Climate Change Data

Ithmaar Holding B.S.C.

Climate Impact & Sustainability Data (2011, 2012, 2018)

Reporting Period: 2011

Environmental Metrics

Total Carbon Emissions:2621 tCO2e/year
Scope 1 Emissions:48,433 kg CO2e/year
Scope 2 Emissions:1,922,278 kg CO2e/year
Scope 3 Emissions:68,062 kg CO2e/year
Renewable Energy Share:Not disclosed
Total Energy Consumption:2,330,316 kWh/year
Water Consumption:Not disclosed
Waste Generated:Not disclosed
Carbon Intensity:Not disclosed

ESG Focus Areas

  • Education
  • Health and Well-being
  • Gender Equality
  • Environmental Stewardship
  • Human Capital Development
  • Community Investment
  • Sharia Compliance

Environmental Achievements

  • Measured and reported carbon footprint (2,621 tonnes CO2 equivalent), identifying electricity usage as the largest contributor (73%).

Social Achievements

  • Sponsored 18 orphaned students through grade 12 at a private school.
  • Supported undergraduate degrees for 30 orphaned students.
  • Funded postgraduate education for 15 needy students from the Muslim world.
  • Provided on-the-job training to 42 university students.
  • Provided 120 volunteer teaching hours in government schools through the inJ az program.
  • Supported the Bahrain Cancer Society.
  • Celebrated Bahraini Women’s Day and honored female employees.
  • Sponsored the annual Sharia conference 2011 and the AAOIFI World Bank annual conference on Islamic Banking and Finance.

Governance Achievements

  • Maintained a Capital Adequacy Ratio (CAR) of 12.88% under Basel II.
  • Established a Corporate Governance Committee.
  • Implemented a whistle-blowing policy.
  • Established a shareholders affairs department.
  • Complied with revised corporate governance rules issued by the Central Bank of Bahrain.

Climate Goals & Targets

Long-term Goals:
  • Not disclosed
Medium-term Goals:
  • Becoming a leading regional Islamic bank.
  • Expanding customer reach in Bahrain and overseas.
  • Introducing innovative products and value-added services.
  • Focusing on regional markets and opportunities in corporate and SME banking.
Short-term Goals:
  • Consolidating and enhancing the successful retail banking model.
  • Improving service quality and delivery.
  • Broadening the retail franchise and expanding the ATM network.
  • Introducing new products (cardless cash, Titanium and Platinum Visa credit cards, Platinum debit card, Ithmaar Premier Banking).

Environmental Challenges

  • Continued impact of the global economic crisis on overseas subsidiaries.
  • Political unrest in Bahrain affecting business activity and investor sentiment.
  • Legacy issues from investment banking assets.
  • Depressed market conditions slowing divestment of underperforming investment portfolio.
  • Need for new capital infusion to support growth in core banking activities.
Mitigation Strategies
  • Reorganisation of business model from investment bank to Islamic retail bank.
  • Reallocation of assets from less productive to more profitable areas.
  • Expansion of retail and corporate banking portfolios.
  • Introduction of new products and services.
  • Investment in IT and personnel development.
  • Restructuring and divestiture of legacy investment portfolio.
  • Focus on regional market expansion, particularly in the SME sector.

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: AAOIFI

Certifications: Null

Third-party Assurance: PricewaterhouseCoopers

UN Sustainable Development Goals

  • Not disclosed

Not disclosed

Sustainable Products & Innovation

  • Not disclosed

Awards & Recognition

  • Certificate of appreciation from the University of Bahrain.
  • 2010 Annual Report ranked among Top 100 and Top 50 Annual Reports globally and in EMEA, respectively.
  • Awards for Most Improved Annual Report and Best Chairman’s Letter.

Reporting Period: 2012

Environmental Metrics

Total Carbon Emissions:2,557 tCO2e
Scope 1 Emissions:14,442 tCO2e
Scope 2 Emissions:1,835.9 tCO2e
Scope 3 Emissions:55.3 tCO2e
Renewable Energy Share:Not disclosed
Total Energy Consumption:Not disclosed
Water Consumption:Not disclosed
Waste Generated:Not disclosed
Carbon Intensity:154.7 tCO2e per million BD income earned (2012)

ESG Focus Areas

  • Sharia compliance
  • Environmental sustainability
  • Social development
  • Community investment
  • Sustainable development

Environmental Achievements

  • Produced first annual report aligned with Global Reporting Initiative (GRI) guidelines
  • Measured and reported carbon footprint for the second year
  • Reduced GHG emission intensity by 34% (154.7 tCO2e per million BD income earned compared to 235.7 tCO2e per million BD in 2011)

Social Achievements

  • Grew customer base by over 18,000 new relationships in FY 2012
  • Engaged with local community through diverse initiatives
  • Supported underprivileged orphaned students
  • Provided on-the-job training opportunities to 30 university students
  • Women account for 29% of staff
  • 92% of Bahrain-based permanent staff were Bahraini nationals

Governance Achievements

  • Adherence to Sharia principles in fulfilling the interests of stakeholders
  • Published annual report aligned with GRI guidelines
  • Implemented anti-corruption training for 195 employees
  • Implemented training on information security for all employees
  • Compliant with all regulatory requirements (Central Bank of Bahrain, Bahrain Bourse, Ministry of Industry and Commerce)

Climate Goals & Targets

Long-term Goals:
  • Not disclosed
Medium-term Goals:
  • Retail Banking to be the ‘Number One Retail Islamic Bank in Bahrain’
  • Corporate Banking to expand its geographic footprint to become a dominant player for Islamic banking in the GCC region
  • International Banking to focus on building relationships and providing financial solutions and facilities to financial institutions and corporate customers in international markets
  • Asset Management to pursue the twin goals of preserving the value of the existing investment portfolio of the Bank while soliciting bids for assets mandated for sale
  • Private Banking to grow and become one of the leading providers of Islamic private banking in Bahrain
  • Treasury to work towards reducing net funding costs while assisting International Banking to further develop inter-bank and money market operations
Short-term Goals:
  • Retail Banking to transform itself to be the ‘Number One Retail Islamic Bank in Bahrain’ in terms of product offerings within the next three years

Environmental Challenges

  • Consolidated net loss attributable to shareholders (BD 11.5 million)
  • Carrying costs of non-core underperforming investments
  • Substantial provision charges
  • Tight liquidity
  • Legacy issues from non-core investments
Mitigation Strategies
  • Sale of identified investment assets
  • Internal cash generation by growing profitable lines of business
  • Raising additional capital (future consideration)
  • Cost rationalisation
  • Overhaul of internal controls
  • Enhanced reporting, risk management, and audit frameworks

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: GRI G3.1 (Application Level C)

Certifications: null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

  • Not disclosed

Not disclosed

Sustainable Products & Innovation

  • MobiCash (cardless cash transfer solution)

Awards & Recognition

  • Islamic Banker of the Year (Mohammed Bucheerei)
  • World Summit Award - Mobile (MobiCash)
  • Multiple ARC Awards (2011 Annual Report)
  • Gold Award for 2011 Annual Report (LACP Vision Awards)

Reporting Period: 2018

Environmental Metrics

ESG Focus Areas

  • Sharia Compliance
  • Sustainable Investments
  • Corporate Governance
  • Social Responsibility
  • Digital Transformation

Social Achievements

  • Various training programs for Board of Directors and Executive Management on topics like IFRS9, AML, compliance, cybersecurity, VAT, and conflict of interest management.
  • Ithmaar Bank launched a new eBanking service and implemented a queuing system (Ithmaar eQ app) to improve customer experience.

Governance Achievements

  • Successful listing of shares on the Dubai Financial Market.
  • Implementation of major enhancements to IT infrastructure at Ithmaar Bank.
  • Establishment of Board Committees (Audit, Governance and Risk Management Committee; Remuneration and Nomination Committee).
  • Adherence to Central Bank of Bahrain's (CBB) requirements and Corporate Governance Code.

Climate Goals & Targets

Medium-term Goals:
  • Ithmaar Bank aims to become one of the region’s premier Islamic retail banks.

Environmental Challenges

  • Challenging market conditions in the region and globally (e.g., weaker performance in some economies, trade tensions, tightening financial conditions).
  • Economic challenges in Pakistan (e.g., inflation, currency devaluation, current account deficit).
Mitigation Strategies
  • Focus on core retail banking business and gradual transformation of the Group's operations.
  • Implementation of a new Core Banking System and eBanking service at Ithmaar Bank to improve efficiency and customer experience.
  • Active management of non-core assets (investments) and identifying opportunities to exit at acceptable prices.
  • Continued focus on growth initiatives and improved financial performance.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: AAOIFI