corporate social responsibility report 2013 Table List List List of Contents of Tables of Figures of Appendices

Welcome 04 Table 01 - Bank Audi's Membership in Industry Figure 01 - Our CSR Milestones 06 Appendix 1 - Highlights of Code of Ethics and Conduct 71 Introduction 06 Associations 14 Figure 02 - Main Steps Followed in our Materiality Appendix 2 - Bank Audi CSR Policy 72 Our Materiality Process 07 Table 02 - Regulations to which Bank Audi Group Assessment 09 Our Updated CSR Strategy for 2013 11 Lebanon Subscribes 19 A Partnership Model for CSR 14 Figure 03 - Materiality Matrix and Main Issues of Priority Table 03 - Total Number and Percentage of Employees Concern for 2013 10 The Corporate Governance Pillar 16 who Received Training on Anti-corruption Figure 04 The Economic Development Pillar 22 by Category 20 - Bank Audi CSR Pillars for 2013 11 The Community Development Pillar 28 Figure 05 Table 04 - Percentage of Senior Management at - At end 2013 CSR at a Glance 12 Health 30 Significant Locations of Operation for Figure 06 - A Partnership Model for CSR 15 Humanitarian and Social Initiative 31 Bank Audi Group Lebanon 26 Figure 07 - CSR Committee Charter 18 Employee Volunteerism 32 Table 05 - Employee Composition by Gender and Culture 34 Employee Category at Bank Audi Figure 08 - A Spectrum of Bank Audi's Brands, Sports 34 Group Lebanon 41 Products and Services 25 The Human Development Pillar 36 Table 06 - Employee Composition by Age Group and Figure 09 - Bank Audi's Kids Rewards Employee Category at Bank Audi Program Characters 32 Training and Development 38 Group Lebanon 42 Performance Appraisal/Management 39 Figure 10 - "Be a Hero for a Day" Volunteering Talent Management 39 Table 07 - Governance Body Composition by Gender Program Examples 33 Diversity and Equal Opportunity 40 and Age Group at Bank Audi 42 Figure 11 - A Spectrum of Community Development Compensation and Benefits 43 Table 08 - Employee Distribution by Contract Type Initiatives 34 Rewards System 45 and Gender at Bank Audi Group Lebanon 42 Figure 12 - A Rounded Employee Development Occupational Health and Safety 46 Process 38 Educational Aid in Community 46 Table 09 - New Employee Hires in Bank Audi Group Lebanon 43 Capacity Building 47 Figure 13 - Bank Audi's Employee Table 10 - Return to Work Rates after Parental Leave Sponsorship Grants 40 The Environmental Protection Pillar 50 by Gender in Bank Audi Group Lebanon 46 Figure 14 - Employee Tenure at Bank Audi Solid Waste 52 Table 11 - Retention Rates after Parental Leave Group Lebanon 45 GHG Emissions 53 by Gender in Bank Audi Group Lebanon 46 Figure 15 - Government Capacity Building Program Energy Consumption 55 at Bank Audi 47 Environmental Loans and Sponsorships 57 Table 12 - Paper Recycling between 2012 and 2013 52 Scientific Research 58 Table 13 - Total Weight of Waste by Type 52 Figure 16 - Total GHG Emissions per Year for Bank Audi 53 Supplementary Information 60 Table 14 - Bank Audi's Greenhouse Gas Emissions Reporting and Ratings 62 between 2012 and 2013 53 Figure 17 - Bank Audi's Greenhouse Gas Conclusion 68 Emission Sources 54 Table 15 - Global Warming Potentials (GWP) of Common Internal Audit 71 Greenhouse Gases and Refrigerants 55 Figure 18 - Emissions per Source in 2013 54 Table 16 - ISO 26000 Core Subjects Reference Table 62 Figure 19 - Monthly Variation of GHG Emissions in Bank Audi Group Lebanon 55 Table 17 - Implementation of GRI Content Index - General Standard Disclosures 63 Figure 20 - Sources of Conversion Factors Used 56 Table 18 - Implementation of GRI Content Index - Specific Standard Disclosures 66 Table 19 - Implementation of the 10 Principles of the UN Global Compact 67 Table 20 - Bank Audi Awards for Bank Audi Group Lebanon in 2013 69

4 5 In 2012, Bank Audi had formalised its adherence and of being a role model for ethical behaviour. Hence, Bank to its long lasting inherent CSR principles, and had Audi’s commitment to sustain a sound financial standing developed a comprehensive and ambitious Corporate and performance comes concurrently with a commitment Social Responsibility policy founded on 4 key pillars: to preserve the common interests of all our stakeholders Sound Governance, Economic Development, Community through sound controls, risk management and governance Engagement and Human Development. practices, and with a commitment to be a role model, not only for ethical behaviour, but also for environmental In 2013, we articulated it further, giving the environmental awareness, for community engagement and support, and dimension a higher visibility and promoting it to the same for the promotion of culture. pre-eminence as the other pillars. We are proud to have abided by our ambitious policy, and to have advanced on In conclusion, we wish to express our gratitude to all previously launched initiatives, notably in our support to our shareholders, customers and employees for their young entrepreneurs, as well as in environmental efforts, continuous support and for embracing with us our crucial capacity building and philanthropy. Many new objectives CSR objectives. were also set and reached, including the development of a far reaching Social and Environmental Management Sincerely, System, the promotion of CSR awareness at all levels of the corporation, the boosting of employee community Raymond W. Audi The year 2013 was another good year for Bank Audi engagement, the consolidation of our commitment to best Chairman and General Manager at both business and performance levels, whereby the sustainability reporting guidelines, and others. Welcome results fairly reflect the set strategic orientations. They underscore the Group’s leaner organisation and its capacity In 2013, Bank Audi also took additional CSR-related Statement of the Chairman and to seize opportunities for the development of activities commitments towards existing and new stakeholders, thus the Chief Executive Officer and expansion in new better rated countries, ensuring tying further its long term financial performance and success added value to all stakeholders within its customers’ and with its commitment to its CSR policy and objectives. shareholders’ base at large. Samir N. Hanna At a time where the global banking industry is under an Group Chief Executive Officer As in previous years, our results were achieved without exceptional scrutiny, where spectacular social responsibility compromising our commitment to Social Responsibility failures (in terms of corruption, wrongdoings and unethical objectives. They were reached within a sound Governance behaviour) have tarnished the reputation of renowned framework (commended again by industry observers and global banking leaders, and where worldwide regulators are agencies) and while upholding the highest ethical standards, looking at the banking industry as a key law enforcement maintaining environmental awareness, remaining supportive vector, we, at Bank Audi understand more than ever before and engaged in our communities, and promoting culture. the crucial importance of being accountable for one’s acts

6 7 Introduction

Founded in 1830 in Lebanon, Bank Audi has sustained growth, excellent financial standing and large financial external stakeholders, and close adherence to G4 reporting most recent previous report being that of 2012 which was its solid growth, building a strong legacy of excellence in flexibility, in the context of an entrenched risk management principles and guidelines in 2013. published in September 2013. The Report will flesh out all banking. While the Bank continues to be headquartered culture and best practice corporate governance. the above advances within a discussion of Bank Audi’s in Lebanon, by 2013 it had successfully expanded to 12 Other important achievements in 2013 include the initiation revised and extended CSR strategy which revolves around countries located across the Near East, North Africa, GCC To date, we have managed to bolster, diversify and grow of a local volunteering program, “Be a Hero for a Day”, our five identified CSR pillars. We are confident that the and Europe, including Jordan, Egypt, Turkey, Qatar, the our Corporate Social Responsibility (CSR) strategy in the which formally extends our long tradition of volunteerism discussion that follows will not only be engaging, but will Kingdom of Saudi Arabia (KSA), Monaco, Sudan, Syria, as Lebanese context. In this respect, we are building on strong and community service. We have also introduced a one of a also help capture our manifold positive impacts on people, well as France and Switzerland. Bank Audi is a joint stock foundations from previous years, including the setting up of kind capacity building project which makes various training society and the environment during 2013. Hence the Report company (“société anonyme libanaise”) with a diversified a stand-alone CSR unit in 2010, the establishment of a CSR and skill building modules available to the public sector, provides aggregate and detailed reporting in relation to shareholder base that encompasses historical shareholders, Committee and a formal CSR Policy in 2012, the piloting to help in sharing knowledge and nurturing public service core activities falling under each of those five pillars which large regional investors, and international institutional of ISO 26000 Guidance in 2012, as well as the delineation effectiveness, efficiency and productivity. We have also are grounded in an extended materiality exercise that has investors. The Bank offers a full range of products and of our four-pronged CSR strategy in 2012, revolving gone a long way in further institutionalising CSR through the helped us focus on the issues that matter the most to our services that cover principally Corporate, Commercial, around four core pillars, including sound governance, core operations of the Bank, by introducing a charter for the business, our stakeholders and our society. This year, we Individual and Private Banking, and caters to the needs of economic development, community development and CSR Committee which formalises its mission, mandate and have raised the bar in terms of transparency and with regard various sectors and industries in the economy including: human development. In 2013, we are proud to continue scope. Moreover and in addition to various CSR awareness to the scope of our reporting by mapping the Report’s manufacturing, trading (wholesale and retail), construction to steer forward in relation to being a leader in CSR in sessions, we conducted an employee survey to seek coverage in relation to the core subjects captured in the and real estate development, hotels, apartments and the local context, by adding a menu of new worthwhile feedback on CSR, and disseminated a CSR tracking sheet ISO 26000 guidance. In this respect, we were fortunate to restaurants, education, media services, health and social social initiatives that will be disclosed in this report, but to core operational units, as well as to the recent integration be the first bank in Lebanon to benefit from piloting ISO services, and individuals and high net worth customers. also refining and bolstering our CSR strategy through of a required operational assessment of the presence of a 26000 and integrating its guidance in the various aspects Some of the primary brands, products and services include integrating a stand-alone environmental protection pillar CSR component in various projects. We have also initiated of our strategy and reporting year after year (Table 16). Our a variety of accounts, loans, cards collection, in addition in 2013 to complement the mix (Figure 1). We believe that discussion with our various subsidiaries across the Group Report, which also addresses the 10 Principles of the UN to assurance, insurance and investment products across environmental stewardship is an important social issue to harmonise CSR efforts around core materiality issues, Global Compact (Table 19), is prepared “In accordance” regions and branches. Going forward, Bank Audi aims both in the Lebanese context and globally, and we are keen although this is still in early phases of coordination. with GRI G4 Guidelines and the Financial Services Sector to position itself as a large “Levant Bank”, with Lebanon, to give it full and systematic attention as illustrated in the Disclosures, at a "Core" application level, and features a Turkey and Egypt constituting the main development pillars current report. The Report explains how the selection of In 2013, we have therefore explicitly adopted an approach to useful guide which can serve as a roadmap to the reader by geography, and to pursue its robust financial growth these five pillars for 2013 is validated through an assiduous CSR that respects the triple bottom line, expressing a strong (Tables 17 & 18). In this respect, we are proud to be one strategy, building on its established track record of sustained materiality exercise, consultations with internal and commitment to a better world and a means of measuring of the first institutions in Lebanon to adopt G4 Guidelines and reporting our performance against economic, social and stand by GRI’s vision of responsible management and and environmental parameters. In this context, we are proud transparent reporting. It is in this context that the Bank Figure 1 | Our CSR Milestones to constantly scrutinise and reinvigorate our CSR strategy, joined GRI as an Organisational Stakeholder (OS) to further building on what we have done in previous years, but also assert its commitment to sustainability reporting. forecasting future trends, encouraging efficiency and the Five CSR Pillars precautionary principle, looking downstream at impacts Our Materiality Process but also upstream at causes, and taking into consideration the social and environmental realities around us, as well Drawing on our strong determination to use our industry GRI G4 Guidelines as the limits to the growth of our current ecosystem. The leadership and deep commitment to the communities in precautionary principle is in fact central to our business and which we operate, we have endeavoured, in 2013, to engage Establishment of CSR Committee Further Institutionalisation of CSR risk management processes, and guides our CSR strategy in a diligent exercise to identify the significant impacts that are across our five pillars. This has translated into a continuous important to our company, our stakeholders and our society. learning and improvement journey, and important changes The content of the Report reflects the aforementioned to our business model and patterns of resource use that meticulous materiality exercise and its aspect boundaries. are more restorative and inclusive and seek to make us a We are confident that our CSR reporting methodology 2010 2011 2012 2013 more sustainable business that contributes in a positive continues to evolve year after year, building on extensive way to making the world a better place. Our approach stakeholder consultations and a more thorough consideration to CSR is thus an extension of our core values which of our core activities, hence systematic delineation of core revolve around Transparency, Human Capital, Heritage, material (priority) aspects for our CSR strategy, based on a Quality, Civic Role and Innovation. It embodies important better understanding of aspect boundaries, or of where our Formation of the CSR Unit ISO 26000 Guidance elements of partnering and collaboration, as discussed in main impacts are likely to occur. the enclosed report, all intended to contribute to make a Four CSR Pillars positive difference in the lives of people and the society Building on the first principle of stakeholder inclusiveness, we live in. our materiality assessment has formally started with engagement in various rounds of consultations with internal Establishment of CSR Policy The current document is the third edition of Bank Audi’s and external stakeholders. Internal stakeholders include annual CSR Report, for the 2013 reporting period, and employees, Management, and shareholders, while external Establishment of CSR Strategy sits alongside the Bank’s 2013 Annual Report, with the stakeholders include suppliers, clients, non-governmental

8 9 organisations (NGOs), civil society, the media, Banque Externally, and in order to respect the principle of stakeholder Figure 2 | Main Steps Followed in our Materiality Assessment Du Liban (BDL), the Association of Banks in Lebanon (ABL), inclusiveness, we referred to information from a recent chambers of commerce, competitors, and the Lebanese customer survey conducted by Bank Audi in August 2013, government. Internally, we used different channels to engage which helped identify salient issues. While not specifically with our stakeholders, including e-newsletters, surveys, tailored for CSR, the survey was nevertheless instrumental 1 Internal consultations with key stakeholders and various forms of customised internal communication, in validating and confirming important CSR considerations, Analysis of our business strategy in addition to meetings, workshops, trainings and pertaining primarily to the financial stability and robust Analysis of input from our employees collected awareness sessions. Externally, we continue to engage economic performance of the Bank. It also highlighted through employees' survey data (survey completed in September 2013) with and communicate with our stakeholders through the importance of other considerations related to market Consultation with Bank Audi key strategy setting customised meetings, surveys, roundtables, workshops presence and the suitability, accessibility, transparency and VɉJPHSZPUJS\KPUN[OL*OHPYTHUVM[OL)VHrd of and conferences, in addition to the Bank’s Annual Report. fair design of products. Last but not least, it shed the light DirLJ[VYZ[OL.YV\W*OPLM,_LJ\[P]L6ɉJLY on issues relevant to cost and process efficiency, trust, and [OL.YV\W*OPLM-PUHUJPHS6ɉJLYHUK:[YH[LN` External review of salient issues in 2 Director HUK[OL.LULYHSManager for Lebanon Internally, we made sure our stakeholder engagement data confidentiality. This feedback was crucial in underlining sustainability in the local context process focused on employees, Management and core CSR issues from a customer perspective, one to which 9L]PL^VMJ\Z[VTLYZ\Y]L`KH[H shareholders, given the high stakes they have in the Bank. the Bank must continue to give all the attention it deserves. (survey conducted in August 2013) Externally, we leveraged feedback from our customers, the Meetings and analysis of feedback from civil society and local community partners, in addition to We also touched basis with a core set of civil society and civil society and local community partners various external experts considering their grounding and local community partners, who we believe are instrumental Touching base with local social and economic L_WLY[ZPUrelation to salient issues understanding of the realities of the external context. In fact, in the course of our materiality process since they are these two sets of stakeholders are our priority stakeholders more tuned to the needs and realities on the ground. On 3 Internal prioritisation of key issues within the CSR across various facets of our banking and CSR activities. a parallel note, we conducted various rounds of meetings Committee and in consultation with Bank Audi's Executive Committee and Top Management As described below, both sets of feedback have allowed with various partners namely CCCL, ADR, SESOBEL, AUB, 0KLU[PÄJH[PVUVMWYPVYP[`ZVJPHSHUKLU]Pronmental us to define our material aspects and boundaries based Heartbeat, KidzMondo, Bader Young Entrepreneurs, and issues and their importance on the substantive interests and expectations of our key the MIT Enterprise Forum. Based on these meetings, we Validation of Disclosures on Management 4 Approach (DMA) with Senior Management Mapping and reviewing these issues to the .90.:\Z[HPUHIPSP[`9LWVY[PUN.\PKLSPULZ stakeholders. identified a range of material issues from the community including heads of Credit and Commercial perspective, which we need to consider as a priority while )HURPUN9PZR4HUHNLTLU[*VTT\UPJH[PVUZ AgrLLTLU[^P[OPU*:9*VTTP[[LLVUJVre TH[LYPHSPZZ\LZHUK*:9WPSSHYZMVY We started by reviewing various documents (e.g. business defining our CSR strategy and Report content for 2013, and /\THU9LZV\rJLZPUHKKP[PVU[V[OL.LULYHS strategy documents and CSR Committee minutes). We including securing health and educational opportunities 4HUHNLYMVY3LIHUVUVU[OLYH[PÄJH[PVUHKVW[PVU complemented this effort with a tailored survey which was among the disadvantaged and various segments of VM[OLÄ]L*:9WPSSHYZMVY Consensus and agreement on report content dispatched to all our employees in September 2013, to vulnerable communities, promoting entrepreneurship and and aspect boundaries which are captured tease out material issues and areas of priority involvement job opportunities, protect the environment and reduce our \UKLY[OLÄ]LWPSSHYZPUJS\KLKPU[OPZreport from their perspective in relation to CSR. Various material environmental footprint. issues were identified based on this survey, including the importance of diversity, inclusion, equal opportunities, as Moreover, we conferred two local social and economic were in turn shared with the Bank’s Executive Committee, analysis of context, and the identification of relevant issues well as talent development and progressive labour relations experts who are familiar with the Lebanese context and as well as with Senior Management including the heads of for our institution to address at this particular juncture. in a broad sense through systematic attention to training and its various intricacies. Social issues facing Lebanon were Credit and Commercial Banking, of Risk Management, of Accordingly, the Report also meets the main quality education, grievance mechanisms and occupational health delineated accordingly, including a stagnating economy, Communications and of Human Resources. They were then reporting principles identified through the G4 Guidance and and safety. Employees also pointed out the importance of with public debt to GDP reaching 138% of GDP in 2013, validated against scope, aspect boundaries and reporting pertaining to accuracy, timeliness, comparability, reliability nurturing the budding volunteering culture within the Bank. a decline in tourism and foreign investment, and soaring period. With the active involvement of Mr. Marc Audi, and clarity. We also consulted with key strategy setting officials and poverty and unemployment. We learned that 28% of Country Manager Lebanon, the CSR Committee finally stakeholders at Bank Audi, including the Chairman of the the Lebanese population today is considered poor, and confirmed that these pillars would serve as the basis for In light of this extensive exercise, the material aspects Board of Directors, the Group Chief Executive Officer, the that unemployment is projected to reach 20%, while the Generic Disclosures on Management Approach (DMA) illustrated in Figure 3 include: due diligence, ethical Group Chief Financial Officer and Strategy Director and the youth and women unemployment is projected to reach of our bank in 2013. conduct, transparency, anti-corruption, compliance, risk General Manager for Lebanon who pointed to the need to highs of 34%. It is worth mentioning that we considered management, integrity, economic performance, market continue to give priority attention to extensive due diligence, this important feedback and these stark realities as The materiality exercise was instrumental in distilling the presence, indirect economic impact, product portfolio, risk management processes, and core governance we defined our Report content and aspect boundaries views of various stakeholder groups with whom we interact product responsibility, customer satisfaction, humanitarian, foundations based on ethical conduct, integrity and trust. for 2013. on a regular basis. As illustrated in Figure 3, this exercise social and cultural initiatives, community health, local This first round of feedback provided instrumental guidance has helped us flesh out the main issues that have direct communities, responsible employment including diversity in the initial phases of our materiality process. Beyond identification of core material issues and aspect and indirect relevance to our CSR strategy for 2013. and equal opportunity, training, education and talent boundaries, we engaged in a process of prioritisation This comprehensive and systematic materiality process development, external human development, labour Moreover, we touched basis this year with our various through which we tried to consolidate and analyse the was also useful in validating that previously identified practices and grievances, in addition to environmental entities, as included in our consolidated Annual Report, collected feedback by various rounds of CSR Committee pillars and issues are still relevant, and to integrate new protection through assessment of our environmental Page 175, to harmonise our thinking in relation to our meetings which focused on sorting the key areas for CSR emerging issues and considerations. The process adopted footprint in terms of emissions, effluents and waste, and strategy, our materiality process and our envisioned pillars. involvement in 2013 by priority. The committee also focused thus reflects the principles of materiality, stakeholder energy consumption. Given that the materiality process was Even though this entailed a fruitful process of discussion on mapping these issues to the GRI G4 Sustainability inclusiveness, sustainability, context and completeness, restricted to the Lebanon Group level, these aspects are and exchange of ideas, a conscious decision was made Reporting Guidelines. The entire materiality process is as clearly outlined in the G4 Guidance. Completeness is relevant for all Lebanese entities and the scope of the Report to restrict the scope of the current report to the Lebanon depicted in Figure 2. This process has led to the materiality demonstrated in the fact that the five CSR pillars identified in and aspect boundaries are primarily focused on Bank Audi entities, while giving room for this discussion with the global matrix (Figure 3), and from there, to the five pillars that will light of this materiality exercise are comprehensive in scope Group Lebanon (Bank Audi, Bank Audi Investment Bank, entities to progress and mature. serve as the basis for reporting for the year 2013. These pillars and coverage. The CSR priorities are in turn anchored in an Bank Audi Private Bank and A Services) although the Report

10 11 will make limited reference to instances where the identified Disclosure on Management Approach (DMA). Given the Figure 4 | Bank Audi CSR Pillars for 2013 material aspects are relevant outside the institution and to extensive materiality exercise in which we engaged this year specific entities, in cases where the information is available. in accordance with G4 Guidelines, and the reorganisation Corporate Economic Community Human Environmental Governance Development Development Development Protection of our CSR strategy into five pillars rather than four, there We will thus focus on the material aspects identified through have been updates of information from the previous this diligent materiality exercise considering their importance 2012 Report. We have also made a number of changes, from a stakeholder perspective and their potential internal compared to previous reporting periods, in the Scope and and external impacts. As with everything we do, we will Aspect Boundaries, particularly those corresponding to endeavour to responsibly manage, measure and assess the Environmental Protection pillar, as well as new aspect these material aspects in the context of our overall strategy, boundaries captured under the Economic Development, while evaluating their respective impacts. We consider Community Development and Human Development pillars. this an on-going journey of discovery and continuous As indicated in the next section, all material aspects improvement whereby we strive for continuous refinement identified in 2013 are captured under the respective five Our Updated and adjustments year after year. This denotes our Generic pillars which form the core of our CSR strategy for 2013. CSR Strategy for 2013

In light of the diligent materiality exercise described above, The fourth pillar is the Human Development pillar which we have managed to cluster and identify the following five captures material aspects pertaining to responsible pillars which form the core of our CSR strategy for 2013. At employment including diversity and equal opportunity, Figure 3 | Materiality Matrix and Main Issues of Priority Concern for 2013 the heart of all our operations and serving as the foundation training, education and talent development, external for delivering sustainable value to our internal and external human development, and labour practices and grievances. stakeholders is sound Corporate Governance (capturing This pillar is related to Bank Audi being one of the largest material aspects pertaining to due diligence, ethical private sector employers in Lebanon and reflects our conduct, transparency, anti-corruption, risk management, continuing commitment to human capital, diversity and

HIGH compliance and integrity). Best practice Corporate equal opportunity, talent nurturing and internal and external Governance is what allows us to create a robust, resilient rewarding. Not only is internal human capital development Product Responsibility vital for our ability to compete and differentiate ourselves; and sustainable business that inspires confidence and trust. External Human Development it is also important to invest in human capital development Indirect Economic Impacts This is why we have re-classified Corporate Governance more broadly, including skills, knowledge and capacities Customer Satisfaction this year as a baseline pillar which, in a way, sets the Humanitarian, Social & Cultural Initiatives which can enhance competitiveness at a national level. Economic Perfomance tone and provides the foundation for all our banking and Product Portfolio The Human Development pillar describes how we have Community Health CSR activities. Due Diligence Ethical Conduct sustained our investment in human development activities

Greenhouse Gas (GHG) Emissions Labour Practice & Grievances inside and outside the Bank in 2013. Diversity & Equal Opportunity The second pillar is the Economic Development pillar Local Community which captures material aspects pertaining to economic The final pillar is the Environmental Protection pillar which Training, Education & Talent Development performance, market presence, indirect economic impact, Responsible Employment Integrity captures material aspects pertaining to reducing our product portfolio, product responsibility, and customer Energy Consumption Market Presence environmental footprint in terms of emissions, effluents and satisfaction. Given the current stagnation in the Lebanese waste, and energy consumption. We have been sensitised Anti-corruption economy and the realities of poverty and unemployment Compliance to the importance of the ecosystem around us and have Risk Management in the local context, it was deemed important for our bank become conscious of the need to take active measures to ,Ɋ\LU[Z Waste to continue to play a leading role in supporting the local account for carbon emissions and for our environmental Transparency

MEDIUM economy through an array of targeted initiatives intended to footprint. We realise the importance of operating in an Supplier Environmental Assessment Consumer Assessment for Impacts on Community stimulate entrepreneurship and to contribute to economic environmentally sensitive and sustainable manner, and that Occupational Health & Safety and social revitalisation. These various initiatives will be our operations have an environmental impact that should Consumer Assessment for Impact on Environment discussed in greater detail in the coming sections. be monitored and minimised. Hence we have adopted Child Labour active measures this year, and extended our CSR strategy 0TWVY[HUJL[V:[HRLOVSKLYZ to include a stand-alone Environmental Protection pillar Corporate The third pillar is the Community Development pillar which Governance captures material aspects pertaining to humanitarian, in 2013.

Economic social and cultural initiatives, community health, and Development These five pillars, illustrated in Figure 4, will be fleshed out local communities. This constitutes an extension to our Supplier Assesment for Impacts on Society with greater detail in the sections that follow. Taken together, Community community work, particularly in terms of supporting worthy Development these represent a consolidation of our most significant national charities, humanitarian and social programs, and impacts and of the key concerns and expectations of disadvantaged communities including children, the youth Human our stakeholders. They provide the core of Bank Audi’s Development and the elderly in vital social areas such as education, CSR strategy for 2013, which is closely tied to its core health, culture and sports. We acknowledge that the vitality Environmental competence as a leading banking institution, and intimately LOW MEDIUM HIGH Protection of our business depends on the health of the community aligned with its specific context. They also provide a :PNUPÄJHUJL[V)HUR(\KP around us and we have invested ourselves in a number of platform for sustaining our efforts in CSR, within the scope initiatives which will be described in the coming sections. of a delimited set of core material areas of intervention.

12 13 Figure 5 | COMMUNITY HUMAN DEVELOPMENT DEVELOPMENT CSR at a glance Training and development million at end 2013 USD 2.75 Performance appraisal Total contributions to our community Talent management (STVZ[TPSSPVUILULÄJPHYPLZ million CORPORATE ECONOMIC Diversity and equal opportunity GOVERNANCE DEVELOPMENT Health, humanitarian, social, culture and sports Educational aid in community Initiate volunteer program Government capacity building Contribute to economic “Be a Hero for a Day” 68% growth and revitalisation of our total employees Create new jobs and have been adequately trained employment opportunities ENVIRONMENTAL USD 2.6 million on anti-corruption in employee training Enable small businesses to thrive PROTECTION Revised Institutional Bank Credit Policy & Procedure Manual Prosper local economies “Grow Green” initiative 81% 50 products of successfully trained employees Improve paper recycling by 62% ISO 26000 73 services Introduce paperless banking Transparency Taxes of USD 45 million USD 9 million Human Capital Assess carbon footprint in educational programs Heritage Quality Drop of 4% in GHG emission Civic Role employees Innovation 2,890 Accountability Increase environmental loans 17,000 ILULÄJPHYPLZ Commitment 1.7% :JPLU[PÄJresearch of the GDP of Lebanon Strategic partnerships

188 ATM

73 branches USD 200,000 in environmental contributions USD 900,000 in economic sponsorships 25,000 ILULÄJPHYPLZ

14 15 A Partnership Model for CSR Table 1 - Bank Audi's Membership in Industry Figure 6 | A Partnership Model for CSR Associations In 2013, we continued to embrace our work within a ArabNet Bader Young Entrepreneurs collaborative mode of engagement. We believe in the Membership in Associations power of partnerships and in their effectiveness. Besides Bachir Gemayel Foundation AUB the range of trusted partners we have nurtured over Association des Banques du Liban (ABL) Positions held: time, which includes leading non-profits, foundations, 1. Committee for Compliance and Fighting Money Laundering: associations, academic institutions, social incubators chaired by Mr. Chahdan Jebeyli – Bank Audi Group Chief Heartbeat Sidon Orphan Welfare Society and various social initiatives in the country to leverage Legal & Compliance Officer. complementary strengths and maximise social value, 2. Legal Committee: chaired by Dr. Georges Achi – Bank Audi SESOBEL MIT Enterprise we have made a special effort this year to reach out to a Member of the Board of Directors until retirement (2012). player that has potential in Lebanon with regard to CSR, 3. Research Studies Committee: Rapporteur: Dr. Marwan Yaduna Arc En Ciel namely the Public Sector. We have thus tailored a specific Barakat – Bank Audi Group Chief Economist and Head of program of collaboration with the public sector, supporting Research. internal talent enhancement. We succeeded in nurturing a Swiss Business Council – Lebanon range of deep, reliable and long-lasting relationships which will help us optimise our reach and impact, and cater to Arab Federation of Exchanges (formerly Union of Arab neglected stakeholders and communities in need. This is Exchanges) anchored in the context of Collaborative Value Creation (CVC) and the acknowledgement that partnerships World Union of Arab Bankers produce enduring benefits that accrue to organisations, Union of Arab Banks individuals, and society. We intend to continue leveraging the power of networks, partnerships and the coming Chamber of Commerce, Industry & Agriculture together of perceptions of value to tackle common social issues of relevance to our business and our community, International Chamber of Commerce – Lebanon which fall within the scope of our strategy. These include Corporate Governance, economic development, community Union of Arab Stock Exchanges (in 2009) LAU Chronic Care center development, human development and environmental protection. ADR Ayadina

Beyond our local partnerships, we are also keen on engaging CCCL USJ with national, regional and international associations. These memberships are considered strategic because they help Brave Heart IC us define patterns of cooperation and exchange ideas on key banking issues on (Table 1). More specifically, these Skoun Kunhadi partnerships reflect our aspiration to be fully integrated within the various markets in which we operate, by offering St. Georges Hospital Red Cross our bank an opportunity to keep up with the latest trends, knowledge and techniques in the business. We regularly participate in workshops and gatherings organised by these associations, which help us stay tuned to the latest innovations and address relevant challenges and concerns, hence contributing to the improvement of the banking sector as a whole. Most of all, our partnering strategy has allowed us to stay abreast of best practices in the field and to constantly refine our understanding and practice of core banking areas such as governance, control, risk management and others.

16 17 01

Corporate Governance

18 19 Corporate Governance

Bank Audi is one of the largest banks in Lebanon in terms of number of employees and customers, which has led us to realise Through the stewardship of our Board, the various We also integrate the recommendations of international that we need to contribute to the financial infrastructure necessary to a well functioning society. Our main impacts are through committees we have put in place and the supporting policies industry groups including: our relationships, products and services. As for issues of sustainability, they are at the heart of our business and closely tied and processes, we are confident to deliver the highest The Financial Action Task Force (FATF) – Non-binding/ to the Bank’s core operations. We are cognizant that our success depends primarily on the ability to maintain the trust of levels of quality and accountability to clients, shareholders voluntary turns to mandatory when replicated in local laws our stakeholders. This is where our Corporate Governance framework and the checks and balances we have put in place and stakeholders at large. We expect our executives and regulations. have allowed us to develop a full fledged compliance, control and risk management culture that is crucial for strengthening and employees to act with courageous integrity, to be The European Union (Directives) – Non-binding/voluntary, confidence in the various facets and operations of our bank. dependable and reliable, to take the right decisions, and to mandatory for entities established in the European Union. be responsive to the needs of our customers, employees The Basel Committee on Banking Supervision – Bank Audi’s Board of Directors plays an active role in supervision, compliance, audit, remuneration, evaluation, and communities. Governance is thus the foundation pillar Non-binding/voluntary. keeping abreast of key developments and ensuring succession planning, budgeting and capital management. that sets the tone for the quality of our interactions, services The Egmont Group – Non-binding/voluntary. sound governance. The Board consists of up to 12 Particularly noteworthy is our long standing Code of Ethics and relationships with internal and external stakeholders. The Wolfsberg Group – Non-binding/voluntary. members (currently 10) elected by the General Assembly and Conduct (Appendix 1) which highlights the Bank’s Not only was it revalidated as a core CSR pillar in 2013, The international standards set out by major global of shareholders for a term of 3 years. Its responsibility is dedication and commitment to the highest ethical standards but it was also reclassified as a bedrock that provides the correspondent banks and their regulators – Some are to ensure strategic direction, management supervision and in business and guides the behaviour of its employees and baseline standards of behaviour across the Bank’s various mandatory for Bank Audi Group Lebanon as per BDL adequate control of the company, with the ultimate goal of stakeholders across its subsidiaries, branches and affiliates. operating units. Circular 126. increasing the long-term value of the Bank. Many of the principles embodied in this Code of Ethics and Conduct have been reiterated and captured in the Bank’s Furthermore, we subscribe to a number of externally Bank Audi also abides by all the Banque Du Liban’s Our Corporate Governance Guidelines are accessible on CSR Policy that was formally adopted in 2012 (Appendix developed economic charters and principles which provide (BDL) Banking Control Commission (BCC) and Capital the Bank’s website at www.banqueaudi.com 2) and outlines a proactive, cooperative and collaborative helpful guidance across various facets of our banking Market Authority (CMA) regulations, the most important mode of commitment to integrate social and environmental operations. For instance, our group Anti-Money Laundering of which include the Authorisation for Lebanese Banks’ Further details of our Governance framework and the concerns in business operations and contribute to social & Combating the Financing of Terrorism Policy (AML/CFT) and Foreign Banks’ Branches, Corporate Governance, composition of the Board of Directors, including recent well-being. In 2013, we have also formalised the mandate meets the principles and requirements set out in the Banking Standards and Ratios, Operations on Financial changes to these, are available in the Bank’s Annual Report, and scope of our CSR Committee through a precise charter AML/CFT laws and regulations of the various jurisdictions Instruments and Business Continuity Plan (Table 2). Page 10. illustrated in Figure 7. We have also gone a long way in where the Group operates, which are mandatory at the In addition to local regulations, we also abide by the institutionalising CSR in the Bank’s core operations through local level. International Accounting Standards and were requested by The Corporate Governance framework of Bank Audi also our updated tracking sheet, in addition to an obligatory BDL to comply with Foreign Account Tax Compliance Act encompasses a number of policies, charters, and terms of requirement within operating units’ workflow to assess (FATCA) requirements. reference that shape the conduct of our bank in terms of risk whether a project has a CSR component or not.

Table 2 - Regulations to which Bank Audi Group Lebanon Subscribes

Corporate Governance Reserve Requirements Information Technology and security Figure 7 | CSR Committee Charter Compliance function Loans (credit limits, loan classification, related Electronic Banking parties' transactions, bad debts and constitution of provisions, properties acquired in settlement of debts) Discuss, design and update the overall CSR strategy for Bank Audi Audit Function Credit transparency Investments Risk Function Business Continuity Plan Operations on Financial Instruments Disclosure Scientific, technical and ethical qualifications required International Bank Account Annually review the Bank’s CSR policies, programs, activities and performance for performing certain functions in the banking and Number (IBAN) financial sectors Capital Adequacy Accounting Standards and Financial statements Off-balance sheet accounts Set annual KPIs and operational targets for CSR Related Party Transactions Shareholders' equity (capital, reserves, reserves Relationship between banks and Examine the potential of new and conflicts of interests for general banking risk, other reserves, profit/loss financial institutions and their CSR projects as proposed carried forward) correspondents Liquidity Banking Standards and Ratio Other regulations governing all areas of Banking Activities Report on the Bank’s CSR initiatives on an annual basis

20 21 Corruption risk mitigation falls under the scope of the the risk registry of Compliance and controlled through the Special Feature Story Compliance department and is controlled through KYC KYC monitoring processes. All our contracts communicate (Know Your Customer) and monitoring processes at Bank and make reference to the anti-money laundering law Audi Group Lebanon. The Compliance department is promulgated by the Lebanese Central Bank. Along the same Organisational Governance responsible for these controls and for raising awareness at lines, all transactions are analyzed for risk of corruption. from an ISO 26000 Perspective employee levels. Risks related to corruption include the risk Furthermore, our anti-corruption policies and procedures of kickback and the risk of bad reputation as a result of have been communicated to all our governance body ISO 26000 has been instrumental in guiding our steps in objective that we expect to achieve. No amount of interest dealing with corrupt customers. The risk of kickback is the members and employees. It is worth noting that 62% of our the field of CSR and Sustainability. From an ISO 26000 can compensate for the loss of principle or reputation that risk that an employee might get some retrocession from a governance body members (37 out of 60), 67% of front-line perspective, Organisational Governance refers to the is an important asset, the risks of which we consciously counterparty, usually a borrower. This is a risk that we try to employees (1342 out of 2010), 79% of Middle Management systems, structures and processes – whether formal or manage. mitigate through the Credit Policy, but that remains nearly (396 out of 500), and 19% of Senior Management (5 out of informal – by which an organisation makes business decisions impossible to control in terms of following the money trail. 26) have received training on anti-corruption. Hence, 68% including decisions pertaining to social and environmental The updated credit risk management framework is based on The risk of dealing with corrupt customers may cause severe of our eligible employees have been adequately trained on responsibility. We are proud to make systematic progress in a number of core principles that define Bank Audi’s credit reputational and regulatory liabilities and is monitored under anti-corruption. the field of governance as per ISO 26000 guidance year after culture. These principles revolve around one main issue: our year. In 2013, governance-related regulations and practices overall risk appetite is approved by the Board of Directors in continued to evolve with a broadening scope, especially accordance with our capital, funding and earning capacity. Table 3 - Total Number and Percentage of Employees who Received in Lebanon and the other countries of presence of Bank Training on Anti-Corruption by Category Audi Group. Accordingly, our Board continued to monitor its ISO 26000 guidance was also instrumental in revising our governance practices against best practice guidelines and Code of Ethics and Conduct in 2012 in order to integrate Anti-corruption Total Employees applicable regulations. It also successfully carried out and an explicit statement on human rights, namely: “The Bank Training Eligible for Training Percentage drew actionable conclusions from a formal evaluation of its endorses and supports internationally recognised principles practices and effectiveness. Changes introduced during under the Universal Declaration of Human Rights which Total 1743 2536 68% 2013 to the Governance framework of our Group include promotes a global respect for human rights and fundamental the adoption and/or modification of a number of policies, freedoms for all, without distinction of race, national or Senior Management (Grades 22 and above) 5 26 19% at both Group and country levels, notably in the areas of social origin, colour, gender, language or religion.” compliance, disclosure and social responsibility. The Board Middle Management (Grades 17 to 21 Inclusive) 396 500 79% and the various committees are meticulous in carrying out ISO 26000 guidance also largely contributed to the Bank their mandate of overseeing the management of the Bank. being more explicit about the importance of human rights Employees (below Grade 17) 1342 2010 67% The Board is thus satisfied that, in 2013, it fully discharged when dealing with its suppliers. In this respect, we have all its responsibilities as mapped in its yearly rolling agenda added the following statement in all requests for quotations and acted on the recommendations of its committees which within our procurement contracts: “Bank Audi is entitled also substantially discharged all of their own responsibilities. to favour suppliers who, through their business practices, recognise and abide by the Universal Declaration of Human To reiterate our commitment to the precautionary principle, Rights, are in the process of implementing eco-friendly our revised Institutional Bank Credit Policy & Procedure initiatives with the planet’s best interest in mind, fight Manual (IB-CPPM) was approved by the Group Executive corruption and generally aspire to adopt the ISO 26000 Committee in 2012. The IB-CPPM provides common credit Social Responsibility Standard’s Guidelines as part of their principles, policies and procedures across the Group to build business strategy.” a strong credit culture. It governs the extension of credit to all clients within the Bank’s Corporate and Commercial On a parallel note, ISO 26000 guidance was helpful in Banking activities. In the same spirit, we have updated our revising our Health and Safety Action Plan, whereby we Environmental and Social Management System (ESMS) to included the following KPIs which are currently in full ensure that we are dedicated to reducing our operational implementation, namely: footprint, actively managing environmental and social risks Emergency kits, emergency evacuation drills, emergency (i.e. responsible financing for client transactions), and evacuation signs. promoting environmental business opportunities. Food and water checks (contamination risk). Joint Management-Employee Committee proactively We recognise in this respect that a robust credit process is overlooking these issues. an important element in our governance framework and one Clear display areas, training reports and committee that contributes to our success. One of the key objectives minutes of meeting (KPIs). of risk management is to identify, measure and manage risks which have an impact on the Bank’s operations, Last but not least, ISO 26000 guidance was instrumental assets, earnings and capital. To serve our customers and in the instigation of our Carbon Footprint Measurement ensure a satisfactory return to the Bank’s ownership, we process which is reported in detail in the Environmental must balance the risk that we are willing to take with the Protection pillar.

22 23 02

Economic Development

24 25 Economic Development

We aim to contribute to economic growth and revitalisation by creating new jobs and employment opportunities on the one who also exclusively represented Lebanon at the Global “Grow my Business” 2013 winners receiving their prize hand, and enabling small businesses to thrive and our local economies to prosper on the other hand. We acknowledge in this Entrepreneurship Summit in Malaysia, encompasses respect that we do not operate in a vacuum and that our success is intricately tied to the health of the economic environment entrepreneurial clinics, providing customised training to around us. Accordingly, we serve as a powerful economic driver not only through the varied and multiple contributions to entrepreneurs by matching them with relevant experts, employment, taxes and GDP, but also through a range of well selected and tailored initiatives which serve the needs of the bringing together investors, consultants and students, In another dimension, we initiated the “Clear All the Way” Lebanese context. and granting financial awards to the best emerging campaign, an original campaign praising transparency entrepreneurial projects. In view of the various benefits of in banking and intended to provide our customers with a the program, the Bank committed to support Bader with series of useful tips in relation to a multitude of products For example, in 2013, despite an economically challenging crafts and technology). Interest rates are subsidised by USD 200,000 in 2013. and banking services. Apart from the fact that this campaign context, we managed to sustain positive assets growth the Central Bank and thus offer borrowers favourable promotes transparency, one of Bank Audi’s core values, at 15.7%, improve our risk coverage, and reinforce our conditions, with the aim of encouraging investment and In 2013, we continued to support the Association for it is live proof that we also seek to enhance the financial distinguished financial standing across domestic banking production in Lebanon. Beneficiaries of Kafalat loans will the Development of Rural Capacities (ADR), particularly literacy of our customers, of people in general, and of the entities. Our consolidated assets rose by USD 4.9 billion accordingly enhance their production by acquiring new its programs of microfinance loans extended to the community as a whole. In fact, it presents an opportunity to in 2013 to reach USD 36.2 billion at end-December 2013 or used equipment, renovating or expanding a plant, underprivileged at significantly reduced interest rates. ADR improve the sophistication of our customer base, as well as (of which USD 20.8 billion in Lebanon). This growth in purchasing raw material to finance their working capital, is a Lebanese non-profit organisation established in 1998. its ability to make use of our products and services and to assets was particularly owed to customers’ deposits which and cover various construction, marketing, and research Its mission is to empower and integrate marginalised people mitigate critical financial risks. The “Transparency Banking grew by 16.0% in 2013, i.e. the equivalent of USD 4.3 and development costs. through sustainable economic and social development. ADR Tips” campaign, which was produced in Arabic to cater to billion, moving from USD 26.8 billion at end December 2012 seeks to improve access to training tools and financial the needs of Lebanese locals, thus alerts customers to key to USD 31.1 billion at end-December 2013 (of which USD Other initiatives that are tailored to support SMEs include the services among these disadvantaged groups, and or critical issues they need to be aware of when dealing 19.1 billion in Lebanon). “Grow My Business” competition, launched in collaboration facilitate support for income-generating projects. with banks. with the Beirut Traders Association and the MIT Enterprise Beneficiaries are fishermen, farmers, small entrepreneurs, By end-December 2013, we were able to secure Forum – Pan Arab Region. 2013 was our third year of women and the youth from the most impoverished areas in Another example of “educating” customers is the “e-gallery” USD 1.07 billion in total operating income, with total involvement in the “Grow My Business” initiative which is Lebanon. In 2013, we supported ADR through contributions which informs our cardholders about the newest payment operating expenses standing at USD 600 million and intended to help a selection of Lebanese SMEs to grow which helped over 365 beneficiaries, in addition to granting trends and technologies, as well as various “All You Need our total capitalisation in terms of debts and equity at to the next level by presenting their proposals to a jury a credit line charging a very low interest rate to micro credit to Know” initiatives such as “All You Need to Know about USD 3.1 billion. composed of prominent figures and experts. The selection program. The average loan size through the Audi credit line PayPass” and “All You Need to Know about chip cards”, process went from an initially large pool of applicants to for ADR beneficiaries was USD 2,175. In terms of loans, we which update cardholders on the latest features offered by At a national level, we comply with regulatory tax a short list of 25 semi-finalists, then a shorter one of 12 also maintained our support to Maak Microfinance Loans, their cards. policies and have paid our dues to the government in finalist teams with impressive business plans, and to one which helped 170 families across various economic sectors the form of taxes: USD 45 million for 2013, in addition to winning team whose name was announced during a press including farming, cattle and agriculture, tailoring, snacks, It is worth mentioning that our customers are served by USD 11.7 million in personal income taxes withheld from conference held on October 22, 2013 at Bank Audi Plaza, beauticians, and even school and university scholarships. managers who understand their needs. In this respect, we employees’ salaries and forwarded to the Ministry of and who won the equivalent of a USD 33,167 prize to are proud to report an outstanding record: the percentage Finance. We generate employment for 2890 employees further develop their company, thus reiterating Bank Audi’s In the core economic sphere, our bank offers a diverse of Senior Managers and heads of units who are hired and contribute to the Lebanese economy through commitment to supporting SMEs despite the challenging range of products and services which are continuously from local communities is nearly 100% (Table 4) for Bank payment of employee salaries (USD 81 million) and social economic situation in the country. reinvigorated to meet customer needs. These reflect a total Audi Group Lebanon. This illustrates our unwavering security contributions (USD 13 million). As such, our number of 98,205,129 transactions, a total of 50 products, commitment to the economic development of the total contributions have amounted to 1.7 % of Lebanon’s A similar initiative is our ongoing support to the Bader and a total of 73 services for 2013. communities in which we operate, and proves that the GDP in 2013. Young Entrepreneurs program which comprises three key Bank tailors its services to the needs of local communities. components revolving around education (workshops) for Furthermore, 14% of Bank Audi branches (10 branches out Aside from our core employment, salaries and taxes, young entrepreneurs, creating networking opportunities, Figure 8 | A Spectrum of Bank Audi's Brands, of 72) and 15% of Bank Audi Automated Teller Machines we also serve as a powerful economic driver in the local and financing the best entrepreneurial ideas. In 2013, Bader Products and Services “ATMs” (28 out of a total of 188) are located in remote areas. economy through various smaller interventions and targeted launched its “Startup Cup” in the context of which over programs that help stimulate entrepreneurship and job 100 applications were received, with 8 ecosystem partners creation. We are specifically keen on extending a helping on board and 27 judges selecting the top 3 ideas to grow Current Spring Saving Online 24/7 Gold Doctors’ hand to small and medium-sized enterprises (SMEs) which participating startups into potential investment startups. Account Account Account Payment & Platinum Loan constitute a key player in the local economy. SMEs are The program also hosted Global Entrepreneurship Week not only critical backbones of the Lebanese economy, but Lebanon 2013 where 50 entrepreneurship activities were Audi Cards Kafalat Foreign Fiduciary Bill Payroll also a salient stakeholder in our bank since they constitute held in November and which gathered 1,300 attendees Online Loans Exchange Deposits E-Pay Account 60% of the total number of clients and around 13% of the overall. Another noteworthy program in 2013 was total volume of transactions at end-2013. In this context, “Coworking 961” which consists in a group of 10 startups we have maintained our support to Kafalat loans which are attending 20 workshops and a range of events impacting Order Home Insurance High Tech extended to SMEs operating throughout Lebanon, with on 400 entrepreneurs. The project resulted in 3 major Execution Loans E-Gallery Programs Loan Advisory innovative start-ups or environmentally efficient initiatives in startup investments that benefited from USD 1.1 million energy intensive sectors (e.g. industry, agriculture, tourism, which contributed to their regional expansion. Bader,

26 27 Table 4 - Percentage of Senior Management at Significant Locations Special Feature Story of Operation for Bank Audi Group Lebanon Spring Account - The Bank Count Senior % of Senior Count Senior Management Hired from Local Management Hired from Local Account for the Youth Management Communities Communities The Spring Account, launched in 2013, is a current account Audi Investment Bank sal 3 3 100.00% that meets the needs of the vibrant youth generation between ages 18 and 23. The Spring Account gives young Audi Private Bank sal 9 9 100.00% adults the chance to access their money anytime, anywhere, Bank Audi sal 51 50 98.04% and to get a bundle of benefits, offers and discounts. This is part of a larger effort from Bank Audi to be as inclusive and Average 99.35% friendly as possible in its banking services, and to spread a spirit of responsible banking among various segments. By catering to the specific needs of the youth, the Bank hopes As for our supply chain, it involves three important players, Monitor reaches 10,000 readers per issue. Moreover, we to nurture responsible banking, and to develop customer namely our customers, our suppliers, and multilateral are one of the main sponsors of banking conferences in the loyalty and long-term relationships with its clients. institutions. We recognise that our customers and country, including various banking and youth empowerment depositors are the drivers of our business and we go the events: in May 2013, we gold sponsored Al Iktissad Wal The Spring Account has recorded the following important extra mile to give them priority attention and quality service Aamal’s Arab Economic Forum conference which attracted achievements/milestones in 2013: across all banking transactions. In the case of our suppliers, 600 participants from 32 countries. We also extended our we have a delicate supply chain process defined by support to Al Iktissad Wal Aamal’s Turkish Arab Forum Current accounts opened for customers between ages 18 expense managers, procurement channels, and an explicit conference in Turkey. Other sponsorships included the Union and 23 increased by 217% from 2012 to 2013 after the procurement policy which outlines the rules and regulations of Arab Banks’ conferences in Lebanon and in Turkey, Al launch of the Spring Account in May 2013 (official launch that govern the purchasing process. All purchased goods Bank Wal Mustathmer’s Future Vision conference, the Beirut in October 2013). and services should be acquired in a fair, transparent, Arab University Center for Entrepreneurship conference, A Facebook page was opened for the Spring Account and competitive, timely and efficient manner. To make our the Harvard Arab Alumni Association conference, and the gathered more than 24,000 fans. 85% of “likes” are from commitment to CSR and human rights as explicit as conference of the Association of Banks in Lebanon. Other people between ages 18 and 23. possible, we have recently added the following statement to relevant events were our contribution to the Association of A website was created for the Spring Account and had all supplier requests for quotations within our procurement Lebanese Industrialists conference on the occasion of the more than 4000 registrations in 2013. contracts: “Bank Audi is entitled to favour suppliers who, National Day of the Lebanese Industry, the annual reception Bank Audi branches located next to universities were very through their business practices, recognise and abide by the of the International Finance Conference (IFC) in Dubai, the proactive in terms of attracting Spring Account customers. Universal Declaration of Human Rights, are in the process annual reception of the Lebanese Franchise Association, The top 10 branches in terms of sales are located next to of implementing eco-friendly initiatives with the planet’s the General Union for Chambers of Commerce, Industry universities. best interest in mind, fight corruption and generally aspire and Agriculture for Arab Countries conference in Amman, 87% of our Spring Account holders are students. Youth financial literacy to adopt the ISO 26000 Social Responsibility Standard’s the Arabnet 2013 annual event, in addition to the First Approximately 60 open door events promoting the Spring Guidelines as part of their business strategy.” More Protocol Social and Economic Awards conference and Account took place in 8 months. broadly, we maintain good relationships with all suppliers, ceremony. All in all, we contributed with over USD 600,000 80 Spring Account ambassadors were recruited between founded on a monitoring of historical performance, as well to these events, all of which have positive spillovers on the September and December 2013. as product and service quality. Finally, we engage with Lebanese economy through advancing knowledge and several multilateral organisations and international financial building a more robust financial sector. institutions which invariably provide important guidance to the Bank and help us secure medium and long-term funding All responsible business initiatives implemented under the in support of small and medium-sized enterprises (SMEs) Economic Development pillar are an integral part of our which form the backbone of the Lebanese economy. CSR strategy and constitute an extension of the Bank’s now Agreements are in place with the European Investment renowned slogan: “Grow Beyond Your Potential”. In 2013, Bank (Luxembourg), Agence Française de Développement we initiated various worthwhile initiatives which support (France), SANAD Fund for MSME (Luxembourg), Arab entrepreneurship and innovation. We also established a Trade Financing Program (UAE), and Overseas Private robust partnership program which connects small businesses Investment Corporation (US), allowing the Bank to serve with entrepreneurial support mechanisms, incubators and more than 100 SMEs for an aggregate amount of around accelerators, providing material and intellectual capital, USD 300 million. as well as complementary competencies, with a view to cultivating small startups and businesses that help spur Through our various economic reports, we continue to serve economic growth and job creation. Hence, via well selected as a credible source of economic information at the national collaborative programs, we are working, step by step, to and regional levels; for instance, the Lebanon Weekly positively impact the revival of the Lebanese economy.

28 29 03

Community Development

30 JIF 2014 Photo contest by Jad Safi 31 in 2013 USD 1.7 MILLION to support social and religious organisations > USD 530,000 Community Development to support cultural events

In line with our pledge to support economic development and our efforts aiming at promoting healthy ecosystems, we USD 520,000 have further developed and extended our Community Development pillar, targeting the areas of health, humanitarian to support medical causes and social support, culture and sports. Besides seeking to make a positive difference in the communities around us through a spectrum of donations and sponsorships, we rely on the valuable volunteering and fundraising efforts of our employees. We also mobilise various types of partnerships to enhance our reach and help build stronger local communities. 71% Our total contributions to the community amounted over USD 2.75 million and are divided as such: USD 520,000 on health, of existing branches made accessible by ramp USD 1.7 million on humanitarian and social, and USD 530,000 on culture. Humanitarian and Health Social Initiatives

In the domain of health, we continued our long-standing to our community in general and to our fellow Lebanese 2013 also saw a renewal of our active engagement towards emphasis on issues related to women qualifications and partnership with the Children’s Cancer Center of Lebanon citizens. In this context and like in 2012, we provided worthy humanitarian and social initiatives, particularly those women rights. We also partnered with Yaduna – Women (CCCL) and were keen on supporting its mission of hope full financial support for the treatment of 5 diabetic and with a clear impact on the well-being of the community or Heart Heath Center, a non-profit organisation with a mission and healthy future for children in Lebanon. During 2013, thalassemic children at the Chronic Care Center; we of disadvantaged groups in the community. To name a few: to empower underprivileged Lebanese and Arab women and we provided funds to cure almost 3 sick children with the funded the Brave Heart Fundraiser events (Brave Heart is a Hôpital Tel Chiha, the King Hussein Cancer Foundation, improve their living conditions by providing quality services, participation of employees and clients through customer volunteer initiative benefiting children with congenital heart Hôpital St. Joseph, and various smaller community health raising awareness and spreading best practices. We also surveys and loyalty points. disease and providing assistance to needy families), the organisations with generous donations. In 2013, we also contributed to International Women’s Day, whereby our Skoun fundraiser gala dinner (Skoun is a Lebanese NGO gave our support to the Lebanese Red Cross, in addition to Retail department offered a branded photo frame to female We also renewed our support to Heartbeat, a humanitarian committed to bringing life, health and hope to drug users employee donations in lieu of Secret Santa gifts, the Amar customers and colleagues to celebrate Women’s Day. and charitable organisation with the mission to make and their families through a sustainable treatment model), International Charitable foundation to run a drug awareness surgical technology available to needy children to facilitate and SESOBEL, in addition to the Institut de Rééducation session targeting the Bank employees’ teenager children, With regard to children’s rights, we took part in a national the treatment of 25 children with congenital heart problems. Audio-phonétique (IRAP) and Ahlouna through end-of-year and Anta Akhi whose mission is to educate teenagers workshop on CSR and Child Labour on October 22, gifts that we purchase from these organisations to help with Down syndrome. We also took part in Cénacle de la 2013, which was organised by the International Labour We are also committed to the other partnerships we support their respective missions. Lumière’s special concert to raise awareness on the harms Organisation (ILO) in partnership with the American had initiated in 2012, that had proved to be beneficial of drug use. Furthermore, our employees participated in a University of Beirut (AUB) and the Association of Lebanese blood donation campaign in 2013, whereby they channelled Industrialists (ALI), and during which we were exposed to 62 calls for blood donations to various colleagues and a variety of programs aiming at helping street children in their families. Lebanon. Bank Audi was selected as a model case for CSR in Lebanon during the workshop. We also reached to In the same context, we adapted some of our facilities to our own employees’ children through multiple programs: improve the access of potentially disadvantaged people to on Universal Children’s Day in March 2013, we invited our branches: today, our Branch Network Management is in them to an exclusive preview at the movie theatre. On a the process of adding ramps to branches and ATMs, following parallel note, 72 Bank Audi employees and their children Management’s firm decision to make all new branch ATM participated in the “My School Pulse” 5 Km walk to raise machines fully accessible to physically challenged people. funds for this non-profit organisation which seeks to bring In 2012, 5 branches hosting an aggregate 7% of total ATM school education to hospitals, and attends to the needs of machines were provided with disability access, and in children undergoing treatment for life-threatening illnesses. 2013, 51 branches representing 71% of existing branches were made accessible by ramp, with their ATMs. This will Furthermore, the “Donate your Points for a Good Cause” continue to be an important social consideration for our initiative was initiated in 2012 as an extension of the Audi bank going forward given our increasing and unwavering Rewards Program with a view to encouraging Bank Audi commitment to CSR issues and priorities across our core cardholders to donate their points to support one of twelve business operations. national humanitarian associations such as Skoun, AFDC, Jouzour Loubnan, The Lebanese Red Cross and Balsam. Active steps were also taken to tackle various social issues The Kids Rewards Program was also launched in 2013 in like women’s and children’s rights, among others. With order to reach out to our customers’ children. This program, regard to women’s rights, we participated in the Women’s the first of its kind in Lebanon and the Arab world, uses five Challenge Marathon, a national marathon dedicated to cartoon characters (Figure 9) to raise children’s awareness women for the benefit of the National Commission for on the action of giving and on donations. In this respect, Bank Audi employees running for the Children Cancer Centre of Lebanon Lebanese Women, a Lebanese foundation seeking to 2013 saw 80,000 subscribers donate a significant amount to enhance the status of women in society, with particular the various NGOs affiliated with the Audi Rewards Program.

32 33 Figure 9 | Bank Audi's Kids Rewards Program Characters Figure 10 | "Be a Hero for a Day" Volunteering Program Examples

Ayadina | 2 hours of football training every Saturday for 15 children | IT consultations | Audi Saturdays: Cartoon training - Storytelling - Painting - Handicraft - Cooking

Assabil | Opening the library every first Sunday of the month | Establishing a Film Club In the realm of children’s development, Bank Audi’s funds of over USD 1,000,000 via our GPRS machines | Storytelling and various activities for children partnership with KidzMondo gave rise to “A Children’s deployed at event premises where our employees were World” in 2013. KidzMondo is a replica of a real city located representing the Bank and assisting guests with their at the heart of the Beirut Waterfront, where children play payments and addressing any inquiry they might have. the roles of adults in preparation for the real world. Bank ULYP Audi implemented a banking branch with the objective of teaching children the importance of working, earning a | Soft training and presentations attended by 25 young participants living and spending wisely, as well as of introducing them to Bank Audi branch at KidzMondo to for 4 consecutive Saturdays enhance children's financial literacy the world of banking including cash outs, deposits, saving money, and using credit cards and ATMs. This is part of a broader sustainability goal for Bank Audi, which consists in increasing financial literacy among various community segments including our current, future and potential CCCL customers. Commenting on the new initiative, the General | Entertaining in-patients: Handicraft - Show - Magician Manager of Bank Audi Lebanon underlined the Bank’s commitment to promote financial literacy and educational opportunities in Lebanon through pioneering initiatives such as KidzMondo.

We also reached out to various local non-governmental organisations (NGOs) that support children and their SOS well-being, including Tamanna, a non-profit association Employee Volunteerism | Board games afternoon that grants the wishes of children with critical illnesses; the Phillipe Hatem Foundation whose purpose is In 2013, we capitalised on our employees’ inherent to bring happiness to as many children as possible volunteerism and took a courageous step to initiate around the world; and Himaya, an NGO with the and formalise the “Be a Hero for a Day” initiative, a local mission to promote a global protection of innocence volunteering program launched in September 2013 in in danger. partnership with five NGOs, namely Ayadina, Assabil, CCCL, SOS Villages d’Enfants and ULYP (Unite Lebanon Youth As for Maxime Chaya, the first Lebanese athlete to climb Project). Through the piloting phase of this program and within In 2013, we also sustained our pledge to the UN Decade Mount Everest, Bank Audi’s Corporate Ambassador and three months of its inception, we tried to formally extend our of Action for Road Safety, in partnership with Kunhadi, an a symbol of strength and endurance for our country, he tradition of volunteerism and community service, mobilising NGO which seeks to educate the new generation on road continued to represent the Bank in various events and the involvement of 4 departments and 23 volunteers who safety. This partnership was intended to amplify the number conferences conducted in schools and universities across contributed with over 120 hours of their time in support of of community pledges in the context of the “Conscientious the world, delivering motivational speeches to the youth. various causes. Roughly speaking, our volunteers contributed Driver” campaign, a number which exceeded 8500 since to train 15 children in football at Ayadina, to storytelling and inception. In parallel, support was maintained to various Last but not least, we are striving to link our business supporting library services for children at Assabil, and to national foundations including the May Chidiac Foundation processes to our community development efforts through providing soft training and presentation skills for the youth which is dedicated to research and education on media, our various business units by innovating in a range of at ULYP. These experiences were equally rewarding to press, democracy, and social welfare issues, and the Samir programs which support worthy social causes. For instance, both our employees and beneficiaries, which encouraged Kassir Foundation which brings together journalists and our e-Payment Solutions and Card Services department us to formally institutionalise and scale this volunteering intellectuals with a passion for reviving Arab culture and participated in 10 events, helping the collection of donation program in 2014. protecting freedom of expression.

34 35 Culture Special Feature Story

In the cultural realm, we sponsored several several key consisting in rewarding francophone literature – which cultural initiatives including the Beiteddine Festival, Byblos was awarded to writer Wajdi Mouawad for his latest novel, Bank Audi Covers the Education Festival, Baalbeck Festival, Al Bustan Festival, Zouk “Anima”. The year was also marked by the “One Blood” of Red Cross Martyrs’ Children Mikhael Festival, Jounieh Festival, and Batroun International exhibition held at the UNESCO Palace and Zaitunay Bay Festival, in addition to various smaller events and local after Perpignan (France), and intended to show “unity Salma writes a letter to her deceased husband, Maher, a festivals like the Faqra Club Street Circus and Exhibition, in diversity” through the art of photography focusing on Martyr from the Lebanese Red Cross and the Antelias Book Festival. 2013 also witnessed the blood. Total contributions to cultural happenings exceeded annual “Prix Phénix de la Littérature” – an annual tradition USD 500,000 in 2013, benefiting over 300,000 beneficiaries. My dearest Maher,

Cultural Festivals Sponsored by Bank Audi It has been eight years since your tragic accident. A day so God has rewarded you for all the good that you have done vivid in my memory that my heart still strikes out every time for this country, for your passion and for your commitment, I recall the incident and the fear that struck me the moment by unexpectedly blessing your family with a guardian angel I realised the responsibility that befell on my shoulders: that has been a strong pillar and sounding board in a difficult raising two little children on my own: Kareem and Malek journey, providing both financial and spiritual support. who had a long road ahead of them. Little did I know that I was not alone in this journey and that I am very grateful for Bank Audi and the support it has a guardian angel was watching over the family. Two days given us, and I owe my children’s success to the Bank’s after you were abruptly taken away from us, I received a call benevolence and spirit of parenthood. Without them, I from a representative from Bank Audi asking to visit me for would not have seen my Malek be the successful engineer condolences. he is today, or my patriotic Kareem reside in the arms of his country’s army. During his visit, he expressed his concern for our children’s future; that was visible from his tone and questions. He I know you are watching over us and safe guarding our lives inquired about their plans and aspirations. I answered with your tranquil smile. Sports with deep remorse, thinking that my children’s dreams had evaporated into thin air… Malek wants to become May your soul rest in peace. At Bank Audi, we regard sports as a crucial complement of Figure 11 | A Spectrum of Community Development Initiatives an engineer and Kareem aspires to join the army. To my a healthy lifestyle and a healthy community. We therefore surprise, towards the end of his visit, the representative We will miss you forever, continued supporting athletes in their passionate drive, conveyed Bank Audi’s offer to cover all of Kareem and particularly those whose potential allows them to represent Malek’ educational expenses. Salma Lebanon at the international level. In 2013, we extended our support to the Beirut Marathon Association for the Beirut Bank Audi granted our children full scholarships, along with International Marathon to “Tourisme et Sports d’Hiver Mzaar” a savings account that will mature by the time they reach for the Mzaar Summer Festival, and to the Lebanese Ski college. The latter was a generous donation from Bank Audi, Federation. one of many that are offered to our community, instilling Culture hope in the youth and providing them with the means to As a leading player in the country’s economy, we are fully ExhibitionsFestivals committed to promoting the wellbeing of the communities we fulfil their dreams. serve. This is grounded in a holistic understanding of CSR Health MusicArt Sponsorships of medical organisations where the social bottom line and community wellbeing are Donations for patient treatment Fundraisers central considerations. As shown in Figure 11, our community development initiatives spread across the entire social landscape and aim at building stronger and more resilient communities. In 2013, we continued to deploy a balanced portfolio of community investment projects attending to health, social and humanitarian issues in such a way as to craft a buffer of social and coping skills while preserving Humanitarian/Social Human rights heritage and culture. As illustrated, those projects cover Social aid all regions and are deployed in collaboration with trusted Social causes local partners to ensure effectiveness and reach the most vulnerable and disadvantaged community groups. In this Bank Audi’s respect, we are fully cognisant that the long-term success of Community our business depends on proactive community engagement and on building a sound and healthy social and cultural Development context around us.

36 37 04

Human Development

38 39 Human Development

We recognise the importance of developing human capital and cultivating talent development. In line with our 2012 strategy Performance Appraisal/ to be a leader in human development, we have propelled this pillar forward in 2013 to further embrace various elements of human development at the internal and external levels. Internally, we are keen to develop our human capital, considered Management as our most vital asset, and to invest in our employees’ well-being and skill development within a culture of continuous motivation and empowerment. Externally, we are major supporters of youth education and empowerment, and a strong Assessment constitutes another important facet of employee believer in the promise of the youth who constitute the most important raw material for future leadership, entrepreneurship development at Bank Audi. Employee assessment revolves and innovation. around providing feedback to employees about their communication style, skills, behaviour and performance. Our performance appraisal process is therefore developmental in content and approach. It is less intended to pass judgment Training and Development and more focused on nurturing talent and potential while identifying areas for growth. The performance appraisal We acknowledge and comprehend the importance of Implemented learning programs aim at assisting employees tools we have adapted include a description of key job employee development as a vital component of our in upgrading their competencies and abilities in areas responsibilities, the identification of smart business goals institution’s efforts to improve quality, retain talent, meet related to technical skills (such as banking, finance and for the past period, and the assessment and nurturing external environmental pressures relating to competition economy, human resources, information technology, of key competencies revolving around customer focus, and constant change, and incorporate key advancements languages, legal, regulations, AML & fraud, retail and risk communicating with impact, adaptability, self-development, in technologies and work design. Accordingly, we management, as well as languages) and to soft skills (such teamwork and risk awareness. They also include a section have developed a three-tiered approach to employee as managerial and organisational behaviour, leadership, identifying training and development needs, as well as goals development founded on training and development, negotiation and conflict resolution, communication, and objectives for the coming period. This performance continuous assessment, and coaching and mentoring teamwork, employee wellness, cultural development, and in 2012 in 2013 appraisal process applies to all Bank Audi Group Lebanon’s (Figure 12). general management). Furthermore, we provide transition 1.2 MILLION employees, staff, Middle Managers and Top Managers who assistance programs in order to facilitate continued USD USD 2.6 MILLION have a yearly performance and career development review. in training in training employability and the management of career endings In addition, our employees are encouraged to file complaints due to retirement or termination of employment, such related to any sort of work situation that causes distress, as the Management Development Program, Advanced among which concerns regarding work, working conditions Management Program, and Special Development Programs and relationships with colleagues. The latter is founded on which are restricted to specific positions. 2012 the Grievance Procedure which is at the core of the Bank’s Bank Audi employees trained Employee Handbook. These trainings have led to a ratio of successfully trained employees to total employees of around 81%. In this respect, we have developed a portfolio of in-house 80% Talent Management training schemes including the “Bank Audi Corporate Academy” which aims at nurturing skills and talent To nurture a pipeline of future talent, we have also and creating a culture of performance and continuous established the Talent Assessment Center (TAC) in 2013. improvement. The TAC is an advanced assessment methodology that seeks to select qualified candidates based on performance It is important to note that all training decisions are made inputs from multiple exercises and assessors. For example, based on in-depth training needs assessment at multiple in 2013, five TAC employees enrolled in a three-year levels, including the needs of the organisation, the needs 2013 developmental program providing them with a full scope required by job descriptions, and individual level needs. Bank Audi employees trained banking experience and challenging assignments. In making | Figure 12 A Rounded Employee Development Process Accordingly, in 2013, training activities and programs were this selection, we take into consideration the individual’s based on our annual strategic plan drawing on our mission 81% experience and the skills required for the various jobs Our starting point always revolves around the assumption and vision: departmental needs based on meetings with within our institution. We also acknowledge that employee that our employees constitute our strongest asset and line managers and their recommendations, and individual interactions with more experienced organisation members hence, that employee learning and development are competency-based training needs identified and compiled can significantly develop their skills and knowledge about important priorities. In 2013, we invested around USD 2.6 throughout the annual performance management the Bank and its operations. Accordingly, we attach great million in employee training: more than 79,000 training man process. A comprehensive assessment phase follows importance to mentoring and coaching processes, and to hours were deployed, covering a bulk of 2080 employees, the training stage in order to adequately measure the results leveraging those successfully in developing our employees. almost equally split in terms of gender representation and of training programs. For technical trainings, our Training targeting all levels of employment. Average training hours and Development department runs post-course tests to for both genders are 4.78 hours per year; average training ensure knowledge transfer; for soft skill trainings, feedback hours per annum are 9 for Senior Managers, 4 for Middle is collected through evaluation reports and continuous Managers, and 4 for frontline employees. follow-up.

40 41 Table 5 - Employee Composition by Gender and Employee Category Figure 13 | Bank Audi's Employee Sponsorship Grants in 2013 at Bank Audi Group Lebanon

In 2013, 66 employees were granted Bank Audi Group % of Staff % of Middle Managers % of Top Managers 66 Lebanon (below Grade 17) (Grade 17 to 21 Inclusive) (Grade 22 and above) scholarships to pursue their education Bank Audi employees benefiting from various sponsorship grants 14 granted sponsorships for higher education in local universities. 477 employees certified in Females MalesFemales Males Females Males ”Lebanese Financial Regulations” 5 integrated international universities such as Bank Audi sal 40.0640.26 7.86 10.84 0.12 0.86 IE and HEC Paris, and got various degrees: Audi Investment Bank sal 26.3247.37 0 15.79 0 10.52 Masters in Computer Business, MBA, EMBA, Executive Masters in Financial Management and Diversity and Equal Opportunity Audi Private Bank sal 24.0511.39 45.57 16.46 0 2.53 Masters in Strategic Marketing. A Services 23.1276.88 0 0 0 0 We also strive to ensure diversity and inclusion in all aspects of our employment. The composition of our workforce with respect to gender, for example, has slightly 9 were selected to enroll in banking-related Table 6 - Employee Composition by Age Group and Employee Category at improved from 45% females vs. 55% male employees in studies, specialised banking studies and Bank Audi Group Lebanon 2012 to 46% female vs. 54% male employees in Bank advanced banking studies. Audi Group Lebanon in 2013 (1,326 female employees and 1,564 male employees across Bank Audi Lebanon). Bank Audi Group % of Staff % of Middle Managers % of Top Managers (below Grade 17) (Grade 17 to 21 Inclusive) (Grade 22 and above) Furthermore, looking at age groups across different Lebanon 36 applications were approved for specialised managerial levels, we notice that Senior Management certifications: Diploma in International Financial positions are mostly occupied by older employees Reporting, Certified Management Accountant, who have more seniority, experience, and tenure within Foundational Financial Accounting Certificate, the Bank. Certified Public Accountant, Certified Financial <30 Accountant, Professional in Human Resources, 30-50>50<30 30-50 >50 <30 30-50 >50 Human Resources Business Partner, Certified Bank Audi sal 25.49 41.08 13.750.1613.83 4.71 0 0.29 0.69 Internal Audit, SAS Predictive Modeler. Audi Investment Bank sal 26.3236.8410.53 0 5.26 10.53 0 5.26 5.26 Audi Private Bank sal 19.0016.460 3.80 37.97 20.25 0 1.26 1.26 2 completed their Executive Education programs A Services 21.3248.9529.73 0 0 0 0 0 0 at INSEAD (Management Acceleration Program) and Harvard Business School (General Management Program). We strive to maintain a reasonable balance with respect echelons of the Bank and in key committees remains on the to the gender composition of our workforce and gender low side (Tables 5 & 7). We will continue to make every effort representation at multiple levels. Our commitment to to alleviate the glass ceiling in all its aspects as part of our Another core component of employee development efforts ensure good gender representation in upper Management commitment to diversity, inclusion and equal opportunity. is revealed through our support to our staff’s attainment echelons is also unwavering, with women currently of higher education. In 2013, we invested around occupying 43% of the managerial positions available at the USD 500,000 in supporting the development of our Bank. Thus we strive to enhance women empowerment employees including advanced university courses, and helping women break the glass ceiling and reaching specialised banking studies and certifications, and executive the highest organisational levels. We realise the importance education. We are very much aware that developing of diversity in the Bank’s day-to-day operations and in employees will reflect positively on their motivation and the context of its long-term strategy, and we are keen on performance, particularly when these employees apply in 2012 in 2013 nurturing a culture of equal opportunities in all employment aspects. By supporting diversity and inclusion, we also what they have learned in their current jobs. In 2013, 66 female female show our commitment to human capital in its various employees benefited from the Bank’s sponsorship grants employees 45% employees 46% and 477 employees became certified in “Lebanese Financial guises, one where employees are valued and appreciated Regulations”. male male irrespective of gender, religion, and marital/family status, employees 55% employees 54% thereby cultivating a healthy work environment. While we systematically try to address any barriers to female advancement, the representation of women in upper

42 43 Table 7 - Governance Body Composition by Gender and Age Group at Bank Audi Table 9 - New Employee Hires in Bank Audi Group Lebanon

BOD and Committees Gender (%) Age (%) Group Audi Lebanon Total Number of Gender (%) Age (%) New Hires

Males Females<30 30-50 >50 Males Females<30 30-50 >50 Board of Directors - Bank Audi sal 154 79 75 113 41 0 80 20 0 0 100 Total of 10 members Audi Investment Bank sal 1 0 1 0 1 0 Board Group Risk Committee - Audi Private Bank sal 10 5 5 3 4 3 Total of 3 members 100 0 0 0 100 A Services 29 5 24 16 12 1 Group Audit Committee - Total 194 89 105 132 58 4 Total of 3 members 66.7 33.3 0 0 100 Percentage 46% 54% 68.0% 29.9% 2.1% Corporate Governance and Remuneration Committee - 100 0 0 0 100 Total of 3 members Human Resources Planning (HRP) is also a main driver Compensation and Benefits Group Executive Committee - for our functional HR activities. Accordingly, we engage in Total of 4 members 100 0 0 0 100 appropriate aggregate planning of employees’ supply and As far as employee compensation and benefits are concerned, demand, and in succession planning which stems out of we make it a point to be an employer of choice who offers the HRP cycle and serves as a buffer to changing external both attractive career opportunities and fair and competitive and internal requirements. For example, employment has pay rates. Salaries and benefits constitute our highest HR Looking closer into the type of employment contracts signed in 2013 increased by 4.85% since 2012. In 2013, we also explored costs, exceeding USD 220 million in 2013 (around USD 81 by our employees, we notice that 1,288 females and 1,520 Women occupy managerial various new successful recruitment channels, including an million in salaries alone). We offer our employees generous males were granted an unlimited employment contract positions at the Bank on-line application system, to ensure that we are attracting pay schemes which are complemented by various significant (CDI), that 38 females and 44 males were granted a limited 43% the right talents at the right time, to serve the needs of our advantages. In Bank Audi Group Lebanon, benefits include: employment contract (CDD) (Table 8), and that more than institution and clients. We also made sure to be present in performance bonuses, sales commissions, stock options 97% of employees are covered by collective agreements. job fairs hosted in various universities across Lebanon such plans, medical insurance, life insurance, scholarship Furthermore, Table 9 shows that the total number of new 4.85% Increase in employment as the American University of Beirut (AUB), the Lebanese insurance, work accident insurance, auto insurance, employee hires (194) at Bank Audi during 2013 was almost American University (LAU), the University of Balamand, transportation allowances, family allowances, marriage equally split between females and males. Université Saint Joseph (USJ), and the Holy Spirit University allowances, child birth allowances, children education of Kaslik (USEK), among others. Furthermore, we offered allowances, death allowances, representation allowances, Internships to university students, amounting to over USD food allowances, mobile allowances, as well as an infirmary Table 8 - Employee Distribution by Contract Type and Gender at Bank Audi Group Lebanon 90,000, and catered to 460 intern requests which, in turn, and a gymnasium. In 2013, we invested more than feeds into our HRP cycle by helping us spot the most USD 4 million in the tuition fees of 861 employees’ outstanding interns as potential future recruits. children (around USD 2500/child); we awarded 14 high Group Audi Lebanon Total GenderContract Collective achieving employees’ children with cash rewards and Number of Agreement other prizes totalling USD 81,000 for their outstanding Employees GPA achievement in school. These initiatives are part CDD CDI of our Pro-Family program which we bolstered in 2013 and which illustrates our commitment to invest in the leaders of tomorrow and in the gifted children of our own talent pool. %% MMFF M FCovered Not Covered

Bank Audi Group Lebanon 2890 1564 132644 38 1520 1288 97% 3%

Unlimited employment contract (CDI) Limited employment contract (CDD)

44 45 in 2013 Bank Audi employees aided with their children’s school tuition fees 861 for a total of USD 4 MILLION Figure 14 | Employee Tenure at Bank Audi Group Lebanon Salaries and benefits constitute our highest HR costs, exceeding USD 220 MILLION Distribution of Tenure at Bank Audi

40 As a result of our diligent efforts towards maintaining a healthy human capital management strategy, we have 35.4 35 34 successfully maintained human capital turnover rate of only 2013 3.87% in 2013 in Bank Audi Group Lebanon (as compared 2012 to 4.22% in 2012). Looking closer, we also note that the 30 turnover rate of females (1.43%) is less than that of males (2.37%) in Bank Audi Group Lebanon, and that the age 25

segment that witnesses the highest turnover is the one 21.5 21 between 30 and 50 years of age (2.12%). 20

As illustrated in Figure 14, in terms of tenure, 62% of the 15 Bank’s employees have a tenure of less than 10 years, and Percent 12.9 38% of our employees have a tenure of more than 10 years, 11 10 8.7 with many of them working at the Bank for 15, 20, 30 and 8 7 40 years. Thus we are doing reasonably well in terms of 6 6.6 5.5 55 retaining our most valuable employees and maintaining a 5 4.9 healthy mix of talent and a good balance between new and 3 3 1 1 old blood, and fresh and veteran perspectives. 0.3 0.200 0 0 0 1-5 6-10 11-15 16-20 21-25 26-30 31-35 36-40 41-45 46-50 51-55 in 2012 in 2013 4.22% 3.87% Tenure (Years) human capital human capital Rewards System turnover rate turnover rate We are equally sensitive to the importance of rewarding our an opportunity arises. This is the case in our agricultural employees for their hard work, commitment and loyalty. On empowerment, whereby we purchased 2,922 10-liter gallons June 17, 2013, we rewarded 41 of our employees for their of olive oil and 2,900 boxes of apples for a total of 25 years of service at the Bank and showed appreciation USD 224,000, which were distributed to employees in 2013. of their loyalty during the Silver Jubilee celebration held Pro-Family educational program awardees at Bank Audi Plaza. We are also keen on recognizing our At Bank Audi, we care that our employees take the time top performers and best employees on a quarterly basis. to nurture their newborns and fulfil their roles as parents in In 2013, 11 employees from various branches of the Bank the best possible way. On that basis, we encourage all our were elected “Top Performers in Productivity” and “Best employees to take their parental leaves and urge them to Performers in Quality of Service” for their remarkable return back to work refreshed to pursue their career paths. achievements during the fourth quarter of the year. In a Looking at Tables 10 and 11, we notice that out of the 104 similar process, the Quality Program recognises the “Best females who took a parental leave, 98 returned back to Performer” on a monthly, quarterly and annual basis. In work, which means a return to work rate of 94%, and that addition, the Bank is always as generous in its end of year 97 of them are still employed 12 months after. The latter gifts and distributed 3,158 5g gold units to all its employees translates into an impressive post parental leave retention (the equivalent of USD 700,000) at end 2013. We also rate of 99%. consider our employees as priority beneficiaries whenever

46 47 in 2013 Approximately USD 1 MILLION in scholarship endowment funds and sponsorships to universities and schools Table 10 - Return to Work Rates after Parental Leave by Gender in Bank Audi Group Lebanon

Bank Audi Group Total Number of Total Number of Total Number of It is important to note that our doors are always open to Capacity Building Employees who Took Employees who Employees who Returned students who want to learn more about the banking industry. Lebanon In 2013, students from Azm School (Tripoli), Collège des Parental Leave Returned to Work after to Work after Parental Externally, an additional unique human development Saints Cœurs, Sœurs de la Charité and Lycée Pilote visited program initiated in 2013 is the Public Sector’s Capacity Parental Leave Ended Leave Ended and Are still our Hadath branch, and 200 students from Deutsche Schule Employed 12 Months after Building Program which makes various training and skill Beirut visited our Khaldeh branch. In the same context, building modules available to public sector’s employees, Their Return we always volunteer to assist in presentations and events to help in sharing knowledge and nurturing public service conducted at schools and universities, which help expose efficiency and productivity. Inspired by JFK’s famous quote students to the banking industry and expand their horizons “Ask not what your country can do for you but what you in terms of career opportunities. Our Group e-Payment can do for your country” and engineered by the head of Solutions and Card Services department, for instance, Human Resources, the Capacity Building Program, which made several presentations at the American University of regularly offers Bank Audi employees in-house training Females Males Females Males Females Males Science and Technology (AUST). courses on behavioural and soft skills, expanded to include public sector employees. Training sessions include Bank Audi sal 9688 90 88 89 86 On another note, our Corporate Social Responsibility seminars on communication, leadership, negotiation and (CSR) has built its own reputation whereby the spillover conflict resolution skills which lie at the heart of effective Audi Investment Bank sal 222111 effect has been recognised as a case study within various public service. The purpose of this program is to forge ties organisations such as Notre-Dame University (within Audi Private Bank sal 444111 with governmental stakeholders, to communicate on the business ethics courses); at special workshops with the importance of CSR, and to help provide value addition A Services 222554International Labour Organisation (ILO), in collaboration to public sector employees in their endeavors to improve with the American University of Beirut; with the developing delivery and performance. Total 104 95 98 95 97 92 government of Kurdistan, its members of parliament, and other private businesses. Retention Rates after Parental Occupational Health and Safety Table 11 - Figure 15 | Government Capacity Building Program at Bank Audi Leave by Gender in Bank Audi Group Lebanon We are aware of the importance of safeguarding our employees’ safety. In 2013, Bank Audi’s Corporate ObjectivesStrategy Tactics Outcome Information Security & Business Continuity (CISBC) team Bank Audi Group Enhance the Capacity Building Behavioural and soft Public sector officials established an informal safety committee and appointed Lebanon “safety marshals” who are in the process of being trained effectiveness, efficiency, Program for Lebanese skill training conducted receive certificates. on safety rules and procedures. We hope to institutionalise and productivity of government and public in collaboration with this committee by 2014. Furthermore, the Bank is eager public servants/officials service officials. Bank Audi’s Training to take and implement severe precautionary measures in Females Males in Lebanon. department. response to vibration, fire, hold-up or intrusion situations. Improve the quality of Training sessions Increasingly effective These policies, which serve against the threats and Return to Work Rate 94% 100% government services. include seminars public sector violence the Bank may be subject to, establish specific Retention Rate 99% 97% coping measures and detection systems to attend to any of on behavioural management. the above-mentioned situations. communication, leadership and In a nutshell, we have placed human development at the negotiation, conflict Educational Aid in Community Motivation and heart of our CSR Strategy, confirming our commitment resolution skills, empowerment to diversity and inclusion, to human capital development, Microsoft Office and Externally, we are dedicated to invest in selective amongst public sector and to progressive employment strategies. Our continuous English language. human development efforts, particularly in support employees. investment in internal talent development, through effective of the Lebanese youth: we provide educational aid recruitment, selection, training and development, diversity to various schools and universities across Lebanon, and inclusion, compensation and benefits, and health among which are university scholarship endowment and safety measures, has allowed us to foster a culture funds amounting to over USD 480,000 to AUB, LAU We are thus fully committed to promoting human and potential, and to ultimately make their way to rewarding of high performance and continuous learning, one which and USJ. Key educational institutions also benefited development in its various guises both inside and outside career paths. By building a strong foundation for human differentiates our bank and helps it stay ahead of the league. from generous scholarships and donations in 2013, the Bank. Human capital in its various forms is a material capital in Lebanon, we are catering not only to our own This has contributed to develop a strong employer brand including La Sagesse schools (through the “Mérite Blé concern for our institution and is incorporated within its developmental needs, but also to those of the country as a which attracts talent, retains employees and customers, Vert” initiative) and Irfan School, in the form of scholarships long-term organisational strategy. Our human development whole. Our dedication to people is strong and unwavering and ultimately gives our bank a competitive edge within to needy students which totalled over USD 367,000 and efforts empower individuals by providing them with the tools and intended to spur individual growth, business success the industry. represented the partial or full tuition of over 300 students. they need to develop their skills, competencies, leadership and broader value for society.

48 49 Special Feature Story Toastmasters Club at Bank Audi The First Corporate Toastmasters Club in Lebanon

Following the Community, Sports, Music, Green, and Travel survey, respondents rated the ability to communicate as the Clubs, Bank Audi has expanded its employee involvement most important factor in making an executive promotable, in CSR through its newest employee club which was even more important than ambition, education and capacity launched at the heart of the Bank in 2013: the Bank Audi for hard work. Communication skills are also consistently Toastmasters Club. ranked as crucial for managerial success and advancement, with the average business executive spending 75 to 90 Toastmasters International is a non-profit educational percent of his/her time communicating. organisation that teaches public speaking and leadership skills through a worldwide network of meeting locations. The Bank Audi Toastmasters Club is intended to cultivate It has a wide network of 14,350 clubs in 122 countries. communication skills, which we believe are crucial for Through a series of sessions conducted to improve the conveying ideas, working in teams, developing good communication skills of its employees, Bank Audi pledged relationships at work, serving customers, interviewing, to enrich the skills of its staff and allow them to grow beyond listening, conducting successful meetings, accepting their potential. diversity, negotiating or mitigating conflicts, and applying effective management and leadership in the broadest This newest Bank Audi club builds on the acknowledgment sense. We hope that our employees take advantage of this that communication skills are vital for career success in any latest offering to become more competitive and productive. professional setting. In a recent Harvard Business Review

Toastmasters International recognising Bank Audi's Toastmasters Corporate Club as the first club in Lebanon

50 51 05

Environmental Protection

52 53 In November 2013 148 electric heaters were donated to 7 NGOs: Foyers SOS, Ayadina Association, Dar Al Aytam Al Isslamiya, Bird's Nest Orphanage, Mission de Vie, Oum El Nour and Unite Lebanon Youth Project (ULYP)

In December 2013 Environmental Protection 63 Our commitment to safeguard the environment and minimise the negative impact of our activities on the environment sprouted IT hardware pieces (1,835 Kg) were donated to Ayadina in 2012 and was incorporated within the Community Development pillar in our 2012 CSR Report. We are now proud to say Association, Assabil, and Al Kobayat Public High School that our environmental protection pledge has blossomed into a stand-alone material pillar. Because we are cognisant of the GHG Emissions importance of the environment for current and future generations, we have boosted our involvement in various aspects of internal and external environmental protection in 2013. These will be fleshed out in detail in the sections that follow. Probing into our GHG emissions revealed a significant (1,204.2 tCO2e), with 19.2% and 5.7% respectively. improvement trend as compared to 2012. As per our GHG Flight trips for business purposes constitute the core Solid Waste inventory based on the GHG-Protocol Corporate Standard, component of Scope 3 and are responsible for 74.3% we reported on the following seven greenhouse gases: (894.9 tCO2e) of total indirect emissions in this scope. Paper We are sensitive to the need to promote environmental is dedicated to collecting plastic bottle caps, selling them carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), consumption constitutes 17.2% (209.7 tCO2e) of Scope protection within the Bank and to engage our at around USD 200 per ton and using the proceeds to build hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), 3’s total emissions and courier services account for stakeholders in the process. This is why we enhanced wheelchairs for the disabled. We also kept tracking the sulphur hexafluoride (SF6), and nitrogen trifluoride (NF3). 8.4% (101.4 tCO2e). the “Grow Green” initiative, a venture aimed at collecting impact of our “Grow Green” program, saving the equivalent recyclables of solid waste such as used paper, metal, of 1,414 trees by third-party pulp paper recycling, and 130 Results revealed that GHGs are emitted from several Kg of plastic bottle caps used for building wheel chairs’ batteries and plastic waste, at the Bank’s 3 special sources grouped into Scope 1- Own generation of power Figure 16 | Total GHG Emissions per Year for Bank Audi hubs, as well as e-waste. Collected plastic bottle caps tires. It is worth mentioning that between 2012 and 2013, and refrigerants; Scope 2- From purchase of electricity are donated to Arc En Ciel, a renowned Lebanese we improved our paper recycling by 62%. As of September from Electricité Du Liban (EDL) and shared generators, non-profit organisation which seeks to create sustainable 2013, further steps were taken to progressively convert to and from selected indirect emission sources; and Scope 22,400 paperless banking throughout all our branches. development by supporting fragile communities and 3 - From paper consumption, flights undertaken for work 22,200 integrating marginalised individuals. Arc En Ciel’s program reasons and courier services. The total GHG emissions 22,000 from the Bank Audi Group Lebanon in 2013 amounted to 21,800

21,309.9 tCO2e, equivalent to 7.68 tCO2e per employee 2e 21,600 Table 12 - Paper Recycling between Table 13 - Total Weight of Waste and 0.220 tCO2e per square meter when accounting for tCO 2012 and 2013 by Type the employees and total space occupied by the Group’s 21,400 respective amenities. It is important to note that this number 21,200 YEAR Kilograms of Paper Waste Management significantly decreased between 2012 and 2013 (Figure 16). Collected for Recycling per Category Kg in 2013 When reporting the emissions by scopes, Scope 2 21,000

was responsible for 75.1% of the total GHG emissions 20,800 2012 2013 2012 51,770 Donated e-waste 1,835 (16,003.9 tCO2e) whereby GHG emissions from EDL electricity 2013 83,192 Dumped e-waste 6,530 was the main contributor, accounting for more than 75.1 % of this scope’s value. On the other hand, Scope 1 (4,101.7 tCO2e) Recycled paper 83,192 and Scope 3 accounted for the rest of total GHG emissions Recycled plastic 130

Internally, we made sure to spread awareness about consumption (electricity purchased and generated), travel Table 14 - Bank Audi’s Greenhouse Gas Emissions the importance of environmental protection through our (land and flight), refrigerants and paper consumption between 2012 and 2013 internal communication. In October 2013, we circulated in all Bank Audi subsidiaries in Lebanon for the year tips to all our employees on how to increase their 2013. Hence, we solicited a specialised company that energy efficiency. These environmental guidelines sought provides tools certified to be in conformance with GHG 2012 2013 to promote employees’ personal liability and involvement Protocol to conduct a comprehensive audit of our in environmental protection by being more responsible in carbon footprint and help us monitor and communicate Total GHG emissions 22,199.8 tCO2e 21,309.9 tCO2e their energy usage. We also proved our commitment to useful information to our different branches and offices. GHG emissions per employee 8.0 tCO 7.68 tCO energy saving on March 23, 2013 by switching off all lights Total expenditure on this investment amounted to 2e 2e

in our headquarters building for one hour in celebration of USD 10,750. The study considered 2012 as a base year, i.e. GHG emissions per square meter 0.230 tCO2e 0.220 tCO2e Earth Hour. the year this initiative was launched and opted to comply with the G4 Guidelines on environmental impact. Data on In an effort to reduce our environmental footprint, we the area occupied by Bank Audi in Lebanon, as well as on engaged in a milestone project to quantify and comprehend the number of employees in each branch, was taken into the nature and breakdown of our energy consumption and account. Organisational boundaries were set by the Bank

Greenhouse Gas (GHG) emissions (in CO2e) particularly to reflect the equity share principle and to be used for hose resulting from regular daily operations such as power operational management improvements.

54 55 Figure 17 | Bank Audi's Greenhouse Gas Emission Sources Energy Consumption

Exploring the energy consumption within Bank Audi Group Scope 1 Scope 2 Scope 3 Lebanon revealed that the total fuel (Diesel) consumption is 1,489.9 tons and that total electricity consumption is 19,185.68 MWH, with 98.3% purchased directly from EDL and the rest purchased from shared generators (0.9%) or produced by owned generators (0.8%). The cooling consumption in 2013 From Diesel consumption From electricity From employees' air originated from direct Scope 1 emissions and amounted to in owned generators purchased from EDL ÅPNO[ZMVY^VYRreasons 4,101.7 tCO2e.

FrVTSPX\LÄLKWL[roleum From electricity purchased From courier services Table 15 - Global Warming Potentials (GWP) of Common NHZ37.\ZLKMVYJVVRPUN from shared generators in Audi Group cafeterias Greenhouse Gases and Refrigerants

From paper consumption GWPs of Common Greenhouse Gases and Refrigerants From refrigerants used Gas or Blend GWP Source

HCFC-22 1,500.0 IPCC Second Assessment Report (1995) This first step and baseline information will be very useful CO in 2013, and that total emissions reached 220.5 2e R-410A 1,725.0 ASHRAE Standard 34 as we strive to continue improving our environmental Kg of CO2e per square meter. Comparing 2012 to 2013, footprint across various facets of our operations and there is a 4% improvement in total GHG emissions. GHG Global warming potentials for used gases in Audi Lebanon Group. designing relevant and appropriate energy saving programs calculations were performed using well established tools to increase the efficiency of electrical energy usage and and methodologies following the GHG Protocol – Corporate combat climate change. Standard developed by the World Resource Institute and the World Business Council for Sustainable Development (WRI, Figure 19 | Monthly Variation of GHG Emissions in Bank Audi Group Lebanon With respect to GHG emissions’ intensity ratio for Scopes 2006b, c). Using an internationally recognised tool allows for 1, 2 and 3, it was noticed that every employee at Bank the standardisation of procedures and calculations, which Audi Group Lebanon was responsible for 7,676.5 Kg of is key for quantifying and comparing emissions accurately. 2500 Moreover and when available, we applied local emissions and the most up-to-date emission factors to ensure the Figure 18 | Emissions per Source in 2013 transparent calculation of a reliable footprint. 2000 Monthly average = 1.729.1 tCO

2e 2e EDL 4% 3% 1500 Owned generators Shared generators 1% Courier services 0% Flight 1000 Papers Refrigeration

18% Tonnes of CO 500

0 Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec.

57% EDL Owned generators Shared generators Courier services 17% Flight Papers Refrigeration

56 57 Figure 20 | Sources of Conversion Factors Used

Emissions from Electricity Consumption

Calculated as per the following equation: Emissions from electricity consumption (tCO2e) = EDL consumption (kWh) x EF EDL (tCO2e /kWh) Where: Environmental Loan EF EDL is the national grid emission factor used and advised by the Lebanese MoE which is 0.65 tCO2e/MWh and Sponsorships

Externally, we succeeded in promoting environmental Scheme. The LEED Schools scheme addresses issues Emissions from Diesel Generators sustainability through our environmental loans, sponsorships, that are at the core of the academic curriculum including and for-cause or benefit sponsorships. In 2013 for instance, waste minimisation/disposal, energy, water conservation, Calculated as per the following equation: we extended over USD 32 million of environmental loans at and a healthy living environment. Some of the main features Emissions from Diesel consumption = Total amount of Diesel consumed (l) x EF Diesel (tCO2/TJ) x net preferential interest rates, all subsidised by the Central Bank that this building embodies and promotes include water JHSVYPÄJ]HS\L5*=VMWL[rol (TJ/Gg) x density of Diesel (Kg/l) x 10-6 Gg/Kg of Lebanon and verified and approved by the Lebanese efficiency, energy and atmosphere conservation, material Where: Center for Energy Conservation. These loans target recycling and resource efficiency, indoor environmental For the calculation of CO2 emissions, the following default values determined by the Intergovernmental varying nuances of environmentally friendly alterations, quality, and innovative design. Panel on Climate Change (IPCC) in 2006 were used: 5L[JHSVYPÄJ]HS\L5*=VMWL[rol: 43.3 TJ/Gg from renovated lighting systems to acquiring photovoltaic EF Diesel (CO2 emission factor (EFCO2) of petrol): 74.8 tCO2/TJ panels, to landscaping implementations applied in private, Density of petrol: 0.85 Kg/l residential or commercial buildings. Another recent project financing benefited to Heavy Oil Distribution Company SAL LEED Gold Certificate (HODICO) to help it refurbish its electrical plant in Zouk, and is Emissions from Purchase of Electricity from Shared Generators likely to have significant positive environmental externalities by reducing the average pollution produced by the plant in question. HODICO treated the fuel with additives, marking a Calculated as per the following equation: ,TPZZPVUZMYVTZOHYLKNLULYH[VYZ$*\YYLU[(_]VS[HNL=_^VYRPUNOV\YZO_4>O2>O_+,- significant and documented reduction in the sulphuric acid (tCO2e4>O_WV^LYMHJ[VY  and carbon monoxide produced by the plant. Where: Current is the purchased amperage (A) Significant efforts were also made in 2013 to support the =VS[HNL=TVUVWOHZLNLULYH[VYZPZ= establishment of environmentally friendly buildings in TYPWSLWOHZLNLULYH[VYZPZ = academic institutions. This is part of raising environmental Working hours total of monthly electrical blackouts in hours awareness among the youth. For example, we extended an DEF (Default Emission Factor) 1.3 tCO2e/MWh Power factor (%) 0.8 environmental loan of about USD 10 million to International College (IC), a prominent private academic institution in Beirut, for the implementation of a new elementary school Emissions from Air Travels building. The elementary school is the first school in Lebanon to be assessed according to the US Green Building Council Calculated as per the following equation: (USGBC) LEED Schools scheme and was accordingly Emissions frVTÅPNO[Z[*62e$5_+2T_,*[*62e. Passenger-1 x Km-1) awarded a “Gold” certificate for its eco-friendly building Where: and Leadership in the Energy and Environmental Design N is the number of passengers +PZ[OLKPZ[HUJLVM[OLÅPNO[ ,*PZ[OLLTPZZPVUMHJ[VYKLWLUKPUNVU[OLZLH[HUKÅPNO[KPZ[Hnce

Emissions from Paper Usage

Calculated as per the following equation: Emissions from paper usage (tCO2e) = Weight (t) x EF paper (tCO2e/t paper) Where: The emission factor for paper is 1.62 tCO2e/tons of paper Data on papers was provided by Audi Group Lebanon and based on consumption. Only selected types were included in this audit

Emissions from Courrier Services

Calculated as per the following equation: Emissions from paper usage (tCO2e) = D (Km) x EF car Where: D is the distance travelled in Km per month ,-JHYPZ[OLZWLJPÄJLTPZZPVUMHJ[VYVM[OLJHYSPNO[NVVK]LOPJSLNHZVSPUL`LHYWresent) 0.33 tCO2eHZWLY[OL./.7rotocol Corporate Standard recommendations IC Green Building

58 59 Another example is the Khauli Building 124, a pioneer Scientific Research green building in Beirut which was financed by the Bank Special Feature Story through an energy loan sponsored by the Ministry of Energy In addition, we further extended our support to various and Water, the Lebanese Center for Energy Conservation universities in conducting rigorous scientific research (LCEC), the UNDP, the European Union, and the Central pertaining to the environment and to air pollution. In this IUCN partnership - Ecotourism Bank of Lebanon. The partnership between Bank Audi and context, we forged ahead with a partnership initiated in Management System Project Khauli 124 is a typical form of partnership between banks 2012 with the American University of Beirut’s Department and developers in pursuit of a greener and more efficient of Chemistry, which consisted in helping build laboratory Through its partnership with IUCN, Bank Audi renews its environment. Khauli 124 was successfully completed in capacity and contribute to the establishment of an Air commitment to the protection of the Lebanese biosphere. October 2013 and currently serves as a model building Quality Assessment lab which would be the first of its kind in One of the projects we have recently embarked on jointly for energy efficiency and renewable energy utilisation. The the country. Bank Audi’s support was also partly channelled with the IUCN is the establishment of a community-based building’s key features include a central solar system, gas to purchase sophisticated equipment that helps measure ecotourism system and the formulation of a National step-up boilers, gas step-up generators, energy efficient volatile compounds and dioxins and pushes forward with Ecotourism Strategy within a climate change context. The VRV air-conditioning, and hi-tech green elevators. the Air Quality Monitoring Study in the Dora/Bourj Hammoud National Ecotourism Strategy seeks to provide an integrated Area. The purpose of this study is to identify the nature of any management plan which will guarantee a comprehensive We also provided partial sponsorship to “Achrafieh hazardous air pollutants in the congested Dora area in Beirut, direction for the future of ecotourism in Lebanon through 2020”, a pioneering environmental and apolitical initiative which may cause sickness, impaired health, or significant identifying relevant problems pertaining to sustainable that aims at transforming the Achrafieh district into a discomfort among workers or citizens of the community. development and recommending feasible approaches to healthy, environmentally friendly space. The project These toxic substances might be emitted from several address these issues. organises “car free” days in Achrafieh, whereby streets sources in the area, including above ground oil storage tanks, The project objectives include: are transformed into pedestrian-only zones for a whole landfills, and industrial activities clustered in less than a day in support of eco-friendly transportation, and are 1 Km radius of this highly populated area. The study is still Enhancing feasible approaches for the promotion animated with various activities including live shows, arts in progress and is expected to produce findings relating to: and development of ecotourism by engaging various and crafts, and sports sessions. Similarly, we supported 1) Some particular carcinogens in two Dora sites that could stakeholders including flora and fauna experts, rural the Association for the Protection of Jabal Moussa, be extrapolated to the Dora area. communities and tourism experts. a biosphere reserve in Lebanon part of the UNESCO 2) Identifying potential emission sources of these carcinogens. Considering ecotourism as an empirical tool for sustainable Network of Biosphere Reserves’ Man and Biosphere 3) Inspiring engineers on exploring new ways to renovate development, management, protection and conservation (MAB) program, in the purchase of containers, labels and buildings and revamp ventilation systems. of the Lebanese environment, natural resources and materials to help with local produce, thereby sustaining 4) Sound scientific basis to develop policies related to cultural heritage. over 40 needy families. air quality environmental regulations and waste dump Establishing a link between the evolving strategy and the practices in the area. national external challenges including economic, social, The total cost of this project is USD 130,000. environmental, educational and resource management realities and constraints. Considering the crucial role the strategy will play in terms of promoting improved natural and cultural conservation, and mitigation of climate change.

60 61 Supplementary Information

62 63 Reporting and Ratings

This report complies with a number of external reporting guidance and standards. Primary among these is the ISO 26000 Community Involvement and Issue 1: Community involvement Various social, health, humanitarian culture and sports Social Responsibility Guidance. In 2012, Bank Audi was the first banking institution to pilot the ISO 26000 Social Responsibility Development Issue 2: Education and culture activities pertaining to Community Development Guidance in Lebanon. Accordingly, the Report addresses the seven core subjects of responsibility defined in the ISO 26000 Issue 3: Employment creation and skills development New employee volunteering program: “Be A Hero for a Day” standard (Table 16). It also addresses many guidelines and indicators set out in the Global Reporting Initiative (GRI), and is Issue 4: Technology development and access Support and partnerships with well known NGOs and prepared “In accordance” with GRI G4 Guidelines and the Financial Services Sector Supplement, at a “Core” application Issue 5: Wealth and income creation corporate foundations level (Tables 17 and 18). GRI is an internationally recognised voluntary guideline which defines principles and indicators that Issue 6: Health companies can use to report on the triple bottom line. GRI is currently observed by over 4,000 organisations in 64 countries. Issue 7: Social investment The Report also complies with the principles defined by the UN Global Compact (UNGC), although we are not as of yet a formal signatory of the UNGC (Table 19). GENERAL STANDARD DISCLOSURES Table 17 - Implementation of GRI Content Index for "In accordance" - Core - General Table 16 - ISO 26000 Core Subjects Reference Table Standard Disclosures

Our CSR activities can be classified based on the core subjects of ISO 26000 as follows: General Standard Disclosures Description Reference ISO 26000 Core Subjects Issues Section in CSR Report Strategy and Analysis

Organisational CSR management and Disclosures on Management G4-1 Statement from the most senior decision-maker of the organisation about P. 4 Governance Approach (DMA) the relevance of sustainability to the organisation and the organisation’s Stakeholder engagement strategy for addressing sustainability Due diligence and ethical conduct under Corporate Governance Pillar G4-2 Provide a description of key impacts, risks, and opportunities P. 6 & AR*

Human Rights Issue 1: Due diligence Revised Code of Ethics and Conduct in 2012 to integrate Organisational Profile [GC Principles 1-6] Issue 2: Human rights risk situations an explicit statement on human rights G4-3 Report the name of the organisation P. 6 Issue 3: Avoidance of complicity Adding a statement in all supplier requests for quotations Issue 4: Resolving grievances within procurement contracts, which asserts the G4-4 Report the primary brands, products and services P. 25 Issue 5: Discrimination and vulnerable groups importance of human rights Issue 6: Civil and political rights Human Rights accorded highest regard across various G4-5 Report the location of the organisation’s headquarters AR P. 20 & website Issue 7: Economic, social and cultural rights facets of employment relationships and contracts Issue 8: Fundamental principles and rights at work G4-6 Report the number of countries where the organisation operates, and the P. 6 names of the countries where the organisation has significant operations Labour Practices Issue 1: Employment and employment relationships Progressive human resource policies or that are specifically relevant to the sustainability topics covered in the [GC Principles 3-6] Issue 2: Conditions of work and social protection Promoting diversity, inclusion and equal opportunity Report Issue 3: Social dialogue Work-life balance Issue 4: Health and safety at work Investing in talent development and educational support G4-7 Report the nature of ownership and legal form P. 6 Issue 5: Human development and training in the of our staff and their dependents G4-8 Report the markets served (including geographic breakdown, sectors P. 6 workplace served, and types of customers and beneficiaries) The Environment Issue 1: Prevention of pollution Environmental management [Principles 7-9] Issue 2: Sustainable resource use Carbon footprint assessment G4-9 Report the scale of the organisation including: P. 24 Issue 3: Climate change mitigation and adaptation Supporting environmental loans and various programs to - Total number of employees Issue 4: Protection of the environment, biodiversity minimise environmental footprint including solid waste, - Total number of operations and restoration of natural habitats GHG emissions, energy consumption - Net sales (for private sector organisations) or net revenues (for public Support for scientific research in relation to the sector organisations) environment - Total capitalisation broken down in terms of debt and equity (for private sector organisations) Fair Operating Practices Issue 1: Anti-corruption Fair operating practices - Quantity of products or services provided [GC Principles 3-10] Issue 2: Responsible political involvement Transparent governance practices Issue 3: Fair competition Guidelines for tracking CSR projects across branches and G4-10 a. Report the total number of employees by employment contract and P. 40 Issue 4: Promoting social responsibility in the value units and assessing if any project has a CSR component gender chain Risk management compliance and revised risk b. Report the total number of permanent employees by employment type Issue 5: Respect for property rights management policy and gender c. Report the total workforce by employees, supervised workers and gender Consumer Issues Issue 1: Fair marketing, factual and unbiased Anti-counterfeit measures d. Report the total workforce by region and gender information and fair contractual practices Customer surveys Issue 2: Protecting consumers' health and safety “Clear all the way” campaign e. Report whether a substantial portion of the organisation’s work is Issue 3: Sustainable consumption Increasing financial literacy among various customer performed by workers who are legally recognised as self-employed, or Issue 4: Consumer service, support, and complaint segments by individuals other than employees or supervised workers, including and dispute resolution Responsible product design and product portfolio employees and supervised employees of contractors Issue 5: Consumer data protection and privacy f. Report any significant variations in employment numbers (such as Issue 6: Access to essential services seasonal variations in employment in the tourism or agricultural industries) Issue 7: Education and awareness * AR: Annual Report

64 65 General Standard Report Profile Disclosures Description Reference G4-28 Reporting period (such as fiscal or calendar year) for information provided P. 7 G4-11 Report the percentage of total employees covered by collective bargaining P. 42 agreements G4-29 Date of most recent previous report (if any) P. 7

G4-12 Describe the organisation’s supply chain P. 26 G4-30 Reporting cycle (such as annual, biennial) P. 7

G4-13 Report any significant changes during the reporting period regarding the AR P. 12 G4-31 Provide the contact point for questions regarding the Report or its content P. 70 organisation’s size, structure, ownership, or its supply chain G4-32 a. Report the “In accordance” option the organisation has chosen P. 7 & 62 G4-14 Report whether and how the precautionary approach or principle is P. 10 & 21 b. Report the GRI Content Index for the chosen option (see Table 18) addressed by the organisation c. Report the reference to the External Assurance Report, if the Report has been externally assured (GRI recommends the use of external assurance G4-15 List externally developed economic, environmental and social charters, P. 19 but it is not a requirement to be “In accordance” with the Guidelines) principles or other initiatives to which the organisation subscribes or which it endorses G4-33 a. Report the organisation’s policy and current practice with regard to seeking Applicable only for external assurance for the Report our Carbon Footprint G4-16 List memberships of associations (such as industry associations) and P. 14 b. If not included in the assurance report accompanying the sustainability Assessment national or international advocacy organisations in which the organisation: report, report the scope and basis of any external assurance provided - Holds a position on the governance body c. Report the relationship between the organisation and the assurance - Participates in projects or committees providers - Provides substantive funding beyond routine membership dues d. Report whether the highest governance body or Senior Executives are - Views membership as strategic involved in seeking assurance for the organisation’s sustainability report Identified Material Aspects and Boundaries Governance

G4-17 a. List all entities included in the organisation’s consolidated financial AR P. 175 G4-34 Governance structure of the organisation, including committees under the AR P. 10 statements or equivalent documents highest governance body b. Report whether any entity included in the organisation’s consolidated P. 8 financial statements or equivalent documents is not covered by the G4-38 Report the composition of the highest governance body and its committees AR P. 10 Report G4-39 Report whether the Chair of the highest governance body is also an executive AR P. 10 G4-18 a. Explain the process for defining the Report’s content and aspect officer* boundaries P. 7 G4-48 Report the highest committee or position that formally reviews and approves b. Explain how the organisation has implemented the Reporting Principles the organisation's sustainability report and ensures that all material aspects for Defining Report Content are covered** G4-19 List all the material aspects identified in the process for defining report P. 8 Ethics and Integrity content G4-56 Describe the organisation's values, principles, standards and norms of P. 10 & Appendix 1 G4-20 For each material aspect, report the aspect boundary within the organisation P. 9 behaviour, such as Code of Ethics and Conduct G4-21 For each material aspect, report the aspect boundary outside the P. 7 organisation

G4-22 Report the effect of any restatements of information provided in previous P. 10 reports, and the reasons for such restatements

G4-23 Report significant changes from previous reporting periods in the scope and P. 10 aspect boundaries Stakeholder Engagement

G4-24 Provide a list of stakeholder groups engaged by the organisation P. 7

G4-25 Report the basis for identification and selection of stakeholders with whom P. 8 to engage

G4-26 Report the organisation’s approach to stakeholder engagement, including P. 8 frequency of engagement by type and by stakeholder group, and an indication of whether any of the engagements were undertaken specifically as part of the Report’s preparation process

G4-27 Report key topics and concerns that have been raised through stakeholder P. 8 engagement, and how the organisation has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns

* The chair of the highest governance body is not an executive officer. ** The Executive Committee.

66 67 Table 18 - Implementation of Core GRI Content Index - Specific Standard Disclosures Financial Services Sector Indicators for the Sector Material Aspects DMA and Indicators Omissions

Anti-corruption G4-SO4: communication and training on anti-corruption policies and procedures Specific Standard Disclosures Local Communities G4-FS13: access points in low-populated or economically disadvantaged areas Material Aspects DMA and Indicators Omissions by type

Generic DMA: why the aspect is material, which impacts make this aspect material, G4-FS14: initiatives to improve access to financial services for disadvantaged and the evaluation of Management approach. people

Generic DMA: how the organisation manages the material aspect or its impacts. Product and DMA: initiatives to enhance financial literacy by type of beneficiary (former FS16) Service Labelling Economic Performance G4-EC1: direct economic value generated and distributed Product Portfolio Organisation-wide goals regarding performance relevant to this aspect, including Market Presence G4-EC6: proportion of Senior Management hired from the local community at plans to improve implementation of policies/procedures identified in “Policies with significant locations of operation Specific Environmental and Social Components Applied to Business Lines” (former FS1) and “Procedures for Assessing and Screening Environmental and Social Risks Indirect Economic Impacts G4-EC7: development and impact of infrastructure investments and services in Business Lines” (former FS2) and any relevant audit results supported G4-FS8: monetary value of products and services designed to deliver a specific Energy G4-EN3: energy consumption within the organisation environmental benefit for each business line broken down by purpose

Emissions G4-EN15: direct greenhouse gas (GHG) emissions (Scope 1) Audit Coverage and frequency of audits to assess implementation of environmental and G4-EN16: energy indirect greenhouse gas (GHG) emissions (Scope 2) social policies and risk assessment procedures (former FS9)

G4-EN17: other indirect greenhouse gas (GHG) emissions (Scope 3) G4-EN18: greenhouse gas (GHG) emissions' intensity Table 19 - Implementation of the 10 Principles of the UN Global Compact Effluents and Waste G4-EN23: total weight of waste by type and disposal method Core Area Principles Examples of Implementations at Bank Audi Overall G4-EN31: total environmental protection expenditures and investments by type Human Rights Principle 1: - Bank Audi updated its Code of Ethics and Conduct to make explicit reference Employment G4-LA1: total number and rates of new employee hires and employee turnover by Businesses should support and respect to the respect of human rights and the Universal Declaration on Human age group, gender and region the protection of internationally proclaimed Rights (UDHR) under the principle relating to “Compliance with Laws, Rules, human rights; and Regulations and International Declarations”. G4-LA2: benefits provided to full-time employees that are not provided to temporary Principle 2: - The CSR policy makes explicit reference to “contributing to alleviate challenges or part-time employees, by significant locations of operation Make sure that they are not complicit in related to human rights high-risk situations on a case-by-case basis”. human rights abuse. - We added a statement in all supplier requests for quotations within procurement G4-LA3: return to work and retention rates after parental leave, by gender contracts, which asserts the importance of human rights. Occupational Health G4-LA5: percentage of total workforce represented in formal joint Management- Our health and - Human rights are accorded highest regard across various facets of employment and Safety worker health and safety committees that help monitor and advise on occupational safety committee is informal relationships and contracts. health and safety programs Labour Principle 3: - Bank Audi is a member of the Association of Banks in Lebanon (ABL) and Training and Education G4-LA9: average hours of training per year per employee by gender and by Businesses should uphold the freedom of complies with all its principles relating to labour issues. employee category association and the recognition of the right - More than 97% of the Bank’s employees are covered by collective agreements. to collective bargaining; - Progressive labour conditions that embody respect for human rights. G4-LA10: programs for skills management and lifelong learning that support the Principle 4: - Responsible employment including diversity and equal opportunity, continued employability of employees and assist them in managing career endings The elimination of all forms of forced and occupational health and safety, training education and talent development, and compulsory labour; external human development. G4-LA11: percentage of employees receiving regular performance and career Principle 5: - Abiding by ABL's Collective Labour Agreement (2013-14), Chapter 1, Article 5. development reviews, by gender and by employee category The effective abolition of child labour; and - Abiding by the Lebanese Labour Law. Principle 6: - Progressive working conditions for staff, as shown in the Report. Diversity and Equal G4-LA12: composition of governance bodies and breakdown of employees per The elimination of discrimination in respect - Diversity and inclusion philosophy and practices, as shown in the Report. Opportunity employee category according to gender, age group, minority group membership, of employment and occupation. and other diversity indicators Environment Principle 7: - Carbon footprint measurement. Labour Practices G4-LA16: number of grievances about labour practices filed, addressed and Number not available Businesses should support a precautionary - Precautionary approach in relation to solid waste, GHG emissions and energy Grievance Mechanisms resolved through formal grievance mechanisms for disclosure approach to environmental challenges; consumption. Principle 8: - Support to scientific research pertaining to the environment. Undertake initiatives to promote greater - “Grow Green” program. environmental responsibility; and - LEED program. Principle 9: - Environmental loans and sponsorships. Encourage the development and diffusion - Partnership with IUCN. of environmentally friendly technologies. - Environmental awareness.

Anti-corruption Principle 10: - The Code of Conduct makes explicit reference to anti-corruption. Businesses should work against corruption - 62% of our governance body members, 67% of employees, 79% of Middle in all its forms, including extortion and Management, and 19% of Senior Management have been trained in relation bribery. to anti-corruption policies and procedures.

68 69 Conclusion Awards and Recognition

We recognise that being a responsible company is integral to our success. Our 2013 Report has made clear that we are striving In 2013, we were honoured by a variety of organisations for our innovative banking practices to create multiple streams of added value for our clients, shareholders, the economy, the community and the environment. and our progressive employment policies, a few of which are captured below: Over the past two years, we have innovated and continued to update and refine our CSR strategy. Today, we feel proud of our achievements and the CSR strategy we have established, which revolves around five key pillars, namely good governance, local economic development, community development, human development and environmental protection. We consider each of these Table 20 - Bank Audi Awards for Bank Audi Group Lebanon in 2013 areas to be relevant and important to our business, our stakeholders and our common future. Through systematic engagement across these five interconnected CSR material areas or pillars, we make sure to attend to all dimensions of our responsibility, to Banker Middle East Industry Awards 2013 add value to society, and to strengthen the fabric of trust with our stakeholders and with the communities around us.

As outlined in this report, we have made considerable initiatives that will contribute to sustainable development Global Finance Award 2013 progress in relation to each of these five pillars. In the area in the broadest sense. We have also begun to coordinate Best Bank in Lebanon 2013 of Corporate Governance, the Report made clear how efforts across the Group to ensure that we harmonise our we have laid down strong foundations of ethics, conduct involvement around core CSR issues that make sense to and integrity, and best practice governance practices and our business. FTSE Global Markets 2013 Global Awards policies. We also continue to streamline our governance practices year after year and focus on important issues to We feel proud that the activities under those five pillars Third top ranked bank overall for Investor Services across Levant & North Africa, deliver value to our clients. In the Economic Development cohere and complement each other, thus allowing us to HUKÄYZ[[VWYHURLKIHURI`3L]HU[(ZZL[4HUHNLYZ pillar, we have tried to address issues resulting from the create value at multiple levels and to implement our vision recent economic downturn, working in close collaboration in the area of CSR and sustainability. We remain committed with leading non-profits, to revitalise entrepreneurship and to this course of continuous innovation and improvement, Social Media Awards 2013 create local economic opportunities. Under the Community and look to differentiate ourselves and to be more proactive )LZ[-HJLIVVR(WWSPJH[PVUMVY[OL 5V]V NHTLPU Development pillar, we have collaborated with key social in CSR-related issues year after year. Each of these five organisations to create direct social impact in areas of pillars has its specific focus; together, they cohere to make greatest need. We have also continued to nurture human us more successful, both financially and socially, and to MENA Cristal Awards 2013 talent and competencies, and to outdo peers in helping create new opportunities, more inclusiveness, and certainly talented employees and community youth grow beyond more hope in our future. We are keen on staying the course, Sapphire (Silver) Cristal MVY[OL 5V]V JHTWHPNUPU their potential. In the Environment field, we have taken active and on reaping and sharing the benefits of this responsible ,TLYHSK)YVUaL*YPZ[HSPU0UZ\YHUJL)HURPUN-PUHUJPHS:LY]PJLZ-PST*H[LNVY` steps to strengthen our environmental protection efforts business orientation locally and across the entire group in MVY¸4HRLP[)PNV\[VM3P[[SL¹;=*VTTLYJPHSPUMVY both internally and externally, and to come up with new the years to come. ,TLYHSK)YVUaL*YPZ[HSPU7YVK\J[PVU)LZ[7OV[VNYHWO`*H[LNVY` MVY¸4HRLP[)PNV\[VM3P[[SL¹;=*VTTLYJPHSPUMVY

Best Innovative Launch for 2013 by VISA =0:(VUSPULWSH[MVYTMVYemall.me

For information about the Report, please refer to: CSR Unit [email protected] Bank Audi Palladium – Bab Idriss, Beirut, Lebanon

70 71 Internal Audit Appendix 1 - Highlights of Code of Ethics and Conduct Code of Ethics and Conduct Objective Compliance with laws, rules and regulations: “It is the Group’s objective to comply with all applicable laws, rules and regulations in all localities where it does business.”

Review and evaluate the development of the Corporate Raising ethical issues: “All of the Group’s representatives, including directors and employees, are expected to consider compliance with ethical Social Responsibilities activities Report in line with ISO 26000 standards as a vital element of their responsibilities.” Standards, Global Reporting Initiative (GRI – G4), UN Global Compact Principles (GC principles) and best practices. Guiding Ethical Principles Commitment to honesty, integrity and trustworthiness Commitment to fair competition Adherence to local and international standards

Executive Summary Fostering a Professional Conduct

Group Internal Audit conducted a review over Bank Audi’s Supporting a Positive Work Environment Violence and harassment free workplace 2013 Corporate Social Responsibility (CSR) activities Discrimination free workplace Report based on the objective outlined above. Alcohol and drug free workplace Smoke free workplace

The Bank is continually exerting efforts to enhance Acting Responsibly Respect of working hours CSR-related activities, and has established an operating Use of Group property mechanism to ensure alignment to the International Use of telephones, internet and email Standard (ISO 26000), the Global Reporting Initiative Personal belongings Guidelines (GRI-G4), Global Compact (CG principles) and Political and religious affiliations best practices. Betting and gambling Workplace proper etiquette Communication with the media and the public Based on our audit, nothing has come to our attention to make us believe that the information contained in the CSR Ensuring Mutual Security Secure workplace Report has not been fairly presented in all material respects. Access to Group premises

We identified opportunities to enhance the current CSR Managing Information External activities activities as follows: Personal relationships Personal finances Gifts and benefits Continue to further integrate CSR across the Bank’s decision-making processes and operations, as well as Being Good Global Citizens Involvement in social responsibility raising awareness and building competency for social Respect of human rights responsibility. Reporting Concerns Continue to engage the Bank’s employees at the various Investigations levels toward applying and promoting the Bank’s CSR principles. Administration of the Code Violation of the Code Review and amendments of the Code Formalise the internal operating procedures to better mirror the current CSR operating environment, e.g. responsibilities, processes/sub-processes, required controls and interdependence of the various concerned parties across the Bank, including the streamlined transmission of all CSR-related data and information.

Mahmoud Majzoub Head of Group Internal Audit

72 73 Appendix 2 Proactive, cooperative and Bank Audi CSR Policy collaborative commitment to integrate social and environmental concerns in business operations and to contribute to the well-being of the society

Integrity and open communication in interacting with internal and external stakeholders

Integrity in business

Human development, valuing teamwork and talent rewarding

Role model for socially responsible behaviour in Lebanon

7VZP[P]LPUÅ\LUJLVUV\Y]HS\LJOHPU[VHIPKL by socially responsible guidelines

Minimising the negative impacts of our activities on the environment

Accountability for decisions and actions we take

Consciousness and corporate citizenship

Diversity and equal opportunity among all employees

Civic behaviour and sense of belonging

Promoting healthy ecosystems, social equity and good organisational governance

Abide by ISO 26000 Guidelines

Alleviate challenges related to human rights as per the Universal Declaration of Human Rights

74