Serving the Country, Pride the Nation

SUSTAINABILITY REPORT 2019

DIGITALIZATION EMBRACING NATION PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

BNI is reinventing itself and transforming into a

“digital banking entity. Through digitalization, BNI embraces the nation and provides leading services to SMEs. BNI’s concrete steps to form a digital-based financial ecosystem are aimed at MSMEs engaged in the“ manufacturing, fisheries, agriculture and trade sectors. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

TABLE OF CONTENTS

03 SUSTAINABILITY STRATEGY 05 BNI SUPPORT TOWARDS SDGs 06 OVERVIEW OF SUSTAINABILITY PERFORMANCE 10 MESSAGE FROM THE BOARD OF DIRECTORS 14 STATEMENT OF RESPONSIBILITY OF THE BOARD OF COMMISSIONERS AND BOARD OF DIRECTORS 16 PROFILE IN BRIEF 21 ABOUT THE REPORT 24 SUSTAINABILITY GOVERNANCE

36 DIGITALIZATION FOR THE NATION 40 Superior Products and Services in Digital Banking 42 Obligation to Develop Products and Services on Sustainable Finance

45 SERVING THE WHOLE COUNTRY 46 Equality in Service Provision 52 Employment 60 Guaranteeing Customer Satisfaction 62 Inclusive Finance and Empowering the Community

67 MY ENVIRONMENT, MY COUNTRY 68 Disclosure on Climate Change Impacts 72 Sustainable Finance Portfolio 80 Support for Environmental Conservation 90 INDEPENDENT ASSURANCE STATEMENT 94 RESPONSE TO FEEDBACK 95 POJK REFERENCE AND INDEX OF GRI & SUSBA STANDARDS PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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DIGITALIZATION EMBRACING NATION

SUSTAINABILITY STRATEGY

BNI has recorded a strong performance on economic, social, environmental and good governance standards, and retained the ‘A’ rank with respect to MSCI’s ESG Ratings. In terms of market-capitalization weighted index, as of January 31, 2020 BNI is ranked 7th in the list of 10 Main Constituents of MSCI Indonesia.

VISION, MISSION, AND SUSTAINABILITY STRATEGY

For BNI, sustainability means becoming a financial institution that provides superior

performance and services to all customers;

“increasing investment value for investors; creating the best working conditions for employees; raising concern for the environment and community; and enforcing “ corporate governance in the context of sustainable finance. This commitment to sustainability is enshrined in the Company’s vision and mission statements.

In the Mission statements 4 and 5 on increasing concern and responsibility to the environment and the community, and to be the exemplar of compliance and good corporate governance, BNI has considered the Environmental, Social and Governance (ESG) aspects of the company’s operations. The company’s operations are expected to support the achievement of the Sustainable Development Goals (SDGs). PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

BNI SUSTAINABILITY PILLARS

BNI’s exceptional performance on sustainability has been realized through its efforts to build a culture of sustainability. Besides ensuring good corporate governance“ “practices, BNI implements five Sustainability Pillars that serve as guidelines for managing financial performance while taking into account the environmental and social impacts, and supports the achievement of the sustainable development goals.

BNI FOR INDONESIA

BNI FOR CUSTOMERS BNI FOR THE ENVIRONMENT

BNI SUSTAINABILITY PILLARS

BNI BNI FOR THE COMMUNITY FOR EMPLOYEES PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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BNI SUPPORT TOWARDS SDGs

BNI has mapped out its banking operations and community empowerment initiatives to support achievement of the Sustainable Development Goals (SDGs). Support for the 17 Goals was identified on a scale of 1 to 3 (moderate to very high). From this exercise eight Goals were deemed as priority for BNI support.

BNI’s Support Impact of SDGs on BNI No SDGs for Sustainable BNI’s SDGs Priority Business Development Goals

1 No Poverty

2 Zero Hunger

3 Good Health and Well-being

4 Quality Education

5 Gender Equality

6 Clean Water and Sanitation

7 Affordable and Clean Energy

Decent Work and Economic 8 Growth

Industry, Innovation and 9 Infrastructure

10 Reduced Inequality

Sustainable Cities and 11 Communities

Responsible Consumption 12 and Production

13 Climate Action

14 Life Below Water

15 Life on Land

Peace and Justice Strong 16 Institutions

Partnerships to achieve the 17 Goal PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

OVERVIEW OF SUSTAINABILITY PERFORMANCE

ECONOMIC ASPECT

SOCIAL FORESTRY PEOPLE’S BUSINESS CREDIT (KUR)

2019 2018 32.70 3.34 Billion Rupiah Billion Rupiah

INCOME NET PROFIT

2019 2018 2017 2019 2018 2017 78.4 71.7 66.6 15.38 15.09 13.77 Trillion Rupiah Trillion Rupiah Trillion Rupiah Trillion Rupiah Trillion Rupiah Trillion Rupiah

SUSTAINABILITY RELATED ECONOMIC PERFORMANCE*

Trillion rupiah Million rupiah 5 Rp30,121 Rp104,814 Types of products that Value of products and/ Value of production or meet the criteria for a or services that meet the services for financing sustainable business criteria of a sustainable sustainable businesses model business model (KKUB) from the Work Plan and Budget (RKAB)

% Million rupiah Trillion rupiah

% 41.20 Rp57 Rp30,064 Percentage of sustainable Funds raised Funds disbursed businesses portfolio to total portfolio

*as of September 2019 PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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INCLUSIVE FINANCE PERFORMANCE

TOTAL AGEN46 AGENTS VALUE OF PRODUCTS PROVIDED BY AGENTS (Persons) (Trillion rupiah)

2019 157,144 2019 159.6 2018 111,836 2018 94.5 2017 69,589 2017 11.6

ENVIRONMENTAL ASPECT

Description Unit 2019 2018 2017

Earth Hour MWh 11,392.64 8,001.26 7,387.67 Water use efficiency

Pengurangan Limbah 2019 63,891 2018 (96,620)* Paper use efficiency Tons 988.9 1,284 2,155 2017 12,967 Funding allocation for Billion rupiah 143.23 115.20** 107.76 environmental issues *indicates an increase in consumption

Fuel consumption Thousand 1,738 1,468 1,504 rupiah

Let’s Save with Waste Customers 162,733 159,622 -

Conservation of biodiversity Efficiency in electricity Rhino conservation program Rehabilitation and conservation of 72 Java use from Earth Hour rhinoceros 2019 11,392 MWh

Organic Forest Program Planting of 1,000 plants with estimated CO2 2018 8,001 MWh absorption of 45.9 tons 2017 7,387 MWh Release of orangutans 9 orangutans released back into the wild in Bemban watershed

**restatement PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

SOCIAL ASPECT

POSITIVE IMPACTS OF SOCIAL ACTIVITIES

Billion Rupiah % 1,619 Rp265.40 41.4 Total fostered Funding for Partnership Increase in ISPO & partners and Community RSPO certified palm Development Program oil debtors (PKBL)

Billion Rupiah % Rp38,416 90 Financing for toll roads Employee Engagement and infrastructure Level Score projects

ADVERSE IMPACTS OF SOCIAL ACTIVITIES

In general, BNI’s community empowerment activities deliver benefits to the communities directly targeted. On the other hand, these activities also cause adverse effects although not as significant. Rp

These adverse effects include the tendency towards consumerism as and when the level of welfare increases, resistance in communities to carry on the empowerment activities on their own, or even envy among communities that are not the recipients of the program. In this regard, BNI conducted social mapping to identify local competencies among communities to implement activities according to their needs. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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AWARDS AND ACHIEVEMENTS 2019

Sustainable Business Award (SBA) 2019: Best Flagship

Asian Sustainability Award (ASRA) 2019: Finalist for Best Sustainability Report for Public Sector

Asia Sustainability Reporting Rating (ASRRAT) 2019: Gold

PADMAMITRA+ AWARD: DIGITAL INNOVATION

CECT Award 2019: Fair Operating Practices and Overfall Sustainability Reporting for Finance Industry PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

MESSAGE FROM THE BOARD OF DIRECTORS [102-14]

ACHMAD BAIQUNI President Director

“ BNI strives to provide all-digital services to all customers by implementing “ the BEYOND strategy

Respected stakeholders,

On September 23, 2019, the United Nations Responding to this global issue of climate change, Secretary General called on all world leaders to Indonesia once again stated its commitment to raise awareness in reducing Greenhouse Gas support the Paris Agreement on Climate Action of (GHG) emissions that cause climate change and 2015. Indonesia along with 186 other countries global warming. The UN noted that the effects of called for actions to prevent the increase in global climate change are increasingly real and require average temperature to exceed two degrees Celsius concrete actions from world leaders to reduce GHG each year. In this regard, Indonesia’s commitment emissions. must be proven by reducing GHG emissions by 29% by 2030. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

To realize this commitment, Indonesia needs These pillars prop up BNI’s sustainability strategy the support of all parties, including the business in implementing digital banking innovations that community. support sustainable development.

PT Bank Negara Indonesia Tbk (BNI) as a 74-year old Policies in Response to Challenges institution also expresses its support towards this As the business community is now expected endeavor. In service to the nation, BNI implements to contribute to mitigate the adverse effects of sustainable finance with one of its objectives being climate change, the banking industry has begun the reduction of GHG emissions. Overall, this to integrate Environmental, Social and Governance implementation covers the economic aspect by (ESG) principles with respect to financing or product increasing the welfare of the people, environmental innovation. To that end, BNI has taken steps to aspect by mitigating the impact of climate change, implement sustainable finance principles in its and social aspect by reaching out and empowering business practices. In this context, BNI has laid down neglected and remote communities. All of these a policy to address the challenges of its sustainability initiatives are carried out through good corporate strategy by adjusting credit requirements and the governance. Company’s internal procedures. Executing the sustainability strategy involves increasing awareness In line with the implementation of sustainable and being responsible to the environment and finance, in 2019 we continued the Corporate strategy community, and ensuring compliance to corporate of strengthening the motto of #BNItuDigital. governance codes. Digitalization has brought changes to the banking industry and has now moved towards supporting An example of the application of sustainable sustainable finance. In the long term, BNI’s move development principles within BNI can be seen towards digitalization is expected to support through the construction of green buildings for GHG emissions reduction through the adoption its operations. The green building concept aims to of environmentally friendly lifestyles, increase the achieve energy savings and towards environmental reach of inclusive finance and provision of finance sustainability. Besides, green buildings signify for eco-friendly industries. the spirit of providing superior services to the community as well as being great places to work for BEYOND Traditional Financial Services employees. BNI has the long-term strategy of BEYOND, representing a new era towards its mission of “BNItu Traditionally, banks only paid attention to economic Digital”. In this digital age, BNI wants to leave behind aspects, which is no longer sufficient in the traditional banking services to become a ‘beyond present context. Banks must now also consider traditional financial services’ company, i.e., one which ESG principles on economic performance. For provides comprehensive digital financial services. BNI, integration of ESG principles with economic BEYOND was adopted with the consideration that performance is realized through formulation of the financial industry has experienced significant the Sustainable Finance Action Plan (RAKB). Based changes due to shifts in customer needs that on President Director Directives No. KMP/4/2602 have evolved from developments in information concerning Implementation of Sustainable Finance, technology. Furthermore, this strategy also takes formulation of the Sustainable Finance Action Plan into account BNI’s aspirations. is coordinated by the REN Division; implementation and evaluation of sustainable finance is under the While committed to be a ‘beyond traditional financial ERM Division; while reporting on sustainable finance services’ company, BNI nevertheless adheres to its implementation through Sustainability Report is Sustainability Pillars, namely: BNI for Indonesia, performed by the KMP Division. The directives BNI for customers, BNI for employees, BNI for denote the leadership’s commitment to applying the community, and BNI for the environment. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

sustainable finance principles within BNI, which in ESG-oriented businesses. A total of Rp17,759 billion 2020 was reinforced through formulation of the of KUR has been paid out to 220,066 debtors, or action plan’s second edition. equivalent to 111% of the Government’s KUR disbursement target. In addition, BNI also disbursed Rp122.17 billion towards sustainability-oriented Achievements from Application of Sustainable partnerships. All of these achievements represent Finance our commitment to supporting the implementation BNI has established priority activities through of sustainable finance in line with the RAKB. its Sustainable Finance Action Plan, i.e., baseline identification and establishment of the Criteria for In addition, BNI has stiffened its resolve for a Sustainable Business Model (KKUB) for renewable supporting inclusive finance for rural and urban energy and social forestry over the next three years. communities through the Agen46 program. As These activities are aligned to BNI’s support for of 2019, 157,144 Agen46 agents were spread sustainable development goals, including climate throughout Indonesia with the total value of change mitigation through financing the renewable transactions amounting to Rp159.6 trillion. Inclusive energy industry, and promoting inclusive and finance has also been achieved through the ‘Let’s sustainable economic growth through the “Let’s Save with Waste’ program, which integrates financial Save with Waste” program. literacy with environmental concerns in the BNI supply chain, and is implemented in the areas of In 2019, BNI initiated the KKUB baseline Jakarta Kota, Jakarta Kemayoran and BSD. identification for the palm oil and renewable energy industries for the corporate and medium segments Besides financing, BNI’s support for sustainable as initially targeted. In addition, the ‘Let’s Save with finance is realized through sharing of experiences Waste’ program targeted at three Jakarta regional in various forums and seminars, including support offices was successfully implemented in Jakarta for Indonesian Sustainable Finance initiative (IKBI) Kota Region, Jakarta Kemayoran Region, and Jakarta activities. Internally, BNI also applies the Go Green BSD Region. concept by reducing the consumption of paper, electricity and water. While still at the early stage, Overall, BNI’s 2019 performance recorded a net BNI has begun to use alternative energy sources, profit increase of 2.5% over 2018, which was driven e.g., installation of 2,200 watt solar panels at the by revenue increase from interest and the sharia BSD plaza for park lighting. business. In line with this positive result, we have contributed by financing activities that deliver However, the endeavor to apply sustainable finance positive effects on economic and social aspects and is also faced with various challenges. Among them environmental conservation. and perhaps the biggest is to change people’s mindset and behaviors to act in environmentally- As of September 2019, the portion of sustainable friendly ways, both within the Company and its finance was 41.2% of total loans disbursed. Of this debtors. Further, limitations in the integrated system figure, the biggest share was for Micro, Small and for monitoring sustainable finance implementation Medium Enterprises (MSMEs) totaling Rp104,814 within BNI, as well as the view that profitability is billion, followed by financing for management supreme or that eco-conscious business practices of living natural resources and sustainable land entail high costs for debtors also represent major use amounting to Rp20,986 billion. Furthermore, obstacles. On the other hand, external factors BNI developed synergies with the Government such as business competition are also hurdles to to enhance the micro-economy sector through implementing sustainable finance. disbursement of People’s Business Credit (KUR) for PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Strategies for Achieving Performance Targets that the prospects for financing renewable energy on Sustainable Finance projects are quite huge. As a result, BNI is preparing In the course of achieving sustainable finance to support the use of renewable energy with the performance targets, various risks related to objective of mitigating climate change and global economic, environmental, social, and governance warming. In this regard, in 2019 BNI financed aspects are considered. In this context, BNI renewable energy projects totaling Rp3,459 billion. implements a risk management strategy involving analyses of debtors’ credit requirements and The issue of climate change and its environmental establishing general policies for credit, which impacts potentially provides BNI with business includes risk analysis on environmental and social opportunities in sectors with large portfolios factors. of funded projects. BNI has begun to map environmental risks in the KKUB for the energy, low Another strategy employed is through upskilling carbon transportation and plantation sectors. of available human resource competencies. BNI has invested Rp326,422 million for in-class and BNI is conscious that changes in people’s e-learning trainings, especially on sustainable consumption patterns that prioritize technology finance and governance. As of end-2019, 28,470 use can affect the company’s business sustainability. employees underwent training on sustainable For this reason, BNI has endeavored to enhance its finance competencies. BNI is also representative of digital ecosystem services for access by the wider equality in the workplace and decent and safe work market through the Application Programming environment, where 38.9% of senior manager posts Interface (API) Since the API’s launch in 2017, more and above are filled by female workers. than 100 clients from fintech and e-commerce institutions have joined up, leading to an increase Business Opportunities and Prospects for in services revenue. Sustainable Finance Sustainable finance provides tremendous business Appreciation for the Nation opportunities and prospects given Indonesia’s All of BNI’s achievements on sustainability are abundant natural resources. At present, Indonesia’s a result of the hard work of its employees and energy requirements are mainly met by fossil synergies with stakeholders. On behalf of all BNI fuels, while renewable sources have been relatively employees, we would like to state our appreciation underutilized. Currently only around 9.4 gigawatts and gratitude. or 12.5% of total electricity generated is derived from renewable energy sources. This figure shows

Jakarta, January 2020

Achmad Baiquni President Director PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

STATEMENT OF RESPONSIBILITY OF THE BOARD OF COMMISSIONERS AND DIRECTORS ON THE SUSTAINABILITY REPORT 2019 We, the undersigned, declare that all information contained in the Sustainability Report 2019 of PT Bank Negara Indonesia (Persero) Tbk has been stated in full and we are fully responsible for the accuracy of the report’s contents.

This statement is hereby made in all truthfulness.

Jakarta, January 2020

BOARD OF COMMISSIONERS

ARI KUNCORO President Commissioner/ Independent Commissioner

PATANIARI SIAHAAN REVRISOND BASWIR JONI SWASTANTO Independent Commissioner Independent Commissioner Commissioner

AHMAD FIKRI ASSEGAF SIGIT WIDYAWAN Independent Commissioner Independent Commissioner

ASKOLANI RATIH NURDIATI* Commissioner Commissioner

*In the process of fit and proper test by Financial Services Authority PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

STATEMENT OF RESPONSIBILITY OF THE BOARD OF COMMISSIONERS AND DIRECTORS ON THE SUSTAINABILITY REPORT 2019 We, the undersigned, declare that all information contained in the Sustainability Report 2019 of PT Bank Negara Indonesia (Persero) Tbk has been stated in full and we are fully responsible for the accuracy of the report’s contents.

This statement is hereby made in all truthfulness.

Jakarta, January 2020

DIRECTORS

ACHMAD BAIQUNI President Director

HERRY SIDHARTA PUTRAMA WAHJU SETYAWAN ANGGORO EKO CAHYO Vice President Director Managing Director - Managing Director - Corporate Banking Consumer Banking

RICO BUDIDARMO BOB TYASIKA ANANTA ARIO BIMO Managing Director - Risk Managing Director - Treasury Managing Director - Finance Management and International Banking (CFO)

ADI SULISTYOWATI DADANG SETIABUDI TAMBOK P. SETYAWATI Managing Director - Managing Director - Managing Director - Institutional Relations Information Technology and Micro, Small, And Medium Operations Enterprises (MSME) and Networks

ENDANG HIDAYATULLAH Managing Director - Human Capital and Compliance PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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PROFILE IN BRIEF

VISION, MISSION AND SUSTAINABILITY VALUES [102-16]

1. To provide excellent services and value- added solutions to all customers and VISION become the prime business partner. 2. To provide the best investment returns for To be a leading investors. financial institution 3. To provide the most suitable work in service and environment and a place of pride for employees to deliver their best performance. performance and achievement. 4. To increase concern and responsibility towards the environment and community. 5. To be an exemplar of compliance and good corporate governance in the industry.

MISSION

BNI’s sustainability values are reflected in its ‘Prinsip 46’ corporate culture, which is an acronym for 4 Workplace Values and 6 Main Behavioral Values. This principle encapsulates BNI’s work culture and behavioral guidelines that apply to all BNI Hi Movers, comprising the Board of Commissioners, Board of Directors, and Leadership down to the lowest ranks of employees in the organizational structure, including the employees of partners. WORKPLACE VALUES 4 6 MAIN BEHAVIORAL VALUES PROFESSIONALISM

Possessing superior competencies and Enhancing competence and committed to delivering the best results. provide the best results

INTEGRITY

Committed to always be consistent between thoughts, words * Honesty and sincerity and actions based on conscience and to trust in the principles * Discipline, consistency and responsibility of essential truths.

CUSTOMER ORIENTATION

To forever prioritize the interests of customers based on Provide the best services mutual respect and synergistic relationships. through strategic partnerships

CONTINUOUS IMPROVEMENT

Continuously looking out for opportunities and * Continuously improvement solutions to improve service and performance that * Creativity and innovation exceed customer expectations. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

BNI has a Code of Ethics which includes acting professionally, being a role model and reminding each other, maintaining good interpersonal relations between BNI personnel, maintaining confidentiality, recording data and preparing reports, commitment to the environment, maintaining workplace security, and preventing conflicts of interest. The Code of Ethics is the basis for relationships between BNI personnel in the conduct of business.

Branch Office Locations Company Name [102-1] PT BANK NEGARA INDONESIA Indonesia, Singapore, Hong Kong, Japan (PERSERO) TBK (Tokyo and Osaka), UK (London), USA (New York), South Korea (Seoul), Myanmar (Yangon). Detailed information on branch and representative offices can be seen in Head Office [102-3] the BNI Annual Report 2019 Grha BNI Jl. Jenderal Sudirman Kav. 1 Jakarta 10220 Telephone : (62-21) 251 1946 I-Telex : 765185 BNI DLN IA Share Ownership [102-5] Fax : (62-21) 251 1214 Email : [email protected] State-Owned Enterprise, Limited Company Website : www.bni.co.id PO Box 1946 Jakarta Mampang 12700 60% Government of Indonesia Operational Areas[102-4] Operating in 8 Countries Indonesia, Singapore, Hong Kong, Japan, United Kingdom, United States of America, 40% South Korea, Myanmar General Public

Business, Products and Services [102-2] Retail banking with products and services on savings, loans, credit cards and e-banking. Detailed information on branch and representative offices, products and services and business sectors served can be seen in the BNI Annual Report 2019.

Markets Served [102-6] Domestic and International (New York, London, Hong Kong, Singapore, Tokyo, Osaka, Seoul and Yangon) Sectors and Customer Types Served: Corporates, SoEs, and MSME entrepreneurs PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

Organization Scale [102-7]

TOTAL ASSETS TOTAL CAPITALIZATION

2019 2018 2017 2019 2018 2017 845.6 808.6 709.33 146.39 118.05 184.62 Trillion Rupiah Trillion Rupiah Trillion Rupiah Trillion Rupiah Trillion Rupiah Trillion Rupiah

REVENUE TOTAL EMPLOYEES

2019 2018 2017 2019 2018 2017 78.4 71.7 66.6 27,211 27,224 27,209 Trillion Rupiah Trillion Rupiah Trillion Rupiah Persons Persons Persons

EMPLOYMENT [102-8] During 2019, BNI’s workforce totaled 27,211 employees, consisting of 13,142 men and 14,069 women.

Employee Composition Based on Gender and Position [102-8]

Position 2019 2018 2017

Male Female Total Male Female Total Male Female Total

>= VP 206 49 255 196 42 238 182 42 224

AVP 784 337 1,121 755 322 1,077 730 276 1,006

MGR 1,838 1,239 3,077 1,803 1,190 2,993 1,692 1,101 2,793

AMGR 5,010 5,097 10,107 4,743 4,842 9,585 4,078 4,191 8,269

ASST 5,218 7,347 12,565 5,451 7,684 13,135 5,576 8,592 14,168

PGD 86 0 86 196 0 196 749 0 749

Total 13,142 14,069 27,211 13,144 14,080 27,224 13,007 14,202 27,209

Number of Employees Based on Education Level

Education 2019 2018 2017 Level Male Female Total Male Female Total Male Female Total

Doctorate 6 4 10 5 4 9 3 4 7

Masters 1,581 1,042 2,623 1,556 1,028 2,584 1,509 963 2,472

Bachelors 10,166 11,546 21,712 10,031 11,392 21,423 9,718 11,334 21,052

Diploma III/ 788 1,468 2,256 872 1,641 2,513 995 1,883 2,878 Academy PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Education 2019 2018 2017 Level Male Female Total Male Female Total Male Female Total

Primary - 601 9 610 680 15 695 782 18 800 High School

Total 13,142 14,069 27,211 13,144 14,080 27,224 13,007 14,202 27,209

Number of Employees Based on Age

2019 2018 2017 Age Group Male Female Total Male Female Total Male Female Total

>50 Years 965 442 1,407 664 302 966 813 344 1,157

45-50 Years 1,673 1,281 2,954 1,946 1,322 3,268 2,030 1,379 3,409

40-45 Years 2,246 1,641 3,887 1,888 1,407 3,295 1,928 1,482 3,410

35-40 Years 1,216 1,325 2,541 1,769 1,805 3,574 1,881 1,950 3,831

30-35 Years 2,994 3,599 6,593 2,449 2,884 5,333 2,507 3,027 5,534

25-30 Years 2,981 4,127 7,108 3,432 4,795 8,227 3,404 5,061 8,465

<= 25 Years 1,067 1,654 2,721 996 1,565 2,561 444 959 1,403

Total 13,142 14,069 27,211 13,144 14,080 27,224 13,007 14,202 27,209

Number of Employees Based on Operational Region

2019 2018 Operational Region Male Female Total Male Female Total

Head Office 2,639 2,213 4,852 2,391 1,896 4,287

Regional Office 10,475 11,854 22,329 10,730 12,180 22,910

Overseas Branch 28 2 30 23 4 27 Office

Total 13,142 14,069 27,211 13,144 14,080 27,224

Number of Employees Based on Employment Status

2019 2018 2017 Employment Status Male Female Male Female Male Female

Permanent 12,127 12,758 12,485 13,401 11,866 12,775

Contract-Based 651 887 446 443 1,141 1,427

Trainee 364 424 213 236 0 0

Total 27,211 27,224 27,209 PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

External Initiatives and Certifications[102-12]

INDONESIAN SUSTAINABLE Indonesia Business Council for FINANCE INITIATIVE (IKBI) Sustainable Development (IBCSD) 2018 PRESENT 2011 PRESENT ROLE: FOUNDER ROLE: FOUNDER SCOPE: NATIONAL SCOPE: NATIONAL

ISO 9001/2015 ISO 9001/2015 ISO 9001/2015 ISO 9001/2015 Quality Management System on Quality Management Quality Management Credit Clearing, Credit Trade Processing Center System on IT Operation System on IT Security Administration and Card Services Management Production & Distribution 11 01 2018 10 01 2021 14 09 2018 26 09 2019 14 09 2018 26 09 2019 15 01 2020 15 01 2023 SAI Global Certification Services SGS SGS SGS

ISO 9001/2015 ISO 9001/2015 ISO 9001/2008 BNI Corporate University Quality Management Banking Operations for Preparation and Verification System In House Learning and e-Learning/ Guarantee Letter, Real Time Processon Published Financial Digital Learning for BNI Employees Gross Settlement (RTGS) & Statements Remmitance Services (2018) 09 03 2017 09 03 2020 10 10 2016 10 10 2019 SGS United Kingdom Ltd Societe Generale de Surveillance SGS United Kingdom Ltd (SGS S.A.) United Kigdom

Membership in Industry Associations [102-13]

Association Role Scope

Indonesian Credit Card Association (AKKI) Member National

Payment System Association of Indonesia (ASPI) BNI Director as Chairperson National

National Banks Association (Perbanas) Member National

State-Owned Banks Association Member National

Banking Archives Communications Forum Member National

There were no changes to the ownership structure In carrying out its operational activities, BNI or supply chain during 2019. However, fourteen new works with third parties that provide specific outlets were opened while another eighteen were services. These suppliers deliver services such as closed during the year. Further, there were changes IT infrastructure, office supplies, transportation to the status of certain outlets where a sub-branch and security. Selection of the winning bid as well office (KCP) was upgraded to be a branch office (KC), as enhancement of the capabilities of suppliers or while two cash offices (KK) were elevated to become vendors is conducted with reference to Company sub-branch offices. Details of changes in BNI outlets Guidelines (PP) concerning Procurement No. can be seen in the BNI Annual Report 2019. [102-10] IN/312/PGV/004 dated June 21, 2019. [102-9] PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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ABOUT THE REPORT

The Sustainability Report 2019 is the tenth edition in Defining Content and relation to BNI’s sustainability performance for the Quality of the Report [102-46] period January 1 - December 31, 2019. This report In determining the topic boundaries and content is published annually, and last year was issued in of the sustainability report, BNI has involved March 2019. [102-50] [102-51] [102-52] management, independent observers, and academics who have knowledge and expertise in The report has been prepared according to the preparing such reports. The prioritization of material Financial Services Authority Regulation (POJK) No. topics was based on the principle of stakeholder 51/POJK.03/2017, GRI Standard 2016: ‘core option’ involvement, sustainability context, materiality and and Financial Services Sector Disclosure 2013 issued completeness. Assurance of the reporting quality by the Global Reporting Initiative (GRI). In addition, has been made through the principles of balance, preparation of the report refers to the SUSBA-WWF comparability, accuracy, timeliness, clarity, and as a reference. [102-54] reliability. All of these processes were carried out through internal coordination mechanisms and by This report has been independently assured by an discussions with the SR drafting team on December external agency, namely SR Asia. The assurance 3, 2019, which was also attended by the Deputy process took place at the Corporate Secretary and Head of the KMP Division. Communications Division (KMP) on January 7-8, 2020. Preparation of the report was coordinated This Sustainability Report covers economic, social, by the Corporate Secretary. Selection of the environmental and governance aspects at BNI, external assurer was based on Company policy by and also describes some of the sustainability considering the expertise and reputation of the activities performed by its subsidiaries. Financial independent agency, and by ensuring that there information contained in this report is sourced from were no conflicts of interest with other parties.[102-56] the consolidated financial statements including subsidiaries, namely PT BNI Life Insurance, PT BNI Multifinance, PT BNI Sekuritas and subsidiaries, BNI Remittance Ltd., and PT Bank BNI Syariah. Other information related to the outcomes of sustainability activities originates exclusively from BNI. [102-45] Determination of Priority Topics

4 Economic performance and digitalization Indirect economic impacts and inclusive finance

3 Confidentiality of customer data Education and training

Sustainable finance portfolio 2 Employment

Anti-corruption Impact on stakeholder

assessments and decisions 1 Local communities

Energy

0 1 2 3 4 Significant impact towards economic, environmental and social factors PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

Material Topics [102-47, 102-49] BNI has mapped the priority sustainability issues that have a significant impact and influence on the decisions of stakeholders. The sustainability issues were then adjusted as per relevance to sustainability topics based on GRI Standards, especially information relating to sustainable finance. There were no significant changes in the reporting period, as well as in the boundaries of material topics. By mapping out priority sustainability issues, BNI has determined seven topics to be material with one of them being different from last year, namely indirect economic impacts.

Internal External Material Topic Sustainability Issue Stakeholders Stakeholders

Customers, Government and Economic Portfolio of Financial Services Authority, Investors/Shareholders, Performance environmentally and Suppliers, Community Employees, Trade Union socially-conscious products Organizations/NGOs, Media, Business Organizations

Financial Literacy, Customers, Government and Inclusive Finance, Financial Services Authority, Employees Community Community Organizations/ Development Programs NGOs, Media Indirect Economic Impacts

Capacity building for management and Employees, Trade Customers, Suppliers, employees, specifically Union Community Organizations/NGOs on sustainable finance Education and considering environmental Training and social aspects

Equality of employment Government and Financial opportunity, Employees, Trade Union, Services Authority, remuneration, decent and Investors/Shareholders Community Organizations/ safe working environment NGOs Employment for employees

Handling of customer Customers, Government complaints, customer Employees, and Financial Services data confidentiality Shareholders/ Authority, Media Investors Customer Privacy PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Internal External Material Topic Sustainability Issue Stakeholders Stakeholders

Customers, Government Mitigation efforts Employees, and Financial Services against corruption and Shareholders/Investors Authority, Community fraud Organizations/NGOs, Anti- Media Corruption

Funding for eco-friendly industries, energy efficiency Government and Financial (electricity, water and Employees, Shareholders/ Services Authority, paper), and support for Investors Community/NGOs, Media climate change mitigation Green Portfolio

To improve the quality of the report, several restatements have been made over the previous report. The restatements involve economic performance, credit portfolio and educational expenditures. The restatements were made because of reclassification or changes in calculation methods, or in light of more comprehensive calculations. [102-48]

We value all feedback to further improve on the information presented in this sustainability report. In this regard, requests for information, suggestions and questions on the report may be submitted to: [102-53]

PT Bank Negara Indonesia (Persero) Tbk Grha BNI, Lt.24 Jl. Jenderal Sudirman Kav.1 Jakarta 10220 Indonesia Telephone : (62-21) 2511 946, 572 8387 Fax : (62-21) 572 8295, 572 8053 MEILIANA E-mail : [email protected] CORPORATE SECRETARY PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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SUSTAINABLE GOVERNANCE [102-18]

GENERAL MEETING OF SHAREHOLDERS

Elect & Dismisses

BOARD OF DIRECTORS Check & Report to BOARD OF COMMISSIONERS

Secretary to Board of Commissioners

Internal Compliance Division Audit Unit Audit Committee

Review Internal Audit Reports Review Compliance Reports Independent Auditor Corporate Bank Risk Management Secretary Division Policy Management Division Risk Monitoring Committee

GCG Unit Review Risk Management Reports

Nomination & Credit Committee Remuneration Committee Risk Management Integrated Risk Sub-Committee (RMC) Management Committee Integrated Governance Committee

Risk Management & Assets & Liabilities Capital Committee Sub-Committee (ALOO)

Performance Technology Credit Human Products Committee Management Management Procedures Capital Anti-Fraud Sub- Committee Committee Policy Committee Committee Committee

DUTIES OF THE BOARD OF DIRECTORS AND BOARD OF COMMISSIONERS

In realizing sustainability governance, BNI’s Finance Action Plan and will carry out monitoring leadership which includes the Board of and evaluation activities against its implementation. Commissioners and Directors provide support The Head of the Strategic Planning Division is on planning and direct supervision of sustainable responsible to the Director of Finance who has finance issues. BNI has determined the division of the duty and authority over the application of labor for implementing sustainable finance through sustainable finance. Further, sustainable finance the President Director Decree No. KMP/4/2602 is also implemented by BNI subsidiaries, including concerning Implementation of Sustainable Finance. those preparing their own action plans such as At present, BNI is in the process of finalizing BNI Life, BNI Multifinance, and BNI Syariah. These organizational functions and corporate governance entities planned to apply sustainable finance in to support the sustainable finance plan in an ideal 2019 by preparing themselves through training, manner. In this process, the Strategic Planning mapping ESG-aware products and establishing Division has specifically prepared the Sustainable teams to support its implementation. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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DEVELOPING In-Class Training on Sustainable Finance COMPETENCIES ON 2019 SUSTAINABLE FINANCE Training Type Facilitator Total Participants BNI provides opportunities for members of its Board of New and Renewable Energy - USAID ICED II 30 Directors and Commissioners and Solar Energy employees who are responsible for New and Renewable Energy - Mini Hydro USAID ICED II 30 implementing sustainable finance to develop their competencies and Preparation of Sustainability Report IFC 27 capabilities on the subject. In line Preparation of Sustainable Finance Action WWF dan IFC 20 with the finalization of sustainability Plan governance processes within Sustainable Finance WWF 20

BNI, sustainable finance training Sustainability Report Training NCSR 2 was given to staff in the various International Seminar On Sustainable IKBI 6 divisions responsible for its Banking implementation. During 2019, 392 Green Climate Fund IKBI 4 personnel including senior leaders at the VP and Manager levels took Trade Finance Presentation IKBI 1 part in sustainable finance training. Implementing Environmental and Social IKBI/ SMI 2 As for the top leadership, BNI’s Protections Director of Finance participated Exit Strategy on Community Development Trisakti 24 in an International Seminar on Developing Community Development Trisakti 24 Sustainable Banking, while the Director of Risk Management was a Reporting Corporate Social Activities Trisakti 24 speaker at the one-day Sustainable Environmental Analysis Training OJK 3 Finance Forum. Oil Palm Plantations Industry LPP argo nusantara 58

Animal Husbandry and Construction Jakarta Finance 79 Industries Consultancy

Industry Study & Analysis: Agriculture & Jakarta Finance 38 Plantation Sector Consultancy

2018 2017

Training Type Total Training Type Facilitator Total Participants Participants

Sustainable Finance Workshop 20 Training on ESG Integration OJK dan 28 WWF- Training on Sustainable New and 20 Indonesia Renewable Energy Projects Environmental Analysis Training OJK 20 Environmental, Social & Governance 24 Integration For Banks ESG (Understanding Indonesia 30 environmental risk) WISE Workshop - TFT 13 Agricultural 34 Commodities

Industry Study & Agriculture Sector Analysis 80

Training on Study & Analysis of the 41 Beef cattle Breeding industry through Partnership Scheme

Training on Plantations and Processing (Oil 46 Palm)

Basic and Advanced Environmental Analysis 11 Techniques, Training of Trainers (ToT) PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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In accordance with the stipulation of OJK Regulation in accessing sustainable finance training online No. 51/POJK.03/2017 on sustainable finance, BNI has through the BNI Smarter platform. Sustainable made sustainable finance as a priority with respect finance training is one of the six mandatory modules to the learning and development of its employees. that must be undertaken by employees. The BNI Nevertheless, BNI continues to face obstacles in Smarter platform can deliver effective and efficient delivering such training due to time constraints and training, and represents a BNI initiative for lowering the need for adjusting the governance structures. the carbon footprint by reducing transportation to For this reason, BNI strives to facilitate employees training venues. 25,276 employees “ have accessed the Sustainable Finance training on BNI “ Smarter

DEEP46

BNI is committed to the upskilling of employee to employees on a daily basis, and to be responded competencies in accordance with their respective online between 00:00 - 19:00 hours. In 2019, a total positions by building a culture of learning through of 175,723 employees had taken part in the DEEP46 the Daily Exercise Employee Program 46 (DEEP46). program, representing a 187% increase from 2018 This program involves the asking of short questions at 60,422 employees.

Total Total Total Total Participants in Participants Participants in Participants 2019 in 2018 2019 in 2018

Small Credit 4,723 4,574 Legal, Governance, Risk 32,169 27,092 and Compliance Consumer Lending 3,422 1,956 Commercial Credit 817 820 Consumer & Retail 67,753 - Treasury 4,930 2,256 Services – Teller 4,535 7,954 Human Capital 247 230 Services – CS 4,655 3,465 Goods/Services 3,094 3,085 Services – Leadership 3,282 2,959 Procurement

Auditor 829 759 Brevet Branch 2,500 2,321 Management Emerald RM 266 237 Branch Operations 2,721 - Small Credit 1,840 970 for Agricultural BNI Eksekusi (4DX) 26,939 - Commodities International and Trade 220 - Credit Administration 2,754 - Finance

Sales 5,771 1,744 Bank Guarantees 2,256

Total Participants 175,723 60,422 PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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MANAGING SUSTAINABLE FINANCE RISKS Good governance within BNI is a prerequisite for accommodating the needs and expectations of stakeholders, and to be aligned with business norms and applicable laws and regulations.

Assessment of BNI’s Good Corporate Governance (GCG)

ASSESSMENT 2017 2018 DESCRIPTION FOLLOW UP

Self-Assessment Ranking 2 Ranking 2 Demonstrates that the Bank Follow-up the shortcomings of GCG has implemented good of the assessment outcomes, implementation governance fairly well. This and to enhance supervision in 2018 is reflected in the adequate by the compliance unit to fulfillment of GCG principles lower the frequency and fines imposed by the regulator

CGPI 88.38 88.94 BNI’s IICG score in the CGPI To action IICG’s (Most Trusted) (Most Trusted) is on the increase, indicating recommendation on good implementation of GCG increasing synergies between principles the business unit and risk control unit in mitigating risks

Asean Corporate 88.60 91.58 BNI GCG assessment based Follow up on CGPI’s Governance (Good) (Very Good) on the Annual Report and the recommendation on gender Scorecard company website diversity, where women now sit on the Board of of Commissioners

Superior Emerging Industry Leader BNI is considered as a Improving business processes Performance Industry company with systematic to be more systematic Assessment Leader business processes and shows Criteria 2017 by a strong commitment to the SOEs Ministry learning

Anti-Corruption Policy

The first phase of the Corruption Control program began with the signing of the “Commitment“ towards Corruption Control” by the President Director on October 17, 2016, and the establishment of the Corruption Control Unit (UPG) at the Compliance Division.“ In addition, BNI has issued the Corruption Control Company Guidelines that can be accessed by all personnel through BNI ePP. These guidelines are an addition to the anti-corruption provisions that earlier were only expressly stated in the BNI Code of Ethics. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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All employees are included in the corruption control program by signing the ‘Employee Integrity Pact’ at the start of every new year, and since December 2018 they are able to report on alleged corruption in paperless form through the Compliance Information Management System (CIMS) portal at www.cims.bni.co.id. The Compliance Division also provides verbal and written responses to questions from Division/Unit concerning corruption. Details of other information related to corruption control can be seen in the BNI Annual Report 2019.

Trend in Corruption Reporting 2017-2019

Total Reports on Corruption Value of Reported Corruption

290 Rp1,621.61

12 Rp20.65 7 Rp6.4

2017 2018 2019 2017 2018 2019

The year 2019 witnessed an increasing trend in the reporting of graft within BNI, which denotes a rise in stakeholder awareness on internal corruption as well as the effectiveness of the CIMS digital reporting system. The reports received by the Compliance Division were forwarded to the Corruption Eradication Commission (KPK) through the Online Anti-Corruption application (GOL), with average reporting rate of no later than eight working days from the 30 day deadline.

RISK MANAGEMENT ON ENVIRONMENTAL, SOCIAL AND GOVERNANCE ASPECTS [102-11] [FS2, FS3] The procedures for identifying, measuring, monitoring and controlling risks in implementing sustainable finance within BNI are carried out with reference to its four pillars on risk management. In this context, BNI adopts a precautionary approach with respect to risk management.

Active Oversight by Adequacy of Policies, the Board of Procedures and 01 Commissioners and Directors. Determination of Limits 02 FOUR PILLARS OF RISK MANAGEMENT

Adequacy of Risk Identification, Internal Control System Measurement, Monitoring and 03 Control Processes, and Risk 04 Management Information System

Further explanation on Risk Management practices within BNI can be seen in the BNI Annual Report 2019. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Sustainable finance is applied beginning with an 1. Legal requirement for the debtor’s business to analysis of the debtor’s credit terms by the Credit have an Environmental Impact Analysis (AMDAL) Committee. The determination of general policies permit for corporate, medium, small, and consumer loans, 2. Performance requirement of the Corporate including risk analysis of new debtors with respect Performance Rating Program (PROPER) from to environmental and social aspects is done by the Ministry of Environment and Forestry (KLHK). the Risk and Capital Management Committee. On BNI will not provide credit to business owners the other hand, evaluation of sustainable finance having Red or Black PROPER ratings without related products is carried out by the Product having conducted preventative actions. Committee. Should there be problems in banking 3. Debtors of the export-oriented furniture industry policy and operations, these are resolved by the must adhere to eco-labelling and Timber Legality Audit Committee. [FS2] Verification System (SVLK) requirements. 4. Debtors in the plantation sector, such as oil BNI is committed not to finance businesses whose palm plantations, must have the following processes do not adhere to environmental, social business permits: Plantation Business Permit and governance standards, along with sectors (IUP), Cultivation Business License (IUP-B), prohibited by the Government. This commitment is Plantation Processing Business License (IUP-P), realized through the exclusionary principles based Plantation Business Registration (SPUP). In on Corporate Secretary and Communications addition, companies must have the Indonesian Division (KMP) Memo No. 8/0274 dated February Sustainable Palm Oil (ISPO) and Roundtable 1, 2012 on the prohibition of financing palm oil Sustainable Palm Oil (RSPO) certificates. Through businesses having a Black or Red PROPER rating. the ISPO and RSPO requirements, BNI indirectly BNI also encourages its debtors to enhance encourages palm oil debtors to pay more awareness and responsibility on environmental attention to social and environmental aspects in and social aspects. Following are the provisions for their business processes. debtors/ prospective debtors along with PROPER ratings: In 2019, BNI sent three employees to take part in 1. As per Minister of Environment Regulation No. the Environmental Analysis Training conducted by 5 of 2011 concerning PROPER, debtors with the Financial Services Authority (OJK) in an effort to black rating are referred to law enforcement upskill its HR on implementing credit policies and agencies while those with red rating are referred procedures with due regard to environmental and for instruction in improving their environmental social aspects. [FS4] performance. As a precaution against risks in financing debtors who are deemed not to Throughout the year, BNI conducted audits against have met the statutory provisions, BNI requires debtors whose business areas generally produce debtors/ prospective customers to take adverse effects on the environment. The audits anticipatory actions. were carried out against 122 mid-segment debtors 2. The blue, green and gold PROPER ratings are including those in the processing and extractive used to enhance BNI’s commitment towards industries such as mining, palm oil mills and metal business and environmental sustainability, processing. The audit outcomes were then used to arising as a consequence of debtors’ activities. determine the fulfillment of the ESG criteria asa basis of credit provision. Furthermore, in the context BNI is also committed to provide lending that is of implementing an eco-friendly audit mechanism, not prohibited by external regulations and does BNI has digitalized the process through the FAST not pose a reputation risk. In the Business Banking and AUDIGI applications which covers audit Guidelines for Corporate Segment Book I, BNI planning, implementation, monitoring of findings, has set the criteria on environmental, social and and documentation of audit work papers in the governance integration that includes the following: form of electronic files, so as to reduce paper use. [FS9] [FS1] PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Besides the audits against disbursed credit, the BNI has identified that it is exposed to various project respective Business Banking units performed risks. Among them are risks pinpointed based on a supervisory actions. Each month, these units drew study of the palm oil industry since 2018. This study up a watchlist with ratings to monitor the fulfillment has allowed BNI to map the global conditions that of requirements and the results are submitted influence the palm oil market, as well as key factors to the BNR and CMR every 3 months. A scoring that effect the success and failure in financing the system is used as the basis for monitoring debtors palm oil industry. [FS3] and for audit findings to measure compliance. The scoring is prepared with reference to the Organic BNI already has policies and procedures in place Consumer Credit Company Guidelines, Organic for making adjustments (down grading) in case of Consumer Credit Company Guidelines Book IV, debtor’s indifference to environmental factors that and Business Banking Credit Company Guidelines impacts business continuity, both in the short and Book I. Monitoring against a sampling of debtors long term. [FS12] is carried out through an internal audit in the respective unit. [FS3] The potential and risk of debtors against ESG aspects are managed through the Assessment process, which includes identification of business opportunities (Business Unit), risk identification and mitigation (Risk Control Unit) and compliance assessment (Compliance Unit). [FS3]

Assessment Pathway

Credit Administration Business Unit Risk Unit Compliance Unit Credit Committee Unit

Risk analysis General the risk control Conduct C2R (Credit To analyze debtors/ Conduct credit and potential units is involved in Compliance Review) prospective debtors administration of debtors/ determining the CRR to ensure the credit including risks and documentation prospective (Customer Risk Rating) process complies risk mitigation debtors and CCR (Customer with all applicable mechanisms. Credit Rating) provisions including generated from IRS regulations on (Internal Rating System) environmental and and LEL (Loan Exposure social aspects. Limit), including IRR (Industry Risk Rating) used by business units and the business risk unit.

Responsible Division

Business Scale: Corporate

LMC 1 Corporate Credit LMC 2 ERM > BNR KPN ADK Committee BIN PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Debtors : Medium & Small

BMN Credit Administration at Regional Offices Medium & Small Credit ERM > CMR KPN BSL Committee Credit Administration at Branch Region (SKM & SKC) Branch Offices

Notes: •LMC 1 (Local Corporate & Multinational Company Division 1) •BIN (Government Institutions Business Division BIN) •LMC 2 (Local Corporate & Multinational Company Division 2) •BSL (Small Business Division) •ERM (Enterprise Risk Management Division) •CMR (Middle & Small Credit Risk Division) •BNR (Corporate Credit Risk Division) •KPN (Compliance Division)

The Bank conducts a compliance test against loan requests through the Compliance Division which delivers its considerations with respect to external regulations, and in accordance with the type of credit and the industrial sector. A credit compliance test is conducted before a decision is reached by the Credit Committee, and its results are part of the considerations. Follow-ups to the compliance tests for fulfilling unmet criteria may be accomplished within a certain period before or after credit is disbursed.

CHALLENGES TO IMPLEMENTING SUSTAINABLE FINANCE

In developing and applying sustainability Other challenges that are external to BNI which governance, BNI is of course effected by the hinder sustainable finance include the intense challenges to implementing sustainable finance, competition between banks to attract new both internal and external. Internal challenges customers, and limited information and clear include a large workforce, complex organizational guidelines for related industries. The issuance of structure, and branch networks that stretch far and OJK guidelines that are more holistic than before wide. Addressing the need to enhance sustainable and complemented by incentives for companies to finance competencies for this large workforce adopt sustainable finance can perhaps be a solution evenly obviously requires comprehensive effort and to some of these challenges. planning. In developing internal capabilities, what can be done The limitations of the integrated automated system is to provide benchmarks and external training, for monitoring and reporting on sustainable sustainable finance training for top management, finance implementation represents an internal and industry studies related to ESG aspects. Other obstacle. On the other hand, existing sustainable things that may be done is to organize capacity finance regulations also affects the markets building activities and regular training on ESG and is a hindrance to its application. Currently, aspects in financial services, raising awareness we are witnessing the transformation towards especially to customers, publishing e-learning/e- information technologies and digitalization, thereby books, videos, and in-class training for employees. increasing the risk of disruptions for the Bank. This transformation demands an increasingly dynamic business model and industry life cycle, which impinges upon the limited resources and support for the successful implementation of sustainable finance.

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STAKEHOLDER INVOLVEMENT

The following is a description on stakeholder involvement in the implementation of sustainable finance. BNI involves stakeholders in every decision making and determination of the company’s strategy, including opinions in determining priority topics that are presented in the Sustainability Report. BNI maps stakeholders

INVESTORS/ SHAREHOLDERS GOVERNMENT CUSTOMERS EMPLOYEES TRADE UNION & OJK

Economic Economic, Legal Relations and Legal Legal Relations Relations Ownership and Stakeholders who help Relations as a Financial Legal Relations achieve organizational goals Services Institution

Discussion Topics Discussion Topics Discussion Topics Discussion Topics Discussion Topics • Security of banking • Financial and • Employee rights • Employee rights • Compliance with transactions non-financial • Equality of Remuneration and regulations and • Small and Medium performance opportunity benefits legislation Enterprises Business • Investment for eco- • Career development • Environmental & social Loans friendly companies • Valuable and BNI Approach and risk analysis in granting • Banking facilities and enjoyable work Response credit easy access experience • Anti Bribery and BNI Approach and Discussion on • Information on banking Corruption (ABC), Response Collective Labor products and services Anti-Money Laundering Reporting on Agreement that are clear and BNI Approach and (AML) and Anti Performance During transparent Response Terrorism GMS • Internal media Frequency of • Green banking BNI Approach and (Portal), telephone Approach • Inclusive banking Response Frequency of frontliners and • Sustainable finance Approach e-mail Once every two • Call Center Service years • Customer satisfaction Quarterly • Employee BNI Approach and survey Satisfaction Survey Response • Website & Frontline Information Frequency of Report on the • Gathering of Agen46 Approach implementation of agents compliance & notification • Ongoing basis at Bank Indonesia • Once a year Frequency of Approach Basel II Accord-Basel • Ongoing basis Committee. Sharia • Once in two years compliance reporting to • Ongoing basis the National Sharia Board. • At least once a year Establishment of Agen46, ATMs for persons with disability, preparation of RKAB and Sustainability Report

Frequency of Approach At least once a year PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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through identification and assessment by considering the principles of dependency, responsibility, tension, influence, diversity, perspectives and proximity. [102-40; 102-42; 102-43; 102-44]

COMMUNITY BUSINESS SUPPLIERS ORGANIZATIONS/ MEDIA ORGANIZATIONS NGOs

Economic & Legal Relations Social Relations, Social Relations and Legal Relations & Industrial Social License & Social License Interests Responsibility and Proximity to the Company

Discussion Topics Discussion Topics Discussion Topics Discussion Topics Mutually beneficial Performance of Investment Environmental impact & Financial & non-financial relationships with suppliers in environmentally friendly performance; CSR programs performance; Environmental of goods and services companies, non-financial implemented & planned; impact & performance of through fair & transparent performance, operational Opportunities to collaborate CSR Programs implemented procurement processes activities, direction of in CSR programs; Information & planned; Opportunities to business development on company activities collaborate in CSR programs BNI Approach and Response BNI Approach and BNI Approach and BNI Approach and Seminars & dissemination Response Response Response of policies National and regional Strategic cooperation Press Conference meetings & activities, on BNI’s social concern; Media Gathering Frequency of international conferences Reporting on community Approach development partnership Frequency of programs As required Approach Frequency of Approach As required Frequency of Once in three months Once in four Approach years At least once a year PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Collaboration with WWF-Indonesia Series of training on sustainable under the “Pilot Project Indonesia: finance in collaboration with First Movers on Sustainable Banking” competent partners and companies program. Training on Sustainable whose operations encapsulate Finance Implementation was held for responsible economic, environmental Financial Services Institutions, Issuers and social aspects. and Public Companies SYNERGIZING WITH PARTNERS TOWARDS SUSTAINABLE Partnership with the Jakarta Provincial FINANCE [FS5] Routine dissemination of information Government in the on various provisions to credit ‘Let’s Save with Waste’ Program managers

ANTI-CORRUPTION AND ANTI-FRAUD PROGRAM

MANAGEMENT APPROACH [103-1, 103-2, 103-3]

Another important aspect of corporate governance to ensure that the Bank’s operations run reliably is the implementation of the anti-corruption and anti-fraud program. In accordance with the joint signing of the corruption control commitment between the BNI President Director and State Audit Board (BPK) Chairman on October 17, 2016, BNI is committed to preventing the occurrence of corrupt practices. The discussion on anti-corruption and anti-fraud in this report does not cover subsidiaries.

The Compliance Division, which is responsible for executing the the anti-corruption and anti-fraud strategies, has issued Company Guidelines (ePP) No. IN/155/KPN/001 concerning Corruption Control dated 27 March 2018 and ePP No. IN/342/KPN/002 concerning Anti-Fraud Strategy dated July 1, 2016.

The Compliance Division works closely with the Anti-Fraud Committee to control the number of fraud cases by making corrective actions. Both of these Reports of transgressions may be submitted through the Divisions also actively communicate Whistleblowing System (WBS) managed by the Compliance with relevant Divisions/ Units to ensure Division as per the following contact: that corrective actions have been carried out. Violations against the anti- a. Telephone : 021-57853377 corruption and anti-fraud strategies are b. Email : [email protected] included in the Compliance Report to c. Mailbox : BNI Transparan PO BOX 2646/JKP 10026 the Compliance Director every quarter d. Website : http://bni-transparan.tipoffs.com.sg and submitted to the OJK each semester. e. SMS : 081-1970-1946 PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Through the Compliance Division, BNI strives On the other hand, BNI has also developed towards realizing the principle of ‘no fraud for our policies and procedures on Anti-Money Laundering bank’ through the implementation of an anti-fraud & Prevention of Terrorism Financing (APU & strategy and the Whistleblowing System (WBS). PPT) which have been approved by the Board The anti-fraud strategy is applied through the of Directors and Board of Commissioners and four pillars as stipulated in OJK Regulation No. 39/ reported to the regulators (OJK and PPATK). The POJK.03/2019 concerning Implementation of Anti- APU & PPT programs have accommodated the five Fraud Strategies for Commercial Banks, namely: pillars of risk management Active Oversight by the prevention, detection, investigation, reporting and Board of Commissioners and Directors, Policies sanctions, dated December 19, 2019. and Procedures, Internal Control, Management Information Systems, and Human Resources and BNI has determined corruption to be a part of fraud. Training. The policy is periodically reviewed and In 2019, 6 cases of fraud with losses exceeding updated in accordance with applicable regulations. Rp100 million were reported BNI has followed up these cases in a responsible manner. Presently one To optimize transaction monitoring in implementing employee involved in fraud has been dismissed, the APU and PPT programs, BNI has an Enterprise while five others are undergoing the settlement Fraud Management (EFM) system consisting of Anti process. Money Laundering Detection, Sanction list, Filtering & Screening Terrorist modules, PEP Screening The decrease in fraud cases from the eight reported Detection and Customer Due Diligence (CDD) in 2018 is also an outcome of the trainings delivered Risk Scoring, and the Suspect Account to Verify on anti-corruption and fraud, namely through the (SAV) system. In addition, BNI also has the Walk in in-class learning and e-learning programs. [205-3] Customer (WIC) application system.

In order to ensure the successful implementation of the APU and PPT program in all operational areas, BNI continuously monitors these programs as per the following: ● Supervision on APU & PPT in domestic branches Reported Fraud Cases is carried out by risk based sampling, especially 2019 6 at the High Risk and Medium Risk Branch Offices 2018 8 where the process is performed both offsite and 2017 17 onsite.

*above Rp100 million ● Quarterly supervision through one on one meetings and discussions covering five APU and PPT Pillars against five subsidiaries, namely As above, the decrease in reported fraud cases BNI Aset Manajemen, BNI Life, BNI Syariah, BNI in 2019 has been supported by in-class learning Multifinance, and BNI Sekuritas. and e-learning programs which were attended by ● Offsite supervision on APU & PPT implementation 26,314 participants. These learning programs have at overseas Branch Offices, namely New York raised awareness on the importance of integrity in and Seoul. the workplace. ● Conducting surveys on compliance levels on WIC and PEP provisions in all Branch Offices. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Services that My Nature, Independent Cover the Country My Country Assurance Statement

MANAGEMENT APPROACH [103-1, 103-2, 103-3]

For BNI, the issue of economic performance that includes concluded long with 100% implementation of the ‘Let’s Save a portfolio of environmentally and socially-conscious With Waste’ program in three regions, namely Jakarta City products is important as a basis for its banking business Region, Jakarta Kemayoran Region, and Jakarta BSD Region. operations. BNI has proclaimed its support to sustainable development as stated under Board of Directors Decree An audit on economic performance was carried out internally No. KP/412/Dir/R dated December 4, 2018 and through and externally based on Financial Accounting Standards formulation of the Sustainable Finance Roadmap which (SAK) and International Financial Reporting Standards began in 2018 and implemented in 2019. BNI’s policies and (IFRS). BNI reports on its economic performance to the initiatives related to sustainable finance are listed in the Board of Directors and the Financial Services Authority (OJK) Sustainable Finance Action Plan. periodically, and the results of the consolidated financial statements are presented at the Annual General Meeting of As per the Bank Business Plan, credit growth in 2019 was Shareholders (GMS) and BNI Annual Report. In this regard, targeted at 15% and non-performing loans (NPL) was complaints on economic performance are handled by the projected at 1.8%. The actual credit credit growth in 2019 was Corporate Communication and Secretariat Division. 8.6% with the ratio of NPL at 2.3%. In regards to sustainable finance, BNI disbursed Rp134,052 billion of financing for Entering the digital era, BNI has innovated in providing digital sustainable business activities or 41.20% of total bank loans services to support productivity, comfort, convenience, and as of September 2019. Economic performance and product service efficiency for customers. In line with the corporate portfolios presented in this report are consolidated for all plan 2019-2023 BEYOND, BNI will develop digital-based BNI work units, including overseas offices and subsidiaries. services to cater to the demand for strategic business as well as Business As Usual (BAU) to support day-to-day BNI initiated the process of identifying the Sustainable operations. Business Model Criteria (KKUB) baseline for the palm oil and renewable energy industries in the Corporate BNI has set four strategic directions with respect to and Medium Segment, and Social Forestry in the Small information technology, namely new digital proposition; Segment. Further, the process also tried to identify governance towards performance; strive for operational consumptive programs/ products to be included in the excellence; and innovative and agile organization. Going KKUB. During 2019, the baseline identification process was forward, BNI will continue to prepare technological innovations to support digital services in 2020.

During 2019, BNI recorded a net profit of Rp15.38 trillion or 92.65% compared to the target of Rp16.6 trillion. Besides this, BNI booked revenues totaling Rp78.4 trillion.

This achievement has also supported the country’s development through BNI’s tax payments totaling Rp4.7 trillion. Furthermore, BNI allocated funds for community development which was distributed directly to community empowerment programs amounting to Rp143.23 billion.

Realization of Community Development Fund as of December 2019

Total Realization (billion rupiah) Description 2019 2018* 2017

Education and training 47.56 41.32 34.81

Places of worship 28.95 24.55 18.99

Poverty alleviation 24.40 13.30 22.95

Development of public infrastructure and facilities 16.30 18.77 19.46

Health development 15.73 10.37 6.41

Natural conservation 5.87 2.34 2.65

Natural disasters 4.42 4,54 2.49

Total 143.23 115.19 107.76 *restatement PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

Growth of Economic Value Generated and Distributed (Rp trillion) [201-1]

Description 2019 2018 2017

Economic Value Generated

Total Assets 845.6 808.6 709.3

Bank Credit / Financing (excluding consumer credit) 436,581 403,737 314,764

Third-party funds 614.3 578.8 516.1

Revenue 78.4 71.7 66.6**

Net Profit 15.4 15.1 13.8

Economic Value Distributed

Operating Costs 48.7 42.6 40.1**

Employee Costs (salaries and benefits) 10.2 9.5 9.3

Dividends 4.8 4.8 4.0

Tax payments to Government 4.7 4.7 3.4

Community Investment 0.1 0.1 0.1

Total 68.5 61.7 56.9

Economic Value Retained

Revenue-Economic Value Distributed 9.9 10 9.7

Performance Ratio (%)

Minimum Capital Adequacy Ratio 19.70 18.5 18.5

Problematic earning assets and non-earning assets to total 1.8 1.3 1.5 earning and non-earning assets

Problematic earning assets to total earning assets 1.6 1.3 1.5

Provisioning against Loss of Value (CKPN) of financial assets 2.2 1.9 2.1 to earning assets

Gross NPL 2.3 1.9 2.3

Net NPL 1.2 0.8 0.7

Return on Asset (ROA) 2.4 2.8 2.7

Return on Equity (ROE) 14.0 16.1 15.6

Net Interest Margin (NIM) 4.9 5.3 5.5

Efficiency Ratio (BOPO) 73.2 70.1 71.0

Loan to Deposit (LDR) 91.5 88.8 85.6

Liquidity Coverage Ratio (LCR)

a. Individual LCR 181.6% - -

b. Consolidated LCR 184.1% - -

* Financial data in this sustainability report is consolidated and unable to be presented by region or marketing area. * Financial data of BNI and subsidiaries are included in the consolidated financial statements. ** restatement due to reclassification or changes in calculation method PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

BNI supports national development priorities through the provision of productive loans to corporate, medium and small enterprises in various sectors. To support the development and improvement of the national economy, BNI supports the funding of government projects, including toll roads and construction, electricity, transportation, telecommunications, and oil and gas exploration.

Credit Portfolio based on Category* (billion rupiah) [FS6]

Business Category Percentage compared 2019 2018 2017 to total credit

Small 17.28% 75,461 66,063 56,479

Medium 16.64% 72,691 74,731 70,261

Corporates 66.08% 288,626 262,998** 218,760**

Total 100% 436,778 403,493 345,499

* productive credit ** restatement due to reclassification or changes in calculation method

Economic Sector Development Financing Portfolio (billion rupiah) [FS6]

Economic Sector 2019 2018 2017

Toll Roads and Construction 38,416 37,605 29,854

Electricity Generation 27,080 25,439 28,858

Transportation 15,419 16,591 16,917

Telecommunications 8,618 12,166 10,946

Oil & Gas 10,476 18,803 12,937

Total of Government Projects 100,009 110,604 99,512

Credit Portfolio based on Business Sector (billion rupiah) [FS6]

Business Sector 2019* 2018 2017**

Manufacturing 83,145 96,044 83,631

Commerce, Restaurants & 92,776 87,985 74,407 Hotels

Agriculture 54,464 48,352 46,290

Business Services 44,342 48,448 39,081

Transport, Warehousing and 27,394 30,267 25,329 Communications

Construction 38,416 32,657 26,193

Electricity, Gas and Water 28,830 22,884 46,290

Mining 9,034 18,024 11,670

Social Services 17,097 13,832 9,924

Others - 5,130 5,114

Total 395,498 403,623 367,929

Notes: * as of November 2019 ** restatement due to more comprehensive calculations PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

SUPERIOR PRODUCTS AND SERVICES IN DIGITAL BANKING

BNI Digital Products and Services The development of digital products and services in 2019 was initiated through an IT Planning Session where the IT unit had detailed discussions with other work units. The digital applications developed during the year include those covering the demand for strategic business and Business As Usual (BAU) to support day-to-day business operations. These IT-based innovations have been reported to the OJK. To ensure the success of the plan to develop digital applications in support of“ the corporate plan 2019-2023, BNI has set four strategic directions on IT, namely new“ digital proposition; governance toward performance; striving for operational excellence; and innovative and agile organization.

BNI has developed several innovative digital banking products and services that is expected to boost penetration in the millennials segment.

BNI Sonic Advantages of BNI Sonic BNI has created BNI Sonic to provide convenience for customers for various banking transactions at branches. BNI Sonic offers self-service banking 160 Accounts 480 Minutes terminals and biometrics in lieu of going to the Maximum number of Operational hours are CS to open an account, thus CS have more time possible accounts, much similar to CS to provide sales and advisory services. Currently more than with CS at 32 accounts BNI Sonic is available in seven BNI Digital Branch outlets and represents a first step in BNI’s Branch

Transformation process to be undertaken. Average time to open an account is 3 minutes, or much faster than with CS at 15 minutes.

BNI BUSINESS ACHIEVEMENTS 2019

More than More than Billion Rp 22.28 11,000 Total Third-party Funds Opening of new accounts Deposited

PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement BNI achieved a MURI (Indonesian World Records Museum) record in the category“ of “First Bank to open the Fastest Account through the Opening Account Machine.

BNI Digital Opening Account

Through the BNI Digital Opening Account application, customers no longer need to visit branch offices to open an account. In this regard, customers can directly submit the required information through the mobile phone app and open an account. Data validation is done through video banking with BNI employees, as well as biometric finger print validation with data from the Civil Registry Office (Disdukcapil).

More than More than More than Billion Rp5.7 5,000 44,000 Funds deposited from new Opening of new accounts Customers that have downloaded customers and used the app

BNI eProcurement

Procurement at BNI is performed by the PFA Division, whose process has now been automated through the eProcurement system. This system allows for a holistic procurement process beginning with initiation, proposals until the issuance of contracts, all of which are carried out in an effective, efficient, and transparent manner. Procurements can now be done quickly in a standardized and consistent format in accordance to the PFA Division’s Procurement SOP, besides also minimizing the use of paper.

BNI’s Other Digital Services

BNI Digital BNI BNI BNI Services Call Virtual eCollection Digital Loan

API-based digital services Virtual assistance service for Virtual account Digital loan service that integrate the customers and non customers services, both VA debit that is integrated entire digital business based on text and voice and VA credit/ billing with the existing ecosystem to provide conversations for information that facilitates digital and growing digital convenience, speed and and transaction purposes business ecosystems business ecosystem. security in the use of BNI through mobile access. to offer various digital This supports the financial services. This application succeeded services to customers. disbursement of in making operational KUR/ BWU as well savings in its first year of as disbursement of implementation worth Rp4 other BNI consumer billion. loan products. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

OBLIGATION TO DEVELOP PRODUCTS AND SERVICES ON SUSTAINABLE FINANCE

INNOVATION AND DEVELOPMENT OF SUSTAINABLE FINANCE PRODUCTS/SERVICES

In the effort to enhance its market share, BNI has In the design of financial products and services, a initiated an ‘Employee Advocacy’ strategy to actively development and improvement stage is conducted involve employees in promoting programs and which involves risk mitigation and compliance analysis products on their personal social media networks by the Compliance Division, Risk Management with pre-prepared content. As an incentive, Division and the Technology Division, both in terms employees who are successful in promoting BNI of operational and technological procedures as well programs/ promotions/ news are rewarded based as conducting a Post Implementation Review (PIR). on the volume of information that has been shared. Should the PIR results have shortcomings, the PIR will be repeated. Products and services that have BNI’s commitment to deliver sustainable banking met operational, technology and risk requirements products and services also gives due consideration based on PIR results will be submitted to Bank to the safety of customers, where all products have Indonesia and the Financial Services Authority (OJK) been thoroughly evaluated. All (100%) products and to obtain further approval, before being launched features launched by BNI have been evaluated for to the public. [FS15] customer’s safety and include product risk profiles, with the aim that no product launched previously BNI measures customer satisfaction on banking must later be withdrawn. In line with this endeavor, services through the Customer Satisfaction BNI continuously strives to improve its products. Survey (CSS) which is held every two years. The latest CSS was carried out during end-2019, the results of which will be reported in the next year’s Sustainability Report. The results of this survey will be BNI’s reference for monitoring and providing quality services for customers.

POSITIVE AND ADVERSE IMPACTS OF SUSTAINABILE FINANCE PRODUCTS

In the present context, BNI has focused on the potential of increasing its ESG- oriented credit portfolio, which is expected to deliver positive outcomes related to environmental conservation and improving the people’s welfare. On the flip side, ESG-oriented loans can also cause adverse outcomes to the bank’s financial performance if not conducted carefully. For example, it can cause an increase in non-performing loans (NPLs) for projects that are not feasible. For this reason, all credit procedures are strictly applied, so that the entire range of sustainable finance activities give support to environmental sustainability and social welfare. The hope is to reduce and minimize adverse effects through collaboration with other parties and by periodic monitoring. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

BNI Mobile Remittance (MoRe) BNI-WWF Affinity Card BNI has joined and become an exclusive member In partnership with WWF Indonesia, BNI offers of the Society for Worldwide Interbank Financial the BNI-WWF Affinity Card to its customers. Telecommunication - Global Payment Innovation Ownership and use of this card allows cardholders (SWIFT GPI). SWIFT GPI is a new standard for to indirectly participate in funding conservation or cross-border global payments with improvements environmental protection activities carried out by in payment process and transparency from the WWF Indonesia through a sharing fee of 0.4% for earlier implementation of SWIFT. In addition, to each retail transaction undertaken. As of December improve remittance services, BNI has developed a 2019, 38,966 BNI-WWF Affinity credit cards were Mobile Remittance app known as MoRe. This app in circulation with total sharing fee amounting to facilitates customers in sending money from abroad Rp2,343.2 million in 2019. to Indonesia anytime and anywhere through use of a gadget. Furthermore, this app also reduces paper usage.

BNI-WWF Affinity Card

Period 2019 2018 2017

Sales Volume (billion rupiah) 615.81 549.78 493.18

Endowment Fund (billion rupiah) 2.34 2.09 1.85

Total Cards (BTD) 38,966 32,883 28,222

Digital Banking Services

BNI Digital Branch Having imbibed a spirit and determination to realize digitalization, BNI has opened digital outlets to accommodate customer transactions in a self-service mode, i.e. by using digital devices. For example, opening of accounts through BNI Sonic machines. Besides providing a digital banking experience for customers as well as self-service conveniences, digital branch outlets can also be a solution in reducing the carbon footprint in that customers do not require transportation to visit main branches. For BNI, the presence of digital branches can improve the brand image and generate operational efficiencies. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

14 Digital Branch outlets

As of end-2019, the number of On average, 25 new accounts are accounts had reached 12,498 with opened per day total deposits of Rp26,562.3 million

BNIDirect

BNI has innovated in providing cash management solutions and services as per customer needs through the BNIDirect service since 2017. Besides increasing effectiveness and efficiency for customers, BNIDirect also aims to enhance payment transparency for the government, for example, by bypassing middlemen in handling immigration documents, paying taxes, local government levies; and monitoring fiduciary revenues at the Ministry of Law and Human Rights.

To improve BNIDirect performance, BNI has implemented acquisition, penetration, cross selling and activation strategies for the corporate and middle segments. As of 2019, BNIDirect was used by 62,543 customers with total transactions numbering 2,377.71 trillion.

BNI Financial Supply Chain Management (BNI FSCM)

The BNI Financial Supply Chain Management (BNI FSCM) mechanism supports the establishment of sustainable supply chains through an integrated transactional service platform. BNI FSCM can help debtors to optimize working capital and cashflow arrangements in working with business partners (corporate/ suppliers/distributors), as well as provide business solutions in a single chain from upstream to downstream that are tailored to the needs of Corporate customers.

BNI FSCM Achievements

BNI FSCM Unit 2019 2018 2017

Slip Item 24,431 19,292 16,075

Revenue Billion rupiah 44 8.17 11.33

Value Billion rupiah 3,344 1,057 1,413 PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

SERVING THE WHOLE COUNTRY PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

SOCIAL PERFORMANCE

EQUALITY IN SERVICE PROVISION

BNI is committed to providing equal services to all consumers, be they in the corporate, medium or small scale segment. This commitment is also realized by serving environmentally and socially-conscious MSMEs; communities in the coastal areas; frontier, outermost and least developed regions (3T) of Indonesia; and persons with disabilities through appropriate financial services.

Improving the Fishermen Economy Besides improving its corporate financial performance, BNI also deems economic equality and support for priority community groups to be important. Included in this group are coastal area communities and fishermen.

BNI’s credit portfolio for the maritime sector has seen a yearly increase; with outstanding credit in December 2019 worth Rp16.82 trillion and collectability rate of 96.08%. The highest collectability rate is recorded by People’s Business Credit (KUR) products at 99.1%.

The biggest share of BNI financing in the maritime sector is for aquaculture and fisheries, totaling Rp1,026 billion for 4,461 debtors. With respect to aquaculture and fisheries, the largest portion is for fishing activities, totaling Rp994 billion for 1,928 debtors.

Maritime Sector Credit Portfolio

Trends in Maritime Sector Credit Portfolio Small Scale Segment December 31, 2019

billion 16.82 15.41 15.24 Rp546 debtors billion 12.01 4,669 10.38 Rp1,502 debtors 1,037

KUR Non KUR 2015 2016 2017 2018 2019 Maritime Sector financing has seen a yearly increase, The highest collectability rate for the maritime where credit quality has been maintained, and in sector is with KUR products at 99.1% December 2019 totaled Rp16.82 trillion with a collectability rate of 96.08% PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

Credit Portfolio of Small Segment Maritime Sector

Maritime and Fisheries Sector Other Maritime Sub-Sectors

billions billions Rp2,066 Rp1,026 debtors debtors billions 5,706 billions 4,461 billions Rp271 billions Rp201 debtors Rp472 billions billions debtors Rp75 485 debtors Rp12 343 debtors Rp9 67 313 debtors debtors 12 25

Aquaculture & Fish Processing Trading of Shipyards Freight & Port Tourism Total Fisheries Industry Fisheries Shipping Construction Facilities Products

Credit Portfolios of Small Segment Aquaculture & Fisheries Sub-Sector

Fisheries

billions billions debtors Rp1,026 Rp994 1,928 debtors Aquaculture 4,461 Other Fisheries Services billions debtors Total Portfolio of Aquaculture, billions debtors Rp431 1,928 Fisheries & Other Fisheries Services Rp102 352

Aquaculture Sub-Sector Portfolio Fisheries Sub-Sector Portfolio

billions billions Rp186 Rp327 debtors debtors

1,928 billions 313 billions Rp246 Rp165 debtors debtors 1,986 1,615

KUR Non KUR KUR Non KUR PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

Small Segment Fish Processing Sub-Sector Portfolio

Debtors Debit Tray

277 Billion 169 Rp201 debtors 66 32 343 Total Portfolio of Fish Processing Industry KUR NON KUR KUR NON KUR

BNI also facilitated fishermen or coastal communities engaged in the small and medium sector by providing access to funding, as well as assistance and training to improve their business through partnership programs. Funding is provided to fishermen or people with potential but not having received loans from other banks. As per Regulation PER-05/MBU/2007 governing SOEs partnership programs, BNI has disbursed financing to the aquaculture and fishing subsectors totaling Rp4 billion to 125 debtors.

Disbursement under the Aquaculture & Fisheries Sub-Sector Partnership Program

Aquaculture Sub-Sector Fisheries Sub-Sector

Billion Billion Rp4.0 Rp2.0 debtors debtors Billion 125 Billion 79 Rp1.3 Rp0.5 Billion Billion Billion debtors debtors Rp0.1 20 Rp0.05 Rp0.05 21 debtors debtors debtors 2 2 2

Other Freshwater Salt Extraction Other Fisheries Other Sea Other Fishing Shrimp fishing Total Aquaculture Services Fishing

Billion Rp0.6 debtors Billion 24 Rp3.3 Aquaculture debtors 101 Fishing

Added Value for Coastal Communities BNI partners with FishON and Aruna to develop tools that facilitate fishermen in finding fish, provide a market place for selling their catch and buying fishing needs, and provide assistance. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

Fisherman Assistance Roadmap

Increase in production of fishermen, hence If specified standards are met, the fish they have sufficient capital to add value, i.e. products can be exported through the from raw to processed products. online marketplace at fishmart.id or other portals.

Assistance and Product Exports Marketing Funding Diversification Orientation

Assistance from BNI and FishOn to BNI and FishOn will assist fishermen to fishermen in terms of capital, digital-based gain market share from their processed ecosystem creation, and other BNI and products. FishOn collaboration features.

Opening Market Opportunities for Fishermen Through FishMart Outlets

Fishmart.id Household Industry Wholesaler

TPI Online Logistics Supplier Ice Supplier Fuel Supplier Fish fresher Supplier

Rp

Locally- Generated Fisherman’s Family Revenue FishOn App for Fishermen PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

Role in the Supply Chain

BNI Fish On Supplier

Through Agent 46 agents, • Fish On App Providers of fishing facilities BNI provides easy access to • Fish Fresher (to keep fish fresh longer). for fishermen such as capital and other banking • Assistance and training to fishermen on the concepts of diesel, basic foods, hooks, products and services. Fishmart (Agen46 agents), Fish Finder, and Fishmart.id fishing rods, nets/nets, fish In addition, BNI provides • Warehouse (fish storage). feed, fish storage boxes, assistance to fishermen • Requirements for going out to sea at Fishmart outlets through and other daily needs. by raising awareness or FishOn-designated suppliers. banking literacy at all times • Market Place as a place to sell fish catch through TPI Online. when interacting with • As a BNI Collection Agent. beneficiaries.

Improving the Quality of Fisheries Products Through the Rumah Nelayan Indonesia Concept

Rumah Nelayan Indonesia (Indonesian Fishermen House)

Partners Platform Vendor

Warehouse Mini Processing Plant Buyer Fisherman and Fishermen Communities

Role in the Supply Chain

BNI Aruna Vendor Buyer

Facilitate access to • App provider. Supply the requirements Buyers of fish caught banking and capital • Assistance and training to fishermen on the for going out to sea by fishermen either along with other Indonesian Fishermen House concept and for fishermen such as individuals or as products and services. use of the app. as diesel, basic foods, organizations • Provide a Mini Processing Plant which aims to hooks, fishing rods, nets, process the fish catch for storing for a longer fish feed, fish storage period. boxes, and other fishing • Provide Warehouse as a temporary fish equipment. storage area before selling. • Provide requirements for going out to sea through vendors that have been appointed as Partners. • Provide a Market Place for selling fish caught by fishermen. • As a BNI Collection Agent. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

Challenges Strategy

Lack of knowledge of Local Hero on Banking (eg agency Training and Outreach on Indonesian Fishermen House and capital) and RNI information which have not been (RNI) concept disseminated to branch offices Addition of data on fostered fishermen and standardizing Data on fishermen who do not meet banking standards for data on fishermen who want to join the scheme provision of credit facilities • Development of the Indonesian Fisherman House app • Fishermen transactions have not been activated at the • Mapping of vendors/ suppliers for fulfilling the needs of Indonesian Fisherman House fishermen • Lack of vendors providing goods required by fishermen Information search on potential buyers and what The market for selling fish catch is less than optimal commodities are of interest to the market

ATM for People With Disabilities Equality in service provision has been realized through ATM machines for people with disabilities, which are located in Bandung, Papua, Yogyakarta, Jakarta, Padang and Semarang. These ATMs have averaged more than 6,399 transactions. In the past three years, 19 ATMs for people with disabilities have been installed. [FS14]

HUMAN RESOURCE MANAGEMENT

MANAGEMENT APPROACH [103-1, 103-2, 103-3]

BNI puts a premium on Human Resource Management In 2016, BNI established the Human Capital Architecture (HRM) as employees are stakeholders who play an which regulates the relations between employee and important role in the conduct of business and in the company through the Employee Value Proposition (EVP). endeavor to become a premier financial institution in EVP represents a strategy to jointly realize BNI as a place providing services to customers. In this context, BNI to contribute, support and grow within a sustainable refers to policies and standards of human resource process. This process encapsulates a comprehensive guidelines in managing HR. All HR data in this report is HR management framework, starting from recruitment sourced exclusively from BNI. to employee remuneration. Existing policies on HC Architecture are evaluated through FGDs and surveys of HR management is coordinated by the Human Capital new employees as needed by the HCT Division. Management Division (HCT) and HR evaluation results are periodically reported to the Board of Directors and The increasing challenges and dynamic developments of Board of Commissioners. Employment policies are the banking business are an imperative which compels formulated jointly with the Trade Union in the Collective BNI to adapt by running necessary human resource Labor Agreement (PKB), which covers all BNI employees competency development programs. HR competencies (100%). The PKB is renewed every two years, where are upskilled through digital learning and in-class the current has been in effect since 2018. The PKB learning approaches. Employee attendance in training regulates the workers’ rights and obligations, including programs is monitored by the BNV Division or branch, competence and career development, employee welfare, and is recorded in the Human Capital Management performance appraisal, and industrial relations. [102-41] System (HCMS). Employee participation in e-learning can also be supervised on the BNI Smarter platform. BNI targets 100% of employees to attend e-learning training and the daily exercise employee program (DEEP46). PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

EMPLOYMENT EQUALITY OF EMPLOYMENT OPPORTUNITY

BNI provides equal employment opportunities to all BNI recruited 1,779 new employees in 2019, or and ensures that there is no practice of forced and 6.5% of total employees, to support its growing child labor. In addition, no organizational activities of business and improve the quality of banking any significance are performed by non-permanent services for customers. On the other hand, the employees or seasonal workers. employee turnover rate was 4.57% due to interbank competition to attract the best talent and the BNI’s commitment to provide fair and equal opening of significant employment opportunities in employment opportunities to all is also manifested the banking industry in general. in the percentage of women holding the position of directors and commissioners. Currently 18% of Directors are women, as are 11% of Commissioners.

New Employee Totals Based on Placement Location [401-1]

Placement 2019 2018 Location Male Female Total Male Female Total

Head Office 438 491 929 241 242 483

Regional Office 325 525 850 476 459 935

Age 2019 2018

Male Female Total Male Female Total

<30 Years 737 1,009 1,746 668 680 1,348

30-50 Years 24 7 31 49 21 70

>50 Years 2 0 2 0 0 0

Total 763 1,016 1,779 717 701 1,418

Employment Turnover Totals Based on Placement Location

Placement 2019 2018 Location Male Female Total Male Female Total

Head Office 96 116 212 104 80 184

Regional Office 342 689 1,031 351 778 1,129

Age 2019 2018

Male Female Total Male Female Total

<30 Years 162 330 492 161 374 535

30-50 Years 262 464 726 275 486 761

>50 Years 14 11 25 19 8 27

Total 438 805 1,243 455 868 1,323

Employee 3.33% 5.72% 4.57% 3.42% 5.98% 4.76% Turnover Rate PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

Employee Remuneration BNI has a high concern for adequately rewarding its employees through

compensation“ in the form of salaries, allowances, incentives, and other benefits. BNI is also committed to providing remuneration in accordance with applicable regulations and above the regional minimum wage. The policy on permanent“ employee remuneration includes participation in government social security programs such as BPJS Kesehatan and BPJS Ketenagakerjaan.

EMPLOYEE LEARNING AND DEVELOPMENT

BNI allocates 5% of the human capital budget to Learning and Development Spend (million rupiah) cover learning and development requirements. In 2019, BNI spent Rp326.42 billion on training and development costs towards capacity building of employees. These trainings were delivered either centralized by BNI Corporate University, or decentralized by the respective 326,422.41 359,395.46* 348,150.11 work unit, or even personally by employees 2019 2018 2017 through their individual BNI Learning Wallet budget. *restatement

Training Based on Employee Position [404-1]

Total Employees Trained Total Training Hours Average Training Hours Level As Per Gender As Per Gender Based on Gender Male Female Male Female Male Female

PGD 123 - 784 - 6.37 -

ASST 5,419 7,694 241,948 348,544 44.65 45.30

AMGR 5,210 5,339 591,367 624,204 113.51 116.91

MGR 1,912 1,322 146,867 97,951 76.81 74.09

AVP 822 351 59,248 21,994 72.08 62.66

VP 174 38 7,133 1,078 40.99 28.37

SVP, EVP 53 13 2,128 686 40.15 52.77

13,713 14,757 1,049,475 1,094,457 76.53 74.17 Total 28,470 2,143.932 75.30 Notes: PGD : Staff MGR : Manager SVP : Senior Vice President ASST : Assistant AVP : Assistant Vice President EVP : Executive Vice President AMGR : Assistant Manager VP : Vice President PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

Learning Based on Academy

2019 2018 2017 Academy Courses Classes Participants Courses Classes Participants Courses Classes Participants

Leadership Academy and Corporate Core Function

Leadership 35 68 29,244 37 84 28,179 43 119 6,694

Governance, 20 57 164,118 21 43 162,227 23 96 113,450 Risk and Compliance

New Entry 6 26 634 4 25 571 5 20 520

Corporate Core 72 119 32,504 76 151 40,317 188 312 57,612 Function

Total 133 270 226,500 138 303 231,294 259 547 178,276

Business Academy

Banking 17 61 7,008 20 35 17,732 17 65 21,147 Operation

Credit and 77 319 20,545 83 278 22,107 87 244 17,643 Business

Marketing, Sales 63 271 100,852 64 228 10,940 75 209 16,620 and Service

Transactional 5 35 3,785 6 16 3,849 4 5 2,486 Banking

Treasury and 10 32 5.967 6 8 1,657 9 29 2,820 Global Banking

Professional 19 202 5,729 17 122 3.346 27 120 3,259 Certification

Total 191 920 143,886 196 687 59,631 219 672 63,975

Grand Total 324 1,190 370,386 334 990 290,925 478 1,219 242,251 PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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DECENT AND SAFE WORK ENVIRONMENT A decent and safe work environment can be the backbone to fulfilling the needs of all stakeholders with respect to a company’s operations. The convenience and safety of the BNI workplace includes clean toilets, dining rooms, nursery rooms, smoke detection devices and portable fire extinguishers, prayer rooms, bicycle parking lots and so on. These facilities have been available in the past three years at four BNI central office buildings, namely Grha BNI, Menara BNI Pejompongan, Gedoeng BNI and Plaza BNI, along with proper maintenance and no complaints have been received thus far. BNI provides opportunities for people with disabilities to work in a comfortable and appropriate“ work environment in accordance with Law No. 4 of 1997 and Government Regulation No. 43 of 1998. In “ 2019, 20 persons with disabilities were employed at BNI.

Besides ensuring a decent and safe work and music etc. Examples include 46 Cat Lovers, 46 environment, employees are also facilitated to Afternoon Music and 46 Cyclist. The Community develop a good learning environment and learning of Interest (CoI) is an effective tool for discussing culture through the Community of Practice (CoP) and exchanging ideas between employees under a initiative. CoP is a community of employees who more relaxed atmosphere (casual). It is hoped that share a passion for something they do and interact the CoI will allow employees to exchange insights regularly to discuss and study together online and and solutions in improving workplace performance. offline. With the CoP, employees can develop new knowledge and innovation through sharing of BNI has consistently conducted the Employee information and ideas, and where the outputs of Engagement Survey (EES) which aims to identify such activities can be stored in the system (zoom employee-level engagement with the company, and meeting / chat) or in the form of personal notes. explore employee insights and aspirations over the CoP involves BNI Expert Locator (BEL), Subject policies that have been implemented. In 2019, the Matter Expert (SME) and BNI Corporate University level of engagement achieved by BNI was 90%, or Learning Consultant. up 2% over 2018 at 88%. This increase is the result of policy and program interventions based on data Furthermore, employees can also join the Community and facts as summarized in the EES results, with the of Interest (CoI) or better known as P46UYUBAN. object that the outputs are right on target and able CoI is an informal Hobby Community at BNI and to meet the needs of employees. focuses on shared interests such as hobbies, art PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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SOCIAL AND ENVIRONMENTAL RESPONSIBILITY

SOE Creative House (RKB)

Since 2016, the SOE Creative House (RKB) has been a place for SMEs to further develop and increase their contribution to the Indonesian economy. BNI has established RKBs in 45 locations throughout Indonesia, with one of its goals being to increase the capacity and capability of SMEs so that quality SMEs can be realized.

Through the RKB, BNI hopes to gradually create high-quality entrepreneurs starting with the Go Modern stage, then Go Digital, to Go Online. A total of 158,973 SMEs have been registered at rkb.id to develop their businesses and market their products more broadly.

SOE Creative House Performance

Technical Assistance for SMEs at BNI SOE Creative House 5,069 1,940 Online Products Online Transactions Category Total Participants Activities

2,244 Workshops/trainings and 234 4,800 Total SMEs Rp1,479.42 million similar activities Online Value of Online Transactions Technical assistance/ sharing 222 2,454 session and similar activities 158,972 SME visits 86 86 Registered at RKB.ID/Go Modern Exhibitions/ events and similar 111 253 activities PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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KAMI with BNI

Indonesian Migrant Workers Attending Capacity Building Programs The Keluarga Migran Indonesia (KAMI) with BNI initiative provides financial literacy education to Entrepreneurship Training Locations Indonesian Migrant workers abroad. In general, this initiative is divided into two programs, namely: a. Financial education b. Entrepreneurship training 300 185 594 South Korea Japan Taiwan Provision of this training has the objective of making BNI to be the bank of choice for Indonesian migrant workers employed abroad or those who have returned to Indonesia. 1,355 961 255 Hong Kong Singapore Malaysia

BALKONDES (Village Economy Center)

The Balkondes concept represents a synergy between the Ministry of SOEs and several SOEs including BNI, which is aimed at supporting the village economy through tourism-based empowerment and development programs. Since its inauguration in 2017, Balkondes Wanurejo has seen an increase in tourist numbers along with an improvement in welfare of the community around Borobudur Temple. The BNI-established Balkondes Wanurejo currently has 20 homestay rooms designed with a rural concept. In addition, this Balkondes also provides space for economic and cultural activities, such as gamelan performances, music and dances.

KAWAN (Kampung Wisata Anak Negeri)

BNI has assisted in renovating homestays in tourist villages under the Kampung Wisata Anak Negeri (KAWAN) program. The program provides added value for people in tourist destination areas by focusing on improving administration and tourism services by the local community so that visitors feel comfortable living in local homestays. Besides an improvement in the quality of homestays, the KAWAN program also increases the development of local culinary, souvenirs, and tour packages that can improve the people’s economy. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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5 Tourist Destinations 50 43 150 Total Rooms Total Homes Households Involved • Kuta Mandalika, Central Lombok • Pramuka Island, Thousand Islands • Ranupani Bromo, Lumajang Total assistance disbursed • Sembalun Rinjani, East Lombok Rp • Sibetan, Karang Asem Bali 1,898 Million

BNI Discover History, Achieve Your Dreams (KEJAR)

In commemoration of the National Health Day and National Heroes Day, BNI together with various communities organizes the BNI KEJAR social movement “ “ with the tagline “Kenali Sejarah, Raihlah Mimpimu (Discover History, Achieve Your Dreams)”. BNI KEJAR aims to encourage young children to take part in protecting the environment and managing waste creatively. To fulfill this vision, BNI invites children with cancer, children with disabilities, and elementary school students to create art installations from waste materials.

SmartFarming 4.0 Since October 2019, BNI provided support to the Ushering Agriculture 4.0 Movement held in Garut Regency, West Java. Besides assistance for precision agriculture and easy access to banking, BNI provides high added value for farmers through the application of digital technologies that can be used by for cultivating various types of crops.

The Ushering Agriculture 4.0 Movement has been executed in the regencies of Garut, West Pasaman, Sukabumi, Situbondo, and Dairi involving a total of 2,962 farmers and disbursement of KUR Tani worth Rp1,361.5 million for 105 farmers. BNI also provided CSR assistance by distributing nine RITX Soil & Weather Sensors.

BNI is aware of climate change risks that not only impact the banking sector, but also effect the economic and social aspects of society at large, including agriculture. The existing climate variability at present has increased the potential for flooding and drought, and at the same time decreased agricultural yields. The decline in agricultural output will undoubtedly have an adverse effect on the economy of farmers, thereby requiring individual adaptation and technological innovation to overcome these risks. In this context, BNI has aided the farmers through the provision of nine RITX Soil & Weather Sensors for monitoring land and weather conditions in real time.

Added value for the Ushering Agriculture 4.0 Movement is also actualized through the construction of a rice mill unit (RMU) in partnership with several SOEs, Ministry of Agriculture, Perhutani, Ministry of Environment and Forestry, and a Village-Owned Enterprise (BUMDes) in the Kedungmoro and Banyuresmi areas, i.e. PT Mitra Desa Bersama Intan (MDBI). The objective is to encourage the formation of agricultural corporations that have an impact on improving the quality of agricultural outcomes. BNI provided financing support amounting to Rp4 billion for site development and Rp2.3 billion for machinery procurement and RMU warehouse construction and supervision. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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SOCIAL FORESTRY

BNI’s synergy with SOEs in providing credit to farmers working on forest land is realized through the Social Forestry Program. This program aims to improve the welfare of communities living around forests, especially those working on degraded and deforested land, and to conserve forests. In 2019, BNI disbursed KUR on Social Forestry totaling Rp32.70 billion to 3,805 farmers.

SUMMARY OF CSR ON SOCIAL FORESTRY

No Regency Recipient CSR No Regency Recipient CSR

1 Probolinggo BUMDES Brani 22 Drilling Well, Hose and 9 Jambi HKM. KTH Penoban 2 Coffee Grinders Wetan Water Pump Lestari 2 Chainsaws 10 Hand Tractors 2 Grass Cutters SD Negeri 2, Desa Renovation of School Brani Wetan Building KUD Kharisma Tani 1 Hand Tractor

2 Madiun BUMDES/LMDH 3 Cultivators 9 Grass Cutters Madiun 9 Corn Planters 5 Chainsaws

3 Corn Harvesters Air Bernah I 1 Hand Tractors Forest Farming 10 Water Pumps Community 9 Grass Cutters

3 Tuban BUMDES/LMDH 2 Hand Tractors 5 Chainsaws Tuban 2 Water Pumps 10 Cianjur LMDH Wana Tani 1 Coffee Peeler Mukti Road Repairs LMDH 1 Grass Cutter MI Al Busyro Improving Quality of Campakawarna Education LMDH Giri Warga 1 Grass Cutter 4 Bojonegoro BUMDES/LMDH 1 Cultivator Sejahtera Bojonegoro 1 Water Pump 2 Water Pumps LMDH Giri Karya 1 Mini Tractor 2 Hand Tractors Mandiri 1 Coffee Peeler 1 Corn Planter LMDH Sugih Mukti 1 Water Pump 3 Corn Harvesters 1 Mini Tractor 5 Malang BUMDES/LMDH 4 Porang Slicing Machines Malang KTH Raksa Buana 1 Grass Cutter

6 Cianjur BUMDES/LMDH 10 Water Pumps 1 Coffee Peeler Cianjur 12 Nets KTH Rindu Alam 1 Grass Cutter

6 Grass Cutters 1 Coffee Peeler

3 Chainsaw LMDH Wana Lestari 1 Grass Cutter Pokland Other Implements Such as 1 Mini Tractor Hoes, etc. 11 Indramayu LMDH Tani Jaya 1 1 Hand Tractor 7 Indramayu BUMDES/LMDH Milkfish Aquaculture Indramayu Equipment LMDH Tani Jaya 2 1 Hand Tractor

8 Palembang 5 LMDH at Musi 5 Tractors LMDH Tani Jaya 4 1 Hand Tractor Banyuasin 12 Garut KTH Karang Sewu 1 Coffee Counting Machine

KTH Dapur Areung 2 Coffee Counting Machine PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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GUARANTEEING CUSTOMER SATISFACTION

MANAGEMENT APPROACH [103-1, 103-2, 103-3] BNI considers customer trust to be a vital element in running a responsible business. BNI is committed to optimizing the customer data security with reference to the Company Guidelines on Customer Data Management, based on OJK Regulation No.1/POJK.03/2013 concerning Consumer Protection in the Financial Services Sector and OJK Regulation No. 1/POJK.7/2013 dated July 13, 2013 concerning Transparency of Bank Products Information and Use of Customer Personal Data. The principles of customer protection at BNI are set out in the following provisions: • IN / 135 / DMA / 002, 10-04-2017, Concerning Customer Data Management. • IN / 199 / EBK / 001, 30-03-2016, Concerning Customer Data Protection. • IN / 784 / PDM / 001, 17-12-2014, Concerning Account Opening Form.

All forms of customer complaints related to financial products and services can be conveyed through BNI Branch offices and BNI Call managed by the BNI Contact Center, for further recovery actions. BNI has enhanced its customer service strategy through improvements to the integrated Online Request Management (ORM) application and setting a Complaint Resolution Rate (CRR) target of 97%.

Settlement of customer complaints is conducted with reference to Company Guidelines No. IN/17/BCC/002 Concerning

Customer Complaints Settlement dated January 17, 2018. All forms of violations related to customer data confidentiality are processed at the Internal Audit Unit (SAI) which is directly monitored by the President Director. BNI received 803,489 complaints in 2019 related to banking and credit card issues,“ “ of which 789,470 or 98.47% were appropriately resolved

COMPLAINTS MECHANISM

Customer Complaints Based on Channel [418-1]

2019 2018 2017 Channel Banking Credit Card Banking Credit Card Banking Credit Card

Mass Media 0 2 1 7 6 2

Electronic 6,720 53 70 43 16 24 Media

Social Media 12,234 12 4,048 43 334 104

Letter/Fax 7 2 17 15 13 34

Email 2,837 3,532 3,145 1,235 3,780 1,315

Telephone/ 713,593 63,943 563,937 68,113 376,297 74,070 Branch

Others 435 119 264 83 146 52

Total 735,826 67,663 571,482 69,539 380,592 75,601 PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Resolution of Complaints

Complaint Type Year Number of Complaints Banking Credit Card Total

2019 Total 735,826 67,663 803,489

Under Process 13,155 864 14,019

% 1.79 1.28 3.07

Resolved 722,671 66,799 789,470

% 98.21 98.72 98.47

2018 Total 571,482 69,539 641,021

Under Process 10,526 549 11,075

% 1.84 0.79 1.32

Resolved 560,956 68,990 629,946

% 98.16 99.21 98.68

Through the customer complaints channels, the are regularly monitored by the bank. All responses BNI Contact Center receives financial and non- to complaints are also delivered through the financial complaints and plays an active role ofa contact center. In addition, public complaints can strategic asset unit, by providing various insights to also be directly lodged at branch offices. The BNI business units to enhance the products, features Contact Center receives financial and non-financial and services to customers. In addition, the BNI complaints and plays an active role of a strategic Contact Center constantly evaluates the process asset unit, by providing various insights to business and effectiveness of customer complaints resolution units to enhance the products, features and through synergies with divisions; provides feedback services to customers. In addition, the BNI Contact to business/ product owners related to customer Center constantly evaluates the process and complaints and monitors Service Level Agreement effectiveness of customer complaints resolution (SLA) on complaint resolution. through synergies with divisions; provides feedback to business/ product owners related to customer Besides the various channels to log complaints, complaints and monitors Service Level Agreement BNI provides a special contact center of BNI Call (SLA) on complaint resolution. At present, all 1500046. This contact center is part of the public complaints data presented in this report is sourced complaint mechanism, in this case customers who from BNI Call. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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INCLUSIVE FINANCE AND EMPOWERING THE COMMUNITY

MANAGEMENT APPROACH [103-1, 103-2, 103-3]

BNI endeavors to boost the nation’s economy by investing in infrastructure to increase access, and providing support to increase financial literacy and inclusion for the community. This support is realized through BNI’s CSR program and to comply with the existing law on social and environmental responsibility (TJSL) in Indonesia.

Assistance and funding for community empowerment is allocated to the Partnership and Community Development Program (PKBL). The Partnership Program (PK) is managed by the BSL2 Division and Community Development (BL) is under the KMP Division. Each division monitors, evaluates and reports on disbursement of funds and implementation of the program. Total funds disbursed in 2019 amounted to Rp125 billion for the partnership program, and Rp150 billion for the the community development program.

Effectiveness of the BL related to community infrastructure begins with the initiation stage through a feasibility survey by the relevant divisions, regions and branches. Furthermore, monitoring and evaluation of developments up to the handover stage is carried out directly by branch offices.

BNI allocates CSR funds with the objective, among others being to improve infrastructure that can drive the people’s economy.

INFRASTRUCTURE DEVELOPMENT [203-1] In 2019,“ BNI spent Rp143.23 billion of Community Development funds on natural disaster mitigation, education, health, development of public facilities and infrastructure, religious facilities, nature conservation and poverty alleviation schemes. Of this amount, Rp29.83 billion or 20.1% of total Community Development funds were allocated for development of infrastructure and worship facilities on in-kind or pro-bono basis. [302-1]

Infrastructure Development Assistance [302-1]

No Assistance Type Nominal Amount Notes

Infrastructure

1 Village Roads 3,507,084,500 36 villages

2 Bridges 617,423,000 6 Bridges

3 Sanitation & Clean 3,263,603,901 25 villages Water Facilities

4 Irrigation 1,393,456,250 11 villages billion billion Religious Facilities 1 Mosques/ Prayer 18,960,311,224 262 Rp12.5 Rp5.9 Rooms 44 1,352 Scholarship 2 Churches 972,483,200 13 Ambulances Recipients 3 Temples 1,017,000,000 25 The development of infrastructure and 4 Vihara 100,000,000 5 unit supporting facilities is expected to improve access that will consequently enhance the Besides enhancing equality of access through development people’s economy, along with betterment in of public infrastructure, BNI also delivers increased public health and welfare levels. access to health and education through the provision of ambulances and scholarships. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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POSITIVE AND ADVERSE IMPACTS OF TEMPORARY MULTIFAMILY HOMES FINANCIAL LITERACY AND INCLUSION (HUNTARA)

As one of the large-scale government-owned HUNTARA are temporary dwellings erected by BNI banks, BNI actively engages in financial literacy in the event of large scale natural disasters that and inclusion activities. This delivers a positive severely impact the social and economic balance and beneficial outcome as people develop a in the area. HUNTARA are meant as temporary deeper understanding of banking and realize shelters for people affected by disasters. In addition, the importance of financial planning in their lives. HUNTARA also provide psychological support to the On the other hand, there is also the potential for community in rebuilding their lives and recovering a detrimental outcome if the community cannot as quickly as possible. On the other hand, HUNTARA take advantage of the opportunity to develop can also be used as a transit point for refugees from their abilities. As an example, training on banking tents to permanent residences until the relocation and digital innovations can lead to the rise of process is complete. technological crimes. In addition, digital innovations may also lead to excessive consumptive behaviors if not complemented by correct understanding. As a result, as a mitigation effort BNI works closely with many parties to provide financial literacy training on an ongoing basis, while increasing understanding on appropriate ethical and business behaviors to the community. 80 Another adverse effect currently faced by many units in Sumberjaya Village, banks is the proliferation of financial technologies Sumur District, Pandeglang Regency (fintech) that are able to reach all levels of society. Fintech will undoubtedly bring about beneficial outcomes if complemented with proper education 100 and awareness of financial risks. However, the HUNTARA units for tsunami existence of fintech will have negative outcomes if victims in Pandeglang Regency not properly disseminated. Given this situation, BNI cooperates and continues to develop technologies and products that can reach the wider community. 20 units in Tunggaljaya Village, Sumur District, Pandeglang Regency PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Social Assistance Products In Partnership with the Government

Total Accounts Product Description (billion (unit) rupiah)

Savings

BNI Pandai Personal savings scheme with easy requirements and having the 771.20 9,723,377 characteristics of a basic savings account (BSA). These are issued by BNI which can be opened through Branch offices or through the Agents46 network.

TabunganKu Personal savings scheme which are jointly issued by Indonesian banks to 3,410.46 6,690,033 foster a savings culture among the community

BNI Simpanan Student savings scheme and issued nationally by Indonesian banks, with 2,354.46 11,374,823 Pelajar easy and simple requirements and attractive features. Aimed at financial (SimPel) literacy and inclusion to encourage a savings culture early on

Social assistance from the Ministry of Social Affairs, Ministry of Religious Affairs and Ministry of Education & Culture

Smart PIP through Kartu Indonesia Pintar (Smart 3,396.22 4,592,500 Indonesia Indonesia Card/KIP) is the cash assistance to school age children (aged 6 Program (PIP) - 21 years) from poor and vulnerable families studying in public scholls or madrasas.

Ministry of This is the Ministry of Social Affair’s assistance program for the poor 266.34 108,877 Social Affairs through cash assistance for rehabilitating dilapidated homes, improving Program the living environment, assistance for empowering community groups, assistance for the elderly poor and family support, and social rehabilitation for children.

‘Let’s Save The ‘Let’s Save With Waste’ Program is implemented by BNI together with 3.60 162,733 with Waste’ related parties (Civil Service, Schools, Local Governments & Communities), Achievements and involves a combination of financial education especially savings and environmental awareness to create a clean environment by proper waste management. In 2019, BNI collaborated intensively with the Jakarta Provincial Government, covering 5 administrative cities (Central, West, East, North, South) and 1 administrative district, i.e, Thousand Islands. The program is specifically targeted towards elementary and junior school students in Jakarta.

KPR Online The public can apply for Home Ownership Credit (KPR) or BNI Griya through 214 11,858 the online application feature or E-Form.

FLPP Program The Housing Liquidity Facility (FLPP) support is provided to Low-Income 1,263.33 9,743 Communities and managed by the Ministry of Public Works and Public Housing (PUPR).

BSPS Program Assistance for improving and building simple homes for the underprivileged 193.48 9,274 classes from the Ministry of Public Works and Public Housing (PUPR) PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Products Supporting Financial Inclusion

Total Number of Product Description Activated Cards

Supporting Infrastructure

Bansos Card The Bansos Card is a type of BNI Debit card that is used for channeling 10,746,119 government social assistance programs (Bansos).

Farmer Card Farmer Card or Kartu Tani is a type of debit card that is intended for use by 1,149,000 Indonesian farmers. In addition to being a debit card, it also functions as a medium for receiving subsidies and social assistance from the government.

Smart Indonesia A debit card that can be used as a marker to ensure all school-age children (6-21 8,136,820 Card (KIP) years old) from KKS holder families receive benefits from the Smart Indonesia Program.

KUSUKA Fisherman A single identity card meant for marine and fisheries businesses that also 151,182 Card functions as a distribution channel for aid and subsidies from the Ministry of Fisheries and Maritime Affairs. This is a Multi-Function Card issued by banks where the recipient’s data is recorded on the card. It also functions as a savings card and e-wallet (Combo) for spending from quota allocations.

Agen46 The growth of the Agen46 network is BNI’s effort in increasing financial literacy and inclusion, as well as to provide convenient services for the middle to lower classes in rural and urban areas. The Agen46 scheme allows community members to conduct banking transactions without having to come to branch offices. Agen46 is also a part of the community empowerment program, with ‘Let’s Save With Waste’ being one of them.

A total of 157,144 Agen46 agents are spread across Indonesia, denoting an increase of 40.51% from the previous year. This achievement is also complemented by a 5.88% increase in BNI Pandai accounts over the previous year. [FS16]

Agen46 Performance [FS13] Performance vs Target

exceeds the 109.02% exceeds the target 104.76% target Operational Third Rp1,323.07 Billion Total Agen46 150,000 Party Funds (DPK) agents persons

110.14% exceeds the exceeds the Operational Third 141.6% target target Total transactions Party Funds BNI 88,21 million Rp699.96 Pandai PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Description Unit 2019 2018 2017

Achievement Percentage increase

Agen46 Totals Agents 157,144 50.51% 111,386 69,589

Transactions Million 124.88 57.47% 79.3 34.4

Transaction Value Trillion rupiah 159.6 68.90% 94.5 11.6

Operational Third Billion rupiah 1,442.48 119.08% 658.4 592.8 Party Funds

BNI Pandai million accounts 9.72 5.88% 9.18 4.84 accounts

BNI Pandai Third Billion rupiah 770.98 21.16% 636.3 561.9 Party Funds

Agen46 agents are spread throughout Indonesia as per the following:

WMD 9,649

WPD 8,017

WMO 4,983 WPL 11,157 WPU WBJ 3,278 WJS 7,421 WJK 6,110 WJK 5,801 WSM WMK 5,801 12,075 WSY 7,578 11,768 WJY WJB 8,212 9,329 WYK WMA 14,078 15,473 WDR 6,553

Notes: :

1. WMD : Medan Region 4. WBN : Bandung Region 7. WMK : Makassar Region 10. WJS : Jakarta Senayan Region 13. WJB : Jakarta BSD Region 16. WYK : Yogyakarta Region

2. WPD : Padang Region 5. WSM : Semarang Region 8. WDR : Denpasar Region 11. WMO : Manado Region 14. WJY : Jakarta Kemayoran Region 17. WMA : Malang Region

3. WPL : Palembang Region 6. WSY : Surabaya Region 9. WBJ : Banjarmasin Region 12. WJK : Jakarta Kota Region 15. WPU : Papua Region PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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MY ENVIRONMENT, MY COUNTRY PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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BNI allocated Community Development funds for environmental conservation amounting to Rp9 billion. The funds were disbursed through education and outreach activities such as“ plastic waste reduction, garbage boat assistance, Megamendung organic forest, city park “construction, rhino conservation and reading parks. The spend on community development with respect to environmental conservation amounted to Rp5,101.6 million for external activities and Rp737.3 million for internal activities.

BNI’ environmental performance is based on internal and external actions. Internal actiions include reduced paper use, while external actions involve credit provision with due regard for environmental, social and governance (ESG) aspects.

DISCLOSURE ON CLIMATE CHANGE IMPACTS

USE OF ENVIRONMENTALLY FRIENDLY MATERIALS

BNI has adopted an eco-friendly building management scheme since 2016 by constructing the BNI Pejompongan Tower with a green concept, along with getting green building certification for other buildings. As of 2019, BNI offices that are green green building certified by the Green Building Council Indonesia (GBCI) include Plaza BNI BSD with Platinum certification and Menara BNI Pejompongan with Gold certification. Further, 8 BNI employees from the PFA and JAL divisions have been certified as green building professionals by GBCI.

WASTE MANAGEMENT

As a banking concern, BNI does not use many types BNI has endeavored to reduce paper use by of material in its operations. As a consequence, converting from the use of printed documents and most of the waste generated is is of paper. In this correspondence to digital format. This paperless regard, management of paper waste is conducted in concept has been realized through development collaboration with PT. Nara Bina Lingkungan, which of the document management portal called BNI involves collection of waste paper from offices and E-Office, comprising the electronic attendance recycling to reusable material, as well as upcycling. application (e-attendance) and correspondence application (emplus). As a result, efficiencies are From August to December 2019, 2,230 kg of generated by leave applications, late arrivals, and paper were collected to be recycled to produce employee attendance being reported through 1,000 paper bags, 1,000 notebooks and 250 tissue e-attendance. holders which were reused in daily operations. Besides internal use, the recycled materials will be In 2019, the use of E-Office generated savings from handed out as souvenirs for the general public in the non-printing of documents totaling 183,654 BNI’s various activities. copies. Assuming the price of a paper ream at Rp 56,000, the savings from non-printing of documents amounts to Rp10.28 billion a year. As a document can consist of several sheets of paper, the savings can thus be several times the above figure. BNI thus far has not received any environmental complaints over its management of paper waste, as with its management of electronic waste. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Saving on Paper

Documents Circulated Through Application

No. Document Type 2019 2018 2017 Besides E-Office, reduction in printed documents and correspondence is effected through BNI 1 Memos 108,389 81,625 67,971 e-PP and e-billing for billing purposes. E-PP is a 2 Internal Notes 12,288 9,833 7,799 systematic policy and guideline for the preparation and updating of SOPs online so as not require 3 Letters 2 4 9 printing and sending of documents. In 2019, BNI 4 External 62,975 43,870 32,744 estimates to have generated savings from e-PP Correspondence totaling Rp1,770.9 billion. Paper savings through

Total Documents 183,654 108,523 108,523 e-billing amount to 13,492,809 pages and 322,821

2 in 1 billing envelopes, with total savings of Total Authorizing 626,141 553,456 410,136 Signatures Rp71,703.12 million. Paper savings through e-billing contributed emissions “ reduction equivalent to 137 Tons of CO “ 2

ENERGY USAGE

MANAGEMENT APPROACH [103-1, 103-2, 103-3] With respect to energy, the utilization of electric power is important for BNI as banking operations rely heavily on electronic devices in providing services for customers, as well as to power the office buildings. Environmental management at BNI refers to Law No. 32 of 2009 concerning Protection and Management of the Environment, and Government Regulation No. 47 of 2012 concerning Social and Environmental Responsibility.

The energy efficiency program has been initiated in all regional offices and outlets through regulation on Efficiencies at BNI Outlets No. JAL/2.2/1799 and Efficiencies on Lighting and Air Conditioning No. JAL/3/3564. The discussion on energy usage and savings only cover BNI Headquarters in four buildings (Grha BNI, Menara BNI, BNI Plaza, Gedoeng BNI) and the Slipi Dual Data Center (DDC).

BNI executed energy saving initiatives in 2019 to minimize environmental impacts, while at the same time contributing to climate change mitigation even though long-term energy efficiency targets have not been set. These initiatives involve minimizing usage of electricity, water, and paper on a collective basis by all BNI work units and coordinated by the Procurement and Fix Asset (PFA) Division and the Network Management Division (JAL). The PFA Division reports the energy saving performance to the Finance Director for evaluation. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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In 2019, BNI consumed 37,674,580 kWh of electricity supplied by PT PLN (Persero) to support operational activities. In the event of a power outage, BNI utilizes diesel- fueled generators to support (near) zero downtime in providing technology-based information.

BNI’s water supply is provided by the Regional Drinking Water Company (PDAM). BNI estimates that total volume of water used in 2019 is 180,047 m3, or a decrease of 26% from the previous year. However, most of the water consumed is sourced from ground water, based on the location of the company that occupies the office area. Management of waste water is adjusted to the building management system.

The utilization of energy outside the company was on fuel for transportation purposes. In 2019, BNI consumed 222,858.8 liters of fuel.

Energy and Water Consumption [302-1]

Energy Source Usage Unit 2019 2018 2017

Energy Consumption Within the Company (Head Office)

Electricity Building operations kWh 37,674,580 26,785,745 18,220,920

Water (PDAM) Building operations m3 180,047 242,283 146,538

Groundwater Building operations m3 0 1,655 780

Energy Consumed Outside the Company

Fuel Transportation IDR 1,738,298,666 1,468,171,449 1,504,038,411*

Energy Intensity kWh 1,384.5 983.9 669.6

Note: Estimation of electricity and water consumption is calculated using assumptions based on total electricity and water bills. Electricity consumption is calculated from the total bill divided by the price per kWh of Rp1,115 for the B-3 category and Rp1,645 for the special customer category. PDAM water consumption is calculated from the total bill divided by the price per m3 of Rp12,550. The calculation results are then converted to GJ, with the formula 1 kWh = 0.0036 GJ and 1 m3 = 0.038 GJ.

ENERGY EFFICIENCY

Rp 979.5 million

Initiating Electricity Cost Lights are switched off Reducing the use of Savings Strategy at Grha during lunch break (12.00 chillers on Saturdays dan BNI, Plaza BNI, Menara - 13.00) Sundays BNI and Gedoeng BNI PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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BNI has also carried out the following energy 5. Using magnetic bearing technology at the Plaza efficiency measures: BNI cooler and so as to support near frictionless 1. Participation in ‘Earth Hour’ in all domestic working of moving parts. and overseas work units. This was able to save 6. Efficiency in electricity usage through reduced 11,392.6 MWh of power. lighting in Grha BNI, Plaza BNI, Gedoeng BNI and

2. Limiting business travel and replacing with Menara BNI by 50% since May 2019, resulting in teleconference. savings of Rp199,492,617.

3. Promoting green behavior or green attitude. 4. Limiting air conditioning temperature to within the range of 23oC - 25oC at BNI Tower, Grha BNI, Gedoeng BNI and Plaza BNI. Support for renewable energy is realized “ through installation of solar panels with a “capacity of 2,200 watts for garden lighting at Plaza BNI.

BNI’s banking operations do not produce significant solid waste and effluents. Grha BNI cooperates with a third party, namely the DKI Jakarta Provincial Government’s Wastewater Treatment Agency (IPAL) for managing waste water. Waste water treatment technology has also been implemented at BNI plaza with a capacity of 125 m3/day. The treated water is reused for toilet flushing, watering plants and cooling towers.

No waste spills have been recorded at BNI operational locations as this does not match with the bank’s business characteristics.

Efforts to reduce emissions and save fuel are realized through vehicle sharing system, namely Shuttle & Car Pooling. In addition, BNI took the initiative to partner with an online taxi service to replace operational vehicles, namely ‘Grab for Business’ program. This program resulted in savings in 2019 worth Rp2.9 million per month per unit or equal to 20.37% of the leasing costs of operational vehicles.

The transfer from leasing operational vehicles to GrabCar was carried out in stages as per the end of contract of a leased vehicle. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

Increasing Awareness on Energy Efficiency and Energy Conservation in the Education Sector

BNI has endeavored to increase awareness on In partnership with the Indonesian Institute for energy efficiency and energy conservation in the Energy Economics (IIEE) and Ministry of Energy and education sector in Bandung City. This initiative Mineral Resources, BNI has organized a program was motivated by the lack of alternative energy called “Increasing Awareness on Energy Efficiency sources besides fossil fuels. As a bank that supports and Energy Conservation in the Education Sector”. the achievement of SDG 7 on sustainable energy, This program targets ten high schools/ vocational BNI has initiated a program to increase public schools in Bandung, involving representatation awareness of the importance of energy efficiency by one teacher and ten students per school. The and conservation, and to prepare the younger selected teacher is the Energy Manager (ME), generation to assist the Government in reducing while the students are appointed as Energy Saving the impact of Greenhouse Gas (GHG) emissions. Envoys (DHE). The DHE serve as the team leading the implementation of energy saving programs in schools and encourage other students to apply energy saving measures in their homes. This program is planned for 43 months and is divided into three major activities, namely Program and Training for ME and DHE, Assistance and Evaluation, and Energy Saving Competition.

SUSTAINABLE FINANCE PORTFOLIO In 2019, targeted the identification of the baseline for sustainable activites in“ the palm oil and renewable energy industries for the corporate and medium segments and“ social forestry for the small segment, with initiation of the identification process (stage 1) being carried out in its entirety (100%).

As a bank that supports the Government of The RAKB 2019 achievements as of September Indonesia’s efforts in following up on climate 2019 are symbolized by the existence of a funds change issues, BNI is committed to be consistent accumulation product that complies with the in channeling funds to eco-conscious business Criteria for a Sustainable Business Model (KKUB), sectors. namely the “Let’s Save With Waste” Program which as of September 2019 totaled Rp57 billion from ± In this report, BNI has conveyed the 2019 800,000 Tabungan Simpel accounts. Disbursement achievements of its sustainable finance portfolio of funds in adherence to the KKUB is with respect based on the Sustainable Finance Action Plan to the palm oil sector, renewable energy sector, (RAKB). As of September 2019, BNI disbursed Social Forestry Program and Green Bonds with Rp134,052 billion to finance sustainable business total financing of Rp30,064 billion. Nevertheless, activities, or 41.20%. BNI continues to convey the achievements of other financing portfolios that impact on environment and social aspects. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Sustainable Finance Portfolio Achievements (in billion rupiah)

Maximum Credit Portfolio 2018 2017 Maximum Credit Portofolio 2018 2017

Green Financing for Corporates 134,164 57,646 Ratio Percentages

Total Corporate Credit 262,699 188,026 Green Financing for 51.26% 30.66% Corporates/ Corporates BNI Total Productive Credit 403,737 314,764 Green Financing for 33.36% 18.31% Corporates/ Total Credit 2019 Number of Products that Meet Total Earning Assets the Criteria of a Sustainable Business Model * Sustainable Business Model * FUNDS ACCUMULATION Rp 134,052 billion ‘Let’s Save with Waste’ Program Total Credit/ Financing Sustainable Business Model Rp 57 billion Rp 441,668 billion Funds Disbursed Total Credit/ Financing 1. Renewable Energy Credit Non-Sustainable Business Model 2. Social Forestry Credit 3. Palm Oil Industry Credit 4. Green Bonds 41.20% Percentage of total credit/ financing for sustainable Rp 30,064 billion business model to total credit/ bank financing (%)

Amount and Quality of Credit/ Financing as per Total IDR NPL (%) Criteria of a Sustainable Business Model [FS8] *

a. Renewable Energy Rp3,459 billion 0%

b. Energy Efficiency Rp436 billion 0%

c. Pollution Prevention and Control Rp226 billion 0%

d. Management of Living Natural Resources and Sustainable Land Use Rp20,986 billion 0%

e. Conservation of Land and Water Biodiversity n.a. 0%

f. Environmentally Friendly Transportation n.a. 0%

g. Sustainable Management of Water and Wastewater Rp142 billion 0%

h. Adaptation to Climate Change n.a. 0%

i. Manufacture of Eco-efficient Products Rp1,158 billion 0%

j. Eco-friendly Buildings Having Nationally, Regionally or Internationally Recognized Rp528 billion 0% Standards or Certifications

k. Other Eco-Conscious Business Activities Rp2,302 billion 0%

l. Activities of MSMEs Rp104,814 billion 2.2%

*As of September 2019 Notes: 1. Identification and refinement of KKUB debtor data from total existing debtors is an ongoing process. 2. Identification is ongoing for the categories of Conservation of Land and aterW Biodiversity, Adaptation to Climate Change, and Environmentally Friendly Transportation. 3. Percentage of MSME NPL is as of October 2019. 4. Differences in presentation of tables are adjusted to the RKAB and progress of sustainable finance implementation in 2019 PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

As a state-owned enterprise, BNI supports and Reducing Greenhouse Gas Emissions (RAN-GRK). contributes directly or indirectly to the Government BNI is aware of the environmental risks on loans that of Indonesia’s efforts to mitigate the climate change are channeled to debtors; therefore ESG-conscious impacts. BNI continues to innovate on products credit requirements have been set to reduce credit and services, and is internally moving towards eco- risk in non-environmentally friendly sectors. On friendly practices. This is also in accordance with the the other hand, BNI seeks to optimize financing in signing of the Paris Agreement by the Government environmentally friendly business sectors, including of Indonesia in April 2016, concerning the mitigation oil palm projects, renewable energy, energy of greenhouse gas (GHG) emissions, adaptation, efficiency, and credit for MSMEs that are socially and and finance; and Presidential Regulation No. 61 environmentally sound. of 2011 concerning the National Action Plan for

SUSTAINABLE PALM OIL FINANCING

To ensure financing for sustainable palm oil debtors, BNI requires all corporate palm oil debtors to have registered or certified under the Roundtable Sustainable Palm Oil (RSPO) and Indonesia Sustainable Palm Oil (ISPO). Due regard is also given to the issue of deforestation, the potential for overlapping with surrounding community lands or conservation areas, as well as the possibility of legal infringements by debtors. If violations are found, BNI will verify with related parties so as to minimize credit provision to debtors who do not comply with applicable regulations.

In 2019, BNI financed 58 ISPO and RSPO certified palm oil debtors, representing an increase of 41.4% over the previous year. The maximum loan provided was Rp35,159 billion.

Sustainable Palm Oil Financing (billion rupiah)

ISPO & RSPO Certification Status

CERTIFIED 2019 CERTIFIED 2018 CERTIFIED 2017 35,159 59,913 26,312 Maximum Loan Maximum Loan Maximum Loan 58 41 13 COMPANIES COMPANIES COMPANIES

UNDER PROCESS 2019 UNDER PROCESS 2018 UNDER PROCESS 2017 19,473 24,939 25,425 Maximum Loan Maximum Loan Maximum Loan 43 55 23 COMPANIES COMPANIES COMPANIES PT Bank Negara Indonesia (Persero) Tbk

Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement BNI encourages debtors undergoing the RSPO or ISPO certification process to fully“ meet “ compliance with social and environmental regulations. 22 2 Blue PROPER Green PROPER

PROPER Ratings of Palm Oil Debtors

FINANCING OF RENEWABLE ENERGY AND ENERGY EFFICIENCY PROJECTS Besides providing financing for palm oil debtors, BNI also finances the renewable energy sector, which includes mini hydro power plants as well as green building in Makassar. In addition, funding for businesses having energy efficiency initiatives has also been initiated.

Financing of Renewable Energy Projects

Estimated Renewable Energy Syndicated Loan Project No Value Partner Banks Renewable Energy Project Value Duration Generation

1 Malea Energy USD 200,000,000 Bogor BRI 2x45 MW 12.5

2 Kerinci Merangin USD 689,747,000 Bogor BRI, Mandiri, SMI, 350 MW 16.5 Hidro BRI Agro

3 Poso Energy USD 552,194,000 Bogor BRI, Mandiri, Panin 515 MW 11 and BRI Agro

4 Tamaris Hydro 6,000,000,000,000 South BCA, Mandiri 261 MW 15 Jakarta PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization

Sustainability Performance Governance for the Nation

INFRASTRUCTURE FINANCING FOR ECONOMIC DEVELOPMENT BNI’s financing for the infrastructure sector during Q1 2019 totaled Rp114 trillion“ with around 34% allocated for toll road construction. Toll road development represents one of the“ government’s priorities to create connectivity between regions in the context of accelerating economic growth.

BNI supports the expansion of access and economic improvement in Indonesia’s various regions by financing government projects in the form of toll roads, MRT, and LRT. These projects are spread across the regions of Sumatra, Java and Bali.

Financing for Toll Road Projects Financing for MRT & LRT Projects

Trillion Trillion 23 Rp 122,34 Rp 19,25 Total Projects Syndicated Syndicated Loan Value Loan Value

FINANCING FOR DEBTORS OBTAINING PROPER RATINGS

BNI values ​​and supports debtors in getting the BNI has not collected data on the percentage and best PROPER rating, i.e. Gold PROPER. Credit is number of customers that interact or cooperate disbursed only to companies that have received a in environmental and social based activities. minimum of Blue PROPER, meaning that they have Nevertheless, several examples of activities adhered to environmental regulations. The highest conducted by BNI with its customers include the achievement of Gold PROPER is given to companies following: (FS10) who only comply with environmental regulations, • Capacity building for sugar cane farmers with but have gone above and beyond what is required PTPN and have also executed community empowerment • Paper waste recycling program with PT. Nara measures in an appropriate manner. Bina Lingkungan • SmartFarming 4.0 technology innovation based BNI owns assets that have passed the social or on the Internet of Things (IOT) with PT Mitra environmental screening stage, including the Sejahtera Pembangunan Bangsa (PT MSMB) purchase of sustainable bonds from BRI worth USD 5,000,000, or 0.14% of BNI’s total investment in other Note: * Conversion of rupiah to USD using the BI middle rate on December 31, 2019 banks*. Purchase of these bonds signifies BNI’s affirmative stance with respect to environmental protection. PT Bank Negara Indonesia (Persero) Tbk

Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement BNI has purchased sustainability bonds worth USD “ “5,000,000 which signifies its support for the environment

ENHANCING THE PEOPLE’S ECONOMY BNI synergizes with SOEs and other business partners to improve the micro economy sector and increase financial literacy through the provision of KUR and funding of the Partnership Program. KUR disbursement for micro-level entrepreneurs aims to provide access to capital as well as business development assistance to SMEs and Indonesian Migrant Workers (TKI). A total of 220,066 KUR debtors with a maximum credit of Rp17,759 billion were recorded in 2019. This figure represents 111.00% of the target set by the Government.

BNI also seeks to provide added value to the micro economy sector by digitizing the mechanism for scoring credit recipients of Rp1 billion – Rp3 billion to begin the implementation of digital inclusion in banking services.

MONETARY VALUE FOR SOCIAL BENEFIT [FS7]

KUR Disbursement in 2019

KUR Type Total Debtors Maximum Target Achievement against (million rupiah) (million rupiah) Government Target

Micro 142,197 1,945 3,000 12.00%

Retail 68,670 15,506,482 12,500,000 97.00%

TKI 9,199 308,007 500 2.00%

Total 220,066 17,759,722 16,000,000 111.00%

PT Bank Negara Indonesia (Persero) Tbk

Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation “Enhancing the potential of MSMEs to Increase Exports” “ At present, besides its focus on providing trade related services for corporate customers,“ BNI also pays attention to disbursing KUR to develop the export-based MSMEs markets. In addition, BNI offers competitive prices and speedy and efficient export-import transaction services.

Besides disbursing KUR for the trade and consumer segments, BNI also provides the KUR Tani (Farmer). This type of credit aims to support the food security and welfare of farmers. In 2019, as many as 1,149,000 Farmer Cards were activated. Credit recipients are given the Farmer Card which can be used as debit cards and to receive subsidies and social assistance from the Government.

KUR Tani Disbursement

(million rupiah) (million rupiah) (million rupiah) (million rupiah) (million rupiah) Rp 413 Rp 756 Rp 20 Rp 10 Rp 9 Maximum Credit Maximum Credit Maximum Credit Maximum Credit Maximum Credit

24,350 33,751 981 612 615 Total Debtors Total Debtors Total Debtors Total Debtors Total Debtors

Surabaya Region Malang Region Bandung Region Denpasar Region Palembang Region

Besides KUR disbursement, BNI also provides Further, BNI has provided partnership funding added value to farmers through the application of to 1,619 MSMEs for their economic upliftment. technology to ascertain soil conditions and weather This funding represents an important support monitoring to prepare for the growing season; and for the creation of sustainable supply chains construction of rice mill unit (RMU) and assistance in the community. During 2019, BNI disbursed to farmers that will be discussed in the community Rp122,17billion in Partnership Program loans, empowerment section of this report. which were mainly in the trade, restaurant and hotel sectors totaling Rp17,319 billion.

Partnership Funding for MSMEs

2019 2018 2017 Rp 122.17 Rp 104.49 Rp 71.08 (billion rupiah) (billion rupiah) (billion rupiah) PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Synergy with the government has also been Bansos Agents Performance 2019 accomplished through the distribution of social assistance funds (bansos) that can be accessed through ATMs or Agen46 agents who are spread Total Benefit Recipients (Persons) across Indonesia. In addition, also available are the Family Hope Program (PKH) and Non-Cash Food 4,150,359 Family Hope Assistance (BPNT). Program (PKH) 6,595,760 In 2019, a total of 10,746,119 Bansos (debit) cards Non-Cash Food were activated for use in accessing the social Assistance (BPNT) assistance funds. As of December 2019, BNI had disbursed Rp12,943.1 billion in PKH funds for the Number of Disbursing benefit recipients. Branches 197 119 Family Hope Non-Cash Food Program (PKH) Assistance (BPNT) PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

SUPPORT FOR ENVIRONMENTAL CONSERVATION

LET’S SAVE WITH WASTE

The ‘Let’s Save With Waste’ Program represents one of BNI’s obligations to the community and the environment, and is achieved through eco-conscious activities along with financial literacy and inclusion for the community. In partnership with a number of waste banks, BNI involves the Agen46 network in various regions in developing the program. This program has been implemented since 2017 and aims to create a cleaner environment by appealing to the community and students to care about the environment and to have savings, enhance inclusive finance and build a cashless society, and foster a people’s economy through the “Let’s Save With Trash” movement (recycled products, KUR financing, employment).

CONVERSION FROM WASTE TO ACCOUNT DEPOSITS

Waste is deposited at the Waste Bank on a periodic basis. Residents and students are required to carry their ATM cards when depositing the waste

Agen46 agents coordinate 02 the preparation of Savings Book Report to ascertain the details of waste deposit transactions

01 Weighing of waste 03 05 04 Waste Sorting Recording of deposited waste, then by students and it is converted to rupiah based on households price and weight. This recording is done online using the Agen46 agent’s EDC machine. The converted waste is immediately recorded in the student or resident’s savings book PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Cultural Shift Towards a Clean Environment

Changing the Waste Paradigm

Partnerships Impact

BNI 1. BNI GoGreen Scheme BNI 1. Financial Literacy 2. Financial Literacy 2. Addition of Agen46 agents 3. Addition of BNI Customers Waste Bank 1. Waste Processing 4. Good collaboration with 2. Agen46 agents stakeholders

Schools and 1. Clean Environment Initiative Waste Bank 1. Better accountability and service for Communities 2. Save with Waste Waste Bank customers 2. Transaction Fees from Banks Regional 1. Cleanliness of Surrounding 3. Online transaction recording and Government Environment service 2. Public Health Community 1. Having proof of account ownership (Customers) through bank book and ATM card 2. Deposits from waste are directly credited to the account online 3. Online banking transaction services from Agen46 agents 4. Online banking transaction services through all BNI outlets & ATMs 5. BNI Loyalty program

Implemented in three regional offices, namely Jakarta City Region, Jakarta Kemayoran Region, and Jakarta BSD Region.

2019 Target 2019 Achievement 2020 Target

Implementation in three regional offices, namely Development of the ‘One Student Jakarta City Region, Jakarta One Account’ Program as Kemayoran Region, and continuation of the ‘Let’s Save With Jakarta BSD Region. Waste’ Program. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

BNI Simpel achievements through the Let’s Save With Waste Program

SimPel through West Jakarta SimPel and North Jakarta Waste Banks at National Level

Balance: Balance: Rp 3,387 million Rp 68,546 million Total Accounts: Total Accounts: 160,821 816,520

Total Target Customers 2019-2021

Schools Students Organizations Waste Banks

15% schools 20% students 20% employees 50% waste at the national level, at the national level, or 9.06 central or regional or 46,148 schools million students organizations, or 857,383 banks civil servants at the national at the national level, or 3,500 level members

Appreciation Program

BNI Customers Waste Bank Appreciation Program 1. Appreciation for Appreciation in the for stakeholders who individual customers form of operational have contributed to the in the form of equipment for the ‘Let’s Save with Waste’ savings waste bank Program: Students, 2. Appreciation for Ordinary Citizens, Civil schools, campuses, Servants, School Waste and offices in the Banks, Community form of cleaning Waste Banks equipment

Beginning in 2019, the Let’s Save with Waste Program was expanded to the Thousand Islands region. This started with the Green Awareness initiative against 23 schools in the Thousand Islands to educate the youth on environmental conservation and financial literacy. The campaign was designed to be creative and fun to attract the attention of students during the event. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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The culture of sustainability has been internalized within BNI through a series of Go Green programs that involve employees to actively manage the environment.

BNI MILLENNIAL GREEN CHAMPIONS BNI seeks to raise awareness within its ranks of the The Waste Wise Education and Waste Wise Academy importance of environmental protection, especially on programs are delivered in partnership with responsible waste management. This is achieved through Waste4Change, and attended by representatives from the Waste Wise Education and Waste Wise Academy the millennial generation from each division and Building programs. Under Waste Wise Education, employees are Management at Grha BNI, Pejompongan Tower and BSD given a thorough understanding on waste starting from Plaza. Employees who have taken part are designated as its nature, types, treatment methods, impact on life and the Green Champion within their respective divisions. As how everyone can contribute towards change. of end-2019, BNI had 48 Millennial Green Champions.

Under the Waste Wise Academy, BNI employees visit waste The Green Champions are then tasked with disseminating management sites, such as the Bantargebang Integrated information on the training received to other employees Waste Management Site (TPST) and Waste4Change Material in their respective divisions, as well as being a role model Recovery House in the Bekasi area. However, the teaching for implementing environmentally friendly lifestyles to provided is not simply one-way from the instructor; here other employees. participants also learn to manage waste first hand through exciting games and interactive discussions.

COMMITMENT TO REDUCE PLASTIC WASTE

On February 21, 2019, BNI participated in As a first step, this initiative was carried the National Waste Awareness Day and out at the BNI Head Office. In support of announced its commitment to reduce this commitment, BNI also produced and plastic waste in office activities. This distributed eco-themed souvenirs to the commitment was conveyed through memo general public as per the following items: No.KMP/4/3439 dated August 6, 2019 to all 1. Tumblers Divisions and asserts a series of actions to 2. Stainless or Glass Straws follow to reduce plastic waste, including the 3. Re-usable Shopping Bags. following: 1. Not to use Bottled Drinking Water (AMDK) This commitment to reduce plastic waste in daily activities, and for glasses or has also had a beneficial outcome through tumblers to be provided instead savings totaling Rp50,400,000 in the 2. Reducing or not to use plastic straws purchase of bottled drinking water during 3. Reducing the use of plastic shopping the four months of the initiative (August- bags and to utilize reusable bags December 2019). instead. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

GARBAGE BOAT SUPPORT UNDER BNI BERBAGI The excessive waste floating along the rivermouth of Padang Beach was the impulse for BNI to lend a hand in reducing and cleaning up the river. Under the BNI Go Green program, a garbage boat was deployed to clean up the Banda Bakali river for the Padang City Government through the Environmental Services Office. Since beginning operations in February 2018, the garbage boat has been operated by four staff of the Environmental Services Office. These staff members not only clean up the garbage around the Banda Bakali River, but also actively disseminate information and appeal to residents not to throw waste into the river or the sea.

Rehabilitation of Degraded Land and Organic Forest Ecosystem

NI is not directly involved in exploiting natural BNI provided financing worth Rp500,000,000 resources, thus the adverse effects arising from its for nursery costs and construction of facilities operations are quite minimal. Be that as it may, BNI for rehabilitating the organic forest, including conducts activities to support the carrying capacity watering and maintenance equipment, tagging of the environmental ecosystem. In addition, BNI’s and geotagging, and irrigation system. About operational zones do not lie close to or located in 1,000 trees of African wood, white teak, nutmeg, conservation or protected areas. eucalyptus, resin and mahogany were planted. As per the principles of organic forests, forest Since 2018, BNI has implemented a program to management was done using the intercropping improve the environment through the rehabilitation method to restore soil fertility; similarly eco-friendly of degraded land and organic forest ecosystems in organic fertilizer was used for growing the trees. Megamendung Village, Bogor Regency, West Java. This initiative was motivated by increases in size To ensure the success of the scheme, BNI of degraded land and environmental damage that established project monitoring procedures by leads to climate change. This scheme has been making payments in stages according to applicable carried out in Cipendawa Block S Organic Forest, terms and conditions, as well as making direct visits Megamendung Village. The block was established to the designated locations as evidenced by annual in 2001 by the late Mr. Bambang and Mrs. Rosita. activity reports. BNI assisted by planting trees covering 10​​ hectares from a total area of ​​27 hectares of Organic Forest land. At present, the privately-owned Organic Forest land is still managed and implemented on a “voluntary Initiative” basis, and so has nothing to do with the government. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Impact on BNI’s Business Impact Towards Benefit CO2 Absorption at Organic Forest in Recipients Megamendung Village, BNI Planting Block Participation in the Community Development Drive the people’s economy program on environmental around Megamendung conservation as stipulated Village derived from forest 1,636 SAPLINGS by Minister of SOE products and organic Total samples Regulation No. PER-02/ agriculture MBU/7/2017 dated July 5, 2017. 7.5 tons Improve BNI’s positioning Improve the health Total CO2 absorption in implementing the outcomes of the local Environmental Conservation community program in Megamendung Village, West Java. Preserve organic nursery 0.004 ton activities Average CO2 absorption per individual tree Besides being a location for natural conservation, making the organic forest to be an asset for the general 45.9 ton public or educational Estimated CO2 Absorption for institution to visit and study 10,000 Saplings on organic forests.

Conservation of Javan Rhino

As a consequence of the growth of human together to preserve biodiversity, in this case the population, there is increasing competition for land Javan Rhinoceros in Ujung Kulon National Park, and resources. This competition over resources Banten. The planned activities are for a period of affects the sustainability of other living creatures, one year and involve the following: among them the Javan Rhinoceros (Rhinoceros a. Species protection by controlling the Langkap sondaicus), which is currently Critically Endangered plant (CE) based on the IUCN Red List. In this regard, more Langkap (Arenga obtusifolia) is a palm species sustained and expanded efforts and coordination that is causing an imbalance in the ecosystems between all stakeholders are needed to ensure of the National Park. It prevents sunlight the protection and recovery of these species from from penetrating and reaching the soil below, the brink of extinction. Currently, only 72 of these therefore causing a scarcity in the natural food animals remain alive. plants for the rhino. BNI has involved 24 local residents in a survey of locations of Langkap trees As a part of its responsibility and concern for the and 15 others to plant trees for diversification in conservation of rhinos, BNI along with seven SOEs an area of ​​10 hectares. (Bank Mandiri, BTN, Telkom, Pelindo 1, Pegadaian, b. Community Development Program against five Jasa Marga, Angkasa Pura 2) and WWF and the villages that support the Ujung Kulon National Ujung Kulon National Park have agreed to work Park (Rancapinang, Cibadak, Kramat Jaya, Taman Jaya and Ujung Jaya). Under this scheme the Ecological Agriculture Field School are run around the rhino habitat. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Overview of Sustainability Digitalization Sustainability Performance Governance for the Nation

Activity objectives: • Prevent people from entering the National Park • Introducing better and sustainable agricultural practices that can potentially enhance the community’s income. • Capacity building for human resources through learning at the Ecological Agriculture Field School, and to utilize existing resources. • Enhance community organizations through farmer groups to strengthen bargaining position • Meeting the basic need for food and agricultural products that are healthier and more environmentally friendly Activity Types

No Activity Description

1 Information Coordinating with stakeholders (government, related agencies, etc.), weekly discussions for 4 Dissemination at Field months in 5 villages to determine the following: School Place, time, participants and introduction to ecological agriculture

Preliminary testing, group dynamics, microbial culture, problem identification, seed selection practices, seedling practices, and composting practices

Discussion and presentation, integrated pest control concept, roots and transport networks, irrigation and soil properties, plant diagnostics, plant pesticides, institutional strengthening, evaluation and Follow-up Plan (RTL)

2 Implementation in 5 Update on Progress in individual villages Villages

3 Field Day Celebrating Agricultural Field Day (Festival) and inviting officials to witness the field school produce

4 Monitoring Conducted on a monthly basis c. DNA mapping Objectives: Small rhino populations are at risk of extinction - DNA studies are conducted for determining due to genetic factors such as inbreeding so healthy and well-performing rhinos that individual rhinos are less responsive to - Genetic studies are needed to study kinship environmental changes. The emergence of between individual rhinos, along with “inbreeding depression” results in decreased reproductive abilities and to be free from certain reproductive readiness, high mortality of calves diseases and an increase in lethal recessive alleles. - Genetic management of the Javan rhino Pressure due to inbreeding also causes a rise in population based on genetic diversity such that the population of abnormal individuals and the matings are arranged in a structured manner emergence of several diseases due to decreased among rhinos that are genetically distant. endurance. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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d. Supervision of Ujung Kulon National Park Area BNI’s support for the scheme is the largest share and worth Rp500 million, or 26.31% of total To protect the rhino and its habitat, a Rhino funding of Rp1,900 million. To ensure that the Protection Unit (RPU) has been established in scheme runs effectively, BNI conducted a survey the Rhino Protection Area which is around the and a joint visit with 8 SOEs and the Ministry of rhino’s natural habitat. BNI and 7 other SOEs SOEs to Ujung Kulon National Park on October have supported this endeavor by supplying 16-17, 2019 to witness its implementation. motor vehicles and patrol cars.

Impact on BNI: - Improve BNI’s image as a financial institution that cares for the environment - Implementation of BNI’s 4th mission statement - Showcases Implementation of Sustainable Finance by BNI

Impact on Recipients: The partnership between 8 SOEs and WWF-Indonesia Foundation for the conservation of the Javan rhinoceros in Ujung Kulon National Park also empowers the communities around the park. The Field School Program supported by SOEs includes 2 field activities, namely Ecological Agriculture and Agroforestry in 5 villages (Tamanjaya, Ujungjaya, Rancapinang, Kramatjaya, and Cibadak). At present 8 SOEs are providing support and have facilitated 89 participants with 15 thematic local guides.

15 thematic Local Guides (Champions) from the 89 participates of the Field School from the villages of Rancapinang, Cibadak, Kramatjaya, villages of Rancapinang, Cibadak, Kramatjaya, and Ujungjaya, and Tamanjaya, or 3 per village Tamanjaya. BNI is targeting an expansion of the program along with the number of participants in 2020 for Ujungjaya Village Direct Benefit Recipients

BNI’s support to Ujung Kulon National Park has resulted in the birth of four rhinos PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Provision of Water for West Seram and Tangerang Regencies

The local community’s lack of access to clean water was the factor that impelled BNI to implement the clean water assistance program in Waeyasel Village, West Seram Regency. This village is included in the list of priority villages as per the Minister of Villages, Development of Disadvantaged Regions and Transmigration Regulation No. 126 of 2017 concerning Determination of 17,000 priority villages for development of villages, disadvantaged regions and transmigration, as well as being unique for having archaeological remains of dolmens that need to be preserved.

In this regard, assistance to the local community was provided through infrastructure development to facilitate clean water access at West Seram Regency, along with the exploration of a new spring located 7 km from the village. This development was realized in collaboration with three other Himbara banks, namely BRI, Mandiri and BTN.

BNI’s share of funding is worth Rp679 million or Direct beneficiaries include 25% of total financing of Rp2.7 billion 450 families or 1,800 people

Program Impacts

Before After

450 households in Waeyasel village faced difficulties Residents have a new spring located 7 km away from the in accessing clean water due to inadequate discharge village, but access is facilitated by pipes and a storage by the spring in the village. tank with a capacity of 100 m3.

Poor Sanitation Improved sanitation through installation of a comprehensive water supply network across the village. Residents no longer need to defecate and wash at the beach, thus lowering the potential for environmental pollution.

Assistance towards clean water access was also provided to residents of Blukbuk Village, Kronjo District, Tangerang Regency. This area comprises households and rice fields that use rain-fed irrigation. However, the dry season of 2019 caused the wells in the area to go dry, and so residents BNI provided funding support of Rp313 million had to buy water for Rp2,000 per jerry can. Further, towards clean water access in Tangerang Regency, local residents had to travel to other villages to a which was realized in collaboration with Himbara distance of 45 miles just to obtain clean water. Banks (BRI, Mandiri, BTN) With development of the artesian well, the local BNI also provides Rp108 million for improved community no longer needs to buy or travel far just access (road hardening) to the artesian well. A to seek clean water. In addition, hardening of the total of 150 families or 600 people have been directly affected by the program road has also been beneficial in opening access and improving the community’s economy. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

RELEASE OF ORANGUTANS In partnership with the Borneo Orangutan Survival Foundation, “ BNI constructed a monitoring station to observe orangutans “ released back into the wild. Through funds from the Community Development Assistance on Public Infrastructure program, BNI disbursed Rp319 million for construction of a Post Release Monitoring (PRM) station in the Bemban River Watershed, Bukit Baka Bukit Raya National Park (TNBBBR), Central Kalimantan. Assistance provided Since 2016, 161 orangutans have been released back into the wild in Bukit Baka Bukit Raya National Park, 129 of includes building materials, transportation, roofing, them in the Bemban watershed. workers, finishing and furniture.

This semi-permanent monitoring lodge is required to ensure the comfort and safety of the PRM team. The station began to be occupied in June 2019 to accommodate 12 PRM members. A veterinarian rotates in each month to reside at the monitoring During the period June-December 2019, nine orangutans were released. In early 2020, the Luwun Kahio semi- station. During 2019, the PRM team conducted permanent Monitoring Station will be inaugurated along monitoring activities totaling 273 hours. with the release of two orangutans from Nyaru Menteng, Central Kalimantan. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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INDEPENDENT ASSURANCE STATEMENT

000-174 Vers. 2020, pg. 1 of 4

Independent Assurance Statement The 2019 Sustainability Report of PT Bank Negara Indonesia (Persero) Tbk

Number : 001/000-174/II/2020/SR-Asia/Indonesia Type / Level : 1 / Moderate

PT Bank Negara Indonesia (Persero) Tbk, or “the Reporting Organization” or ”the Company”, has engaged Social Responsibility Asia or SR Asia to assure its 2019 Sustainability Report (“the Report). The Reporting Organization is a listed company where the Government of the Republic of Indonesia owns majority of its shares. It has business networks located all over Indonesia and globally in other seven different countries, including one each in the United States of America and the United Kingdom.

The Company has developed the Report content by referring to: (a) Sustainability Reporting Standards of the Global Reporting Initiative (“the GRI Standards”) and its Financial Services Sector Supplement (“FSSS”), (b) Regulation of Indonesia Financial Services Authority No.51/POJK.03/2017 on the Implementation of Sustainable Finance for the Financial Service Organizations and the Listed and Public Companies (“POJK 51”), and (c) Environment Social and Governance (ESG) Integration Pillars of Sustainable Banking Assessment (SUSBA) developed by World Wildlife Fund (“WWF”).

The Management1 is exclusively responsible for the Report content and its presentation. SR Asia’s responsibilities are to evaluate the Report content, generate recommendations, and come up with an Independent Assurance Statement (“the Statement”). The Statement shall NOT be taken as a basis for interpreting the sustainability or overall performance of the Company, except for the areas covered in the scope of assurance work.

Moreover, presentation of SR Asia’s assurance work and the Statement is only to the Management. SR Asia does not accept or assume any responsibility for any other purpose or to any other person or organization; thus, any dependence that third party has placed on the Report is entirely on its own risk.

Scope and Limitation

1. Review, NOT to investigate or audit, the Report document containing sustainability performance disclosures for the reporting period of 1st of January up to 31st of December 2019, especially on the seven topics that are considered material by the Management. They are economic performance, indirect economic impact, education and training, employment, customer privacy, anti corruption, and green portfolio. 2. Type 1 and Moderate Level of assurance procedures are applied; where the risks of information and conclusions of the Report being error is reduced, but not reduced to very low, but not zero. 3. Evaluation on publicly disclosed information, system and process of the Reporting Organization has in place to ensure adherence to the principles.

1 “The Management” refers to the management of the Reporting Organization or the Company PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

000-174 Vers. 2020, pg. 2 of 4

4. Presentation of financial data, information, and figures in the Report is NOT within the scope of assurance. SR Asia supposes that the Company, or independent parties, or other parties associated to the Company, have verified and/or audited any data and information related to financial statements.

Exclusion

1. Stakeholders’ engagement, which may be involved in developing the Report. 2. Evaluation based on indicators or principles other than those mentioned in the Statement. 3. Financial performance data and information from the Company’s documents other than those mentioned in the Report. 4. The Management’s statements and claims describing expression of opinion, belief, expectation, advertisement, and future planning. 5. Topics, data and information: a) Outside the reporting period. b) In the public domain not covered in the reporting period. c) Other than those mentioned under the defining materiality section and discussion on defining Report content.

Methodology

1. Engage independent official partner that has experience in providing assurance service in Indonesia. 2. Conduct initial assessment on the Report document submitted by the Company. 3. Visit the head office of the Company to discuss the Report content with the Management; to review data, information and disclosures as presented in the Report; and to identify supporting documents. 4. Interview data contributors from different units or functions in the Company. 5. Utilize SR Asia GREAT in analyzing the Report content. 6. Evaluate presentation of data and information against the standards, principles, and indicators of AA1000AP (2018) AccountAbility, GRI Standards and its FSSS, POJK 51, and SUSBA.

Adherence to AA1000AP (2018) AccountAbility and GRI Standards

Inclusivity – The Report has fairly presented inclusive information about key stakeholder-groups of the Company. The Report content specifies commitment to integrate stakeholder engagement process across the organizational functions in the Company. Various approaches and methodologies are also applied in stakeholder engagement activities but the process is rather practical than in strategic manner.

Materiality – In overall, the seven material topics presented in the Report content are sufficient, and can explain the sustainability context of the Company. Energy, which was previously a significant issue to the Company, has been excluded from material topics in the Report. The Company determined the material topics in a discussion by considering various inputs from other resources and stakeholders, both internal and external, but did not perform a materiality assessment. Therefore, the reason of changing the material topic in the Report content is difficult to explain.

PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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000-174 Vers. 2020, pg. 3 of 4

Responsiveness – Engagement of the Company in “the First Movers” and “IKBI” initiative has demonstrated its responsiveness to address current sustainability issues in financial services industry sector. The Company also has policies and procedures in place to respond grievances and solve disputes with stakeholders. Furthermore, its responsiveness to sustainable development is also indicated through community development programs and initiatives. In terms of evaluating responses, the Company does not yet a formal mechanism that reviews maturity, impact and prioritization of sustainability topics and its relationships to the responses.

Impact – The Report content discloses data and information indicating the impacts of the Company’s decisions, activities, products, and services on the economy, environment, and society. In overall, disclosures of impacts in the Report content is rather balance and adequate with both metric and qualitative information. However, the Company still needs to integrate comprehensively the identified impacts into key management processes, including its organizational strategy, governance, goals, objectives, and operations.

In “Accordance” with Core Option – The Report follows the core option of GRI Standards where minimum one disclosure of each material topic is presented and discussed in the Report. The disclosures of management approach for each material topic in general are fairly disclosed. When relevant, FSSS requirements are addressed and appropriately presented.

GRI Standards Principles – To some extent, the Management has applied the Principles for Defining Report Content (stakeholder inclusiveness, sustainability context, materiality, and completeness) and the Principles for Defining Report Quality (balance, comparability, accuracy, timeliness, clarity, and reliability). Supporting documents were adequately presented during the assurance work. When applicable, the Report presents clarification on data and information that cannot be disclosed due to Management discretion or system and data administration issue.

Adherence to POJK 51 and SUSBA

Overall, adherence of the Report to POJK 51 is fairly accepted. Sustainable finance topics as required by POJK 51 are well presented in the Report content. Some POJK 51 requirements of data and information, such as emission reduction and environmental grievances that are less likely related to the sustainability context of the Company are not found in the Report content. In terms of adherence to SUSBA indicators, as per assurance work, the Company still needs to develop more policies and initiatives on different sustainability concerns such as the issues related to human rights, deforestation, water risks, heritage sites, as well as sustainable products and services.

Recommendation

On the basis of the assurance methodology and procedure taken, SR Asia recommends the Company to: 1. Implement comprehensive stakeholder engagement as described in AA1000 SES (2015), and to perform materiality testing to review its material topics and key stakeholder-groups for synthesizing the integrity. 2. Identify the clear linkages in sustainability vision, mission, policies, governance, goals, and objectives of “Pilar Keberlanjutan BNI” and sustainable finance framework, as well as ESG Integration Pillars of SUSBA. PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

000-174 Vers. 2020, pg. 4 of 4

3. Carry out an inclusive SDGs mapping against sustainability programs and initiatives of the Company. 4. Use of information technology and tools for faster and mass communication of social and environmental performance measurement. The communication may be integrated across functions and consider standard methodology of data measurement and presentation as indicated by reporting standards and principles.

Statement of Competency, Independency and Impartiality

The SR Asia Assurance Team is consisted of experts in reporting standards of SASB, GRI Standards, International Framework, and others. The experts are also familiar with reporting regulations of the Country where the Reporting Organization must comply. As part of the Assurance Team, the experts must understand the principles and standards of AA1000 AccountAbility, and also have experiences in writing and reviewing sustainability reports and integrated reports.

No member of the Assurance Team has any relationship with the Company that can affect the ability to provide an independent and impartial statement. SR Asia confirms that sufficient mechanism and professional codes of practices are designed and in place to ensure independency and free from bias and conflict of interest.

The assurance provider,

Jakarta, 4th of February 2020

Birendra Raturi 000-174 SR Asia International Director

Social Responsibility Asia (SR Asia) 4F-CS-25, Ansal Plaza, Vaishali Ghaziabad (NCR Region Delhi), Uttar Pradesh 201010, INDIA Landline / Mobile: +91-120-4103023; +91-120-6452020 / +91-9810059109 E-mail: [email protected] Website: www.sr-asia.org PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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RESPONSE TO FEEDBACK

Feedback on the BNI Sustainability Report 2018 was received from various sources suggesting possible improvements to be made. We received inputs from investors who stated the need to articulate BNI’s support for the sustainable development goals (SDGs), including support for climate change action. In this context, Morgan Stanley Capital International (MSCI) has recommended the disclosure of financing related to environmental impacts and governance. In addition, WWF Indonesia also provided a Sustainable Banking Assessment (SUSBA) for use as reference.

BNI has taken in all of these suggestions for evaluating and identifying where improvements can be made. This report conveys BNI’s support for SDGs, climate change action, sustainable finance, and includes SUSBA as a reference. BNI would like to express it appreciation and thanks for all of the positive feedback, and hopes that this report can provide useful information for stakeholders and can be utilized for improving sustainability performance.

GLOSSARY

List of Divisions of PT Bank Negara Indonesia Tbk. BNI Sustainability Report 2019.

Division Abbreviation Division Abbreviation

Local Corporate & Multinational Company LMC1 Procurement & Fixed Asset Division PFA Division 1 Small Business Division 1 BSL1 Local Corporate & Multinational Company LMC2 Division 2 Small Business Division 2 BSL 2

State-Owned Enterprise & Government BIN Subsidiaries Development Division PPA Institutions Division Enterprise Risk Management Division ERM Consumer Products Management Division PDM Corporate Secretary & Communications KMP Transactional Banking Services Division TBS Division

E-Banking Division EBK Human Capital Division HCT

Card Business Division BSK BNI Corporate University BCV

International Division INT BNI Contact Center Unit BCC

Treasury Division TRS Service Quality Unit SQU

Corporate Credit Risk Division BNR Divisi Operasional Digital DGO

Middle & Small Credit Risk Division CMR Customer Analysis & Portfolio VCU Management Unit Compliance Division KPN Internal Audit Unit SAI Network Management Division JAL PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

POJK REFERENCE AND INDEX OF GRI & SUSTAINABLE BANKING ASSESSMENT (SUSBA) STANDARDS

Cross-reference of GRI Disclosure Page and/ URL Standards & POJK

GRI 101: Fundamentals 2016

General Disclosure

GRI 102: General 102-1 Name of the organization 17 Disclosure 2016 102-2 Activities, brands, products, and services 17

102-3 Location of headquarters 17

102-4 Location of operations 17

102-5 Ownership and legal form 17

102-6 Markets served 17

102-7 Scale of the organization 18

102-8 Information on employees 18

102-9 Supply chain 20

102-10 Significant changes 20

102-11 Precautionary Principle or approach 28

102-12 External initiatives 20

102-13 Membership of associations 20

102-14 Statement from the Director 10

102-16 Values, principles, standards and norms of behavior 16

102-18 Governance structure 24

102-40 Stakeholders 33

102-41 Collective bargaining agreements 51

102-42 Identifying and selecting stakeholders 33

102-43 Approach to stakeholder engagement 33

102-44 Key topics and issues 33

102-45 Entities included in the consolidated financial statements 21

102-46 Defining the report content and topic boundaries 21

102-47 List of material topics 22

102-48 Restatement of information 23

102-49 Changes in reporting 22

102-50 Reporting period 21

102-51 Date of most recent report 21

102-52 Reporting cycle 21

102-53 Contacts 23

102-54 Compliance with GRI Standards 21

102-55 GRI Content Index 95

102-56 External assurance for the report 21, 90 PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Cross-reference of GRI Disclosure Page and/ URL Standards & POJK

POJK 51/OJK.03/2017 2. Overview of performance of sustainability aspects 06

5.a Duties of the Board of Directors and Board of Commissioners on 24 sustainability performance

5.b Competency development of Board of Directors’ members 25 related to sustainable finance

5.c Explanation of LJK procedures in controlling sustainable financial 27, 28 risk

5.e Issues related to sustainable financial performance 31

6.a Foster sustainability culture in the internal LJK 04, 83

6.f.3 Impacts arising from Products and/or Services and distribution 42 process

Material Topics

Economic Performance

GRI 103: Management 103-1 Explanation of material topics and Boundaries 37 Approach 2016 103-2 Management approach and its components 37

103-3 Evaluation of management approach 37

GRI 201: Economic 201-1 Economic value generated and distributed 38 Performance 2016

Employment

GRI 103: Management 103-1 Explanation of material topics and Boundaries 51 Approach 201 103-2 Management approach and its components 51

103-3 Evaluation of management approach 51

GRI 401: Employment 401-1 Employee recruitment and turnover 52 2016

POJK 51/OJK.03/2017 6.c.2.a Equal opportunity to work, forced labor and child labor 52

6.c.2.c Decent and safe working environment 55

6.c.2.b Remuneration of permanent employee of the lowest level 53 against regional minimum wage

Education and Training

GRI 103: Management 103-1 Explanation of material topics and Boundaries 51 Approach 2016 103-2 Management approach and its components 51

103-3 Evaluation of management approach 51

GRI 404: Education and 404-1 Average hours of training per year per employee 53 Training 2016

POJK 51/OJK.03/2017 6.c.2.d Training and capacity building of employees 53 PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Cross-reference of GRI Disclosure Page and/ URL Standards & POJK

Indirect Economic Impacts

GRI 103: Management 103-1 Explanation of material topics and Boundaries 62 Approach 2016 103-2 Management approach and its components 62

103-3 Evaluation of management approach 62

GRI 203: Indirect 203-1 Infrastructure investment and service support 62 economic impacts 2016

POJK 51/OJK.03/2017 6.c.3.a Activities or operational areas that result in financial 63 literacy and inclusion

6c.3.c Social and environmental responsibility for sustainable 56 development goals

G4 Financial Services FS13 Access points in low-populated or economically disadvantaged 65 Sector Supplement 2013 areas by type

FS14 Initiatives to improve access to financial services for 51 disadvantaged people

FS15 Policies for the fair design and sale of financial products and 42 services

FS16 Initiatives to enhance financial literacy 65

Customer Privacy

GRI 103: Management 103-1 Explanation of material topics and Boundaries 60 Approach 2016 103-2 Management approach and its components 60

103-3 Evaluation of management approach 60

GRI 418: Customer 418-1 Substantiated complaints concerning breaches of customer 60 Privacy 2016 privacy and losses of customer data

POJK 51/OJK.03/2017 6.f.5 Customer satisfaction survey 42

Anti-Corruption

GRI 103: Management 103-1 Explanation of material topics and Boundaries 34 Approach 2016 103-2 Management approach and its components 34

103-3 Evaluation of management approach 34

GRI 205: Anti-Corruption 205-3 Confirmed incidents of corruption and actions taken 35 2016

Energy

GRI 103: Management 103-1 Explanation of material topics and Boundaries 62 Approach 2016 103-2 Management approach and its components 62

103-3 Evaluation of management approach 62

GRI 302: Energy 2016 302-1 Energy Consumption within the Organization 62 PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Cross-reference of GRI Disclosure Page and/ URL Standards & POJK

G4 Financial Services FS9 Coverage and frequency of audits and risk assessment 30 Sector Supplement 2013 procedures.

FS12 Voting Policy 30

FS10 Partnerships that are responsible for 76 environment or social problems

FS11 Percentage of assets subject to positive and negative 76 environmental or social screening.

POJK 51/OJK.03/2017 6.e.4.b Reduction of emissions 69

6.d.1 Environmental Costs incurred 37, 68

6.d.2 Use of environmentally friendly materials 68

6.d.3.a Volume and intensity of energy 70

6.d.3.b Energy Efficiency 70

6.e Environmental Performance for financial services institution 68

6.e.2 Activities or operational areas that produce environmental 84 impacts

6.e.3.a Impact of operational areas that are near or located in 84 conservation areas

6.e.3.b Biodiversity conservation efforts 84

6.e.4.a Volume and intensity of emissions by type 69

6.e.5.a Volume of waste and effluents produced by type 71

6.e.5.b Waste and effluent management 68

6.e.5.c Spills and incidents (if any) 71

6.e.6 Number and material of environmental complaints 68

Sustainable Banking Assessment Index (SUSBA)

Indicator Disclosure Page

Purpose Sustainability strategy and stakeholder engagement 03, 32

Participation in sustainable finance initiatives 20

Policies Public statements on specific ESG issues 29

Public statements on specific sectors 29

Processes Assessing ESG risks in client and transaction approvals

Client monitoring and engagement 30

People Responsibilities for ESG 56

Staff E&S training and performance evaluation 25

Products ESG integration in products and services 40, 42, 46

Portfolio ESG risk assessment and mitigation at portfolio level 42, 74

Disclosure of ESG risk exposure and targets 74 PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement

FEEDBACK FORM

The Sustainability Report 2019 of PT Bank Negara Indonesia (Persero) Tbk provides an overview of financial and sustainability performance. We look forward to receiving any inputs, critiques and suggestions from you after reading this report. Kindly send this form by email or fax/ mail.

Your Profile Name (if you may) : Institution/Company : Email : Phone/Mobile :

Stakeholder Category □ Shareholder and Investor □ Customer □ Employee □ Trade Union □ Media □ Supplier □ Business Organization □ Government and OJK □ Community Organization/NGO □ Others, please specify......

Please choose the most appropriate answer to the questions below. Yes No 1. This report is easy to understand. ( ) ( ) 2. This report is useful to you. ( ) ( ) 3. This report has described the sustainable development ( ) ( ) performance of a financial services institution.

Please give an assessment of the material aspects which you deem as important for the sustainability of PT Bank Negara Indonesia (Persero) Tbk (score 1=least important to 6=most important).

Economic Performance ( ) Indirect Economic Impacts ( ) Education and Training ( ) Employment ( ) Customer Privacy ( ) Anti-Corruption ( ) Green Portfolio ( )

Kindly provide your advice/suggestions/comments on this report ......

Thank you for your participation, Kindly send the filled-in form to the following address:

Meiliana Corporate Secretary PT Bank Negara Indonesia (Persero) Tbk Grha BNI, Lt. 24 Jl. Jenderal Sudirman Kav. 1 Jakarta 10220 Telephone : (62-21) 2511 946, 572 8387 Faks. : (62-21) 572 8295, 572 8053 E-mail : [email protected] Website : www.bni.co.id PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

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Halaman ini Sengaja dikosongkan PT Bank Negara Indonesia (Persero) Tbk Sustainability Report

Services that My Nature, Independent Cover the Country My Country Assurance Statement SUSTAINABILITY REPORT 2019

Serving the Country, Pride the Nation

Head Office : Grha BNI Jl. Jend. Sudirman Kav. 1 Jakarta 10220, Indonesia

Phone & Fax Solution Center : 1500 046 Phone : 021 - 2511 946 , 572 8387 Fax : 021 - 572 8295 , 572 8053

Online Email : [email protected] Website : bni.co.id