in conducting in- (PMS) ensures that our performance house operations in harmony with evaluation is based on business delivery as appropriate environment for our employees well as on behavioral competencies aligned and propagate a culture in which our with our core values and does not employees are deeply aware of the discriminate among the employees. As part of E&S due diligence while financing, and conditions for employment are also loan files above a given threshold set by the specified. central bank must go through rigorous scrutiny. One of the integral parts of this due All our employees are entitled to avail leave diligence is to check client’s compliance with for any emergency and casualties as per the labor and working condition. That’s how at bank’s policy. With a provision of Leave Fair the client level we ensure that they are well Assistance (LFA), as per the guideline of compliant with labor standards and working Bangladesh Bank. All the employees are conditions as prescribed by local covered under medical insurance scheme. laws/regulations. Dedicated clinical officers are there to provide instant medical support. We also The Sustainable Finance Unit of the bank organize periodical fire drills to educate our also monitors and visits the client premises employees. as part of environmental and social due diligence to oversee clients stand against force labor or child labor.

Our Credit inspection team, a separate and independent team, also undertakes random visits to the client to ensure clients adherence with occupational health and safety standards.

We do not ignore, nor will tolerate harassment or discrimination on account of During the challenging period of the race, age, sex, religion, national origin, or pandemic, we invoked the tenets of our disability of any employee by another person Business Continuity Plan, which has helped in the workplace. An employee who us to continue functioning in the “new experiences harassment or discrimination normal”. We learnt along the way, navigating can always escalate the matter to through the uncertainty with just one appropriate authority for action. objective in mind: to serve our stakeholders in the best possible way. Training sessions on “Diversity, Gender and Sexual Harassment” has been adopted as To realize this aim, we focused on mandatory session for all our employees. maximizing efficiency and productivity while working from home, ensuring that we meet For internal monitoring of the employee daily targets while enhancing collaboration satisfaction against working condition, with our colleagues and sharing updates human resource departments collect through ongoing communication. We also employee feedback on the understanding of utilized the opportunity to equip our the HR policy and views on its effectiveness employees to prepare for the post-pandemic through quick survey which gives valued world through e-learning programmes. feedback on the matter. In 2020, we have invested 204,805 man-hour The rights, obligations, and fringe benefits of for 655 training programmes for our the employees are well articulated in the employees. appointment letter, wherein the entire terms ENVIRONMENT Principle 7: Businesses should support a precautionary approach to environmental challenges;

Principle 8: undertake initiatives to promote greater environmental responsibility; and

Principle 9: encourage the development and diffusion of environmentally friendly technologies. Rooted in its 3P or “People-Planet- practices. By implementing the all- Prosperity” philosophy, BRAC Bank has encompassing ‘3P’ philosophy, BRAC Bank pioneered responsible and sustainable emphasizes on the need to quantify value finance. The bank’s values-based ethos and that transcends financial outcomes and is spirit of integrity embody its deep focus on rather anchored on the positive impact environment as well as sustainable finance. created across the economic, social and Central to this is the bank’s versatile environmental spectrum. Sustainable Finance Unit (SFU), housed In the pursuit of environmental and social under the Supervision of Sustainable initiatives and integration of these Finance Committee (SFC), committed to considerations into the bank’s product expand and enhance the green credentials design, strategic planning and policies, SFU of the bank and contribute to Bangladesh’s is the heart of BRAC Bank’s sustainability SDG vision and efforts of attainment of framework and is focused on extending its goals through green, sustainable and positive arch of influence across the country, responsible finance. covering various stakeholders. BRAC Bank has embraced guidelines for Adhering to the terms of reference laid out environmental risk management and green by Bangladesh Bank, the bank’s SFC, banking under the indicative measures set constituted by the senior management, by Bangladesh Bank. In doing so, it develops serves as the apex authority, holistically inclusive banking strategies to ensure supervising the bank’s sustainability sustainable economic development and activities under Board stewardship. promotion of environmental-friendly

Fronted by the bank’s vision and being financial institutions in the country to have committed to our 3P philosophy, we are adopted the guiding principles of focused on promoting responsible and Bangladesh Bank’s revolutionary guidelines sustainable banking across the real on green banking, way back in September . This is evidently 2013. manifest in BRAC Bank being one of the few Committed to its purpose, the unit has been Formation and Formulation of Terms of growing ever since its establishment and Reference of Sustainable Finance Division in achieving sound diversification, in line with Banks and Financial Institutions, dated Bangladesh Bank’s SFD Circular No. 02: December 12, 2016.

BRAC Bank endorses the principles of The bank provided finance under its unique sustainable banking, enshrined in its Sustainable Finance product umbrella commitment to harness finance to deliver “Planet solution” to clients desirous of economic, social and environmental embracing environmental-friendly progress, and the year 2020 was no technological upgradations and digital different, despite the year being marred by transformation within their factories, thus the coronavirus pandemic. contributing to the circle of positivity by actively addressing climate risks.

BRAC Bank complies with all local laws/regulations, central bank’s regulatory compliances for E&S issues, as well as international best practices, like IFC performance standards and UNGC principles.

BRAC Bank’s Environmental & Social identify E&S risks associated with our clients Safeguard Policy represents the bank’s and monitor risk mitigation plans in comprehensive E&S umbrella meeting accordance with their respective risk grades. regulatory requirements, stakeholder To enhance the capacity and supervision of compliance and voluntary commitments in E&S risks, the SFU team regularly environmental and social best practices. participated in various capacity building These policy-centric guidelines are sessions, seminars and workshops, while established by the Board and designed to also conducting in-house sessions for meet the organizational requirements business RMs/credit officers for enhancing regarding Environmental & Social capacity and knowhow while engaging with Management System (ESMS) that ensure E&S issues. proper framework and in-house capacity to In 2020, BRAC Bank joined the green action initiated by the BANDHU Foundation of of ‘Project Oxygen’, a team of three voluntary Bangladesh, Give Bangladesh and Aamrai development organizations engaged in tree Bangladesh. Together, they planted 49,000 plantation activities in the cyclone Amphan- trees in 49 minutes in the Amphan-affected affected coastal areas. areas of Koyra in Khulna and also commemorated the 49th year of the Project Oxygen was a crowd-funded project country’s independence.

Koyra Upazila lost about 40,000 trees due to species of trees across seven unions of cyclone Amphan in May 2020. The trees led Koyra Upazila. The list of trees included to reforestation of that area, lending crucial 20,500 Shirish, 16,500 Lombu, 2,000 support to the in withstanding Guava, 2,500 Wood Apple, 5,000 Sobeda future natural disasters. (Sofeda), 2,000 Tamarind, 500 Krishnachura, 500 Bokul, 1,000 Amla The project team planted locally-accepted (Amalaki) and 3,000 Tala Palm (Taal).

BRAC Bank contributed 5,000 trees in this green cover expansion initiative. Carbon footprint minimization As a responsible bank rooted in increasing efforts in adopting eco- sustainability, BRAC Bank recognizes the responsible initiatives by exploring more impact of its activities on the planet. With green alternatives in parts of its this awareness, the bank is focused on organizational framework. promoting sustainable financing and

Key sources of the bank’s carbon emissions

Financing In-house Perspective (Direct) (Direct)

Fuel Pharmaceutica ls and consumption pesticides

Power Textile and consumption leather

Paper consumption Power

Construction materials

Our response to minimize our carbon footprint

Green office Sustainable guidelines financing

Financing In-house Perspective (Direct) (Direct) E&S Risk mitigation through ESMS Carbon footprint Climate Risk Fund measurement of under CSR Head Office We signed an agreement with Future Carbon bank to adopt an energy-efficient and Ltd, a leading environmental consultancy carbon-neutral strategy for its in-house firm in Bangladesh, in 2020 as part of our operations, thus advancing the sustainability strategy. Under this organization’s vision of emerging as the agreement, Future Carbon will assist the most sustainable bank of Bangladesh.

Some of the other key initiatives in 2020 or internet banking. As of December 31, comprised the following: 2020, we had 226,826 internet banking users. • We have established Green Office Guidelines as part of our comprehensive • We designed an email-based BEFTN and Environmental & Social Safeguard Policy. RTGS request execution mechanism to ensure less paper consumption • We have ensured lower use of paper, especially in marketing materials and in- • We promoted the use of renewable energy house activities. within the organizational framework, with 18 branches and 2 ATM booths powered • During the year, we had BDT 441 per by solar energy. employee paper consumption, which we aim to reduce in the coming years. • We installed LED lights for optimizing the electricity consumption. • We encourage the use of mobile banking

Forward outlook

Climate change is real and so is the threat to Bank has pledged to reduce its carbon the environment, as amply evident by the emissions, particularly through responsible coronavirus pandemic. Being increasingly and sustainable finance. With a deep cognizant of the calamitous effects of commitment to its sustainability vision, the climate change, relentless efforts are being bank aims to soon become fully paperless, made across the globe to measure and while advancing towards becoming the mitigate climate change-related risks. To leading sustainable bank of the country. contribute to these global efforts, BRAC Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. “For stewarding strategic progress through strong governance, the Board will continue to ensure that the business as a whole is aligned with best practices in governance and that our approach to disclosure remains understandable and transparent.” Dr Ahsan H Mansur, Chairman

At BRAC Bank, we are committed to fostering best practices within the organization, an effective governance framework through including where specific authorities of the our policies and procedures in support of the Board are delegated to the relevant Board bank’s core values that underpins our ability Committees, as well as to the MD/CEO. to set the overall strategic direction of the During the year, we also ensured that our bank. efforts in anti-corruption and anti-money The Board is primarily responsible for the laundering remain unabated, while bank’s strategic and annual plans for promoting daily operational integrity business performance, overseeing the amongst our employees. Moreover, a proper conduct of business, talent and corruption-free pledge has served to uphold succession planning of key management, the organization’s ethical behavioral risk management, shareholders’ standards to further strengthen control communication, internal controls, measures across the bank and its management information systems and subsidiaries. relevant statutory matters. The management BRAC Bank is fully committed to anti- is accountable for the execution of corruption principle of the UN Global expressed policies and attainment of the Compact. We recognize our obligation to join bank’s corporate objectives. governments, international organizations The functions of our Board and the and other financial services organizations to management are clearly defined and close financial channels used by money demarcated to ensure the effectiveness of launderers and terrorist organizations. We the bank’s business and its day-to-day consider practicing anti-corruption as an operations. The Board approves the integral part of our management strategy, corporate governance procedures and rather than a mere legislative requirement. practices adopted by the bank to embed We are fully committed to preventing corruption, extortion and bribery.

Whistleblower policy There is no regulation or guidelines in the financial services industry about encouraging and protecting whistleblowers. However, BRAC Bank always embraces excellence in governance and encourages employees to raise a red flag in the event of coming across any sort of wrongdoing. This includes senior managers and certification regime, which is aimed at improving individual accountability within the financial services industry. Our HR policy clearly states zero tolerance Your-Customer Process and Contact Point approach against employee if he/she is Verification to combat any adversity. involved with any sort of corruption, bribery AML-CFT training is a regulatory requirement etc. resulting immediate termination and mandated by Bangladesh Bank. It is even handover to the law enforcing authority mandatory for new recruits to attend it if needed. during the orientation program. BRAC Bank We have comprehensive policies on “Money employees also participate in various AML- Laundering Prevention”, “Combating CFT and compliance-related refreshers Financing of Terrorism”, and “Know Your round the year facilitated by internal and Customer” that has been approved by our external resources. Board of Directors. We have a full-fledged In 2020 a total of 6,238 participants department to address Anti-money attended different learning programs under Laundering (AML) agenda with adequate various topics of AML, ensuring regulatory staff having a adequate experience in the compliance. relevant field. We follow a stringent Know-

AML-CFT training for new joiners is a mandatory regulatory requirement. Here is a photo of our Young professionals’ (2nd batch) in their orientation programme where they also had an AML-CFT training.

At BRAC Bank, our ethics, values and code of employees are assessed with respect to the conduct are aligned with globally-recognized key performance indicators (KPIs) and anti-corruption and anti-fraud principles and eventually rewarded. benchmark corporate governance practices. It is true that ultimately, our financial and These support us in our quest to doing ESG performance rests on good governance. business purposefully and in the right way To ensure the best governance practices, we and also helps us to build holistic continuously review and update our policies. stakeholder trust. Particularly, our employee training and engagement programmes place In 2020, we continued to strengthen our rigorous emphasis on assessing how they anti-bribery and corruption policy, whistle- interact and engage with our clients and blower policy, etc., to prevent any customers. This is in line with our ethics and malfeasance or defalcation. values, which ultimately influences how our To learn more about BRAC Bank and its performance in the year 2020: Visit: https://www.bracbank.com/financialstatement/BRAC_AR_2020.pdf Or scan the QR code And download our Annual Report 2020.