Corporate Governance
2 MIN READ
Managing Environmental and Social Risks
In executing our agenda, we are guided by our Environmental and Social Risk Appetite Statement (RAS).
We have a low tolerance for E&S risks that adversely affect the business. We actively monitor current and emerging E&S risks across our lending functions, investment activities, and other related bank operations, and we are committed to mitigating the negative impact of these risks to contribute positively to social development goals.
We accept that our lending and investment operations are exposed to E&S risks that may cut across principal material risks, including credit, operational, and strategic risks. We employ an Environment and Social Risk Management (ESRM) framework and a three-lines-of-defense mechanism to manage these risks and ensure adherence to our E&S risk appetite.
On the operational front, we have a low-risk appetite for risk events and significant breaches. We manage our operational risk through a dynamic Operational Risk Management framework and a sound Business Continuity plan (BCP).
We support counterparties and activities that add value to the economy:
a) by aiding in the national goal of job creation, and b) via the production of goods and services that are needed and sustainable.
We seek to promote sustainable business practices by supporting customers who:
a. earn from their businesses legitimately,
b. choose legitimate counterparties, and
c. manage their finances responsibly by practicing sound risk management.
We are strengthening our management of principal material risks, including credit, operational, and strategic risks, through the development and use due diligence frameworks and tools in our lending, investment, and procurement practices.
Metrobank has identified certain types of business relationships that are prohibited by law and where there is a risk to life and well-being. The bank will not knowingly provide financing to businesses or operations that are directly involved in the following sectors and activities:
Exclusion List:
Atomic/nuclear power
Red light business/adult entertainment
Virtual currencies
Production and/or trading of illegal drugs
Unregulated charities
Shell banks and other shell institutions
Operations involving illegal deforestation, fishing, mining, and other similar illegal activities affecting the environment
Human rights violations including child labor, forced and inhumane labor, human trafficking, and unfair labor practices
Projects that could lead to the destruction of areas designated to be of high ecological value (critical habitat, biodiversity hotspot) or cultural value (indigenous sacred ground, UNESCO)
Projects that are in areas that may reasonably lead to unmitigated displacement and destruction of indigenous communities
Metrobank’s Environment and Social Risk Management (ESRM) framework enables us to take a precautionary approach towards environmental and social risks in our lending and investment activities. We manage credit risks by classifying clients and business transactions based on sustainability and climate risk exposure. A due diligence process informs the best actions for identified accounts. Operational risks, however, are mitigated by identifying core environmental and social risk areas that might impact the business, including physical risks arising from natural disasters or man-made disasters, transition risks, such as those arising from the adoption of new technologies or policies, and social risks in connection with health and wellness management, with labor and civil relations, and with developments in cyberspace that may impact our operations, people, property, and facilities.
