Sustainable Bank

Dimas Perdana Oskar February 8, 2012

Indonesian issues on todays sustainable banking

A modest growth affected by global

economy slowdown Unfavorable business environment Syariah Banking Rise of Technology and Social Media Rise of Local bank

CIMB Niaga
Incorporated on 26 September

1955 under the name of Bank Niaga. Listed on IDX in 1989. Acquired in November 2002 by CIMB Group Holdings Berhad (CIMB Group Holdings) and subsequently transferred its shares

Sustainable Bank

environ ment
financial services

social

Sustainable Bank
The best way for a bank to develop commercially is to look at the big picture and act in a way that benefits consumers, the economy, society and the environment. Banks are part of complex human, social and environmental ecosystems, so it is in their own self-interests to keep those ecosystems going.

Sustainable Bank

selfintere st

Profit and Sustain able

altrui sm

How to be a Sustainable Bank

Cons umer Facin g

Com mitm ent

Com petiti ve
Com muni cate

Care

Significance of Sustainable Bank

It helps build a stronger community
It's good for the corporate future It empowers people to start to meet

their own needs It is designed to be good for the environment Benefits local and global economies

Bank position in sustainable era

Most banks engaging in sustainability today find themselves in one of two camps:
Applying the sustainability lens to the bank's

mission and business. Green operations and philanthropy are givens in this category. Tweaking existing business and operations to incorporate sustainability and social responsibility. This might include recycling and energy efficiency measures on the environmental side, and enhanced HR practices and community involvement on the social side

Dimensions of Sustainability
There are several initiatives which can be taken and has been taken that enable CIMB Niaga to be a leader in the three main dimensions of sustainability; social, environmental, business objectives:

Social
A bank needs to manage the impact of its activities on society in two ways: by removing, or at least mitigating, any negative impacts it may have; by taking positive steps to help communities through its employment practices,

Social Initiatives
1. Create a set of ethical business

principles that must be followed to ensure it is a responsible provider of financial services to customers be they individuals, small businesses, large corporations, public sector bodies or any other entity so that bankfinanced customer activities do not harm others. A banks lending, investing and asset management policies should have built-in respect for

Social Initiatives
2. Investing in communities by making

donations, providing loans and giving other assistance to charities and other good causes

Social Initiatives
3. Persuading suppliers to act in a

socially responsible manner and gaining the support of shareholders for all of these initiatives

Social Initiatives
4. Employees Recruiting the best people and providing good working conditions and opportunities for employees to develop their careers and enhance their knowledge and skills beyond their day job. Systematically raise the awareness of the employees and increase their sense of responsibility for environmental protection. Holding employee survey, discussion forums, behavioral campaigns, and internal communications to raise the employees

Environment
Banks want to minimize any negative impact their activities may have on the environment and, if possible, ensure their activities have no negative impact at all. In some cases, they will try to reverse damage already caused.

Environmental Initiatives
Will be achieved by managing the environmental footprint of our own business, for examples: Using less energy, paper, and water Buying office equipment where we give priority to durability and low energy consumption. Education for environmental changes Community development relate to saving earth.

Business
The most important aspect of a banks sustainability program is managing the impact that its products, services and customer relationships have on the financial sector. First and foremost, a bank must give customers what they want fairly, responsibly and transparently. At the same time, it must provide good working conditions for staff and deliver profitable growth for shareholders.

Business Initiatives
1.

Commitment to Accountabilityaccountable to Financial institutions must be

their stakeholders, particularly those that are affected by the companies and activities they finance. Accountability means that stakeholders must have an influential voice in financial decisions that affect the quality of their environments and their lives -- both through ensuring that stakeholders rights are protected by law, and through practices and procedures adopted by financial institutions themselves.

Business Initiatives
2. Commitment to Transparency

Financial institutions must be transparent to stakeholders, not only through robust, regular and standardized disclosure, but also by being responsive to stakeholder needs for specialized information on financial institutions policies, procedures and transactions. Commercial confidentiality should not be used as an excuse deny stakeholders information.

Business Initiatives
3. Commitment to Sustainable Markets and

Governance Financial institutions should ensure that markets are more capable of fostering sustainability by actively supporting public policy, regulatory and/or market mechanisms which facilitate sustainability and that foster the full cost accounting of social and environmental externalities.

The Quest
If corporate sustainability is to be financially sustainable, there needs to be a payoff beyond efficiency. That payoff is the brand. Does housing your office in a paperless building pay off your brand promise? Yes, if your promise is all about being a green bank. No, if you're a big bank with a mainstream brand. Mainstream banks investing significantly in green infrastructure do not reap brand rewards. Their efforts may make them more efficient

Conclusion
Financial institutions must expand their missions from ones that prioritize profit maximization to a vision of social and environmental sustainability. A commitment to sustainability would require financial institutions to fully integrate the consideration of ecological limits, social equity and economic justice into corporate strategies and core business areas (including credit, investing, underwriting and advising), to put sustainability objectives on an equal footing to shareholder maximization and client satisfaction, and to actively strive to finance transactions that promote sustainability.

Thank You