disclosures on sustainability - indusind bank · 2020. 9. 7. · disclosures on sustainability fy...

Disclosures on

Sustainability

FY 2019-20

Disclosures on Sustainability FY 2019-20

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Introduction:

At a time when the financial sector in India is undergoing a series of changes, IndusInd Bank remains

bullish on its strategy of growing with the nation and its people. As a financial institution working to

expand our physical presence across India, we are equally committed to being environmentally

responsible and keeping our carbon footprint in check. Towards this end, the Bank has interlinked its

strategic business priorities and its sustainability focus areas. With specific targets across business

viability and Environmental, Social and Governance (ESG) facets, the Bank is operating responsibly

while striving to enable inclusive growth and give back to the environment. Our activities are

governance-led, established through our comprehensive disclosures. As a result, the Bank also

contributes directly and indirectly to 12 UN SDGs. We have developed the Environmental and Social

Management System (ESMS) to integrate ESG aspects in our credit/lending business to focussing on

ESG aspects including impact financing, clean energy & renewables, green & social infrastructure,

inclusive & micro-finance, agribusiness, healthcare and education.


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Economic Disclosures

1.1.1 Board Structure:

One-Tier System: Number of members: Executive directors - 1 Independent directors - 7 Other non-executive directors - 1 Total board size – 9

The Independent Directors meet the criteria of Independence as laid down under SCHEDULE IV and Section 149 (6) of the Companies Act, 2013.

The Independent Directors meet the criteria of Independence as laid down under Regulation 16 (1) (b) and 17 (1) (a) of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015.

An independent director can be appointed for 2 consecutive terms of 4 years each. The tenure of an independent director will be in line with the provisions of the Banking Regulations Act 1949. Independent Directors are not liable to retire by rotation. Re-appointment at the end of the term shall be based on the recommendations of the nomination committee and subject to approval of the Board and the shareholders. In considering re-appointment, the Board would take into consideration the outcome of the performance evaluation process and the Director continuing to meet the independence criteria as defined under the Companies Act, 2013.

7 out of the total number of directors (9) are independent directors on the Board. The Board consists of 7 Independent Directors including 2 Woman Directors. Details of 2 women directors can be found on below link: https://www.indusind.com/in/en/investors/investor-landing/board-of-director.html

1.1.2 Non-executive Chairman/Lead Director:

Role of CEO and chairman is split and chairman is non-executive but not independent

1.1.3 Diversity Policy:

Our Board is a truly diverse and makes optimum use of the differences in the skills, industry experience, and other distinctions. The Board appointments are based on merit that complements and expands the skills, experience, expertise of the Board as a whole, taking into account knowledge, professional experience, qualifications, statutory / regulatory requirement and such other factors that might be relevant and applicable from time to time. The Policy can be found on below link: https://oldweb.indusind.com/content/dam/indusind/PDF/Board-diversity-policy.pdf

1.1.4 Gender Diversity:

IndusInd Bank exceeds the statutory requirement of having at least 1 woman director on the board. There are two Women Directors (Mrs. Bhavna Doshi and Mrs. Akila Krishnakumar), on the Bank’s Board. Details of 2 women directors can be found on below link:

https://www.indusind.com/in/en/investors/investor-landing/board-of-director.html

https://www.indusind.com/in/en/investors/investor-landing/board-of-director.htmlhttps://oldweb.indusind.com/content/dam/indusind/PDF/Board-diversity-policy.pdfhttps://www.indusind.com/in/en/investors/investor-landing/board-of-director.html


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1.1.5 Board Effectiveness:

Board Meeting Attendance: Number of meetings attended is 99% in last business/fiscal year. Minimum of attendance for all members required, at least is 11.11 %

Board Mandates: Number of non-executive/ independent directors with 4 or less other mandates: Mr.Shanker Annaswamy, Dr. T. T. Ram Mohan, Mr. Sanjeev Kumar Asthana, Mrs.Bhavna Doshi Number of other mandates for non-executive/ independent directors restricted to 9.

Board Performance Review:

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual evaluation of its own performance, performance of Individual Directors, Chairman of the Board and its Committees. The key areas of evaluation of the Board directors are Knowledge of business, Diligence & preparedness, Effective interaction with others, Constructive contribution to discussion & strategy, Concern for stakeholders, attentive to the internal controls mechanism and ethical conduct issues. While considering the extension of tenure of a Director, the Nomination & Remuneration Committee of the Board reviews the performance of the Director and makes a recommendation to the Board for considering his re-appointment. Performance Evaluation of the Board is conducted on annual basis by an external agency of global standing through electronic mode.

Board Election Process: Board members are elected and re-elected on an annual basis. Board members are elected individually.

1.1.6 Average Tenure:

Average tenure of board members is 8 years.

1.1.7 Board Industry Experience:

Number of independent or non-executive members with industry experience = 8 • Information Technology – Mr.Shanker Annaswamy and Mrs. Akila Krishnakumar • Banking and Finance – Mr. Arun Tiwari, Dr. T. T. Ram Mohan, Mr. Sanjay Asher, Mrs. Bhavna Doshi • Small Scale Industry – Mr. Rajiv Agarwal • Agriculture & Rural Economy – Mr. Sanjeev Kumar Asthana

1.1.8 Executive Compensation - Success Metrics:

The Bank has pre-defined financial returns and/or relative financial metrics relevant for Chief Executive Officer’s variable compensation. The variable component of the remuneration for Managing Director & CEO is based on the following parameters: - (1) Annual performance on Bank’s business objectives approved at the beginning of the financial year by the Board of Directors. (2) Bank’s financial performance and profitability. (3) The variable component of the remuneration is based on the Bank’s compensation policy designed as per the RBI guidelines on Compensation of Whole Time Directors / Chief Executive Officers / Risk Takers and Control function staff.

1.1.9 Executive Compensation - Alignment with Long-Term Performance:

The Bank has guidelines on deferred bonus, time vesting, and performance period for the CEO’s variable compensation. The longest performance period covered by your executive compensation plan is 1 year. We have a clawback provision in place as per the Reserve Bank of India guidelines.


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1.1.10 Management Ownership:

Position and Name of Holder Executive committee members

Number of shares Multiple of base salary

Chief Executive Officer Mr. Romesh Sobti: (Demitted Office as Managing Director & CEO on March 23, 2020)

9,06,000 15.16

Position and Name of Holder Executive committee members

Number of shares

Mr. Sumant Kathpalia: (Appointed as Managing Director & CEO on March 24, 2020)

5,28,818

Executive committee members

Mr. Paul Abraham 2,19,000

Mr. Kalpathi Sridhar 5,18,065

Mr. Suhail Chander 1,93,000

Mr. Arun Khurana 2,14,500

Mr. S. V. Parthasarathy 30,000

Mr. Ramesh Ganesan 1,10,000

Mr. S. V. Zaregaonkar 50,650

Mr. Sanjeev Anand 140

Mr. ZubinMody 5,600

Mr. Sanjay Mallik 16,500

Mr. Ramaswamy Meyyappan 15,500

Mr. Bijayananda Pattanayak 1,45,500

Mr. M. R. Rao 1,65,606

1.1.11 Management Ownership Requirements:

The bank has no specific stock ownership requirements for the CEO and other members of your executive committee.

1.1.12 Government Ownership:

No governmental institutions own more than 5% of the total voting rights.

1.1.13 Family Ownership:

Distribution of Shareholding as on 31.03.2020

Sr. No. Name of the Shareholder Number of shares held % of shareholding

i. IndusInd International Holdings Ltd. 66575939 9.6

ii. IndusInd Ltd. 23800000 3.43

A. Total Promoters Shareholding (i.+ii.) 90375939 13.03

B. Non-Promoters Shareholding 603159799 86.97

C. Grand Total (A+B) 693535738 100

1.1.14 Dual Class Shares:

We do not have differential voting rights as well as dual class shares. We have a single class of shares for general public as well as the senior management.

1.1.15 Disclosure of Median or Mean Compensation of all Employees & CEO Compensation:


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Mr. Romesh Sobti had been ‘Managing Director & CEO’ of the Bank with effect from February 1, 2008. Reserve Bank of India had approved the appointment of Mr. Romesh Sobti as Managing Director and CEO of the Bank upto March 23, 2020.

Details of Remuneration paid to Mr. Romesh Sobti during the Financial Year 2019-20 are as follows: Salary Rs.209.92 lakhs, Other Allowances Rs.236.30 lakhs, facility of company-leased and furnished accommodation, Provident Fund at 12% of Salary, Gratuity at one months’ Salary, Pension at two months’ Salary, Medical Expenses - reimbursement up to Rs.2.09 lakhs, Leave Fare Concession of Rs.2.09 lakhs, Mediclaim for self and family members, Personal Accident Insurance, Membership of two Clubs and official car with driver.

Mr. Sumant Kathpalia has been appointed as ‘Managing Director & CEO’ of the Bank with effect from March 24, 2020. Details of Remuneration paid to Mr. Sumant Kathpalia during the Financial Year 2019-20 are as follows: Salary Rs.3.59 lakhs, Other Allowances Rs.11.69 lakhs, Provident Fund at 12% of Salary, Gratuity at half months’ Salary, Mediclaim for self and family members, Personal Accident Insurance, Membership of One Club.

Median Employee Compensation for FY 2019-20 = INR 414594.

The ratio between the total annual compensation of the Chief Executive Officer and the mean or median employee compensation: 107.69.

1.2.1 Material Issues:

The CEO oversees the issues material to the Bank especially Digitalisation, Sustainable financing & Responsible investments and Talent attraction & Retention as the Bank believes these will help achieve our 4D+S strategy.

1.2.2 Materiality Disclosure:

We publicly disclose our materiality analysis, including the most material issues and a description of the process. We publicly report on our progress towards our targets or metrics for material issues.

Based on the Materiality Matrix, the top issues for the Bank are:

1. Responsible investment & financing 2. Talent attraction & Retention 3. Digitalisation 4. Compliance & Corporate governance 5. Ethics, Integrity & Fair dealing 6. Client data protection & Cyber security 7. Customer experience 8. Stimulating diversity and equality 9. Environmental risk associated with Transactions

1.3.2 Emerging Risks:

Risk Identified

Source of the risk

Description of the risk

Potential Impact

Estimated financial implications

Likelihood of Occurrence

Methods of management

Regulatory Risk

National &International Regulatory bodies

Compliance with new regulatory guidelines

Erosion of capital

Compliance with regulatory guidelines and penalties/fines levied in

Minimal: The Bank has a well-defined Compliance Dept which oversees compliance

Qualitative checks and controls - Qualitative internal and external audits for maintaining checks and controls to comply with regulatory requirements. Well defined internal policy and function


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case of violations/non-compliances.

function. Bank staffs are adequately educated on the compliance issues and dealing in customers and regulatory issues.

Having a well-diversified portfolio across various industries and segments resilient to individual industry cycles

Occupational Health & Safety Risk

Within Bank premises & external

Health & safety issues related to Indoor Air quality, Ergonomics, physical infrastructure (lifts, stairs, railing, etc.) Health issues due to pandemics & other Natural Calamities

Low Lower productivity, absenteeism & delayed completion of tasks

Low • Bank has sophisticated technology and automated operations, leading to lower operational risk exposure. • Bank’s staff are qualified and adequately skilled to perform operations in the Bank. Regular checks & signages in place for Health & safety aspects in offices & branches

1.4.1 Codes of Conduct:

The Directors, both, executive and non-executive, top management, middle level management and all associates follow and adhere to strong corporate codes of conduct laid out by the organization in its culture and also in policies accessible to all. These policies emphasize on activities being carried out in honest, fair, diligent and ethical manner, within the scope of the authority conferred upon associates and in accordance with the laws, rules, regulations, agreements, guidelines and standards. Directors and associates have a duty to make decisions and implement policies in the best interests of the company and its stakeholders. The Board of Directors is entrusted with the fiduciary responsibility of overseeing the assets and affairs of the company. We have a robust whistle blower process wherein employees can raise whistle blows/ complaints through the forum to the Corporate Ombudsman. This is an open communication channel to identify and report potential risks which are reviewed by the investigation team and the Redressal Committee members and mitigation strategies are looked upon. This is in addition to the existing Risk Management framework, wherein potential risks are identified and reported.

1.4.3 Corruption & Bribery:

Our Bank conducts business with honesty & integrity & in compliance with all regulatory & legal obligations. The principles of anti-corruption & bribery are captured in the 3 codes of conduct we have as below: Code of Conduct for Directors & Senior Management Code of Conduct for Prevention of Insider Trading Code of Practices and Procedures for Fair Disclosure.

IndusInd does not encourage associates or any connected stakeholders to follow unethical means such as Bribery or kickbacks. We have a zero tolerance approach to bribery and corruption and are committed to acting professionally, fairly and with integrity in all its business dealings and relationships, wherever they operate, and to implementing and enforcing effective systems to counter bribery. Strong guidelines have been laid down to avoid malpractices and consequences of such actions are also well defined. Strong and stringent control measures are in place to stop such activities and associates are encouraged to bring to notice any such malpractice which might have been missed out.


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We have made no Direct or indirect political contributions. Charitable contributions and sponsorships are part of CSR funding. We make donations that are legal and ethical under local laws and practices. We follow the mandate laid down by Section (135) of the Companies Act 2013.

The Code of Conduct & Whistleblower Policy can be found on below link: https://www.indusind.com/in/en/sustainability.html

1.4.7 Reporting on breaches:

There were no cases of corruption and bribery in FY 2019-20.

1.5.1 Satisfaction Measurement:

We are committed to delivering superior and consistent customer service across all client touch-points. For a comprehensive, all-encompassing look at customer satisfaction, the Bank employs a number of service channels for client-centric engagement at various levels through Relationship Managers, Service Delivery Managers, and Key Account Managers. Each service channel has different KRAs and incentive programmes. Through these channels, the Bank manages the plethora of services for branches and contact centres, as well as, product-related services, customer complaints & grievances, ATM servicing, and competition monitoring. 69% of customers were satisfied out of total number of customers responding to the survey.

1.6.1 & 1.6.2 Contributions and Other Spending & Largest Contributions and Expenditures:

The Bank does not support political campaigns, political organizations, lobbyists or lobbying organizations and other tax-exempt groups for the purpose of influencing policy.

We support Trade Associations as below: Top 3 Contributions: Indian Banks Association - INR 2124000 Micro Finance Institutions Network - INR 1180000 Impact Investors Council - INR 295000 Others: Institute For Development And Research In Banking Technology Confederation Of Indian Industry Institutional Investor Advisory Services India Limited Bombay Chamber Of Commerce & Industry Indian Institute Of Banking & Finance

1.7.1 Tax Strategy:

The business operations of the Bank are largely concentrated in India. Activities outside India are restricted to resource mobilization in the international markets. Since the Bank does not have material earnings emanating from foreign operations, the Bank is considered to operate only in domestic segment. The Bank is not present in any tax haven countries and does not do business in any tax evasive modes. The Bank does not support political campaigns, political organisations, lobbyists or lobbying organizations and other tax-exempt groups to influence policy.

1.7.2 & 1.7.3 Tax Reporting & Effective Tax Rate:

Particulars FY 2019-20 (Numbers in Crore)

Earnings before Tax 6,120.61

Reported Taxes 1,702.70

Effective Tax Rate (in %) 27.8191 Cash Taxes Paid 2,061.36

Cash Tax Rate (in %) 33.6790

https://www.indusind.com/in/en/sustainability.html


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1.8.1 Information Security/Cyber security Governance:

Mr. Shanker Annaswamy is the Board member who oversees the cyber security strategy & is a part of the Cyber security / information security committee responsible for the oversight of cyber security. He has 16 years of relevant experience. The Chief Information Security Officer (CISO) within the Executive Management team is responsible for overseeing cyber security within the company.

1.8.4 Information Security/Cyber security Breaches:

FY 2017-18 2018-19 2019-20

Total number of information security breaches or other cybersecurity incidents 1 0 2

Total number of information security breaches involving customers' personally identifiable information 0 0 0

Total amount of fines/ penalties paid in relation to information security breaches or other cybersecurity incident. 0 0 0

1.9.2 Integration of ESG Criteria in Wholesale/Corporate/Investment Banking:

The Bank has established Environmental and Social Risk Management (ESMS) Policy to ensure our investments balance economic growth with socioeconomic sustainability. This safeguards the bank against credit and reputational risks. ESMS evaluates our clients on various parameters of E-S-G and assists to identify risks. Implementation of the policy is carried out by our Relationship Managers who undergo rigorous capacity building to appropriately assess all proposals, identify gaps, and maintain transparent reporting through the digital ¬filing systems. The policy is governed at the macro level by key stakeholders including board members, the business heads, and the CEO. ESMS ensures that ESG risks are factored in client due diligence process. The Bank has a zero tolerance policy for non-compliance and as a demonstration of our commitment to the ESMS process, the Bank has delayed disbursements until all non-compliance issues are addressed by clients. 100% of corporate credit/lending clients are informed about ESG related risks and opportunities. To convey ESG performance of Bank, ESG targets for FY 21 were announced in last fiscal year. These targets include among others, a special focus on our ESG portfolio. We have specific targets to increase green lending portfolio and livelihoods supporting/ social lending portfolio. All proposals are screened against the basic ESMS criteria (which is the exclusion list) with about three-fourths of all proposals being screened against detailed sector-speci¬fic checklists. All proposals are subjected to exclusion check as first step while checking environmental and social risks. IndusInd Bank strictly does not do business with any excluded entity. This exclusion list, accessible to all employees, is applicable to corporate banking portfolio.

Exclusion List of IndusInd Bank:

1. Production or trade in any product or activity deemed illegal. 2. Production or trade in substances which are internationally banned, including but not limited to wildlife products, products regulated under CITES, illegal narcotics, among others. 3. Gambling, casinos and equivalent enterprises. 4. Production or trade in products involving forced labor or harmful child labor. 5. Businesses owning factories or workplaces that have inadequate safety mechanism when dealing with known industrial carcinogens. 6. Businesses with a substantial stake in the porn industry. 7. Production or trade in explosives and/or fireworks primarily meant for non-industrial use. 8. Production or trade in tobacco or any of its derivate products including but not limited to Cigarettes, Gutka etc.


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An environmental and social evaluation is undertaken as part of the due diligence. Potential gaps between the outcome of the E&S evaluation and applicable local environmental and social laws, applicable IFC Performance Standards are addressed by the Borrower by implementing an environmental and social action plan, satisfactory to the Lender.

1.9.3 Integration of ESG Criteria in Project Finance:

We align our corporate banking including project finance business with the Equator Principles. We ensure compliance with the Equator Principles (EP) and with other ESG frameworks through internal experts. 6 projects during the last fiscal year have been reviewed in line with the Equator Principles by the PF team.

Case study 1: The Bank decided to lend a project developer for a Transmission Line project that would enable evacuation of electricity generated through renewable energy sources to demand site. During E&S risk assessment it was found that the route of the Transmission Line was to pass through the Eco-Sensitive Zone of a Bird Sanctuary. Transmission lines might have negative impact on birds due to collisions and electrocutions. When transmission lines cut through flyways and migration corridors of birds it can result in considerable number of avian collisions. The IFC EHS Guidelines have suggested that transmission corridors should be aligned to avoid such critical habitats or ensure control measures to minimize avian and bat collisions. As a mitigation measure, IndusInd Bank thus suggested a detour to the project developer which would steer clear of the Eco-Sensitive Zone and the Bird Sanctuary. The transmission line now includes a stretch of ~0.9% of total project length to pass through a wildlife sanctuary and ~1.5% other forest area. As a caveat, the Bank decided to cap disbursement at certain levels unless timely wildlife and forest clearances were obtained by the company.

Case study 2: In a Transmission Line project, some of the proposed transmission lines were to pass through Forest Area measuring ~33% of the total project length & Wild Life Sanctuary and Eco-Sensitive Zone measuring 4.0% of the total project length. The feasibility study for alternative routes provided justification for the chosen route. It also highlighted the lack of any economically viable alternate route that can avoid bypassing the Forest Area & Eco-Sensitive Zone and Wild life Sanctuary. Thus assessment of the impact on bio-diversity became an imperative for the chosen route. IndusInd Bank has therefore stipulated that Biodiversity Impact Assessment report shall be obtained prior to disbursement. Moreover, obtaining wild life clearances was critical to the viability of the project. Hence, obtaining Wildlife and Forest clearances and approvals on time were a part of conditions stipulated at the time of Sanction of the loan by the Bank. In case of any adverse impact on viability of project, case IndusInd also reserves the right to withhold disbursement of the facility at any time.

Case study 3: One out of 6 elements of a Transmission line project was to pass through Wildlife Sanctuary an Eco Sensitive Zone and Forest area measuring 10.03% of the project length. There were no economically viable alternatives to avoid bypassing wild life area. The projects such as setting up of transmission lines have an essential role to play in the country’s social infrastructure yet it can have an impact on the environment. Therefore, the Bank stipulated that the developer will ensure that Wildlife and Forest Clearances are obtained on a timely basis. Consequently, the disbursement under the facility was restricted to a lower debt equity ratio till all the forest and wild-life related approvals for the Project are in place and LIE confirmation is obtained. Further during the initial period, Bank also stipulated that Biodiversity Assessment Report be made available prior to availing subsequent disbursements.

1.9.7 ESG Products & Services for Wholesale/Corporate/Investment Banking:

ESG Credit Lines

Main products/services categories offered Total Monetary Value (INR in the last fiscal year)

Product Category 1: Green and Climate Finance Wholesale/corporate Advances in Crores.

53235800000

Product Category 2: Social and Livelihood/ Inclusive Finance Wholesale/corporate Advances in Crores.

133250700000


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Total volume of green/Environment-Social-Governance based credit lines in your wholesale/corporate/investment banking segment

186486500000

Total volume of credit business (lending book) of your wholesale/corporate/investment banking segment

913340000000

Percentage of green/ Environment-Social-Governance based credit lines vs total credit/ loan business

20.42%

Products/services categories included in ESG Credit lines:

Green and Climate Finance sectors:

Renewable Energy

Energy Efficiency

Clean Energy

Green Buildings

Water, Sanitation and Hygiene Social and Livelihood/ Inclusive Finance sectors:

Education

Healthcare

Affordable Housing

Impact NBFC

Social Infrastructure

Agri-business

Inclusive Finance

Green/Sustainable Infrastructure Finance

Main products/services categories offered Total Monetary Value (INR in the last fiscal year) year)

Renewable Energy 35738400000

Energy Efficiency 2278100000

Green Buildings 12365300000

Clean Energy 590800000

Water Sanitation and Hygiene 2263200000

Total value of green and/or sustainable infrastructure projects financed 53235800000

Total value of infrastructure finance 806809500000

Percentage of green/sustainable infrastructure finance vs. total value of infrastructure finance

6.59%

1.9.6 & 1.9.10 Integration of ESG Criteria in Retail Banking & ESG Products & Services for Retail Banking:

ESG Credit Lines

Main products/services categories offered Total Monetary Value (INR in the last fiscal year) year)

Total value of green or ESG based credit lines or mortgages (Microfinance, Vehicle finance, Retail-Agri finance & Consumer banking)

629030000000

Total value of your credit/loan facilitation business (lending book) 1154490000000

Percentage of green or ESG based mortgages and credit lines vs total value of credit/loan facilitation business

54.48%

Products/services categories included in ESG Credit lines: Microfinance, Vehicle finance, Retail-Agri finance &

Consumer banking


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1.10.1 Crime Prevention: Business Policy/Procedures:

The Bank has established procedures to ensure the effective establishment and implementation of a company culture opposing money-laundering and terrorism financing. These include:

Customer due diligence (CDD): Formal policies and procedures include customer verification based on reliable, independent source documents, data or information, identification of beneficial owner, or conducting ongoing due diligence on business relationships

Non-face-to-face CDD: Formal policies and procedures are in place for non-face-to-face customers including, amongst other measures, certification of documents presented and independent contact with the customer by the Bank

Terrorist financing: CDD procedures include formal searches against lists of known or suspected terrorists issued by competent authorities having jurisdiction over the relevant financial institution

Politically exposed persons (PEPs): Formal policy and procedures in place covering the identification, periodical review and monitoring of PEPs

Senior management to sign off PEP customers or other customers from countries, businesses and products with greatest risk of money-laundering/terrorism financing

Record keeping for five years for all anti-money-laundering/terrorism financing-related documents

Annual independent assessment of monitoring procedures via an external agency There is no legal case pending against the Bank with respect to anti-competitive behaviour and violations of anti-trust and monopoly legislation for FY2019-20.

1.11.1 Global Systemically Important Banks:

Banks play a vital role in the flow of money and credit between savers and borrowers. For a working economy and society, the stability and sustainability of the entire financial system is of utmost importance. Learnings from past financial crisis have driven national and international regulatory initiatives that press for the adoption of stronger capital requirements and loss absorbency, among other measures. Global Systemically Important Banks, as defined and monitored by the Financial Stability Board (FSB), are particularly subject to these regulatory initiatives, as the Basel Committee on Banking Supervision seeks to improve the resilience of banks and banking systems that are active in business areas with high-risk exposure. As per the latest list released by the FSB, IndusInd Bank does not fall under the ambit of Global Systemically Important Banks (G-SIB)

1.12.1 Privacy policy: Systems/Procedures:

Information collected shall be used for the relevant lawful purposes connected with various functions or activities of the Bank related to services in which the Concerned Person is interested, and/or to help determine the eligibility of the Concerned Persons for the product/services requested/ applied/ shown interest in and/or to enable the Bank to verify Persons verification and/or process applications, requests, transactions and/or maintain records as per internal/legal/regulatory requirements and shall be used to provide the Concerned Person with the best possible services/products as also to protect interests of IndusInd Bank A Board approved “Privacy Policy” is already there in place. We, IndusInd Bank are committed to protecting Customers’ privacy during their visits, using our website, availing the products and services vide the online applications. We recognise our responsibility to keep the information provided by the customers to us, confidential at all times. This Policy is applicable to personal information and sensitive personal data or information collected by the Bank or its connects directly from the customer or through the Bank’s online portals, mobile apps and electronic communications as also any information collected by the Bank’s server from the customer’s browser. All Information collected shall be used for the relevant lawful purposes connected with various functions or activities of the Bank related to services in which the Concerned Person is interested, and/or to help determine the eligibility of the Concerned Persons for the product/services requested/ applied/ shown interest in and/or to enable the Bank to verify Persons verification and/or process applications, requests, transactions and/or maintain records as per internal/legal/regulatory requirements and shall be used to provide the Concerned Person with the best possible services/products as also to protect interests of IndusInd Bank. The Customer Account Information shall not be shared with any external organisation unless the same is necessary to enable IndusInd Bank to provide services or to enable the compilation of a transaction, credit


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reporting, or the same is necessary or required pursuant to applicable banking norms or pursuant to the terms and conditions applicable to such Information as agreed to with IndusInd Bank or pursuant to any requirement of law/regulations or any Government/court/other relevant authority’s directions/orders. Needless to add, confidentiality norms as applicable to banks shall be adhered to. Keeping financial information secure is one of our most important responsibilities. We maintain physical, electronic and procedural safeguards to protect Customer Information. Employees are authorized to access Customer Information for business purposes only. Our employees are bound by a code of ethics that requires confidential treatment of Customer Information and are subject to disciplinary action if they fail to follow this code. IndusInd Bank may also share Information to provide customers with better services and a range of offers and services available to them. If customers desires IndusInd Bank to limit such sharing whereby customer would not like to be informed of offers available he/she may contact Bank at [email protected]. The Policy applies to the entire Bank. Defined point of contact is in place for escalation of privacy issues. Privacy policy system is embedded in group-wide risk/compliance management.

1.12.2 Customers' Information:

Customer engagement encompasses the client’s interaction across all touch points including digital channels, Relationship Managers and Service Managers.Each channel has distinct KRAs and objectives. IndusInd Bank is committed to protect Customers’ privacy during their visits, using itswebsite, availing the products and services, vide the online applications. Bank recognises its responsibility to keep the information provided by the customers, confidential at all times. The Privacy Policy can be found on below link: https://www.indusind.com/content/home/footer/privacy-policy.html

Employees are authorised to access Customer Information for business purposes only. Employees are bound by a code of ethics that requires confidential treatment of Customer Information and are subject to disciplinary action if they fail to follow this code. If customers so desire, Bank can limit sharing of customer information; whereby a customer would not like to be informed of offers available he/she may contact Bank at [email protected].

The Bank treats every customer’s personal information as private and confidential and it is not disclosed to any other entity unless otherwise authorised by the customer or the disclosure is compelled by law as mentioned in the Customer Rights Policy.

1.12.3 Breaches of Customer Privacy: Complaints:

During FY 2019-20, there were no complaints received from outside parties & regulatory bodies or substantiated by the organisation regarding breaches of customer privacy and losses of customer data. There were no identified leaks, thefts, or losses of customer data.

https://www.indusind.com/content/home/footer/privacy-policy.htmlmailto:[email protected]


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Environmental Disclosures

2.1.1 Environmental Reporting – Coverage:

The Bank reports environmental indicators such as electricity use, energy use, GHG emissions, water, paper waste and e-waste for 100% of its operations.

2.1.2 Environmental Reporting – Assurance:

The Bank reports environmental indicators such as electricity use, energy use, GHG emissions which have been assured as part of the GHG assurance which is part of the CDP response of the Bank. Environmental indicators such as water, paper waste and e-waste have been assured as part of the Integrated Report assurance. Please refer below link for latest Integrated Report with the assurance statement: https://www.indusind.com/in/en/sustainability.html

2.2.1 & 2.2.2 Direct Greenhouse Gas Emissions (Scope 1 & Scope 2):

GHG Emissions (MT of CO2) FY2016-17 FY2017-18 FY2018-19 FY2019-20

Direct GHG Scope 1 5937.57 5777.28 5299.38 8831.60

Indirect GHG Scope 2 51141.22 57801.35 60907.97 62785.67

Total GHG Emissions (Scope 1+2) 57078.79 63578.63 66207.35 71617.26

Scope 3 5131.66 5797.56 14350.29 12779.13

Grand Total 62210.45 69376.19 80557.64 84396.39

Please refer Annexure for Independent Limited Assurance Statement on the Greenhouse Gas (GHG) Inventory for FY 2019-

20

Target is 15% Reduction in Scope 1 & 2 emissions over Base year 17-18.

2.2.3 Energy:

FY FY2016-17 FY2017-18 FY2018-19 FY2019-20

Source of Energy

Type of energy EC (MWh) EC (GJ) EC (MWh) EC (GJ) EC (MWh) EC (GJ) EC (MWh) EC (GJ)

Non-Renewable

Direct Energy - Diesel

13485.21 48546.76 11426.04 41133.74 11323.10 40276.69 10857.55 39088.27

Direct Energy – Petrol

503.68 1813.25 304.23 1095.23 222.25 800.10 190.34 685.23

Direct Energy - CNG

3.11 11.20 - - - - - -

Direct Energy - Total

13992.00 50371.20 11730.27 42228.97 11545.35 41076.79 11047.88 39773.50

Indirect Energy (Electricity)

62032.21 223315.96 70588.81 254119.72 74076.87 266676.51 76132.2 274083.65

Total Non Renewable energy consumption

76,024.21 2,73,687.16 82,319.08 2,96,348.69 85,622.22 3,07,753.30 87,180.10 3,13,857.15

Renewable Energy

Solar 255.26 918.94 245.28 883.01 255.80 920.88 252.40 908.67

Grand Total 76,279.47 2,74,606.10 82,564.36 2,97,231.70 85,878.02 3,08,674.18 87,432.50 3,14,765.81

Renewable energy Target is 2% increase in usage over Base year 17-18. Non-renewable energy Target is 15% Reduction in consumption over Base year 17-18. Total costs of energy consumption = INR 555100000 2.2.4 Water: Water consumption FY2016-17 FY2017-18 FY2018-19 FY2019-20

Total water use million cubic meters 0.2802 0.2799 0.3071 0.363



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Target is 5% Reduction in water consumption over Base year 17-18.

2.2.5 Waste:

Waste disposed in metric tonnes FY2016-17 FY2017-18 FY2018-19 FY2019-20

a) Total waste generated - - - 82.3

b) Total waste used/recycled/sold - - - 47.09

Total Waste Disposed (A - B) 24.046 36.4 56.16 35.2

Target is 10% Reduction in waste disposed over Base year 17-18.

The reported data pertains to e-waste & paper waste that was recycled.

2.2.6 Emissions from Business Travel:

GHG Emissions (MT of CO2) FY2016-17 FY2017-18 FY2018-19 FY2019-20

Paper 3013.43 3562.91 9060.16 7619.53

Employee commute 184.61 239.59 273.6 479.83

Business Travel 1933.61 1995.06 2413.58 1226.65

Business Travel-Reimbursement - - 119.54 653.33

Hotel stays - - 67.55 156.51

Data Center - - 70.72 34.30

Transaction based offsite ATMS - - 2345.14 2608.99

Scope 3 Total 5131.66 5797.56 14350.28772 12779.14

Please refer Annexure for Independent Limited Assurance Statement on the Greenhouse Gas (GHG) Inventory for FY 2019-

20


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Social Disclosures

3.1.1 Social Reporting – Coverage:

The Bank reports social indicators for 100% of its operations.

3.1.2 Social Reporting – Assurance:

The Bank's social indicators have been assured as part of the Integrated Report assurance. Please refer below link for latest Integrated Report with the assurance statement: https://www.indusind.com/in/en/sustainability.html

3.2.1 Diversity:

Permanent employees as on March 31, 2020 Age Group Males Females

East West North South Corporate Total East West North South Corporate Total

50 31 42 34 83 98 288 5 8 3 6 15 37

Total 2855 5526 8241 5864 2438 24924 539 1643 1666 1015 887 5750

*The above table contains breakdown of workforce based on age & zones of the country. The Bank has its offices &

branches based in India.

The Bank has 17 permanent employees with disabilities.

3.2.3 Freedom of Association:

There is no employee association in the Bank. At IndusInd, we have a highly educated workforce, whose technical skills are greatly valued globally. Every employee has readily available access to many internal tools to connect with the senior management. IndusInd encourages transparency across its workforce and directly helps connect with leaders and their vision through various events and exchange ideas on myriad issues including company strategy and goals. The employees can also directly connect with the leaders through online platforms like Twitter/ Facebook etc.

Diversity Indicator Percentage (0 - 100 %)

Female share of total workforce (%) 18.75%

Women in all management positions, including junior, middle and senior management (as % of total management workforce)

Junior Management 13.36% Middle Management 4.6% Senior & Top Management 0.79%

Women in junior management positions, i.e. first level of management (as % of total junior management positions)

21.6%

Women in top management positions, i.e. maximum two levels away from the CEO or comparable positions (as a % of total top management positions)

2.9%

Women in management positions in revenue-generating functions (e.g. sales) as a % of all such managers (i.e. excluding support functions such as HR, IT, Legal, etc.)

10.9%



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3.3.1 Human Rights – Commitment:

The Bank's HR policy describes that The Bank is an Equal opportunity provider. The HR policy pertains to regular full-time employees and covers guidelines and policies relevant to employee welfare and benefits, work environment and business ethics. The Bank respects, protects and promotes the Human Rights mandate that is recognised at the global levels. The Sustainable Procurement Policy document provides guidelines for uniformity in the overall procurement process of the Bank including guidelines on transparency, safety and the inclusion of human rights.

3.3.2 Human Rights - Due Diligence Process:

We have formalized processes and systems that facilitate and uphold the principles of ethics and sustainability as they pertain to all stakeholders, including employees. The Bank seeks to associate with supply chain entities willing to abide by standard and progressive labour practices while upholding basic human rights. Our recruitment process is a fair and transparent process, since we constantly emphasize on a talent screening. We aspire to be the first employer and make an environment suitable for the talent to thrive and do better irrespective of the religion, gender etc.

We are committed to being a company with a strong respect for human rights, safe work conditions and environmentally sound business practices for our employees and customers.

3.6.1 Group-wide Strategy:

IndusInd Bank, is committed to running its business in a way that generates sustainable value for its customers, clients, shareholders and employees. The Bank also recognizes that since its sphere of activity and influence extends beyond the boundaries of the financial system, it needs to work through various CSR initiatives for Social Upliftment and Environmental Conservation. In compliance with Section 135 of the Companies Act, 2013 and CSR Rules 2014 in India, the Bank has set up a Board-level CSR Committee to look after its CSR initiatives. IndusInd Bank’s CSR policy and strategy direct and govern the Bank’s activities across all its CSR Focus Areas. These are Environment, Education, Skill Development & Livelihood, Healthcare and Sports. Please refer CSR Policy on below link: https://www.indusind.com/in/en/csr-policy.html

Priority SDG alignment Description of alignment between priority and your business drivers. Please provide supporting evidence.

Business Benefit KPI Please provide supporting evidence.

Social/ Environmental Benefit KPI Please provide supporting evidence.

Priority 1: Good Health and Wellbeing

Goal 3: Ensure healthy lives and promote well-being for all at all ages

Certain districts are categorized as aspirational districts while some are determined as difficult terrain geographies. We are in such difficult terrains and aspirational districts in 5 states

Our work at grass-root level has created goodwill. The community identifies the brand and connects with it. shows well in the credit-deposit ratio which is almost 200% avg in the states we work in.

Ensuring access to highly subsidized and affordable primary healthcare and medicines for 200,000 people per year belonging to poor and lower income families. These will be from some of the most backward and aspirational districts published by NitiAyog

Priority 2: Sustainable Cities and Communities

Goal 11: Make cities and human settlements inclusive, safe, resilient and sustainable

Cities like Mumbai, Gurgaon, Bangalore, Chennai, Hyderabad, Ahmedabad, Noida, Delhi are all business hubs and are worst affected by pollution. We have targeted urban spaces to create mini forests to mitigate the ill effects of pollution

Working with the communities at the ground level brings synergies and creates a win-win situation for us and the society at large. Not just increase in the number of accounts but deepening of books has been seen as outcomes of our intervention.

Planting of 59,000 indigenous trees by 2020. This is expected to have a carbon sequestration potential of approximately 26,700 MT of CO2 (offset over 15 years).

https://www.indusind.com/in/en/csr-policy.html


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Priority 3: Clean Water and Sanitation

Goal 6: Ensure availability and sustainable management of water and sanitation for all

We acknowledge how important is safe drinking water and so started working in area where we have an extensive network of MFIs. These areas had contaminated and high TDS water levels. We work with communities to bring in awareness on drinking clean water.

There is Increase seen in business in rural clusters. Relationships with business correspondents have become stronger and they work with us and the common agenda points of the community. Deposits have grown and continue to grow

Ensuring the additional water availability of more than 700 million litres or 700,000 cubic metres will be created through various conservation and restoration initiatives by 2024. Watersheds will be developed over 3,600 hectares of land. Ensuring the availability of affordable, RO purified drinking water to 160,000 people from Rural Areas.

3.6.3 CSR Input:

CSR Cash contributions = INR 3065740 Employee volunteering during paid working hours = 7292 Hours

3.7.2 Absentee Rate:

Absentee rate for FY 2019-20 is 2.57%

3.8.1 Financial Inclusion:

A key objective of the Bank is to mainstream financial inclusion by serving the unbanked and under-banked

masses, especially to those at the bottom of the pyramid. IndusInd Bank’s rural banking vertical caters to the

BoP segment through various product and service offerings like micro-loans, vehicle loans, savings accounts

and asset securitisation to rural customers while also engaging in term-lending to micro-finance institutions.

Providing microfinance to small-sized businesses or to under priviledged social groups:

Microfinance forms an integral part of our Bank’s overall Financial Inclusion Strategy. We launched our

flagship Business Correspondent model with Microfinance Institutions and works on the principle of value

chain deconstruction where the critical functions are retained while outsourcing the rest of the activities

within the prevailing operative and regulatory framework. This model became a win-win proposition for all

stakeholders through commercial viability and customer engagement and we were able to reach out to the

unbanked and under-banked women customers by offering them microloans through Joint Liability groups

(JLG) and enabled convergence of other financial services.We offer micro-credit / small value loans ranging

from INR 5,000 to INR 50,000 for up to 2 years tenure directly to the financially excluded population. Through

the program, we financed about 1100 legally permitted activities, run predominantly by women.

Providing access to financial services (e.g. lending schemes, accounts) for low income social groups:

Microfinance loans (JLG) - The Microfinance program under the Business Correspondent Model provides small

loans to a women borrowers having a household annual income not exceeding INR 1 lac in rural areas and not

exceeding INR 1.60 lacs in urban and semi-urban households income, as defined by Reserve Bank of India.

100% of our borrowers are women organized in Joint Liability Groups (JLGs) Micro Enterprise Loans - To

expand their businesses & to fulfil increasing financial needs we have launched Microenterprise Loan (MEL)

with loan sizes upto Rs. 2.5 lacs for business purposes like addition to capital assets (e.g. purchase of

machinery), working capital requirements, etc. For Liabilities - For low income group various services like

deposit, withdrawal, fund transfer/remittances, Aadhaar Enable Payment System (AEPS) biometric

authentication on real-time basis, Balance inquiry, Aadhaar seeding, Mobile update, RuPay card activation, etc

are offered.


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Providing access to financial services for disabled people:

All our Banks ATMs are with Braille keypad and talking facilities. We have 2760 ATMs as on March 31, 2020.

Ramps in branches/ATMs for wheelchair users: As on March 31, 2020, ramp facility is available in our 893

ATMs. Branches with ramp facility are 580. Door step banking service is provided to all customers. Banker’s

guide for Customers with special needs and Persons with disabilities is also uploaded on the bank’s website.

Our new website has following features: Colors (Change Contrast High) - Ensure that there is high contrast

between the color of the text presented and that of the background. Ensure that color is not the only prompt

used to convey information. Text (Increase/Decrease font) - Ensure that your text can be made larger without

affecting the content or function of the page or site Images (Alt text implementation) - Ensure your images

have alternative (alt) text unless they are purely for decoration

Providing financial literacy to low income social groups:

Financial literacy (Assets) - Delivering Financial literacy is an integral part of our Microfinance lending. The 1st

step of a borrower becoming eligible for loan is when the women clear the CGT (Compulsory Group Training)

and GRT (Group recognition training) training as a part of the JLG group. These trainings involves sensitizing

the women borrowers on the risks of over-indebtedness, mechanisms for grievance redressal, importance of

making loan repayment on time, Rules and regulations of the Microfinance loan. Financial literacy (Liabilities)

– We conduct “Financial and Digital Literacy Camps” in rural locations where the target group consists of

farmers, women, senior citizen and students etc. Atleast one outdoor camp every month is conducted in the

nearby branches or villages and report submitted to RBI and SLBC. We also conduct special camps on

“Financial literacy week” through our rural branches and Business Correspondents about banking and financial

products and services.

Promoting the use of mobile phone banking to disadvantaged social groups:

Some of the customer centric initiatives undertaken by our bank are to leverage the high penetration of

mobile phones by maintaining regular interactions by conducting Virtual Centre meetings and understand

from the borrower on any difficulties faced in business affecting repayments, need for additional loan,

moratorium, etc. Mobile phones are also used as a medium to send SMS to confirm loan disbursal to Savings

Bank accounts, DBT release, creating awareness on banking products and services, and sending reminders

prior to loan repayment due dates. We are also working on strategies to go cashless on repayments through

the use of UPI, BPPS, Aadhaar pay and other Payment gateways. These initiatives helped predict the likelihood

of delay or defaults in loan repayments and take early action as appropriate, understand customer choices and

preferences and build suitable products and services and differentiated us and helped us stay ahead of the

competition.

Providing financial products designed to increase access to banking services to underserved groups:

To build last mile banking connectivity, we enrolled local village Kirana stores as BMS(Bharat Money Stores)to

act both as merchant and service point of Bank, facilitating Financial (deposit/withdrawal) & Non-Financial

/Balance enquiry and Service requests etc) transactions to customers. The BMS are available within a close

proximity of 500 meters and are available 24X7 giving the customers the flexibility and convenience. We also

introduced a specifically designed Micro Recurring Deposit (Micro RD) and Voluntary Savings Bank (SB) a/c

facility to the customer to enable them to use the account effectively. An application was built which works on

Adhaar Enabled Payment System (AEPS) which the merchants could download on their Android Phones. The

merchant is only required to invest in a biometric dongle. The card less solution helped reduce the cost of

account opening by around 97.50%.

4.1.1 Impact Valuation:

The Bank has implemented Emission Reduction Initiatives namely timers installed at signages, deployment of

thin clients & servers virtualized. The bank has deployed 771 thin clients this year. The per-unit cost of a thin

client is less than the cost of a standard computer and also the electricity consumption is also less. The Bank


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installed 155 Timers in our Signages in this FY. These help reduce electricity consumption in our branches and

offices. The Bank has continued its investment in virtual servers as a means of reducing energy costs and

improving efficiency this financial year. This year the Bank has virtualised 485 servers.

Energy Efficiency Initiative Quantity Electricity Saved Emissions Reduced

Units Numbers (2019-20) kWh MTCO2e

Thin clients 771 219428.00 180.96

Virtual servers 485 2791214.74 2301.89

Solar energy generated at Karapakkam, Chennai

45620.86 37.62

Solar energy generated at IBL House, Mumbai

15983.00 13.18

Solar ATMs 159 190800.00 157.35

Timers 155 153360.00 126.47

Carbon Sequestration Potential of trees planted

59000 PRE Stage Carbon dioxide Sequestration - Before Replantation

14387.79

These initiatives not only help in cost reduction as a result of reduced electricity consumption but also help

reduce the carbon footprint of the Bank and thus help in climate change mitigation.

IndusInd Bank is geared up to finance renewable energy projects in India as a means to contribute towards the

national agenda of installing at least 9% of generation capacity through wind and solar energy – a commitment

within India’s Intended Nationally Determined Contributions (INDC) towards the Paris Climate Change

Agreement. The Bank has financed Renewable energy projects including solar, wind, biomass or biogas and

small hydro projects, Renewable energy products (i.e. solar panels, turbines) and Renewable energy

production/ transmission and distribution. Environmental impacts through Renewable projects financing: As

on March 31, 2020, the Bank sanctioned credit of INR 162.51 billion for setting up renewable energy projects

of 4095.88 MW capacity since 2015.

The Bank has extended the opportunities of sustainable livelihood among underprivileged and economically

disadvantaged groups, thereby encouraging rural development in a significant way. The Bank believes in

bridging the gap between urban and rural India by bringing the unbanked and under banked a step closer to

mainstream banking. Our rural banking model promotes inclusivity by creating and developing opportunities

for sustainable livelihood among underprivileged and economically disadvantaged groups. Microfinance is an

integral part of IndusInd Bank’s financial inclusion strategy. The microfinance programme provides small loans

to women borrowers, with annual household income not exceeding INR 100000 in rural areas and not

exceeding INR 160000. Social impacts through financial inclusion: 9.4 million women Bottom of the pyramid

(BoP) beneficiaries through microfinance loans. Total loan disbursals to weaker sections of INR 358.41 billion.

Total loan disbursal to Micro-enterprises of INR 164.29 billion.


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Annexure: Independent Assurance statement on GHG Inventory FY 2019-20


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disclosures on sustainability - indusind bank · 2020. 9. 7. · disclosures on sustainability fy...

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