United Overseas Bank : UOB Sustainability Report 2023

UOB Sustainability Report 2023

Progress in Harmony

About This Report

United Overseas Bank Limited (UOB) has been committed to creating long-term value for our customers, our colleagues and our communities since 1935. In building a sustainable business over time and across borders, we engage our stakeholders constructively and regularly. This enables us to align our strategies with what is important to them and for them to have a deeper appreciation of how we contribute to enterprise, innovation and economic growth across the region.

In this UOB Sustainability Report 2023, our eighth annual report, we explain our sustainability approach, objectives and performance in the context of the year's operating environment. We also share how we create value for our stakeholders over the short, medium and long term, which is integral to our corporate purpose.

This report is approved by the UOB Board of Directors and is prepared in accordance with:

• the Singapore Exchange (SGX) Securities Trading Limited Mainboard Listing Rules 711A and 711B on Sustainability Reporting, as well as Practice Notes 7.6 Sustainability Reporting Guide issued in June 2016;
• the SGX Core ESG Metrics published in December 2021 and updated in April 2023;
• the Global Reporting Initiative (GRI) Standards 2021 by the Global Sustainability Standards Board;
• the GRI G4 Financial Services Sector Disclosures document issued in 2008 and refreshed in May 2013;
• the Monetary Authority of Singapore's (MAS) Green Finance IndustryTaskforce's Financial Institutions Climate- related Disclosure Document published in May 2021;
• the MAS Guidelines on Environmental Risk Management for Banks published in December 2020;
• the Guidelines on Responsible Financing issued in October 2015 (revised June 2018) by The Association of Banks in Singapore; and
• the Recommendations of the Task Force on Climate- related Financial Disclosures (TCFD) issued in June 2017 and updated in October 2021.

In addition, this report references:

• International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures, issued by the International Sustainability Standards Board (ISSB) of the IFRS Foundation; and
• the Sustainability Accounting Standards Board (SASB) Financials Sector Standards on Commercial Banks, ConsumerFinance and Mortgage Financeversion 2023-12.

This report also supports our submission of the Communication on Progress to the United Nations Global Compact.

The UOB Sustainability Report 2023 adopts the GRI Standards as the key reporting framework, as it enables us to demonstrate effectively how we contribute to sustainable development, through the disclosure of our most significant impacts on the economy, environment and people, and how we manage these impacts.

In aligning with the GRI Standards, we have applied the following reporting principles:

•	Accuracy;	•	Completeness;
•	Balance;	•	Sustainability context;
•	Clarity;	•	Timeliness; and
•	Comparability;	•	Verifiability.

This report is externally assured against the GRI Standards for sustainability reporting. The assurance, provided by Ernst & Young LLP, validates the accuracy and reliability of figures and statements in this report that are related to the subject matters agreed as per the Assurance Statement. The assurance is in accordance with International Standard on Assurance Engagements (ISAE) 3000 Other Than Audits or Reviews of Historical Financial Information. The scope of work and conclusions can be found in the Assurance Statement on page 152 to 166.

This report should be read in conjunction with the UOB Annual Report 2023 and other related disclosures. Links to the relevant resources, correct at the time of publication, are provided throughout the report.

Unless otherwise stated, this report covers the period from 1 January to 31 December 2023 and includes all UOB divisions, and banking and investment management subsidiaries within the Group. The report is published on 20 March 2024 and is available online at www.UOBgroup.com. No copies were printed.

All figures in this report are in Singapore dollars unless otherwise specified. Certain figures in this report may not add up to the respective totals due to rounding.

We welcome your feedback and suggestions at [e-mail].

Please scan the QR code to view the UOB Annual Report 2023.

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Contents

Overview	Uphold Corporate Responsibility
03	Our 2023 Snapshot	76	Corporate Governance and Risk Culture
04	Deputy Chairman and CEO's Statement	79	Regulatory Compliance
06	Our Commitment to Net Zero	85	Information Security
		87	Direct Environmental Impact
Our Approach	96	Sustainable Procurement
10	Sustainability Strategy	98	Community Stewardship
22	Sustainability Governance
25	Stakeholder Engagement	Appendix
27	Material ESG Factors	104	Sustainability in Numbers
		118	Climate Scenario Analysis Methodology
Drive Growth Sustainably	122	Recognition and Awards
33	Economic Contributions	125	Memberships
35	Sustainable Banking	127	GRI Content Index
		135	TCFD Index
Keep Customers at the Centre	136	SASB Index
52	Fair Dealing	139	UN SDGs Index
56	Data Privacy	145	UNGC Ten Principles Index
59	Financial Inclusion	147	Glossary
		152	External Assurance
Develop Professionals of Principle
65	Talent Development and Inclusion
71	Workplace Safety, Health and Well-being

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Overview

Our 2023 Snapshot

Drive Growth Sustainably

7-14% below target	$44.5 billion
reference pathways	extended in sustainable
across our emissions intensity	financing to corporates
metrics as we progress in our
net zero commitment

Keep Customers at the Centre

92%	Zero
of customer complaints	material issues in relation
resolved within established	to data confidentiality
standards	and privacy

Develop Professionals of Principle

37.7%	92.3%
of our senior management	of our colleagues
are women	are hired locally

U-Build

launched to provide

funding support to built

environment sectors

UOB Start-up

Business Loan

launched to support

companies as young as six months in business

$30.4 million

invested in employee

training and development

Taskforce on

Nature-related

Financial Disclosures

(TNFD)

early adopter

Inclusivity-focused

service training

for branch colleagues to

interact better with persons

living with dementia and their caregivers

UOB Better U Campus

launched in Singapore to bring various functional academies under one roof

Uphold Corporate Responsibility

Zero

material incidents in relation to bribery, corruption, fraud or information security

Carbon neutrality

maintained for our

operational footprint

Group Supplier

Sustainability Principles

rolled out to our key banking subsidiaries

$16.0 million

in monetary and in-kind

contributions raised for the community

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Overview

Deputy Chairman and CEO's Statement

Transition of our economies towards a low carbon future is one of the most widely discussed sustainability topics in 2023. It goes beyond the setting of targets and warrants ambitious strategies and plans for implementation from all stakeholders.

UOB is committed to our own transition journey, as well as in supporting our stakeholders in their journeys, where together we can build a sustainable future for ASEAN. As a responsible organisation, we want to create real and positive impact for the economy, environment and society. We believe in a fair, equitable and just transition that considers the socioeconomic diversity of our region.

Driving growth sustainably

In 2023, we deepened our net zero operationalisation efforts and further enhanced our operating model, from governance to risk management, to capabilities and to culture. Our first net zero progress report highlighted the improvements in the emissions profile of our corporate lending portfolio. This was achieved through ongoing engagement with our clients to transform their business models and practices, along with providing financial solutions to support them in doing so.

We launched U-Build, designed specifically for the built environment sector, which is one of the largest contributors to greenhouse gas emissions. The programme offers advisory, industry solutions and funding support to building owners, developers, contractors and suppliers. It adds to our comprehensive suite of sustainable finance frameworks and ecosystem solutions.

In addition to green and sustainability-linked loans, transition finance is critical to the decarbonisation of carbon-intensive sectors and companies. We collaborated with industry stakeholders, including regulators and international alliances, to advocate for greater clarity around transition pathways, policies and guidelines, which are essential to the accountability of both financial institutions and corporates to meet our collective net zero ambitions.

Recognising that small- and medium-sized enterprises (SMEs) may face more barriers to kickstart and advance their sustainability agenda, we held masterclasses focusing on targeted assistance and consultation to SMEs across various sectors. More SMEs across our key markets can now create clear action plans to develop and implement sustainability strategies using the UOB Sustainability Compass.

Given the interdependencies of climate and nature risks, we have committed to be an early adopter of the Taskforce on Nature-related Financial Disclosures recommendations. In 2023, we conducted a preliminary assessment of the potential nature impacts of our corporate portfolio and will continue to enhance our capabilities in this area.

Keeping customers at the centre

Across UOB, our colleagues are committed to safeguarding our customers' interests and are equipped with the skills and knowledge to serve the needs of our diverse customer base.

Our branch colleagues in Singapore received training during the year to better interact with persons living with dementia, and identify and support the banking needs of caregivers. In Thailand, we launched Womenpreneur, a digital transformation programme aimed at empowering female business owners to succeed in the digital economy.

Helping SMEs thrive remains our priority. In addition to a suite of business loans and solutions designed to support the growth of SMEs, we rolled out the UOB Start-up Business Loan, available to companies that are at least six months in business. We also enhanced the UOB SME app to offer digital loan applications with approved-in- principle status, so that pre-qualified SMEs can access much-needed financing faster.

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Overview

Deputy Chairman and CEO's Statement

We continued to enhance our data privacy measures, embedding them into our service delivery and operational processes for customers' benefit. As a founding member of the Monetary Authority of Singapore's Project Mindforge consortium, which seeks to guide financial institutions on the use of generative artificial intelligence, we strive to stay ahead to safeguard customer information and to maintain our customers' trust in us.

Developing professionals of principle

Doing right by our stakeholders requires our people to have the right values and skillsets. We continued to instill The UOB Way by fostering a culture of care, growth and trust, and by helping our people build long-term careers with us.

We consolidated our functional academies under one roof at our new UOB Better U Campus to better meet training needs. The new campus in Singapore features classroom settings of different configurations. In addition to training, we offer our people career mobility opportunities under our new Career+U initiative. To grow young talent through internships, we started the U Unleash Programme for students from polytechnics and institutes of technical education in Singapore, as well as the UOB NextGen Internship for our employees' children who are pursuing undergraduate studies.

Ensuring a conducive and productive environment for our people is also critical. During the year, we created more high-performance workplaces across our operations in the region, with such office space adding up to 922,000 square feet. We received another three Green Mark for Healthier Workplaces certifications, awarded by the Singapore Building and Construction Authority and Health Promotion Board, in recognition of our wellness efforts.

Upholding corporate responsibility

UOB's robust corporate governance and risk culture are vital to creating positive impact for our customers, colleagues and communities. We strive to ensure that our people uphold and demonstrate ethical attitudes and behaviours in line with our UOB values, and that we remain a beacon of stability for our stakeholders in this fast-changing world.

We enhanced the security of our UOB TMRW app with new anti-scam features that include restricting access to the app when screen sharing or when mobile apps with risky permissions are detected.

We also stepped up our efforts to address the environmental impact of our operations. Beyond obtaining green certifications for our wholly-owned buildings, we are reducing the eco footprint of our branches. For a start, three branches in Singapore have been awarded the Green Mark Retail Platinum certification by the Building and Construction Authority. This was to recognise us for implementing initiatives such as a digital queue system, lighting and water fittings designed to conserve resources, and the use of more sustainable materials for interior furnishing.

In Singapore, we announced our participation in the national-level corporate volunteerism pilot Project V, an initiative co-led by the Ministry of Culture, Community and Youth, National Council of Social Service and National Volunteer and Philanthropy Centre. Under this initiative, our colleagues can volunteer with various partners from the private, public and people sectors.

We are pleased that across UOB Group, we clocked more than 63,000 hours of volunteering and raised more than $16.0 million in monetary and in-kind contributions in 2023.

Achieving progress in harmony

UOB's values of being Honourable, Enterprising, United and Committed are exemplified in our promise to do right by our customers, communities and the environment. It is with this sense of purpose that we launched the Sustainability Impact Awards jointly with The Business Times, to celebrate individuals and businesses who have created positive environmental or social impact.

To be sustainable is to be resilient for the long term. As we seek to protect the environment, we must ensure that lives and livelihoods can continue to thrive. This is how people and planet will progress together in harmony.

Wee Ee Cheong

Deputy Chairman and Chief Executive Officer

February 2024

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Overview

Our Commitment to Net Zero

UOB aspires to be a leading sustainable bank in Southeast Asia and is committed to net zero by 2050. We recognise the substantial impact that financial institutions can have in catalysing and facilitating decarbonisation, and seek to balance growth with responsibility through supporting a just transition. Our efforts go beyond the reduction of greenhouse gas (GHG) emissions, helping to ensure that the lives and livelihoods of individuals and communities can continue to improve.

Our commitment and targets

Energy

Power

Reduce emissions intensity by 64% by 2030 and 98% by 2050

Automotive

Reduce emissions intensity by

58% by 2030 and net zero by 2050

Oil and gas

No new project financing for upstream oil and gas projects approved for development after 2022

Built environment

Real estate

Reduce emissions intensity by 36% by 2030 and 97% by 2050

Construction

Reduce emissions intensity by 31% by 2030 and 85% by 2050

Steel

Reduce emissions intensity by 20% by 2030 and 92% by 2050

Covers ~60% of our corporate lending portfolio

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Overview

Our Commitment to Net Zero

Our progress

We used 2021 data as our baseline when assessing our financed emissions intensity across our priority sectors and setting our targets. Our first progress report, published in October 2023, illustrated our first year's journey with 2022 emissions intensities declining across all five sectors for which we have set net zero targets. We remained, at a range of seven to 14 per cent, below the target reference pathways.

Overview of emissions intensity by sector

					Power	8% below pathway						Automotive	7% below pathway
					(kgCO2/MWh)					140		135	(gCO2 /vehicle-km)
600
500											120				126
										128
444	-64%							-58%
400	415				100		118
					by 2030
390	by 2030		-98%	80
300
382				60					54
					by 2050						-100%
200
																	by 2050
					142				40
100
									20
										7								0
0									0
2020	2030	2040	2050	2020	2030	2040	2050

Oil and gas

We commit to no new project financing for upstream oil and gas projects approved for development after 2022

Real estate 14% below pathway	Construction 9% below pathway	Steel	10% below pathway
(kgCO	/m2)	(tCO	/$ million)	(tCO	/tonne)
2		2		2

120					30						2.5			-20%
100	101	-36%			25	25	24	-31%			2.0	1.84
	95				25			1.80	by 2030
80		by 2030			20		by 2030
87			22
							1.5	1.77 1.61	1.42
60	82	56			15
	-97%			18		-85%	1.0					-92%
40				10					by 2050
			by 2050													by 2050
20					5					4	0.5
				3													0.14
0				0						0.0
2020	2030	2040	2050	2020	2030	2040	2050	2020	2030		2040		2050
Note on reference pathways:								Energy		Built environment		UOB data	2021	2022
• NGFS REMIND: Network for Greening the Financial System's Regional Model of Investment and Model Development
• IEA NZE: International Energy Agency's Net Zero Emissions by 2050						Reference pathways
• CRREM: Carbon Risk Real Estate Monitor							• Power: NGFS REMIND (regional)	•	Construction: NGFS GCAM (regional)
• NGFS GCAM: Network for Greening the Financial System's Global Change Assessment Model		• Automotive: IEA NZE (global)	•	Steel: MPP Tech Moratorium (global)
• MPP: Mission Possible Partnership								• Real estate: CRREM (regional)

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Overview

Our Commitment to Net Zero

2023 highlights

We have developed a holistic operationalisation programme focusing on four key areas.

Developing granular	Supporting our	Embedding net zero in	Driving effective
sectoral plans	customers	our operating model	stakeholder engagement
Setting targets, measuring	Providing advisory and	Enhancing our operating	Working collaboratively
progress, and capturing	financial solutions to help	model across governance,	with a broader ecosystem
opportunities across	our customers in their	policies, processes and	of governments, regulators,
sectors to achieve our	decarbonisation journey	capabilities to support	industry and trade
overall decarbonisation		our decarbonisation	associations, and peers to
ambitions		efforts	drive collective action

As part of our 2023 business strategy refresh, we have also identified and integrated commercialisation opportunities which will help drive the decarbonisation of our target sectors.

Overview of opportunities identified by sector

Ecosystem	Sector		Opportunities
Energy		Power	Work with power generation companies and equipment manufacturers to
			adopt decarbonisation targets

Increase financing for new renewable energy projects

Automotive Work with equipment manufacturers, dealers and automotive financial leasing companies to support electric vehicle (EV) supply chains

Increase financing for EV-focused businesses

Oil and gas Work with companies in hard-to-abate sectors to finance renewable energy, low-emissions fuel alternatives and emissions reduction technologies

Built	Real estate Work with property developers, operators, investment companies and
environment		real estate investment trusts to encourage adoption of energy efficiency
		standards for buildings
		Increase financing to support the retrofitting and upgrading of existing
		buildings with energy-efficient equipment and installation of renewable energy

Construction Work with contractors and material suppliers to increase financing to green building construction activities and encourage the increased usage of sustainable building materials for better life cycle cost and to lower embodied carbon emissions

		Increase financing of on-site renewable energy
	Steel	Support crude steel and fabricated metal producers and traders towards
		electric arc furnace (EAF) production methods and usage of scrap metal
		Support research and development of new technologies to improve plant
		efficiency

We will continue to deepen our understanding of our clients' decarbonisation journeys, enhance our sustainable finance products including sector-specific solutions that serve end-to-end needs, and reinforce our ability to catalyse the transformation of ecosystems through advisory and solutions beyond banking.

Find Out More

UOB | Net Zero Commitment by 2050

Sustainability Strategy Sustainable Banking

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Our Approach

1. Sustainability Strategy

1. Sustainability Governance

1. Stakeholder Engagement

1. Material ESG Factors

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