Environmental and Social Sustainability Report

Environmental and social sustainability mission statement

ACLEDA Bank is committed to achieving strong, sustainable financial returns, while respecting the environment and community within which we live. We subscribe to the concept of triple bottom line ('people, planet, profit') reporting and are constantly developing indicators for measuring and reporting on our performance and impacts on the society and the environment and to implement a reporting structure based on the guidelines of the Global Reporting Initiative.

The key elements of ACLEDA Bank's Environmental and Social Sustainability mission are:

1. To provide a framework of guidelines within which ACLEDA Bank can operate in a sustainable manner so that our impact on the environment, society and the community in which we operate is managed in a responsible way.
2. To continue to introduce energy efficient systems into our buildings and to manage sensibly our energy requirements wherever we operate.
3. To honour the society in which we live and actively work to promote an inclusive culture embracing not just shareholders and staff, customers, and business partners but respect for the individual within our community.
4. To recognise that supporting the community is not just morally sound but good for business as well — our 'good health' and prosperity are mutually interdependent.

Environment

ACLEDA Bank fully subscribes to international conventions which prohibit the provision of credit to, or otherwise support, any activities which might harm the environment, be morally repugnant or jeopardise human rights. In particular the bank has in place policies which forbid involvement with exploitative forms of forced or child labour, trade in weapons and munitions, gambling, casinos, brothels, regulated wildlife or wildlife products (CITES rules) and production or trade in radioactive materials or significant volumes of hazardous chemicals. Strict monitoring processes are in place which require customer contact staff to certify that any business we write conforms to these principles.

The Bank employs two full time Environmental Officers who regularly undertake training and refresher courses to coordinate ACLEDA's environmental activities and monitor performance.

Environmental Performance Indicators

In order to establish baselines for the measurement of our efforts to reduce our environmental impact, during 2005 we introduced a tracking system for resource usage. The results are given under their respective headings below and will be used to benchmark our future performance.

Paper Usage

In 2009, paper usage was cut by 23.55% and waste paper was cut by 7.76% per co-worker compared to 2008. This was mainly due to increased use of electronic data storage and the sending of information by e-mail and our internal intranet. Additionally all staff have been trained to use double side printing and to recycle single sided documents.

	2009	2008	2007	2006	2005
Materials
Paper in kg/FTE	17.72	23.18	23.30	25.44	38.92
Waste
Waste paper in kg/FTE	2.14	2.32	2.61	2.32	3.18

Energy Consumption

Electricity consumption per co-worker increased by 1.79% in 2009 because of the increasing use of technology, many branches working conditions were upgraded, and the number of new offices connected to the grid (as opposed to relying on generator). Gasoline consumption was cut by 11.44% and diesel was cut by 2.03% per co-worker compared to 2008 because the opening of new offices and many offices were moved closer to our customers in the rural areas reducing the need for travel. Lubricant and gas consumption were also cut in 2009 by 10.88% and 20.69% respectively compared in 2008. However, the overall growth of the bank inevitably led to an increase in CO₂ emissions in absolute terms.

	2009	2008	2007	2006	2005
Energy
Electricity in kWh/FTE	960.86	943.92	741.34	510.44	535.83
Gasoline in l/FTE	57.49	64.92	78.31	96.36	111.56
Diesel in l/FTE	59.83	61.07	44.00	45.66	40.43
Lubricant in l/FTE	2.62	2.94	3.19	4.03	4.54
Gas in kg/FTE	0.23	0.29	0.45	0.53	0.78
Emission of CO2 (Equivalents — in thousands of kg)
Electricity	3,578	2,768	1,605	793	688
Gasoline	927	824	734	648	621
Diesel	1,112	894	476	354	259

The CO₂ equivalent is referred to the Greenhouse Gas Protocol calculation principles.

Water

Water consumption increased by 29.77% in 2009 compared to 2008. This is largely because our substantial fleet of cars and motorcycles are now washed down on our premises instead of this being outsourced.

	2009	2008	2007	2006	2005
Water
Water in m3/FTE	29.82	22.98	24.02	26.62	30.29

Business Travel

In 2009, the total distance travelled by car and motorcycle was reduced by 21.15% and 7.25% respectively compared to 2008 due to the opening of new offices or relocation of existing offices closer to our customers in the rural areas reducing the need for travel.

	2009	2008	2007	2006	2005
Business Travel
By car in km/FTE	285.88	362.55	337.46	335.02	-
By motorcycle in km/FTE	2,587.50	2,789.73	3,479.21	4,336.23	-

Social Sustainability

ACLEDA Bank's corporate culture is built on respect for the society in which we operate and an inclusive perspective on our stakeholders embracing not just shareholders and staff, customers and business partners but the community at large. In addition to the environmental programs mentioned above the bank observes a policy of equality in all dealings with the public in general and customers and staff alike. Above all, ACLEDA Bank has practiced from the very beginning 'zero tolerance' of corruption both internally and externally and transgressions are dealt with summarily.

The following are key principles in ACLEDA's corporate social responsibility policy:

Staff

• ACLEDA is an 'equal opportunity' employer. Apart from those jobs which involve a higher physical risk (e.g. guards and messengers) appointment to all positions at every level is based entirely on merit regardless of gender or physical disability.
• ACLEDA Bank aims to be the most progressive employer in Cambodia providing medical, pension and other benefits such as personal and housing loan schemes and an employee share ownership program for all staff who have completed probation. It provides comprehensive training both for new recruits as well as experienced staff and encourages those who wish to further develop themselves through external programs.
• A high level committee under the chairmanship of the Chairman of the Board has been specifically tasked with the responsibility of setting and monitoring the bank's moral and ethical standards and respect for human rights.
• In consultation with its staff the bank has drawn up social policies covering i) Code of Conduct, ii) Human Resources Management, iii) Health & Safety, iv) External Relations, v) Freedom of Association and the Right to Collective Bargaining. These are now published on Lotus Notes so that every member of the staff has free (and paperless) access to the most up-to-date versions.
• The staff is represented by a self elected Staff Representative Committee, which excludes management, and a Staff Sports Committee, to promote healthy recreation and good fellowship. At its headquarters, the bank provides a clinic under the care of a full time doctor and a full time nurse. Healthy safe working practices are part of the training provided to all employees under the doctor's supervision. A Health and Safety Policy under the direct responsibility of the Executive Vice President & Chief Administrative Officer is in place which includes a policy supervised by a dedicated committee for the support of our staff who are suffering from HIV/AIDS.

	2009	2008	2007	2006	2005
Employment
Number of staff	7,013	6,128	4,401	3,028	2,484
Male	4,676	4,228	3,164	2,265	1,918
Female	2,337	1,900	1,237	763	566
Number of staff (FTE)	6,771	5,331	3,937	2,825	2,335
Training and Education
Training — career development and refresher programs	2,580	1,428	1,178	950	4,084
Training of new recruits — induction program	1,071	1,901	1,714	686	562
Provide training to external students — local	1,981	695	654	638	282
Provide training to external students — international	15	3	4	12	9

Community

ACLEDA recognises that playing our part as good citizens in the community in which we abide is vital to our mutual interests and prosperity. Major initiatives we are taking are:

• Developing and offering appropriate products and services carefully selected and developed for the particular needs of Cambodian society. In 2006 the bank launched a housing loan scheme, with interest rates fixed for up to 10 years to enable Cambodian people, especially in the lower wealth segment, to purchase their own homes.
• Expanding outreach: opening up banking services to new communities in new locations by expanding our network in the provinces and extending on-line banking services to mobilise savings. The expansion of our 24 hours a day/7 days a week ATM network to all provinces in 2009 has enabled our customers to access their funds at their own convenience, irrespective of the normal opening hours of the bank or national holidays. In 2010 we will launch 'Unity' — our mobile phone banking service — which will extend access to financial services in the Khmer Languages as well as English to every village and commune in Cambodia.
• During January 08 - February 12, 2010, we conducted our annual survey on our micro, small and medium loan customers' living standards to test the impact of our credit services. This involved 2,515 accounts randomly selected from our loan customers of whom 65.3% were micro loans, 26.1% were small loans and 8.6% were medium loan clients, as a proportion of our total loan customers. The responses indicated that across all sectors there were 84.2% who considered that their wealth had increased as a result of credit provided by ACLEDA Bank, 7.0% who did not detect any noticeable change while 8.8% had the perception that they were worse off than before.

	2009	2008	2007	2006	2005
Income Situation
Growth	84.2%	87.4%	89.2%	93.3%	90.0%
Stability	7.0%	8.9%	7.4%	6.2%	7.5% - 9.5%
Reduction	8.8%	3.7%	3.4%	0.5%	1.1% - 2.3%

That this is the second year in which the indicators have deteriorated is a matter of deep concern and while the economic situation both in Cambodia and worldwide is undoubtedly a factor and is largely outside our control we need to look further to ascertain what action is within our power to improve the score.

During 2009, ACLEDA Bank extended its outreach to the lower segment with an increase of 20,064 (13.7%) new microbusiness loans over the previous year.

	2009	2008	2007	2006	2005
No. of microbusiness loans outstanding	166,609	146,545	138,861	126,289	98,570
Average microbusiness loan size (US$)	396	389	494	400	229

• Incorporated into our policies are strictures against overselling or encouraging customers to over commit themselves or buy inappropriate products or services. As a matter of principle, ACLEDA does not impose mandatory savings requirements on its customers.
• Transparency and 'truth in advertising' are strictly enforced when developing, advertising and selling our products and services and full and detailed information is provided through brochures, our website and other promotional material.
• ACLEDA practices equality in its lending irrespective of gender or race: 55.97% of our borrowing customers are female.
• Customer confidentiality is inculcated in all our staff during induction training and transgressions are treated as a serious offence.
• Recognising the particular problem of disability in Cambodia, ACLEDA is taking into account the special needs of the disabled when constructing new, or renovating old offices.
• As a commercial organisation ACLEDA does not receive subsidies but may on occasion, and where appropriate, receive financial support to provide non-commercial services such as workshops for external trainees.
• ACLEDA does not ally itself to any particular political parties or creeds but seeks to cooperate and work in harmony with the elected government of the day. To this end the bank regularly participates in meetings with senior officials through industry associations, business forums, chambers of commerce and other group activities. Individual meetings with officials are conducted with transparency and important matters are minuted. ACLEDA has strict rules governing 'undue entertainment' or other activities which might be open to question on the grounds of probity, including the provision of banking services at non-commercial rates ('policy lending').
• The ACLEDA-ASEAN Regional Microfinance Center, an educational establishment set up in January, 2009, by ACLEDA Bank with financial support from KfW to offer training in micro financial services, has provided 1,981 internships for local students and 15 for international students from England, France, Japan, and Singapore.

Note: FTE (Full Time Equivalent): average number of full-time co-workers during the year.

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