Responsible Banking Services

Lending and Investment Policies
Our financing decisions reflect our business principles, risk assessment processes and the needs of our customers.

Our credit evaluation process includes assessment of any potential environmental or socially sensitive-related risks. Measures to enable us to monitor the implementation of and compliance with environmental and social requirements by our clients are included in our financing agreement credit assessment process. In cases of material deviation from the required standards, we will work with the customer to establish a target date for compliance. Where no progress is made or in instances of a serious breach, we will exit the relationship.

For environmental risk-related matters, we follow the sustainability risk requirements laid down in the Bank's Corporate Lending Guidelines and FAQ on sustainability risk policies. We have adopted the Equator Principles, a set of voluntary guidelines which define a process for implementing common sustainability standards in project finance. We also have specific guidelines on lending to businesses operating in environmentally sensitive sectors such as chemicals, energy, forestry, freshwater infrastructure, mining and minerals, agricultural commodities, and World Heritage Sites and Ramsar wetlands, and these are refined and updated as required. For instance, 100% certification is required for borrowers in forestry industry falling under the refined policy by Forest Stewardship Council U.S. (FSC) or Programme for the Endorsement of Forest Certification (PEFC) by December 2014. For palm oil, 100% Roundtable on Sustainable Palm Oil (RSPO) certification is required by 2018. We also have a Defence Equipment Policy which clarifies the Bank's approach to companies involved with weapons. The Bank will disseminate updates to environment or social risk-related policies to all relevant parties on a timely basis. The latest versions of the policies and guidelines can be accessed by relevant colleagues through the Bank's intranet at any time. The Bank also provided Sustainability Risk Seminar to increase colleagues' awareness. Training programmes for environmental and social policies are in place, including as part of our New Joiners Programme, to improve staff competency in implementing these policies and procedures as applied to our various business lines.

Environment-related impact assessments are a continuous process and have been incorporated into our standard credit evaluation process, e.g. the Sustainability Risk Rating for credit approval from time to time. Regular tracking reports are compiled by the Risk and Compliance Policy team with input from business units. For customers that are not able to comply with our environment policies and requirements by our specified deadline, temporary exemptions or time extensions must be applied for and approved. Failing this, our relationship managers will begin arrangements to exit the relationship. Regular dialogue is maintained between our Risk and Compliance team and middle-office operations of the Bank's business units.