**5.0 GOVERNANCE**
**5.1** The Board of Directors of Commercial Bank of Ceylon PLC, along with the Boards of each financial subsidiary within the Group, hold ultimate responsibility for overseeing Environmental and Social Risk Management (ESRM) across their operations. Each Board is tasked with adopting the Group-wide ESRM policy and approving customized frameworks to ensure alignment with the Environmental, Social, and Governance (ESG) objectives specific to each entity. They also ensure that ESRM practices align with each entity's unique risk appetite and strategic goals.
**5.2** Board-level and senior management committees, such as the Board Integrated Risk Management Committee (BIRMC) and the Executive Integrated Risk Management Committee (EIRMC), oversee the development, implementation, and monitoring of the Group's ESRM policy. These committees may also assess significant Environmental and Social risks within high-risk sector financing activities and adjust Environmental and Social risk distribution within the Bank and its financial subsidiaries' portfolios as needed.
**5.3** The senior management team, including the Chief Risk Officer, ensures that ESRM practices are integrated into the Bank's core business strategy and operations. They provide necessary resources and support for the effective implementation of ESRM.
**5.4** The ESRM team, located within the Bank's risk management department, is responsible for developing and updating ESRM policies, conducting Environmental and Social risk assessments, and training bank staff on ESRM principles and procedures. This team collaborates closely with loan officers and relationship managers to identify potential Environmental and Social risks in lending and investment portfolios. They also engage with external stakeholders, such as regulators and non-governmental organizations, to stay informed on evolving ESG standards and practices.