IDFC First Bank Ltd

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The ESG agenda of the Bank is directed by specific Board and Management committees steering its strategy and implementation. The committees are further supported by a cross-functional working group, together with a dedicated ESG team. [...] **Board-level Committee** **Management-level** **Steering Committee and** **Committee** **Working Group** **» Board Committee*:** **» Chaired by MD & CEO,** **» Specific working groups** CSR & ESG Committee, meets quarterly with cross-functional meets quarterly composition and expertise, **» Drives the strategic** responsible for delivering integration of sustainability on the ESG agenda, within the Bank meet monthly **» Comprises executive** **» Facilitated by a dedicated** members including heads ESG team of Group functions [...] - The Board Committee responsible for ESG was changed to the CSR & ESG Committee from the Stakeholders' Relationship, ESG and Customer Service Committee in October 2024. [...] **Governance** **» Board-level CSR & ESG Committee* providing oversight of ESG practices and performances, including climate-related** issues, which meets on a quarterly basis **» ESG Management Committee and working group role in executing ESG strategy, including climate-related issues** **» Shared responsibility across teams, including business on ESG and climate-related matters

### PRINCIPLE 7 **Businesses when engaged in influencing public and** **regulatory policy should do so in a responsible manner** **1.** **Is your company a member of any trade and chamber** **or association?** The Bank is an active member of several Trade Bodies and Associations. The Bank does not engage in policy advocacy but is actively involved in consultation / discussion forums with the Government and other banking industry bodies such as Indian Banks' Association, Fixed Income Money Market and Derivatives Association of India (FIMMDA), Foreign Exchange Dealers Association of India (FEDAI) and other Associations. **2.** **Have you advocated / lobbied through above** **associations for the advancement or improvement** **of public good?** IDFC FIRST Bank is also working with other financial institutions, NGOs and local government at district level for CSR activities and industrial associations towards advancement or improvement of public good, economic reforms, inclusive development and other associate services.

## PRINCIPLE 7 **Businesses when engaged in influencing public and** **regulatory policy should do so in a responsible manner** IDFC FIRST Bank is an active member of several Trade Bodies and Associations. The Bank does not engage in policy advocacy but is actively involved in consultation / discussion forums with the Government and other banking industry bodies such as Indian Banks' Association, Confederation of Indian Industry (CII), Fixed Income Money Market and Derivatives Association of India (FIMMDA), Foreign Exchange Dealers Association of India (FEDAI) and other Associations. [...] The Bank promotes an efficient and transparent financial system, enhancing financial literacy and improving access to the banking system. The Bank also participates in key initiatives undertaken by the Government and Regulators. [...] Some of the modes of disclosure are: - Publishing the Business Responsibility Report of IDFC FIRST Bank in adherence to National Voluntary Guidelines ('NVGs') laid out by the Ministry of Corporate Affairs ('MCA'), Government of India. - Nomination of the Bank for awards, assessments and ratings by national and international agencies.

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We formalised ESG as a dedicated function a year ago, with an objective to actively seek opportunities to make our Bank more sustainable and showcase our efforts to the larger world. As with other initiatives, we first created a dedicated governance structure, starting with a Board Committee that manages Stakeholders' Relationship, ESG and Customer Service (SRECS), which in turn, is supported by an ESG Management Committee and a Working Group. The ESG function is responsible for identifying opportunities for the Bank to create a larger impact; acting as a centre of excellence for all ESG initiatives across the Bank; running point on ESG goals; evaluating ESG risks; and communicating to stakeholders on the Bank's ESG progress through benchmarked reporting. It is also responsible for charting the Bank's climate action plan and sustainable finance framework.

#### I. Governance

The Bank considers ESG as an organizational imperative and has taken steps to set up a dedicated and robust governance structure, for integrating ESG and climate risk considerations into its business model. The Bank has created a Stakeholders' Relationship, ESG, and Customer Service Committee (SRECS Committee) of the Board, which is supported by an ESG management committee and working group. The ESG function is responsible for identifying opportunities for the Bank to create a larger impact, acting as a centre of excellence for all ESG initiatives, monitoring ESG activities and communicating the Bank's ESG progress to stakeholders through benchmarked reporting. It is also responsible for charting the Bank's climate action roadmap and sustainable finance framework.

##### The Board has a strong oversight of ESG practices & performance within the Bank.

IDFC FIRST Bank

Board

SRECS (Stakeholders' Relationship,

ESG and Customer Service)

Committee

ESG
Management

Committee

ESG Working

Group

**Board-level committee:**

The Bank has established the SRECS Committee which will have a primary responsibility for oversight and monitoring of ESG practices & performance within the Bank including review of statutory ESG reporting such as the Business Responsibility and Sustainability Report (BRSR).

This SRECS Committee also assists the IDFC FIRST Board in monitoring the quality of services rendered to the customers and ensure implementation of directives received from the Reserve Bank of India (RBI) in this regard.

The committee is led by the Chairperson, who is a Non-Executive Director, and comprises of the following members:

**Name of the Director** **Type of**
**Directorship**
Dr. Brinda Jagirdar (Chairperson of the Committee) Independent
Pravir Vohra (Member) Independent
Sanjeeb Chaudhuri (Member) Independent
S. Ganesh Kumar (Member) Independent
Matangi Gowrishankar Independent
Director
V. Vaidyanathan MD & CEO

The SRECS committee meets at least four times a year, on a quarterly basis with a gap of not more than 120 days between each meeting. In the year FY 2023-24, the SRECS committee has met in April 2023, July 2023, and October 2023, and Jan 2024.

**Management Level Committee:**

The Bank has set up an ESG Management Committee responsible for overseeing, supporting, and advising on actions to be taken towards the Bank's sustainable business and long-term value creation for stakeholders. This Committee is led by the MD & CEO and comprises senior members across major functions viz., CFO, CRO, Head-Wholesale, Head- Retail, CHRO, Head-Retail Assets & ESG, CCO, HeadLegal & Company Secretary, Head- Corporate Real Estate & Services, and Head- Investor relations.

The primary responsibility of the ESG Management Committee is to support the SRECS committee with executive level oversight and implement the Bank's policies, strategies and programs related to matters of sustainability. It also assumes the responsibility of aligning the Bank's ESG framework with global frameworks such as TCFD, UN Global Compact (UNGC), and others. The Management Committee meets on a quarterly basis preceding the SRECS Committee meetings.

The ESG Management Committee is further supported by the Bank's dedicated ESG function that enables and executes the Bank's ESG ambitions, initiatives, projects, and day-to-day operations. It has been assigned the mandate to drive the Bank's stated goals and its performances with respect to ESG matters and monitor the Bank's progress towards these measurable goals. It will also be responsible for the preparation of disclosures related to the Bank's environmental & social initiatives and metrics in internal & external stakeholders. The ESG Function also apprises the Working Group (Steering Committee), which comprises heads and leads of relevant functions on the execution of ESG initiatives, efforts and activities.

The Bank does not support political campaigns, political organizations, lobbyists or lobbying organizations and other tax-exempt groups for the purpose of influencing policy.

IDFC Bank is an active member of several trade bodies and associations. The Bank does not engage in policy advocacy but is actively involved in consultation / discussion forums with the Government and other banking industry bodies. Some of the major trade bodies / associations through which the Bank is a member are listed below: 1. Indian Banks' Association 2. Associated Chambers of Commerce and Industry of India (ASSOCHAM) 3. Bombay Chamber of Commerce & Industry (BCCI) 4. Bombay Management Association (BMA) 5. Confederation of Indian Industry (CII) 6. Federation of Indian Chamber of Commerce & Industry (FICCI) 7. Indian Merchants Chambers (IMC) 8. Impact Investors Council 9. Micro Finance Institutions Network 10. All India Management Association Through these associations, the Bank promotes an efficient and transparent financial system, enhancing financial literacy and improving access to the banking system. The Bank also participates in key initiatives undertaken by the Government and Regulators. IDFC Limited has also played a key role in providing leadership and advocacy in areas of corporate governance as well as public policy. [...] Senior Management of IDFC Bank hold significant positions in various Committees constituted by the Government of India, Regulators and other industrial bodies.

In the event that clarification on interpretation is required, consultation must first be sought from the ESG Department of the Bank. [...] The Framework would be approved by the Board of Directors and shall be reviewed by Risk Management Committee of the Board at least annually. [...] Within three months of the end of each financial year, the Bank shall place before its Board of Directors a report covering information on total amount of funds raised through instruments issued under this Framework, list of the projects (with description) along with amount allocated and a copy of third-party verification/assurance and impact assessment report.

The Bank does not support political campaigns, political organizations, lobbyists or lobbying organizations and other tax-exempt groups for the purpose of influencing policy.

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## PRINCIPLE 7 **Businesses when engaged in influencing public and** **regulatory policy should do so in a responsible manner** IDFC FIRST Bank is an active member of several Trade Bodies and Associations. The Bank does not engage in policy advocacy but is actively involved in consultation / discussion forums with the Government and other banking industry bodies such as Indian Banks' Association, Confederation of Indian Industry (CII), Fixed Income Money Market and Derivatives Association of India (FIMMDA), Foreign Exchange Dealers Association of India (FEDAI) and other Associations. [...] **1.** **Is your company a member of any trade and chamber** **or association?** IDFC FIRST Bank is an active member of several trade bodies and associations. Please refer to the Principle 7 for more information. **2.** **Have you advocated / lobbied through above** **associations for the advancement or improvement** **of public good?** IDFC FIRST Bank is also working with other financial institutions, NGOs and local government at district level for CSR activities and industrial associations towards advancement or improvement of public good, economic reforms, inclusive development and other associate services. For more details please refer to Principle 7.

##### Principle 7\n\n Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner\n\n1. Businesses, while pursuing policy advocacy, must ensure that their advocacy positions are consistent\nwith the Principles and Core Elements contained in these Guidelines.\n\n2. To the extent possible, businesses should utilize the trade and industry chambers\nand associations and other such collective platforms to undertake such policy\nadvocacy.\n\n##### Principle 7\n\n1. Is your company a member of any trade\nand chamber or association? If Yes, Name\nonly those major ones that your business\ndeals with:\n\nIDFC Bank is an active member of several\ntrade bodies and associations. A list of\nthese associations have been mentioned\nunder Principle 7.\n\nIn addition to the above, Senior\nManagement of IDFC Bank are members\nof various committees constituted by\nthe Government of India, Regulators and\nother industry bodies.\n\n2. Have you advocated / lobbied through\nabove associations for the advancement\nor improvement of public good? Yes /\nNo; if yes specify the broad areas (drop\nbox: Governance and Administration,\nEconomic Reforms, Inclusive\nDevelopment Policies, Energy security,\nWater, Food Security, Sustainable\nBusiness Principles, Others)?\n\nIDFC Bank is also working with\nGovernment agencies, other financial\ninstitutions and industry associations\nlike CII and FICCI towards funding green\ntechnology and for associate services. For\nmore details please refer to Principle 7.

Periodic review and implementation of policies, strategies, programmes, initiatives, reporting, disclosures and such other matters related to ESG is a part of Terms of Reference of Stakeholders' Relationship, ESG and Customer Service Committee of the Board. [...] Yes. The Stakeholders' Relationship, ESG and Customer Service Committee. [...] Performance against above policies Committee of the Board Annually/Whenever amendments are necessary in view of regulatory changes or otherwise Compliance with statutory Committee of the Board Annually/Whenever amendments are necessary in view of regulatory changes or otherwise

The ESG agenda of the Bank is directed by specific Board and Management committees steering its strategy and implementation. The committees are further supported by a cross-functional working group, together with a dedicated ESG team. [...] **Board-level Committee** **Management-level** **Steering Committee and** **Committee** **Working Group** **» Board Committee*:** **» Chaired by MD & CEO,** **» Specific working groups** CSR & ESG Committee, meets quarterly with cross-functional meets quarterly composition and expertise, **» Drives the strategic** responsible for delivering integration of sustainability on the ESG agenda, within the Bank meet monthly **» Comprises executive** **» Facilitated by a dedicated** members including heads ESG team of Group functions [...] - The Board Committee responsible for ESG was changed to the CSR & ESG Committee from the Stakeholders' Relationship, ESG and Customer Service Committee in October 2024. [...] **Governance** **» Board-level CSR & ESG Committee* providing oversight of ESG practices and performances, including climate-related** issues, which meets on a quarterly basis **» ESG Management Committee and working group role in executing ESG strategy, including climate-related issues** **» Shared responsibility across teams, including business on ESG and climate-related matters

### 3. Policy governance

This Policy will be approved by the Bank's Board of Directors, and governed through the Stakeholders' Relationship, ESG, and Customer Service (SRECS) Board Committee and the ESG Management Committee.

#### I. Governance

The Bank considers ESG as an organizational imperative and has taken steps to set up a dedicated and robust governance structure, for integrating ESG and climate risk considerations into its business model. The Bank has created a Stakeholders' Relationship, ESG, and Customer Service Committee (SRECS Committee) of the Board, which is supported by an ESG management committee and working group. The ESG function is responsible for identifying opportunities for the Bank to create a larger impact, acting as a centre of excellence for all ESG initiatives, monitoring ESG activities and communicating the Bank's ESG progress to stakeholders through benchmarked reporting. It is also responsible for charting the Bank's climate action roadmap and sustainable finance framework.

##### The Board has a strong oversight of ESG practices & performance within the Bank.

IDFC FIRST Bank

Board

SRECS (Stakeholders' Relationship,

ESG and Customer Service)

Committee

ESG
Management

Committee

ESG Working

Group

**Board-level committee:**

The Bank has established the SRECS Committee which will have a primary responsibility for oversight and monitoring of ESG practices & performance within the Bank including review of statutory ESG reporting such as the Business Responsibility and Sustainability Report (BRSR).

This SRECS Committee also assists the IDFC FIRST Board in monitoring the quality of services rendered to the customers and ensure implementation of directives received from the Reserve Bank of India (RBI) in this regard.

The committee is led by the Chairperson, who is a Non-Executive Director, and comprises of the following members:

**Name of the Director** **Type of**
**Directorship**
Dr. Brinda Jagirdar (Chairperson of the Committee) Independent
Pravir Vohra (Member) Independent
Sanjeeb Chaudhuri (Member) Independent
S. Ganesh Kumar (Member) Independent
Matangi Gowrishankar Independent
Director
V. Vaidyanathan MD & CEO

The SRECS committee meets at least four times a year, on a quarterly basis with a gap of not more than 120 days between each meeting. In the year FY 2023-24, the SRECS committee has met in April 2023, July 2023, and October 2023, and Jan 2024.

**Management Level Committee:**

The Bank has set up an ESG Management Committee responsible for overseeing, supporting, and advising on actions to be taken towards the Bank's sustainable business and long-term value creation for stakeholders. This Committee is led by the MD & CEO and comprises senior members across major functions viz., CFO, CRO, Head-Wholesale, Head- Retail, CHRO, Head-Retail Assets & ESG, CCO, HeadLegal & Company Secretary, Head- Corporate Real Estate & Services, and Head- Investor relations.

The primary responsibility of the ESG Management Committee is to support the SRECS committee with executive level oversight and implement the Bank's policies, strategies and programs related to matters of sustainability. It also assumes the responsibility of aligning the Bank's ESG framework with global frameworks such as TCFD, UN Global Compact (UNGC), and others. The Management Committee meets on a quarterly basis preceding the SRECS Committee meetings.

The ESG Management Committee is further supported by the Bank's dedicated ESG function that enables and executes the Bank's ESG ambitions, initiatives, projects, and day-to-day operations. It has been assigned the mandate to drive the Bank's stated goals and its performances with respect to ESG matters and monitor the Bank's progress towards these measurable goals. It will also be responsible for the preparation of disclosures related to the Bank's environmental & social initiatives and metrics in internal & external stakeholders. The ESG Function also apprises the Working Group (Steering Committee), which comprises heads and leads of relevant functions on the execution of ESG initiatives, efforts and activities.

Periodic review and implementation of policies, strategies, programmes, initiatives, reporting, disclosures and such other matters related to ESG is a part of Terms of Reference of Stakeholders Relationship, ESG and Customer Service Committee of the Board. The composition, attendance details and other details of Stakeholders Relationship, ESG and Customer Service Committee are mentioned in 'Corporate Governance Report' [...] Committee of the Board Annually/Whenever amendments are necessary in view of regulatory changes or otherwise [...] The draft directions/ guidelines of RBI are circulated to all the stakeholders. The suggestions received are submitted to RBI on e-mail. In certain cases, the Bank submits the suggestions/ representation on guidelines based on challenges faced by them. IBA seeks suggestions from all banks in various areas. We disseminate these mails to the concerned stakeholders in the Bank. The responses received from the stakeholders are submitted to IBA.

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The nomination and remuneration committee of the Board comprised of the following members :\n\nMr. Ajay Sondhi Chairman\n\nMs. Veena Mankar Member\n\nMr. Anand Sinha Member\n\nThe functions of the Committee include :\n\ni Evaluate performance of the Whole Time Directors (WTDs) (including the Managing Director & CEO) against\npredetermined parameters\n\nii Make recommendations on remuneration (including performance bonus and perquisites) of Whole Time Directors\n\niii Approve policy and quantum of variable pay, bonus, stock options and increments for the employees of the Bank\n\niv Frame guidelines for the Employees Stock Option Scheme (ESOS) and recommend grants of the Bank's stock\noptions to Whole Time Directors of the Bank\n\n...\n\nThe Board approves the risk framework for the Bank. Business activities of the Bank are undertaken within this framework\nto achieve the financial plan. The risk framework includes the Bank's risk appetite, limits framework and policies and\nprocedures governing various types of risk. The performance evaluation framework of Whole Time Directors, equivalent\npositions and senior management personnel in material risk taker roles, incorporates these risk and control aspects as\ndetailed by the Board. These factors include (but are not limited to) elements such as consistency in asset quality, rating\nslippage of existing loans, RORWA, operational risk parameters and quality of systems. The performance management\nframework of the Bank will evolve over time and get more sophisticated and mature. As regards linkage to remuneration,\nthe compensation for Whole Time Director, etc is paid in fixed pay, performance linked variable pay and stock options which\nis approved by the NRC. Furthermore, material risk takers will not be put on any guaranteed bonus framework. Performance\nevaluation of individuals in Credit, Risk and Control functions will have requisite line of independence to revenue making\nsenior management personnel.

IDFC Bank is an active member of several trade bodies and associations. The Bank does not engage in policy advocacy but is actively involved in consultation / discussion forums with the Government and other banking industry bodies. Some of the major trade bodies / associations through which the Bank is a member are listed below: 1. Indian Banks' Association 2. Associated Chambers of Commerce and Industry of India (ASSOCHAM) 3. Bombay Chamber of Commerce & Industry (BCCI) 4. Bombay Management Association (BMA) 5. Confederation of Indian Industry (CII) 6. Federation of Indian Chamber of Commerce & Industry (FICCI) 7. Indian Merchants Chambers (IMC) 8. Impact Investors Council 9. Micro Finance Institutions Network 10. All India Management Association Through these associations, the Bank promotes an efficient and transparent financial system, enhancing financial literacy and improving access to the banking system. The Bank also participates in key initiatives undertaken by the Government and Regulators. IDFC Limited has also played a key role in providing leadership and advocacy in areas of corporate governance as well as public policy. [...] IDFC Bank is also working with Government agencies, other financial institutions and industrial associations towards funding green technology and for associate services. For more details please refer to principle 7.