Sustainability

Advancing sustainability: strategy, implementation, and impact at Alinma Bank

Alinma Bank is committed to fulfilling its corporate responsibility as a leading financial institution in the Kingdom of Saudi Arabia. By embedding a sustainability focus within our strategy, business operations, and corporate culture, we ensure that every employee, partner, and Stakeholder is aware, aligned, and active in pursuing our shared sustainability ambitions.

Sustainability at Alinma Bank is overseen and led by the Governance and Sustainability Committee of the Board of Directors. It is headed by the Vice Chairman of the Board and includes 4 members. This approach ensures clear direction and effective governance, contributing to Alinma Bank’s overall success, reputation, and positive societal impact.

In 2023, we made significant strides in our commitment to sustainability. We launched a comprehensive sustainability strategy, reflecting our dedication to environmental and social responsibility

To effectively manage and execute our sustainability strategy, we established specialized departments, namely the Sustainability Department and the Corporate Social Responsibility (CSR) Department. These departments played a crucial role in overseeing our sustainability and CSR initiatives to leverage our scale, focus our resources, and maximize our positive impact.

Furthermore, we made notable progress in our Environmental, Social, and Governance (ESG) ratings. This progress demonstrates our ongoing commitment to integrating sustainable practices into our operations and highlights our dedication to being a responsible and forward-thinking financial institution.

Our sustainability strategy

Our sustainability strategy was developed with a thorough review of several critical aspects to ensure a comprehensive and effective approach. We conducted an in-depth analysis of our current position and the future objectives we aim to achieve, which was crucial in aligning our sustainability efforts with our long-term goals and aspirations.

Our strategy also closely aligns with the national directives, particularly Saudi Vision 2030 and the Saudi Green initiative, reflecting our commitment to contributing to the nation’s sustainable development goals. We also incorporated the United Nations Sustainable Development Goals (UN SDGs) into our strategy, affirming our dedication to global sustainability standards.

Understanding the importance of staying in line with global trends, our strategy also takes into account the broader global directions related to sustainability and climate change actions. This ensures that our approach is locally relevant and globally responsive.

Lastly, in developing our sustainability strategy, we benchmarked Alinma Bank against our local, regional, and international peers. This benchmarking process was instrumental in ensuring that our approach is both competitive and in line with best practices in the industry.

Our sustainability efforts are structured around 6 main pillars, encompassing 15 goals. This comprehensive approach led to the implementation of over 120 initiatives, indicating a robust and wide-ranging commitment to sustainability. Our balanced approach to sustainability management addresses a range of issues, ensuring that our efforts contribute to both social and environmental well-being, as well as providing a competitive edge as a leading financial institution in the Kingdom.

The 6 pillars of Alinma Bank's sustainability strategy are:

1

Accelerate sustainable finance

2

Foster environmental stewardship and enable a circular carbon economy

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3

Empower our customers

4

Creating a thriving workplace

5

Strengthen our communities and contribute to greater financial inclusion

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6

Robust governance and responsible operations

Materiality

Our sustainability efforts are structured around 6 main pillars, encompassing 15 goals. This comprehensive approach led to the implementation of over 120 initiatives, indicating a robust and wide-ranging commitment to sustainability

Most important

1 Responsible customer relations and satisfaction
2 Talent attraction, retention, and development
3 Diversity and inclusion
4 Digitalization and innovation
5 Governance, accountability, transparency, and ethics
6 Systemic risk management

More important

7Employee engagement and well-being
8Financial inclusion and accessibility
9Data privacy and cybersecurity
10Financial and economic performance
11Sustainable/green financing and investment

Important

12 Operational environmental impact
13 Supply chain management and responsible procurement
14 Social development and community engagement
15 Nationalization

Alignment with regional and international standards

The UN SDGs were reviewed in order to consider Alinma Bank’s alignment with the world’s global goals and visions. The Saudi Vision 2030 was reviewed to consider strategic alignment opportunities for Alinma Bank. This included a review of more specific financial sector development programs of the Saudi Government.

The Saudi Exchange ESG Disclosure Guidelines – a guide for listed companies to help navigate ESG, were reviewed.

Global sustainability standards, and especially sector specific guidelines and standards, were applied to ensure a tailored materiality assessment including:

Global Reporting Initiative
Principles for Responsible Banking
Sustainability Accounting Standards Board (SASB)
World Federation of Exchanges

2023 ESG highlights

In 2023, Alinma Bank demonstrated a strong commitment to ESG principles, marking a year of substantial progress across these crucial areas. Our ESG highlights showcase our dedication and strategic approach to sustainability, social responsibility, and robust governance practices across our operations and footprint.

Environmental achievements and highlights

In 2023, Alinma Bank achieved significant environmental milestones, emphasizing our commitment to sustainability and responsible banking. One of our key achievements was the integration of ESG criteria into our lending and investment decision-making processes. We financed numerous projects under the Sustainable Finance categories, focusing on Green initiatives like renewable energy, energy efficiency, and Green buildings, as well as social projects that included improving access to essential services such as basic infrastructure and health care facilities.

We also made substantial efforts to reduce our environmental impact. This included the completion of digital zones across all 108 branches, significantly reducing paper consumption. We replaced outdated air conditioning units with environmentally friendly alternatives in 24 branches and achieved more than 10% saving in energy consumption. Additionally, we recycled 12,310 kg of used paper and installed energy-efficient lighting in all branches, with plans to extend this to the Head Office. Our commitment to renewable energy was highlighted by the installation of solar energy sources in 58 branches, covering all owned branches, and the implementation of smart building systems, such as timers, in 76 branches.

Aligning with the National Vision’s commitment to net- zero carbon, we developed a methodology for calculating greenhouse gas (GHG) emissions for Scope 1, 2, and 3. This initiative is a testament to our dedication to contributing to national and global environmental goals.

Moreover, we contributed to the greening of our branches by introducing hundreds of plants, totaling 576 (including Ficus Religiosa, Acacia, and Tecoma), across 48 branches, thereby completing the greening initiative in all owned branches.

This initiative enhances the aesthetic appeal of our branches while supporting biodiversity and creating a more pleasant environment for our customers and staff.

Lastly, in our continuous effort to improve our environmental management practices, we developed Alinma Bank’s Environmental Management policy in 2023. We also began the process of developing Alinma Bank’s Environmental Management System and obtaining the ISO 14001 certification. This certification is a testament to our commitment to environmental excellence and sustainable practices in our operations.

These achievements reflect Alinma Bank’s strong commitment to environmental stewardship and our role in promoting sustainable practices in the banking sector.

Social achievements and highlights

Social achievements and highlights In 2023, Alinma Bank achieved remarkable social milestones, underscoring our dedication to employee development, women empowerment, community engagement, and customer satisfaction.

We made significant advancements in developing our employees’ careers. A testament to this commitment was the delivery of 96,744 hours of training, which played a crucial role in enhancing the skills and capabilities of our workforce. Women empowerment was another key area of focus. We successfully increased the percentage of female employees from 19% in 2022 to 22% by the end of 2023. Additionally, women in leadership positions within the Bank reached 8%, showcasing our commitment to promoting gender diversity and inclusion in the workplace.

Our volunteering initiatives saw robust participation, with 492 employees engaging in 56 volunteering activities, contributing a total of 2,412 hours. These efforts positively impacted around 7,000 people, demonstrating our commitment to community service and social responsibility.

In the realm of CSR activities, we made notable contributions. We provided a microfinance fund for over 280 families, amounting to SAR 5 Mn., to support the initiation of home-based businesses. Furthermore, we empowered 20 underprivileged individuals who were unable to access the educational system by providing them with full-package scholarships, amounting to SAR 5 Mn.

Supporting local suppliers was another area where we excelled. In 2023, 77.4% of our total supplier engagements were with local suppliers, and 95.9% of our purchase order amounts were signed with these local entities. This supports the local economy while also aligning with our commitment to sustainable and responsible business practices.

In terms of customer satisfaction, we achieved significant success by reaching second place in the Net Promoter Score (NPS) across banks in Saudi Arabia. This accomplishment reflects our dedication to delivering exceptional customer service and improving client satisfaction.

Lastly, in the realm of digital transformation, we made great strides by completing 85% of our digital projects using Agile methodologies This approach significantly enhanced our ability to quickly respond to and fulfill the needs of our customers, emphasizing our commitment to innovation and advanced digital delivery.

These social achievements in 2023 highlight Alinma Bank’s strong commitment to social responsibility, employee development, community engagement, and customer satisfaction, reinforcing our position as a socially responsible and forward-thinking financial institution.

Governance achievements and highlights

In 2023, Alinma Bank made significant strides in the realm of governance, emphasizing our commitment to sustainability, data security, and compliance with national data management regulations.

A major highlight was our effort to encourage sustainability governance practices. We developed a comprehensive sustainability policy, approved by the Board of Directors, laying a robust framework for integrating sustainable practices into our operations. Alongside this, we also developed a CSR policy, approved by the General Assembly, signifying our commitment to social and environmental responsibilities.

Another critical area of focus was monitoring cybersecurity, particularly in terms of data governance and protection. Recognizing the importance of data security in today’s digital age, we established a data governance and privacy consultation project. This project involved reviewing our current policies and procedures, creating new ones, and conducting awareness and training for all employees. We also provided support and advice on the implementation of these projects. These initiatives are crucial in safeguarding our customers’ and corporate data against emerging cyber threats.

Additionally, we undertook a gap assessment in compliance with the National Data Management Office (NDMO) and the Personal Data Protection Law (PDPL). This involved a thorough review and update of our gap assessment in line with the latest standards and requirements. By performing this gap assessment, we ensured that our data management practices are in full compliance with national regulations, reflecting our commitment to lawful and ethical business practices.

These governance achievements in 2023 highlight Alinma Bank’s dedication to maintaining high standards of governance. Our initiatives in sustainability, data protection, and regulatory compliance serve to strengthen our operational integrity while reinforcing our reputation as a trustworthy and responsible financial institution