Growing Impact National Bank of Kuwait 2018 SUSTAINABILITY REPORT ABOUT THIS REPORT 1 National Bank of Kuwait Sustainability Report 2018 Scope of the Report (102-46) (102-51) In Accordance with GRI (102-52, 102-54) As part of NBK’s sustainability journey, NBK is issuing The NBK 2018 Sustainability Report follows the Global here our third annual Sustainability Report, measuring Reporting Initiative (GRI) Sustainability Standards: Core NBK’s impact on the environmental, social, economic and option. As with all our business operations, we measured governance-related sustainability topics within the six each aspect of our sustainability activities. We collected focus areas of NBK’s Sustainability Strategy. This report data in a consistent, transparent and accurate manner was prepared in accordance with the Global Reporting to track the progress of our initiatives. For more details, Initiative (GRI) standards. Accordingly, this report reflects please refer to Appendix A of the GRI Content Index. NBK’s achievements in a transparent manner to our stakeholders. Furthermore, we have stated our future Communication and Feedback (102-53) sustainability targets and efforts towards impactful We highly valued the feedback and comments received sustainability operations across NBK Kuwait branches and from our stakeholders, and we have made sure to offices. integrate them into the report. We believe that this feedback will improve our sustainability performance in Reporting Period (102-50) the future. Considering the feedback and concerns raised This annual sustainability report provides a during the development of this year’s report, we thank comprehensive overview of NBK’s progress in social, our stakeholders for the valuable input and the resulting environmental and governance achievements and elaboration throughout this report. commitments for the period of January 1, 2018 to December 31, 2018. Any additional comments or feedback on sustainability topics are welcome. NBK’s sustainability people are Inside This Report (102-46) (102-51) reachable for any elaborations or suggestions regarding Throughout this report, a meticulous overview of NBK’s this report. social, economic, corporate governance and environmental performance is offered. The context of Please contact us at: the report targets all stakeholders, including customers, [email protected] employees, shareholders, investors, vendors, government Tel: (965) 22592665 entities, and community. The report structure was constructed to state the following: Sustainability & Governance ٭ Sustainability & Marketplace ٭ Sustainability & Workplace ٭ Sustainability & Community ٭ Sustainability & Environment ٭ 2 National Bank of Kuwait Sustainability Report 2018 3 National Bank of Kuwait Sustainability Report 20172018 SUSTAINABILITY HIGHLIGHTS (102-48) 96% CSI 12 Minutes Customer Complaints Satisfaction Index turnaround time 0 Incidents 65% Data leaks Kuwaitization 80,302 Hours 6 Special Needs Branches Training & One in each Governorate Development 4 National Bank of Kuwait Sustainability Report 2018 KWD 782,000 5,296,500 Cal Community Investment Burned at NBK Walkathon 92.3 Tons 6.8% Decreased Shredded paper GHG emissions intensity recycling 45% Females 22.0% Decreased in the workplace Water consumption intensity per employee 5 National Bank of Kuwait Sustainability Report 2018 6 6 National Bank of Kuwait Sustainability Report 20172018 THIS REPORT ABOUT TABLE OF CONTENTS About NBK NBK Brand 56 Vision, Mission, & Values 10 Sustainable Financial Position 56 Markets Served & Boundaries 11 Sustainable Procurement 56 Awards & Recognitions 12 Procurement System 57 Our Approach to Sustainability Sustainability & Workplace Stakeholder Engagement 16 Workplace Environment 60 Materiality Assessment 18 Employee Engagement 60 - Materiality Process 18 Methods of Engagement 60 - Materiality Matrix 19 Employee Events 61 Alignment With Regional and Global Sustainability 20 63 Training & Development Frameworks & Initiatives Sustainability Updates and Progress 30 Occupational Health & Safety 63 Measuring Our Sustainability Impact 30 Retention 64 Equal Opportunity 64 Sustainability & Governance Diversity 64 Corporate Governance 34 Kuwaitization 65 - Governance Structure 34 - The Board of Directors 34 Sustainability & Community - Board Committees 38 Community Investment 70 Risk & Opportunity Management 39 Healthcare Enhancement 74 Business Continuity 40 Youth & Education Empowerment 77 Crisis Management Plan 40 Social Advancement 79 NBK Credit Rating 40 Community Awareness 82 Health & Safety Policy 40 Ethical Business & Compliance 41 Sustainability & Environment Regulatory Compliance 41 Green Building 86 Ethical Practices 41 Carbon Footprint 86 Anti-Money Laundering (AML) and Fraud Risk 41 GHG Emissions 87 Transparency 42 Scope I 87 Mechanisms for Seeking Advice 42 Scope II 87 Code of Conduct 43 Scope III 87 Resource Management 88 Sustainability & Marketplace Waste Management 89 Customer Experience 46 Water Management 90 Responsible Products 49 Products & Services 50 Appendices Digitization 52 GRI Content Index 94 Data Security & Privacy 53 Boursa Kuwait Sustainability Disclosure 99 Operational Efficiency 53 Economic Value Added 53 Direct Economic Impact 53 7 National Bank of Kuwait Sustainability Report 2018 MESSAGE FROM NBK’S CHAIRMAN (102-14) “NBK believes that ‘sustainability is everyone’s responsibility’. We are committed to becoming a leading advocate of, and a national exemplar in, sustainability practices.” I am delighted to present our 2018 Sustainability Report, 1. Serving Customers which we are proudly publishing for the third year in a 2. Caring for Our Environment row. On behalf of the Board of Directors, I extend my 3. Contributing to Sustainable Economic Development appreciation to all the NBK stakeholders who were 4. Respecting & Developing People involved in advancing our sustainability practices. 5. Giving Back to the Community This report showcases the diversity of impacts our 6. Leading in Governance sustainability performance has for all of our cherished stakeholders, including our employees, customers, The results from our sustainability efforts have been suppliers, shareholders, and the rest of the community. significant. With sustainability playing an important role in many of our innovative new products and services, this This year, NBK’s Sustainability Report is focused on year, NBK’s overall customer satisfaction score was 96% – impact, while also highlighting that our sustainability a new record high – 3 points higher than last year and an commitment and performance are aligned with various average of 9 points higher than all other Kuwaiti banks. organizational, industrial, national and international sustainability frameworks. Our new office tower (under construction) promises to significantly reduce our energy and water footprint in the Our organization-wide sustainability efforts are near future, at the same time as our current operational encapsulated into our six key sustainability focus areas: improvements have already helped us this year to reduce 8 National Bank of Kuwait Sustainability Report 2018 THIS REPORT ABOUT electricity consumption intensity by 5.9%, GHG emissions We have also emphasized the alignment throughout this by 6.8%, water consumption intensity by 22%, and to report between our sustainability performance and the increase recycling by 17% (all compared to 2017). UN Sustainable Development Goals (UNSDGs), Kuwait Boursa ESG indicators, the Equator Principles, and the We are proud to have made a clear contribution to Global Reporting Initiative (GRI) standards. Additionally, furthering sustainable development in line with the new we reached out to analysts and raters to more deeply Kuwait National Development Plan (KNDP), with our understand their expectations regarding sustainability activities championing the key social and environmental performance and disclosure. elements of that renewed vision for our country. Throughout NBK, we are committed to our employees I invite you, valued stakeholders, to actively review our and have increased our emphasis on employee 2018 Sustainability Report and engage with us engagement at every level. This year, once again, we concerning NBK’s impacts and performance. We welcome made major financial contributions to NBK Children’s your feedback, which will be considered and integrated Hospital, along with dozens of other worthy charities and throughout our sustainability journey. exciting community activities. Nasser Musaed Al–Sayer Chairman of the Board of Directors Chairman of the Bank and Community Committee 9 National Bank of Kuwait Sustainability Report 2018 ABOUT NBK (102-1, 102-2) The National Bank of Kuwait (NBK) is a leader in NBK’s depth of knowledge, passionate service providing integrated financial and investment services orientation, commitment to continuous improvement and solutions to domestic and foreign individual, and innovation, and foundational integrity has fortified corporate and institutional clients. NBK provides financial our development from our inception over 65 years ago services within four core business segments: to today’s national prominence and international market presence. NBK’s service excellence is reflected in our high customer satisfaction scores (96%) and our reputation as a trusted bank demonstrated by our brand strength. 1. Consumer and private banking, 2. Corporate banking, More information about NBK’s history and services can be 3. Islamic banking (through the subsidiary Boubyan