Climate Change Data

Environmental Metrics

ESG Focus Areas

• Community Investment
• Employee Well-being
• Environmental Sustainability
• Human Rights
• Corporate Social Responsibility
• Governance

Environmental Achievements

• Installed PVA panels with plans to extend installations on newly acquired premises.
• Updated the Group’s motor vehicle fleet with reduced fuel emissions and electrically powered models.
• Measures are in place to reduce and recycle waste, procure energy efficient equipment
• Renovated a number of buildings, some acquired in a derelict state, and converted them into modern and functional branches / offices.

Social Achievements

• Maintained its community involvement by supporting various initiatives and entities including the Malta Community Chest Fund, Id-Dar tal-Providenza, Inspire, Puttinu Cares, Volserv and several others.
• Staff members benefit from private health care insurance, as well as death in service and personal accident insurance cover.
• Occupational health awareness training is also provided.
• Group staff associations are supported through funding and other initiatives.
• Well exceeds the obligation of 2% in respect of the employment of persons with disabilities

Governance Achievements

• Emphasis will continue to be placed on the Bank’s plan to reduce non-performing loans, which is well on track to achieve the set targets.
• The Board made repeated efforts to resolve the issue surrounding the 49.01% shareholding owned by Cyprus Popular Bank Public Co Ltd (CPB).

Climate Goals & Targets

Environmental Challenges

• Increasingly competitive market
• Continuing low interest rates
• Advances in technology threatening traditional banking service delivery
• Ever tighter and costlier regulation
• Stricter provisioning and capital requirements
• Introduction of a new international accounting standard in 2018 requiring higher levels of provisioning
• Issue surrounding the 49.01% shareholding owned by Cyprus Popular Bank Public Co Ltd (CPB)

Mitigation Strategies

• Changes to our business model introduced in previous years in response to record low interest rates and an increasingly demanding and costly regulatory regime, together with more recent initiatives designed to further diversify sources of income and to increase operational cost effectiveness.
• Further expansion of the Bank’s capital base (examining the possibility of an increase in Tier 1 capital by means of a rights issue).
• Implementation of the growth strategy already in place, with a particular focus on new products and services such as home loans and investment funds.
• More investment in systems and human resources to deal with the challenge posed by the rapid pace of change in financial technology.
• Repeated efforts to resolve the issue surrounding the 49.01% shareholding owned by Cyprus Popular Bank Public Co Ltd (CPB), including an offer to buy back these shares.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Awards received for outstanding and significant contribution to Maltese cultural and architectural heritage

Environmental Metrics

ESG Focus Areas

• Financial Stability
• Risk Management
• Employee Well-being
• Community Involvement
• Environmental Sustainability
• Human Rights
• Anti-corruption

Environmental Achievements

• Measures to reduce waste, procure energy-efficient equipment, update motor vehicle fleet with reduced fuel emissions and electrically powered models, installation of PVA panels and other energy efficient installations
• Launched a scheme to encourage staff to use public transport

Social Achievements

• Signing of a new Collective Agreement for period 2019-2022 with the Malta Union of Bank Employees, including improved terms and benefits for staff
• Intensified recruitment programmes, staff retention efforts, and communication between staff and managers
• Provided learning opportunities for staff, including risk and compliance training
• Organised staff social events and supported staff associations
• Ensured high levels of health and safety and physical security of staff
• Exceeded the obligation to have 2% of the total staff complement composed of persons with disabilities
• Introduced services that promote financial inclusion
• Group staff members make use of family friendly measures

Governance Achievements

• Strong ethical culture based on trust, integrity and professional behaviour
• Rigorous custodianship of property entrusted to the companies by customers and shareholder capital
• Pursuit of long-term corporate and financial objectives
• Assurance of ongoing compliance with all applicable laws and regulations
• Risk awareness and oversight in the determination of risk appetite and risk profile
• Adoption of the four eyes principle
• Accountability through suitable reporting frameworks
• Compliance with all applicable laws, rules and regulations relating to employment

Climate Goals & Targets

Environmental Challenges

• Persistently low interest rates eating into net interest margins
• Increasingly demanding and costly regulatory and compliance obligations
• Stricter provisioning and capital requirements
• Growing competition from new technology players
• MaltaPost faced highly challenging operating conditions, as tariffs remained unchanged for over four years with related expenses increasing, particularly labour costs
• Decline in Letter Mail volumes at MaltaPost

Mitigation Strategies

• Adoption of a low-risk business model
• Judicious treasury management designed to lessen the impact of negative interest rates
• Further development of revenue generating activities and products at MaltaPost in related business areas such as logistics, document management and financial services
• Continued investment in IT and proven technologies, including cyber security systems, and qualified human resources
• Focus on building long-term customer relationships and serving responsibly the Maltese community

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Awards received for outstanding and significant contributions to Maltese cultural and architectural heritage

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Increased its fleet of electrically-driven vehicles
• Launched a scheme to encourage staff members to use public transport, effectively providing for free public transport to coincide with office hours
• Preservation of buildings of architectural importance now serving as modern and functional branches/offices

Social Achievements

• Participation in the MCAST apprenticeship scheme
• Lower staff attrition rate
• Extended programme of both internal and external training courses to cover new topical areas
• Support for several organisations engaged in charitable and philanthropic work
• Introduction of PostaPay&Save accounts as a basic bank account for the unbanked
• Participation in an industry-wide initiative to support the introduction of a code of ethics for the prevention of financial abuse of elderly persons
• Exceeds the obligation to have 2% of the total staff complement composed of persons with disabilities (6.2%)

Governance Achievements

• Further refinement of management structures and processes and the acquisition of appropriate expertise and technological support to strengthen governance, risk and compliance functions

Climate Goals & Targets

Environmental Challenges

• Unrelenting pressure on income streams
• Generalised de-risking stance in the domestic banking industry
• Reputational damage to our financial jurisdiction by sanctionable practices in some credit institutions
• More stringent prudential regulations
• Interest rates that are set to remain at their current low levels
• Ever-increasing cost of regulation and compliance
• Growing competition from fintech institutions and digital services providers
• Recent marked deterioration in the global economic outlook
• Delays in conforming to international standards of financial risk management and compliance

Mitigation Strategies

• Commitment to a selective approach to onboarding depositors and borrowers
• Prioritizing capital protection over short-term financial gain
• Avoiding exposure to economic sectors which experience has shown to be inherently risky
• Mitigation of market risks
• Modernisation of the delivery of banking services while adapting them to changing customer preferences
• Strengthening governance, risk and compliance functions
• Further growth of new business activities
• Expansion of customer base, including through an increased geographical presence jointly with MaltaPost p.l.c.
• Preservation of the Bank’s assets and the creation of shareholder value

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Environmental Metrics

ESG Focus Areas

• Anti-corruption and bribery
• Social and employee-related matters
• Health and safety
• Human rights
• Environmental matters

Environmental Achievements

• Installation of 254 PVA panels and other energy-efficient installations (HVAC systems, LED lighting)
• Use of 43 electric vehicles replacing several internal combustion engine vehicles
• Reimbursement scheme for public transport costs for staff to encourage reduced use of private vehicles
• Preservation and reuse of buildings of architectural importance

Social Achievements

• Offered assistance to commercial and personal customers during the COVID-19 pandemic (working capital fund, home loan repayment moratoria)
• Participation in guarantee and interest rate subsidy schemes introduced by the Malta Development Bank
• Maintained community involvement by supporting various initiatives (Malta Community Chest Fund, Id-Dar tal-Providenza, Volserv)
• Malta Post continued supporting the Malta Postal Museum
• Introduction of posta pay&save accounts for financial inclusion (over 11,000 accounts opened)

Governance Achievements

• Strong governance structures and expertise
• Increased investment in technological resources and additional staff costs to meet growing regulatory burden
• Regular risk reporting to the Audit & Risk Committee and Board of Directors
• Compliance with solvency requirements (Total Capital Ratio at 15.8%, well above statutory thresholds)

Climate Goals & Targets

Environmental Challenges

• Unprecedented challenges arising from the COVID-19 pandemic, materially conditioning financial performance
• Economic slowdown impacting profitability
• Continued low to negative interest rates, narrowing interest margins, and rising operational costs
• More intensive regulatory oversight
• Significant logistical difficulties faced by Malta Post due to the pandemic
• Substantial increase in credit impairment charges related to the macroeconomic consequences of the pandemic
• Reluctance of some counterparties (USD clearing and settlement services) to do business in Malta
• Withdrawal of services by some foreign banks

Mitigation Strategies

• Prompt response to pandemic developments by Lombard Bank and Malta Post
• Investment in technology to enable remote working
• Assistance to corporate customers with working capital requirements at favorable terms
• Moratoria on home loan repayments offered to personal customers
• Collaboration with the Malta Development Bank on COVID-19 Guarantee Scheme
• Efforts to maintain healthy counterparty relationships
• Continued pursuit of strategic priorities in the Business Plan 2020-2022 (business expansion, asset and fund management subsidiary, branch network expansion)
• Maintaining sound asset quality in line with low-risk business model
• Appropriate mitigating actions by Malta Post to preserve business continuity and safeguard employee health and safety
• Investment program rollout by Malta Post (branch network expansion, IT infrastructure strengthening, modern mail delivery tools, diversification into new business activities)

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Third-party Assurance: PricewaterhouseCoopers

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Initiatives designed to further reduce carbon emissions (MaltaPost p.l.c.)

Social Achievements

• Staff training was given increased attention, with several new internal and external courses being introduced.
• New branches opened to provide services to a wider customer base.

Governance Achievements

• Investment in automated anti-money laundering transaction monitoring system.

Climate Goals & Targets

Environmental Challenges

• MaltaPost p.l.c. continued to be affected by pandemic and Brexit-related logistical difficulties, generally higher operating costs and unsustainably low postal tariffs.
• Unpredictable effects of higher interest rates on business cash flows.
• Economic fallout of heightened geopolitical tensions in Europe.
• Increasingly costly one-size-fits-all regulatory regime.
• Higher capital requirements imposed by regulators.

Mitigation Strategies

• Effective credit risk management (secured repayment of a large corporate loan).
• Investment in IT infrastructure and a new core banking system.
• Recruitment of specialized personnel and contracting external consultants for ESG Action Plan.
• Capital Plan (Rights Issue proposal, though blocked).

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed