PNB Corporate Sustainability

Philippine National Bank (PNB) faced many challenges in 2020, starting with the eruption of the Taal volcano in January and followed by the outbreak of the COVID-19 Pandemic. Many lives and businesses were lost and disrupted as the Philippine economy suffered its worst setback since the country started releasing economic data just after World War II in 1947.
Despite these, PNB adapted and managed to obtain considerable gains in various aspects of its business and operations. The bayanihan spirit became even more alive in the bank as PNB stood by its commitment to care for the well-being of Philnabankers by adopting and implementing policies that provide for a safe, flexible, and inclusive workplace. For our clients and communities, we continued to provide uninterrupted, accessible, safe, and secure banking services while promoting good governance, sound risk management, and environmental and social responsibility.
In 2020, PNB was recognized by The Asian Banker as the Best Managed Bank and having the Best CEO Response during COVID-19. It was also commended for its corporate social responsibility (CSR) efforts. Asiamoney awarded PNB as Best Bank for CSR in its annual Best Bank Awards and was acknowledged as a Leader for Women in its Women in Finance supplement. In addition to receiving these accolades, PNB was also able to lay down the foundation for its Sustainability Transformation for the next three years.

Embarking on a Sustainability Transformation Journey

Our sustainability journey began with PNB’s leadership adopting a commitment focused on building a strong relationship with the community it serves. The Bank committed to empower Philnabankers by building up their skills and capabilities. Since then, we have taken a more active stance towards realizing our commitment towards sustainability goals.

We took initial steps to ensure the integration of sustainability principles into our business and operations such as:

  • Formally establishing the Corporate Sustainability Unit (CSU) to centralize all sustainability-related initiatives and activities of the Bank;
  • Formulating a company-wide Sustainability Policy;
  • Integrating the responsibility of promoting environmental, social, and governance (ESG) advocacies and exercising sustainability oversight to the functions of the Corporate Governance and Sustainability Committee;
  • Implementing ESG-cognizant lending through the Bank’s Institutional Banking Sector (IBS);
  • Preparing the initial draft of the Sustainability Finance Framework; and
  • Developing and implementing various initiatives and activities to raise awareness among employees.

In April 2020, the Bangko Sentral ng Pilipinas (BSP) issued Circular No. 1085 on Sustainable Finance Framework. In view of this, we formed a Sustainability Project Steering Committee (SteerCom) backed up by a Technical Working Group (TWG) composed of the following businesses and functions with the objective of providing technical assistance, guidance, and direction to CSU for the preparation of PNB’s Three-Year Sustainability Transition Plan:

STEERING COMMITTEE TECHNICAL WORKING GROUP
Public Affairs Group – Chairperson Corporate Sustainability Unit – Chairperson
Financial Management Sector Institutional Banking Sector
Institutional Banking Sector Retail Banking Sector
Retail Banking Sector Credit Management Group
Credit Management Group Global Compliance Group
Global Compliance Group Risk Management Group
Risk Management Group

We also engaged the services of an external consultant, SGV & Co., to guide the Bank on integrating ESG or sustainability principles in our business and operations. SGV & Co. worked closely with CSU and the TWG from July to November 2020 for the preparation of the Bank’s Three-Year Sustainability Transition Plan.

In addition, the TWG reviewed and revised the current company-wide Sustainability Policy to set the tone and align with the Bank’s Three-Year Sustainability Transition Plan and ESG-related policies that will soon be developed in compliance with BSP Circular No. 1085. The bank also developed PNB’s Sustainable Finance Framework. This framework illustrates how the Bank intends to enter Sustainable Financing Transactions (“SFTs”), which will finance or refinance projects and expenditures that will, at the same time, create a positive environmental and social impact and support our growth objectives.

To this end, we aim to embed our sustainability principles including environment and social risk areas, into our corporate governance framework, risk management systems, and strategic objectives consistent with the size, risk profile, and complexity of our operations.

The company-wide Sustainability Policy and Three-Year Sustainability Transition Plan, as well as the Bank’s Sustainable Finance Framework, were reviewed and approved by the Bank’s different business units, the Sustainability Project Steering Committee, the Corporate Governance and Sustainability Committee, and the Board of Directors in November 2020. These documents were submitted to BSP on December 3, 2020.

Improving Our Sustainability Policy and Extending Our Sustainability Footprint

Philippine National Bank (PNB) is a private Filipino, universal bank with global presence committed to provide relevant financial solutions to customers anywhere in the world. It is committed to generate value through a strategy focused on safe and sustainable growth.

The capacity of the Bank to grow and sustain business is contingent upon the quality of its human capital, the condition of its physical resources, the viability of its businesses, and the Bank’s relationship with its customers, employees, shareholders, regulators, suppliers / vendors, outsourced personnel, third-party service providers, and external communities.

The Bank believes that Sustainability starts from within by respecting human rights, cultivating an inclusive and collaborative work culture, helping all employees regardless of gender and background to gain equal access to relevant training and opportunities to develop skills and capabilities needed to succeed and improve their well-being. Through this Policy, the Bank commits to educate and engage its employees, leading them to align with PNB’s thrust on Sustainability. The Bank aims for its employees to embrace sustainability principles not only at work but also in their own personal lives as well.

Our corporate governance framework supports these sustainability commitments which earned the Bank recognitions from the Institute of Corporate Directors (ICD) and the Securities and Exchange Commission (SEC) on our governance practices and initiatives.

Recognizing the Bank’s essential role in helping shape the environment and the social landscapes, we believe that our Bank’s Sustainability footprint should also extend to our products and services as well as to financing or supporting the businesses and activities of our customers. As such, the Bank commits to fund or support projects and activities that will contribute to the achievement of the United Nations Sustainable Development Goals (SDGs).

The Bank will not support or involve itself in any business or activity that is illegal and which might cause harm, directly or indirectly, to people and the environment.

On the other hand, the Bank will subject to enhanced due diligence and close monitoring high-risk businesses and activities that are considered to have harmful effects or negative impacts on the society and the environment. The Bank will continue to support these businesses or activities provided they have the necessary government approvals and permits, passed the ESG screening of the Bank, and submitted their mitigation action plans to address environmental and social risks.

In addition, the Bank expects its customers, vendors / suppliers, and third-party service providers to improve their business practices by identifying and managing their own environmental and social risks and impacts, adopting good industry standards and practices, and contributing positively to the environment and the society. The Bank commits to educate its customers, vendors / suppliers, and third-party service providers on PNB’s Sustainability Policy.

To promote social inclusion and gender equality, the Bank will support and make available socially inclusive and gender-sensitive financial solutions. The Bank will do this by integrating social inclusion and gender lens in lending to or financing businesses; financing or refinancing projects that aim to improve social inclusion and gender equality; and by supporting CSR initiatives and activities that promote and improve social inclusion and gender equality.

Our economic, social, and environmental responsibility includes complying with all legal requirements. This Policy applies to all activities of PNB, including events, sponsorships, and engagements that the Bank supports. The Bank’s employees, outsourced personnel, vendors / suppliers, and third-party service providers shall uphold the principles under this Policy to the fullest extent possible within prevailing budgets. Employees are encouraged to inform the Bank’s Management about potential barriers that might hinder the growth of the organization’s people and its business.

  1. Economic
    1. Revenue growth, profitability, and business continuity of the Bank.
    2. Engagement in Sustainable Financing Transactions, which will finance or refinance projects and expenditures that will have a positive environmental and social impact and likewise support the Bank’s growth objectives.
    3. Financial wellness and long-term value for customers, employees, and shareholders.
  2. Environmental
    1. Efficient use and management of our resources.
    2. Reduced environmental footprint of the Bank, our employees, customers, outsourced personnel, vendors / suppliers, and third-party service providers.
    3. Support for business and activities with positive impact to the environment.
    4. Support for customers to manage their environmental risks and impacts.
  3. Social
    1. Succession planning through capability-building, leadership development, and strategic talent acquisition.
    2. Enhanced productivity, self-sufficiency, and quality of life for our employees by providing the right competencies and access to learning opportunities and wellness programs.
    3. Development of an empowering and inclusive culture where our employees, customers, and stakeholders are treated fairly and given equal opportunities.
    4. Support for businesses, projects, or activities that promote and improve social inclusion and gender equality among internal and external stakeholders.
    5. Positive contribution to communities through employee volunteerism and other initiatives imbuing responsible corporate citizenship.
    6. Financial inclusion for communities through sustainable products and services.
  4. Governance
    1. Compliance with all applicable laws, rules, and regulations that govern our business.
    2. Alignment with local and international best practices and standards such as, but not limited to, FATF International Standards on anti-money laundering and combating the financing of terrorism, UN Sustainable Development Goals, and UN Global Compact.
    3. Transparency and accountability in all areas of our operations.
    4. An effective Environmental and Social Risk Management System (ESRMS) across all business functions and operations of the Bank.

We commit to do the following:

  1. For our employees, we will:
    • Provide a safe, respectful, and collaborative work environment that cultivates personal and professional growth.
    • Educate them on our Sustainability Policy and encourage and inspire them to contribute positively to their respective communities.
    • Provide them access to various skills development and learning programs relevant to their existing functions and target roles for enhanced productivity.
    • Provide equal opportunities for candidates to be hired, without biases, based on their skills and competencies.
    • Provide equal opportunities for employees to be promoted based on performance, potentials, and aspirations, regardless of gender and background.
    • Eliminate biases, whether conscious or unconscious, towards certain groups or individuals and ensure that decisions are rendered objectively and fairly.
    • Promote diversity, inclusion and gender equality in the employment experience and in the workplace.
  2. For our customers and communities, we will:
    • Ensure the continuity of our business through strategic succession planning.
    • Support businesses and initiatives that foster and enable economic and inclusive growth, environmental protection, social development, and nation-building.
    • Raise awareness on sustainability and the Bank’s sustainability thrusts through various information dissemination channels.
    • Promote financial wellness and create value through tailor-fit and sustainable products and services.
    • Provide or make available social inclusion and gender-sensitive financial solutions, as well as support initiatives and activities that promote and improve social inclusion and gender equality
  3. For our shareholders and regulators, we will:
    • Adhere to all applicable laws, rules, and regulations governing our scope of business and areas of operations.
    • Align with international best practices and standards such as, but not limited to the FATF International Standards on anti-money laundering and combating the financing of terrorism, UN Sustainable Development Goals, and UN Global Compact.
    • Be transparent and accountable in all areas of our operations.
    • Integrate sustainability principles in our enterprise risk management system.
    • Report the progress and milestones of our Sustainability initiatives to the Board of Directors at least quarterly.
    • Review and, if necessary, update the PNB Sustainability Policy annually.
  4. For our vendors / suppliers, outsourced personnel, and third-party service providers, we will:
    • Educate and ensure adherence to the Bank’s sustainability policy and standards.
  5. For our environment, we will:
    • Reduce the environmental impact of our operations through efficient use and management of natural and man-made resources.
    • Adapt eco-friendly technologies.
    • Support businesses and projects that are compliant with environmental laws and regulations and contribute to the protection and conservation of the environment through sustainable financing and strategic partnerships.
    • Partner with our employees, customers, vendors / suppliers, and third-party service providers to push forward the sustainability agenda.

Taking A Cue from Our Sustainability Champions and Leaders

The Bank’s Chairperson and President/CEO are our staunch Sustainability Champions. Together with our Corporate Governance and Sustainability Committee (a Board-level committee tasked to promote environmental, social, and governance advocacies and exercise corporate governance oversight functions), they play a vital role in providing guidance and direction to the Bank’s Management Team on integrating sustainability principles in our scope of business and areas of operations.

In addition, the Bank’s Sustainability Project Steering Committee composed of the heads of the different business units and the TWG, whose members are the assigned representatives of the business unit members of the Steering Committee, meet every month to review and deliberate on all sustainability-related issues that concern the Bank before these are presented and endorsed to the President/CEO, the Corporate Governance and Sustainability Committee, and Board of Directors for approval.

On the other hand, the Corporate Sustainability Unit (CSU) which reports to the Public Affairs Group (both a member of the Sustainability Project Steering Committee and TWG), is tasked to develop and execute the Bank’s sustainability activities and initiatives with guidance from the Office of the President and the Corporate Governance and Sustainability Committee. The CSU reports to both the Bank’s Corporate Governance and Sustainability Committee and Board of Directors every quarter and whenever there are sustainability-related concerns that need immediate committee or Board approval or resolution.

Although it implements Bank-initiated CSR initiatives and activities, CSU is likewise focused on helping the Bank define and develop its sustainability policy, framework, and roadmap. CSU will also be implementing more sustainability-related initiatives for the Bank, starting with an internal awareness raising campaign among employees.

With the recent release of the BSP Circular No. 1085 which requires all banks to integrate sustainability principles in their business and operations within a three-year transitory period, the CSU spearheaded the preparation of the Bank’s Sustainability Policy and Three-Year Transition Plan which was approved by the Board of Directors last November 2020 and submitted to BSP last December 2020.


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