About SUSBA

The Sustainable Banking Assessment (SUSBA) tool shows year-on-year changes and highlights progression or regression in banks’ performance on the integration of environment, social and governance (ESG) considerations in their corporate strategy and decision-making processes.

"I urge all my friends in the banking industry in this region to be part of this ASEAN sustainable growth story and ensure that the activities of their clients fully support the Paris Agreement on climate change and the UN's Sustainable Development Goals. Together, I believe we can create great businesses and prosperous economies that do good for people - and the planet."
Tommy Koh, Ambassador-At-Large, Ministry of Foreign Affairs, Singapore

Objectives of SUSBA

Objectives of SUSBA
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  • Highlight the potential for the financial sector to drive sustainable development in ASEAN and beyond.
  • Provide a decision-useful assessment framework that incorporates environmental and social issues most relevant to the ASEAN region.
  • Help stakeholders assess banks’ management of climate risk amid strong global support for the Task Force on Climate-Related Financial Disclosures (TCFD) framework, UNEPFI Principles for Responsible Banking (PRB), and other initiatives.
  • Help shareholders, potential investors, regulators and civil society representatives to track banks’ progress and performance on ESG integration by displaying the evolution of results year-on-year.
  • Present the results in an online interactive platform that allows users to compare selected banks and indicators based on their preferences.

Who should use this tool?

Who should use this tool?
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Banking regulators and associations

  • Use bank-level assessments to understand and monitor ESG integration performance.
  • Evaluate the effectiveness of existing regulations/guidelines, identify the need to create new or strengthen existing regulations and guidelines, or for additional capacity-building.

Banks (For board members, senior management/C-suite, sustainability teams, etc.)

  • Use the assessment results to understand and improve their level of ESG integration and disclosure against objectively defined indicators.
  • Identify and learn from more progressive peers.
  • Engage with regulators and NGOs on sustainable banking aspects.

Investors (For board members, senior management/C-suite (e.g. chief investment officers), portfolio managers, banking sector analysts, ESG analysts)

  • Gain insights into the ESG integration performance of ASEAN banks already in their portfolios or under consideration for investment.
  • Assess the alignment of these banks' ESG practices with their own commitments.
  • Where misaligned, use the results to engage with portfolio banks to support and drive progress on ESG integration.

Methodology

Assessment framework

The SUSBA tool assesses the public disclosures of 35 listed banks across six ASEAN countries - Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

The assessment framework comprises six pillars and 11 indicators, that signify what WWF considers to be robust ESG integration. The assessment is performed against 70 sub-indicators, with binary "yes/no" answers.

We developed this framework with reference to:

a) Existing international frameworks, standards and initiatives, including:

  • GRI Sustainability Reporting Guidelines
  • International Integrated Reporting Council (IIRC)'s International Integrated Reporting Framework
  • TCFD recommendations
  • Sustainability Accounting Standards board (SASB)

b) Relevant national principles and guidelines on sustainability reporting.

c) Specific environmental and social issues most relevant to Southeast Asia.

d) Deep science-based insights rooted in our global network of sustainability experts.

To provide a more comprehensive data set against which ASEAN banks can benchmark themselves, the 2019 update includes assessments of select international banks that are active in the ASEAN loan market (based on league table data). Although SUSBA remains an ASEAN-focussed tool, ASEAN banks may find it useful to compare themselves against international banks that began their ESG integration journey earlier.

To highlight the progress that banks have made on ESG integration, the assessment results also display improvements or regressions (indicated in green and red, respectively). To view the detailed assessment results and benefit from the tool's full functionalities, users should request access and log in.

Methodology pillars

Scope

The assessment of ESG integration focuses only on the banks' indirect footprint, i.e. its exposure to ESG risks and impacts through client relationships, as opposed to the bank's direct footprint (e.g. building energy consumption, paper consumption, and staff travel). There is a broad consensus among various stakeholders (investors, regulators, civil society) that while the management of direct impacts is important, indirect risks and impacts are far more significant, and should form the backbone of any bank's sustainability strategy.

The assessment focuses on the banks' corporate/wholesale activities. Retail banking, private banking, and asset management divisions are excluded.

Scope covered
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Information used

For consistency purposes, the assessment only takes into account information that is disclosed publicly in English. This can take the form of annual reports or sustainability/corporate social responsibility reports, covering FY 2018 and released before 9 July 2019, as well as information posted on corporate websites such as company policies, statements, investor presentations and press releases (accessible as of 9 July 2019). These public disclosures represent what is available to international investors and stakeholders looking to develop an understanding of how banks are managing climate and ESG risks and opportunities so as to contribute to sustainable development. Preliminary results were shared with each bank. WWF updates the assessment once annually. However, banks may reach out proactively to inform WWF about updates to banks’ disclosures. WWF will consider those and make necessary revisions, such that the assessments can reflect their most updated state.

The information used was derived from a project funded by the International Climate Initiative (IKI).

Information used
© Shutterstock / Leung Cho Pan / WWF

The six pillars of ESG integration

The first step is for banks to develop an overarching sustainability strategy and recognize their role in contributing to a more sustainable economy. Banks should then develop specific policies to guide the integration of ESG considerations into internal processes and engagement with clients. For this to be effective, people need to be trained and have clear roles and responsibilities, with senior-level oversight and accountability. Beyond E&S risk management, banks' should capitalize on opportunities to develop innovative products and services that support their clients in improving sustainability performance. In order to manage enterprise-level risks and opportunities and ensure that a bank's business model is aligned with international sustainable development objectives, it is crucial that ESG risks and opportunities are assessed at the portfolio level.

Purpose

Purpose
  1. Sustainability strategy and stakeholder engagement
  2. Participation in sustainable finance initiatives and policy advocacy with regulators

Policies

Policies
  1. Public statements on specific ESG issues
  2. Public statements on specific sectors

Processes

Processes
  1. Assessing ESG risks in client and transaction approvals
  2. Client monitoring and engagement

People

People
  1. Responsibilities for ESG
  2. Staff E&S training and performance evaluation

Products

Products
  1. ESG integration in products and services

Portfolio

Portfolio
  1. ESG risk assessment and mitigation at portfolio level
  2. Disclosure of ESG risk exposure and targets

Assessed banks

The major publicly listed banks headquartered in each country were included to best represent the regional banking industry upon which most local businesses rely.

Flag of Indonesia

1. Indonesia

  • Bank Central Asia Tbk (BCA)
  • Bank Mandiri (Persero) Tbk (Mandiri)
  • Bank Negara Indonesia Tbk (BNI)
  • Bank Panin Tbk (Panin)
  • Bank Permata Tbk (Permata)
  • Bank Rakyat Indonesia Tbk (BRI)
  • PT Bank Muamalat Indonesia Tbk (Muamalat)
  • PT Bank Pembangunan Daerah Jawa Barat dan Banten Tbk (Bank BJB)
Flag of Malaysia

2. Malaysia

  • AMMB Holdings Berhad (Ambank)
  • CIMB Group Holdings Berhad (CIMB)
  • Hong Leong Bank Berhad (Hong Leong)
  • Malaysian Banking Berhad (Maybank)
  • Public Bank Berhad (Public Bank)
  • RHB Bank Berhad (RHB)
Flag of The Philippines

3. Philippines

  • BDO Unibank, Inc (BDO)
  • Bank of the Philippine Islands (BPI)
  • China Banking Corporation (CBC)
  • Metropolitan Bank & Trust Company (Metrobank)
  • Philippine National Bank (PNB)
  • Security Bank Corporation (SBC)
Flag of Singapore

4. Singapore

  • DBS Group Holdings Limited (DBS)
  • Oversea-Chinese Banking Corporation Limited (OCBC)
  • United Overseas Bank Limited (UOB)
Flag of Thailand

5. Thailand

  • Bangkok Bank (BBL)
  • Bank of Ayudhya (Krungsri)
  • Kasikorn Bank (KBank)
  • Krung Thai Bank (KTB)
  • Siam Commercial Bank (SCB)
  • Thanachart Bank (TBank)
  • TMB Bank (TMB)
Flag of Vietnam

6. Vietnam

  • Bank for Investment and Development of Vietnam (BIDV)
  • Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB)
  • Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank)
  • Vietnam Export-Import Commercial Joint Stock Bank (Eximbank)
  • Vietnam Prosperity Bank (VPBank)

About WWF

WWF montage
© WWF

WWF has worked with the financial sector (banks, investors and regulators) for more than a decade, with the objective of accelerating the integration of ESG risks and opportunities into mainstream finance, so as to redirect financial flows to support the Paris Agreement and the SDGs. Our approach to sustainable finance leverages:

  • Our conservation experience on the ground across WWF’s global practices.
  • Our partnerships with companies on key issues such as climate, energy, food and water to drive sustainability.
  • Our participation in cutting-edge sustainable finance initiatives (e.g. Science Based Targets initiative and the European Commission’s Technical Expert Group on Sustainable Finance).

This has allowed us to strengthen lending and investment criteria for key industry sectors, provide insights and data on environmental and social risks, fulfil critical research gaps, help unlock innovations in sustainable finance products and convene key stakeholders to progress the sustainable finance agenda.

Header image © Shutterstock / Kanuman / WWF