Abu Dhabi Islamic Bank PJSC

The ESG Committee held two meetings, during the course of 2024, to discuss Environmental, Social, and Governance (ESG) and Corporate Social Responsibility (CSR) plans, ensuring that these initiatives align with the bank's strategic objectives and sustainability goals. The committee reviewed ESG ratings and conducted gap assessments to identify areas where the bank needs to improve to meet regulatory requirements. Group ESG updates were provided to ensure consistency and progress across all branches and subsidiaries. Additionally, the committee reviewed and updated ESG policies to ensure they remain relevant and effective. [...] From a governance perspective, ADIB applies best practice by the presence of ESG Committees at both the executive management, and the board levels. Oversight over ESG activities is thus addressed at all relevant governance levels, with periodic, quarterly committee meetings. The responsibility of the ESG management committee is oversight and executive decision making with regard to bank-wide ESG matters, including sustainable finance, regulatory compliance, leading regional and global best practice, strategy, governance, risk management, and all other areas of relevance. The board committee performs a board level oversight function on the same.

###### Board Risk Committee (BRC)

- BRC ensures a robust ESG risk management culture within ADIB Group by delegating responsibilities for decision making and controls to appropriate personnel, units, and committees. BRC shall approve Group's ESG Risk Management Policy, including ESG Risk appetite, and further delegating ESG Risk oversight and management activities as required.

- The BRC shall review and approve any amendments to the ESG Risk Management framework proposed by the Enterprise Risk Committee.

- BRC shall delegate the responsibility for ESG risk oversight to the Enterprise Risk Committee (ERC).

- The BRC through the GCRO shall promote awareness on ESG risks across different levels in ADIB Group.

###### Board ESG Committee (BESGC)

- The BESGC shall oversee ADIB Group's ESG strategy and policies with the objective of setting the tone from the top from an ESG perspective and embedding ESG across ADIB Group's operations.

- Ensuring ADIB Group's ESG policies and practices are aligned with the relevant laws, regulations, Shari'a requirements and standards;

- Monitoring ADIB Group's ESG performance including but not limited to business ethics, data privacy and security, and human rights.

###### Enterprise Risk Committee (ERC)

- ERC shall be responsible for reviewing and recommending ADIB Group's ESG Risk Management Policy, including ESG Risk appetite for approval by the BRC.

- The Committee is responsible for reviewing and recommending the ESG risk assessment methodology, models, and frameworks for approval by the BRC.

- Reviewing ESG-related risks and opportunities within ADIB Group's operations, investments, and financing activities, including risks related to climate change, social responsibility, and governance issues.

- Reviewing and recommending the portfolio level assessments, scenario analysis and stress testing results and ESG risk as part of ICAAP for approval by the BRC.

- Setting the direction and expectations on ESG risk management under guidance by the BRC.

- ERC shall ensure that adequate resources and sufficient skills and expertise are devoted to managing ESG risks.

- Authorise studies for the assessment of impact of ESG risks on ADIB Group's business resilience and long-term value creation.

- The Committee shall be apprised of the ESG risk profile of ADIB Group.

- The Committee shall ensure fair representation of disclosures on ESG risks to the relevant stakeholders.

- ERC shall review any escalations related to breaches or exceptions to the ESG Risk Policy, take action in line with its charter, and report them to the BRC as necessary.

###### ESG Management Committee

The key roles and responsibilities of the team are as follows which will be performed in coordination with the Risk Management team:

- Being notified of updates to the ESG Risk Management Policy, sector materiality assessments, and risk appetite statements made by the Risk Management team;

- Performing an advisory role for the first and second lines of defence on the ESG aspects as required including inputs on the ESG risk management process.