Our Choice Makes A Difference: Responsible Banking at MTB

Our Choice makes a difference
Responsible Banking at MTB

Based on ILO estimates, 2.3 million workers Financially, more than 4
die every year from work-related injuries per cent of the World’s
and diseases annual GDP is lost as a
consequence of work
related injuries and
diseases
An additional 160 million workers suffer from non-

fatal work-related diseases and 313 million from
non-fatal injuries per year
MTB recognizes its own moral, legal, and commercial responsibility and aim to uphold its commitment to
make substantial contribution to safe workplace as financier by being a driver of progress and prosperity in its
own supply chain and being responsible in how it does business and who it does business with.
The unmanaged environmental, social and health & Safety risks of the customers also impacting the Bank
financially. With the increased global awareness on Corporate social responsibility (CSR) & Sustainable
Business, it is going to be impacted further in the future.
Associated Risks of Banks for unmonitored risk of Customers
Customer Bank
Unmanaged EHSS Risk in operation
Risk
A. Operational Risk
• Business discontinuation- Immediate and/or
permanent .
• Ceasing of operation for long term.
• Ceasing of operation for short term.
B. Legal Risk
• Criminal cases
• Civil Cases
Consequences
• Fines and Penalties
C. Financial Risk
Insured loss Uninsured loss
• Damage to buildings, • Fines and penalties by the

equipment, products, enforcement authority.
stocks.  Damage to products,
 Claims on employers equipment, vehicles or
and public liability process not directly
insurances (not attributable to the accident.
common in • Production delays.
Bangladesh)  Loss of goodwill to suppliers
and poor corporate image.
Motivated to be the PIONEER of Responsible Banking in Bangladesh MTB
introduces-
• Its own OH&S (Occupational Health & Safety) Policy with the goal to
ensure that “every employee comes to work and goes home safe to
their families at every workplace”.
• An Occupational Health and Safety Guidebook that layout the relevant
processes, rules and procedures that will enable MTB’s firm
commitment to a healthy and safe working environment.
• An independent EHSSRM (Environment, Health & Safety and Social
risk management system) to ensure active monitoring and managing of
the environmental, health & safety and social risk of the customers.
• A risk assessment tool to assess the environment, Health & Safety and
Social risk associated with the customers operation.
Occupational Health & Safety Policy of Occupational Health & Safety Guidebook of
MTB MTB
• Sets out the commitment of the Bank to • Layout the relevant processes, rules and procedures
provide safe and healthy workplaces for all that will enable the Bank to successfully implement
workers, contractors, customers and other its Occupational Health and Safety policy
visitors. • Outline the Responsibilities, Risk assessment
• Assures the Banks commitment to devote process, Inspection frequency, Incident management
the necessary resources to meet health and process, Emergency Management, Safety training
safety legal requirements wherever it procedure that shall be practiced by the Bank.
operates and, where reasonably practical, • Outlines common Occupational Health & Safety
exceed them. Problems in Bank & relevant precautionary measures
• Confirms the intent of MTB to be a • Outline H&S concerns that will be considered at the
responsible financier. Planning and Design stages of New Branches and
offices.
MTB EHSSRM (Environment, Health & Safety, Social Risk Management) System
• Developed to monitor and manage the

Environment, Health & Safety and Social
Occupational
risk of the customers. Health and
• Developed by Benchmarking the EH&S IFC provided
Safety Policy
of MTB
Guideline of International Finance EH&S
Guideline
Corporation (IFC), World Bank Group,
along with Guidelines on Environmental Guidelines on
Environmental &
& Social Risk Management (ESRM) for Social Risk
Management
Banks and Financial Institutions in (ESRM) for Banks
and Financial
Bangladesh By Bangladesh Bank. Institutions in

Bangladesh
• An risk assessment tool has been

developed to support the system.
• Four color/stage (Red, Amber, Yellow,
Green or High, Increased, Moderate,
Low) risk matrix has been used for easier
prioritization and management of risk.
MTB EHSSRM
Applicability of EHSSRM
EHSSRM of customer
Proposed customer
Understanding of the present EHSS risk
Evaluating the EHSS risk that can cause operational risk in long term business
Identify and discuss the ways for managing the risks
Identify if any major legal or regulatory requirements have been breached
Discuss and try to manage the risk. if not possible, exit strategy identified.
Existing Customer
Understanding of the present EHSS risk
Evaluating the EHSS risk and manage the strategy to monitor and mitigate the risk
If the risk is such that is not manageable identify the exit strategy
Process flow diagram of Review the
EHSSRM project’s
compliance with
Identification
of risk
respect to the Key
performance
Initial Visit to indicators Risk
the assessment Initial report for
Generate Risk and
Prospect’s Data Collection Internal project
Documentation of Rating categorization
/Existing Screening
all provided
Project information Risk Rating
including any (Red, Amber,
permit, license, Yellow,
clearance etc. Green)
Screening
Project
Rejected
Screened out (Not limited to
loan/Exit
out plan only EHSS risk)
Monitor and
On-site follow-up Preparing report
review the
visit and preparing Loan approval and with a time bound
progress on
of report on disbursal (For action plan and
proposed Action
progress made prospects) relevant covenants
Plan
Process Repeat
A SOP has been developed with the relevant
programs, process & Procedures
Key Performance
Indicators on EHSSRM
Occupational and
Environmental Safety Community Health & Social Risk
Safety
1. ES Management System 1. Structural Safety of Project 1. Labor & Working Condition

2. Air Pollution Infrastructure 2. Land acquisition &
3. Water Conservation 2. Life and Fire Safety (L&FS) Resettlement
4. Water Discharges 3. Emergency Preparedness and 3. Indigenous people
5. Waste Disposal Response. 4. Cultural Heritage
6. Hazardous Material Management 4. Communication & Training.
7. Land Contamination 5. Workplace Welfare Facility
6. Physical Hazards (Workplace &
Work Equipment)
7. Biological Hazards
8. Chemical Hazards
9. Disease Prevention
Key Challenges in implementing EHSSRM of Customer
1. Inadequate pressure from government regulatory bodies to enforce

existing regulations.
2. Traditions of abusing the Bangladesh Bank’s ESRM guidelines by peer
banks.
3. In a competitive market where several Banks are ready to fund,
Customers have a tendency to pick the bank with less requirements.
4. No common platform has been established among the banks on the
moral standard as a financier.
5. Acceptability and accessibility of the Bank as an monitoring body of
Environmental, Health & Safety and Social risk is still very low in the
industry.
6. It requires significant resource allocation.
Opportunities for implementing
EHSSRM
Increased Global LDC graduation impact Increased foreign Opportunities to work Growing heavy
Awareness • With the preferential donation with foreign investors industries in the
• If communicated and treatment will be no longer • With the increased foreign • Having a strong EHSSRM
applicable, Environmental, country
advised properly, helping donation in the country, policy and strategy will •With the country
the export oriented Health & safety, Social there will be a growing open up the opportunities
issues will be one of the growing towards heavy
business with the EHSSRM scope of implementing the to work with the growing industries,
will be greatly appreciated. key aspects of getting EHSSRM, if such number of foreign
export preference. environmental, health &
organizations are attracted investors safety and social issues
to channel the finances will be part of their
through us with our strong operational risk.
EHSSRM policy.
Strategies to overcome the Key Challenges
Meaningful communication with customer:

• Communicate the future requirements on environment, social, health & safety
issues.
• Making understand how these issues may impact their business operation.
Positive Financial Incentives:
• Provision for reduction in interest rate.
• Provision for higher debt-equity ratio for borrowers .
• Flexibility in loan conditions.
Showing Appreciations
• Issuance of appreciation letter and upload the name of project on bank’s website.
• Awarding the projects/customers on a program arranged annually.
Possible future collaboration with organizations like ILO, to help develop projects.
Our Choice makes a difference

Our Choice Makes A Difference: Responsible Banking at MTB

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Our Choice makes a difference

Responsible Banking at MTB

An additional 160 million workers suffer from non-

• Damage to buildings, • Fines and penalties by the

• Developed to monitor and manage the

Bangladesh By Bangladesh Bank. Institutions in

• An risk assessment tool has been

Understanding of the present EHSS risk

Identify and discuss the ways for managing the risks

Identify if any major legal or regulatory requirements have been breached

Understanding of the present EHSS risk

1. ES Management System 1. Structural Safety of Project 1. Labor & Working Condition

1. Inadequate pressure from government regulatory bodies to enforce

Meaningful communication with customer:

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