BTN HADIR MENYELARASKAN PERTUMBUHAN YANG BERKELANJUTAN YANG PERTUMBUHAN HADIR MENYELARASKAN BTN BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 PT. Bank Tabungan Negara (Persero) Tbk. 2 3 BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 2 3 THEME EXPLANATION OF SR BTN The existence of Bank Tabungan Negara in the housing sector in Indonesia is becoming stronger. The Bank with the fifth largest asset comes with a variety of products and services. Its customers are also diverse, from the Low-income Community (MBR) to the upper classes, from millennial to baby boomers generation. For the Company, this diversity is a strength, as well as an evidence that its presence is accepted in all circles. In accordance with its vision as a leading and trusted bank in facilitating the housing sector and family financial services, the presence of Bank BTN can align housing needs across generations and reduce housing backlogs that are still high in the country. The company is optimistic that its ability to reach all customers is the key to successfully achieve the sustainable business growth. BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 4 5 TABLE OF CONTENTS Theme Overview 3 Sustainable Performance Highlights 6 BTN and Sustainable Development 9 o Implementing Sustainable Finance to Support Sustainable Development Goals o Implementation of Sustainable Finance Principles o Company’s Strategic Transformation o RKAB 2019 Implementation o 2020 RAKB o The Company and Sustainable Development Goals The Board of Director’s Report 23 o Sustainability Policy and Strategy o Implementation of Sustainable Finance o Sustainable Financial Achievement Strategy About Sustainability Report 31 o Period, Limit, and Standard to Prepare the Report o Process to Determine the Report’s Content o List of Material Topics and Boundary/Limitation of Topics o External Assurance o Feedback o Information Access to the Sustainability Report Statement of the Board of Commissioners and Board of Directors on the 38 Accountability of the Report Profile 41 o Company’s General Information o Milestones o Company Brief History o Vision, Mission, and Corporate Culture o Organizational Structure o Company’s Business Activities o Operational Areas and Markets Serviced o Share Ownership Composition o Company Scale o Information On Employee o Supply Chain o Significant Change on the Organization and its Supply Chain o Prevention Approach or Principle o External Initiative o Association Membership BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 4 5 Sustainable Governance: 67 o Commitment to Implement Corporate Governance o Principles of Corporate Governance o Governance Strategy o Integrated Governance, Risk, and Compliance (GRC) o Focus on Corporate Governance Implementation in 2019 o Implementation of Sustainable Finance o Problems Faced, Development, and Influence on the Implementation of Sustainable Finance o Governance Structure o Risk Management o Implementation of the Prudential Principle o Code of Ethics and Conduct o Internal Control System o Whistleblowing Stakeholders Engagement 91 Sustainable Economic Performance: 95 o o Move Together to Overcome Housing Deficit o o Building and Empowering the Community Sustainable Environmental Performance: 119 o o Achieving Environmentally Friendly Bank Sustainable Social Performance: 129 o o Achieving the Best Human Resources o o Inclusive and Sustainable Products As Solution o o Customer Satisfaction As Services Priority Index of GRI Standards 159 Regulation No. 51/POJK.03/2017 164 Tauatan Standar GRI dan SDGs Compass 167 Lembar Umpan Balik 170 Independent Assurance Statements 170 BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 6 7 Ikhtisar Kinerja Keberlanjutan 2019 Economic Performance [2.a.1)] [2.a.2)] [2.a.3)] [2.a.4)][2.a.5)] Quantity of production/ Interest income and net profit Profit for the services sold sharing Year Consumer 10.089.177 3.027.466 Banking 9.340.940 8.961.801 2.807.923 Commercial Banking 209.263 Sharia Business Unit Banking Services 17 18 19 17 18 19 Social Performance [2.c] Description Units 2019 2018 2017 Total employees Persons 11.647 11.810 10.690 Total female employees Persons 5.345 5.345 4.770 Employee turnover Percentage 1,51% 2,26% 2,65% Total occupational accidents Case None None None Total customer complaints Case .113 71.674 40.051 Complaints settled Percentage 98,11% 98.30% 96,04 Total allocation for CSR and PKBL fund Billion Rupiah 48,69 64,23 31,38 BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 6 7 Environmental performance [2.b.1)] Use of water Environmental (Head Office) Complaints 98.280 97.410 93.537 None 17 18 19 BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 8 9 BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 8 9 BTN AND SUSTAINABLE DEVELOPMENT [1] BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 10 11 Implementing Sustainable Finance to Support Sustainable Development Goals Banking has a big role to play in achieving sustainable (POJK) No. 51/POJK.03/2017 on Implementation of development, which is the development to meet current Sustainable Financial Statements for Financial Services needs without compromising the needs of future Institutions, Issuers, and Public Companies for Bank generations by emphasizing the supporting capacity Tabungan Negara as of 1 January 2019, the Company has of the environment, the achievement of social justice, prepared a Sustainable Finance Action Plan (RAKB) as a economic and environmental sustainability. In this matter, guideline for the implementation of sustainable finance. banks as financial institutions are required to be selective in channeling their financing so that the projects financed The existence of RAKB is expected to create long-term are in line with the principles of sustainable development, value creation that is not limited to the form of creating not the other way around. sustainable competitive advantage for the Company, but also includes the wider community and environment As one of the largest banks in Indonesia, especially and accompanied by strengthening resilience because as a State-Owned Enterprise (SOE), Bank Tabungan the Company participates in managing all risks in the Negara is committed to supporting the realization of economic, social, and environmental sectors more sustainable development. Real support is provided by quickly, precisely, and accurately. the Company by providing selective financing, which is in line with the sustainable finance principles. In line with the enforcement of Financial Services Authority Regulation Objectives of the Sustainable Finance Action Plan In 2023, Bank Tabungan Negara will achieve its objective as a leading Company in the housing sector and a trusted family financial partner that applies sustainable finance principles to jointly achieve the sustainable development goals in Indonesia. Company’s Strategic Steps for Sustainable Finance 1 2 3 4 5 6 Strengthening Developing a Strengthening Developing Developing Strengthening the policies and digital-based risk management banking products sustainable institutional practices of sustainable policies by and services banking capacity through managing CSR finance strengthening through housing, operations by institutional programs that pay communication policies and consumption, and implementing structuring and attention to 3P strategy by programs MSME financing the concepts resource capacity (People, Planet, involving the through that considers of green office development Profit) aspects with millennial preparing environmental and and sustainable the partnership generation sustainability social aspects to procurement elements of ABCG policies and strengthen the (Academy, Business, strategies portfolio Community, and Government) According to Appendix 1 of POJK No. 51/POJK.03/2017 • Directing all aspects of implementation of the in the Executive Summary Section, which regulates sustainable finance programs to be in line with the requirements for employees, officers, or work units to be targets to be achieved. responsible for the implementation of the Sustainable • Determining the strategy and implementation of Finance Action Plan, the Company has designated the corporate communication programs for various Corporate Secretary Division as the person responsible sustainable finance programs so that the Bank’s for implementing RAKB 2019-2023. This division has duty reputation is well maintained. to supervise the implementation of all sustainable finance • Coordinating, monitoring, and evaluating all aspects programs and assigning program implementation to the of the implementation of sustainable finance other related divisions. The duties and authorities of the programs. Corporate Secretary Division are: BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 10 11 Roadmap of the Implementation of the Bank’s Sustainable Finance in 2019-2023 2019 2020 2021 2022 2023 PHASE I: Consolidation • Preparing a set of policies and PHASE II: sustainable finance Stabilization Strategy models • Institutional strengthening and PHASE III: the establishment of Sustainablity Policy & Development sustainable finance structures Assessment, Sustainability Risk Policy, Identification and Measurement of Social and Environmental Risks Index Green Lending, Green Bond, Green Index (SRI - Kehati), and