Investing in our Communities

Giving back to the community is an integral part of NBK's mission and therefore 'Investing in our Communities' is a critical component of our ESG Strategy. Our community investments primarily aim to offer superior customer service, promote financial inclusion, enhance financial literacy and accessibility, and provide customer security, including data privacy. In addition, NBK has an extensive history of making sizeable financial contributions to community development. We are continuously focused on maximizing the positive social impact of our Corporate Social Responsibility (CSR) investments, in alignment with the United Nations Sustainable Development Goals (UNSDG).

Key Highlights in 2023:

Nationalization:

• 76.7% Nationalization rate.
• Launched the NBK Tech Academy in 2023, offering innovative digital transformation programs for Kuwaiti youth.

Community Development:

• Community Investments totaled KD 28 million in 2023 (USD 91 million), a 22% increase from 2022.
• "Best Bank for Corporate Responsibility in the Middle East 2023" by Euromoney.
• NBK organized a Media Awareness Workshop on Sustainability and Climate Change, the first-of-its-kind in Kuwait.
• Committed KD 3.0 (USD 9.8) million for the restructuring of Shuwaikh Beach Waterfront in line with NBK’s corporate responsibility and sustainability principles.

Financial Inclusion:

• Launched new designs for all our cards aligned with our inclusivity goals, including design themes especially for the visually impaired.
• Launched the "Bankee" financial literacy program in Kuwait’s schools, with 15,940 students and around 3,400 teachers participating.

Women Empowerment:

• Excellence in Inclusion, Equity, and Diversity Bronze Winner for NBK RISE by SHRM.
• Awarded by MEED: "Best Initiative for Women in Business".
• Launched "She's Next" initiative in partnership with VISA, a global advocacy program that aims to support women-owned small businesses.

"2023 was another year of NBK's steadfast dedication to sustainable practices, which was marked by the launch of our 3-year ESG Strategy Roadmap. Our roadmap lays out key goals and commitments in areas where we can significantly contribute to a sustainable and just transition to a low carbon economy. These are designed to make positive environmental and social impacts on the communities we serve. On behalf of NBK, I extend my gratitude to all our stakeholders for their consistent support. We're confident that together, we can fulfil our ESG commitments, achieving tangible results towards a sustainable, socially fair future. Let's continue forward to seize the opportunities that our shared commitment to sustainability offers."

Hamad Mohamed Al-Bahar
Chairman

This is NBK's eighth consecutive annual Sustainability Report and factsheet focusing on the 2023 fiscal year. The report provides a detailed summary of the Bank's significant ESG and sustainability matters, threats, and performance data. Here we also covered our entire ESG policies, strategies, and pledges for the reporting period. Our report is centered around the four pillars of NBK's enhanced ESG Strategy Framework. Moreover, this report is aligned with both domestic and global sustainability or ESG reporting standards and frameworks including the Global Reporting Initiative (GRI), Sustainable Accounting Standards Board (SASB), United Nations Sustainable Development Goals (UNSDG), Boursa Kuwait's ESG Reporting Guidelines, and Kuwait Vision 2035.

NBK was established in 1952 and is the first shareholding company and a domestic bank within GCC to be locally founded. Currently, NBK is the leading conventional banking group in Kuwait. The bank also boasts about its credit ratings and brand value, positioning it among the top regional banks. NBK operates in 13 countries and boasts a network of more than 140 branches spread across 4 continents with its headquarters located in Kuwait. NBK's primary business operations include Consumer Banking, Corporate Banking, NBK Wealth and Islamic Banking (through subsidiary Boubyan Bank).

Leadership at NBK believes that sustainability is crucial for the bank's success and is strongly committed to integrating sustainability efforts with our core business actions, risk management, services, and operations. The ESG Strategy aims to support economic growth and act as an example of sustainable development. This strategy is built around four main pillars: Governance for Resilience; Responsible Banking; Capitalizing on our Capabilities; and Investing in our Communities.

NBK upholds strong ethical standards and comprehensive strategic planning, supported by transparent governance structures. Combined with our robust risk management that buffers against various risks, these key elements assure stakeholders of our powerful leadership, oversight, and accountability. In 2023, NBK launched a modular ESG governance framework with Board oversight. NBK also adopted measures to handle climate and ESG risks and opportunities. In this context, NBK institutionalized alignment with the recommendations of Taskforce on Climate-related Financial Disclosures (TCFD) during the year and developed a roadmap for adequately integrating climate-related matters in the bank’s enterprise risk management framework.

Key Highlights in 2023:

• The Board approved the Group ESG Strategy, setting a formal implementation mandate.
• ESG metrics have been integrated into the Board and Executive Management's responsibilities.
• A Sustainability & Climate Change Committee, headed by the Vice Chairman & GCEO, has been established.
• Five Sustainability Sub-Committees have been created, delegating ESG roles to the Executive Management.
• NBK joined the UNGC to enhance international alignment and stakeholder engagement.
• Maintained a score of 'C' from CDP, for both the Climate Change and Forest categories.

NBK intends to enhance sustainable finance offerings and support clients' transition to sustainable business models. NBK recently incorporated ESG metrics into client credit assessments, covering aspects like safety, environmental protection, succession planning, and governance. Moreover, we persistently monitor and handle our energy and water usage, greenhouse gas emissions, and material usage and disposal, while also ensuring it is all accurately reported.

Key Highlights in 2023:

Sustainable Finance:

• Approximately USD 3.65 billion in Sustainable Assets.
• Expanded bank offerings to Eco-friendly EV and Housing Loans.
• Updated procurement policies to include ESG principles.

Energy Management:

• Reduced electricity consumption by 5.75% YoY and 15.8% compared to our baseline year (2021) through proactive energy management.
• Installed Building Energy Management System (BEMS) in 22 local branches.

Climate Change and Decarbonization:

• Reduced overall disclosed GHG emissions by 10.43% compared to baseline year (2021).

Responsible Procurement:

• NBK has revised its Procurement Policy with the inclusion of ESG, implementing a more sustainable procurement strategy and methodology.
• Local suppliers comprised 70% of NBK's total suppliers and 84% of the total procurement spending.
   

NBK's strategy of 'Capitalizing on our Capabilities' is primarily focused on promoting sustainable business growth through organizational resilience. This starts with how we manage our workplace. Our policies, culture, practices, and programs are all designed to encourage a bank-wide transformation that aligns with our sustainability goals, achieved through extensive employee engagement and development programs. Alongside outlining our HR practices, we also state our commitment to diversity, equity, and inclusion initiatives. We strive to foster health, safety, and wellbeing, and continuously work towards establishing a flexible work environment that embraces digital solutions.

Key Highlights in 2023:

Diversity, Equity & Inclusion:

• Women represent 44.0% of the workforce, with 28.8% females in managerial positions.
• Awarded by MEED: "Best Implementation of Diversity & Inclusion Initiatives".
• 41.9% of new hires are female.
• 84.5% of new hires are Kuwaitis.

Employee Development:

• Provided Sustainability Champions across the Bank with training on Global Reporting Initiative (GRI) Standards.
• Introduced the Sustainability Essentials Training Program Group-wide, enhancing employees' understanding of key sustainability concepts.
• 147,701 total training hours. On average, each employee received 6.1 training hours.
• Over 3,300 training hours on ESG-related topics with focus on Sustainability Awareness, Sustainable Finance, and Climate Risk Management.

Employee Engagement and Wellbeing:

• Implemented an Employee Grievance Policy, accessible to all employees via the NBK Group website.
• Launched the Employee Engagement Survey "Your Voice Matters" in 2023 to foster a better and more inclusive workplace.

Digital Transformation:

• Introduced a new mobile banking experience titled "Tailored for You" offering NBK Customers the latest digital services.