My first Publication ocbc_ar17_fullreport_english | Page 54

SUSTAINABILITY REPORT
RESPONSIBLE FINANCING
RESPONSIBLE BUSINESS PRACTICES
WHY THIS IS MATERIAL TO US
We recognise that promoting long-term sustainable development and providing financing that is in our customers’ best interests are
fundamental to our continuing success.
MANAGEMENT AND EVALUATION OTHERS
Under a traditional ESG risk assessment approach, Responsible Financing
focuses on protecting the environment and communities from untoward
commercial interests. However, at OCBC Bank, we take a broader view
of Responsible Financing beyond the traditional ESG considerations.
Responsible Financing is about ensuring that every transaction makes
sense for customers. We acknowledge that certain industrial sectors are
complex and have elevated ESG risks. For a better
understanding of our lending exposure, please
refer to Pillar 3 Disclosures on page 95.
We are committed to advancing environmental and social progress and
to conducting our business in a responsible manner. We integrate ESG
considerations into our credit and risk evaluation process, as part of
our holistic approach towards risk management. This helps us to better
manage our risk exposure and generate long-term sustainable returns. PERFORMANCE AND TARGETS
As a responsible lender, we encourage financial prudence through the
assessment of our customers’ repayment ability. We customise solutions
to meet their financial needs through both good and difficult times. This
involves working closely with our customers and offering appropriate
solutions, such as restructuring outstanding loans and/or revising
repayment plans for those that may be facing difficulties with meeting
their repayment obligations.
SELECTED POLICIES
OCBC Responsible Financing Framework
Establishes an overall approach towards the management of
ESG risks in lending activities
 OCBC Responsible Financing Policy and Sectorial Policies
Sets out the criteria and guidelines for the assessment of clients
and transactions in relation to ESG issues. For industries that could
have adverse ESG impact, in particular fossil fuel-fired power
generating facilities, enhanced due diligence is performed on
the operational aspects of the customers’ business activities.
This includes seeking approval from the Reputational Risk Review
Group on transactions with these customers
SELECTED PRACTICES
ESG Risk Assessment
Covers existing and new corporate and institutional borrowers
Mandatory Annual Training
Covers awareness of ESG matters and conducting of ESG risk assessment
Total Debt Servicing Ratio (TDSR) Analysis
Assesses borrowers’ repayment ability so as to encourage
financial prudence
Periodic ESG-related reporting is made to the Group CEO and Board Risk
Management Committee (BRMC) on the progress of our Responsible
Financing implementation. We continue to engage non-governmental
organisations (NGOs) that share our view that sustainability is an
ongoing journey for companies.
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OCBC ANNUAL REPORT 2017
We implemented our Responsible Financing –
ESG Risk Assessment in 2017, keeping to our
internal timeframe and meeting the expectations
of The Association of Banks in Singapore (ABS).
More performance indicators will be identified
and tracked over time.
1,173
NO. OF EMPLOYEES WHO ATTENDED
RESPONSIBLE FINANCING TRAINING
MET
THE ASSOCIATION OF BANKS IN SINGAPORE
RESPONSIBLE FINANCING GUIDELINES
– THREE PRINCIPLES
NO
TRANSACTIONS ESCALATED FOR
REPUTATIONAL RISK REVIEW GROUP’S
ASSESSMENT WERE APPROVED
Transactions with high ESG or reputational risk
are escalated to the Reputational Risk Review Group
for review and clearance prior to credit approval
506
NUMBER OF CLIENT COMPLIMENTS RECEIVED
BY COLLECTIONS DEPARTMENT
As a financial partner to our clients, we seek to
positively influence their behaviour by engaging
and supporting them in adopting appropriate
sustainable practices over time.