**6.10. ESG Governance:**
A systematic and streamlined governance framework is essential for responsible investment. The Bank's corporate governance processes are in compliance with the Companies Act, 2013 (including the rules made thereunder), the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the various guidelines/circulars/regulations issued by the regulators from time to time. The Board of Directors have delegated the CSR&ESG Committee, a Board Level Committee responsible for overseeing and providing direction to the bank with respect to the ESG strategy. The 360-degree ESG governance structure aims to gradually build awareness across the organization, encouraging teams to collaborate and identify opportunities within our lending portfolio. It also guides the management in implementing interventions to embed integrated thinking into our culture and amongst our clients. The CSR&ESG Committee pledges to incorporate sustainability into investment analysis including fundamental analysis, and investment decisions to ensure that the ESG inputs are considered by the prospective clients.
The governance structure shall ensure that the Bank conducts its business in a sustainable and responsible manner by adhering to the following principles:
❖ Principle 1: Businesses should conduct and govern themselves with integrity, and in a manner that is Ethical, Transparent, and Accountable.
❖ Principle 2: Businesses should provide goods and services in a manner that is sustainable and safe.
❖ Principle 3: Businesses should respect and promote the well-being of all employees, including those in their value chains.
❖ Principle 4: Businesses should respect the interests of and be responsive to all its stakeholders.
❖ Principle 5: Businesses should respect and promote human rights.
❖ Principle 6: Businesses should respect and make efforts to protect and restore the environment.
❖ Principle 7: Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent.
❖ Principle 8: Businesses should promote inclusive growth and equitable development.
❖ Principle 9: Businesses should engage with and provide value to their consumers in a responsible manner.
**8. Roles and Responsibilities:**
The Bank always believes that high standards of good governance combined with ethical and transparent business processes lead to greater effectiveness and efficiency, and sustainable business outcomes. Towards this objective, the Board has designated MD & CEO as the Director responsible for ESG implementation and Chief Operating Officer as the executive responsible for ESG implementation & BRSR reporting.
The roles and responsibilities at each level of the governing structure are outlined below:
❖ The Board of Directors shall be responsible for approving the ESG Policy and shall oversee on implementation of the Policy through CSR & ESG Committee.
❖ The CSR & ESG Committee of the Board a Sub-Committee of the Board shall be responsible for overseeing the development and implementation of the Bank's ESG policy framework. The Committee will provide strategic direction to the Bank's ESG performance taking into consideration the relevant risks and opportunities. The Committee will also oversee compliance with applicable ESG related regulatory requirements, track progress against goals and targets as well as review the Bank's ESG disclosures.
❖ The Chief Operating Officer shall directly supervise the implementation of the Policy on behalf of the Board.
❖ The CSR Committee an Executive Committee reporting to the CSR & ESG Committee of the Board shall be responsible for overall execution of the policy in the Bank. The Committee will be responsible for:
- Ensuring that the policy is consistently and effectively executed by each functional unit
- Adequate training, coaching and resources to ensure effective implementation and compliance.
- Reporting on the achievements, failures and difficulties of implementing the policy to the CSR&ESG Committee of the Board.
- To review the effectiveness of the Policy and place a note to the CSR&ESG Committee.
❖ The Senior Management and Functional Heads of the Department are responsible for implementing, maintaining, providing and demonstrating the ESG reporting requirements at the Central Office level along with Central Office Credit Committees and through Divisional Managers at Divisional Office Level
❖ The Chief Operating Officer as the executive is responsible for ESG implementation & BRSR reporting and shall be the owner of the ESG Policy. The Chief Operating Officer through CC & SR Cell shall:
- Formulate the Policy and communicate within the Bank across all levels.
- Ensure implementations of the Policy in coordination with the Senior Management, Functional Head and the CSR Executive Committee
- Co-ordinate, collate and compile the Business Responsibility and Sustainability Report
- Share the BRSR report with Company Secretary.
- Review the policy in line with the regulatory requirement.
❖ The Company Secretary shall be responsible for placing the report along with other items of Annual Report to the Top Management and the Board.