19 April 2016

To our stakeholders:

I am pleased to confirm that The Saudi Investment Bank reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Musaed Al Mineefi
CEO

•It is the Banks policy to adhere to the law and regulations issued by the Ministry of Labour and other regulatory authorities in the Kingdom of Saudi Arabia.
•The bank has an approved Employee Code of Conduct which is a published Standard Operating and Accounting Procedures Manual.
•Assessment of Human Rights related risks and impact in the Bank are adhered to based on the law and regulations issued by the Ministry of Labour and other regulatory authorities in the Kingdom of Saudi Arabia.
•As per section III of our Code of Conduct - employees should strictly avoid any behavior, language or gestures that are offensive to other staff members, customers or the public. This includes all forms of discrimination, harassment, and other acts which might be interpreted as disrespectful to individuals or groups, men, or women. Strict adherence to the acceptable cultural norms in Saudi Arabia should guide the dealings with others of different gender.

•Staff grievances procedures are documented in Sections 17.6, 17.7 and 17.8 of our Human Resources Policy Manual.

Labour rights for employess are documented in the Human Resources Policy Guide administered by the Banks HR Department and in accordnace with local law.

In 2015 we developed and approved a formal environmental policy that represents our general position on environmental issues, and the policies and practices we will apply in conducting business. The purpose of this policy is to help us to continuously improve our environmental performance and integrate recognized environmental management best practices into our business operations, as well as reduce our consumption of resources and improve the efficient use of those resources. The policy includes our position on climate change, as well as sections on the management of the direct environmental impact of our operations, the environmental impact of our supply chain, environmental risks associated with lending and investment, as well as provision of environmental solutions through products and services.
We are working to improve our environmental performance in all areas by investing in environmentally friendly technology and raising awareness among our employees and customers. In 2015, we began to produce and distribute a monthly dashboard that shows the consumption of electricity, water and paper by branches in comparison with performance from the same month of the previous year. All branches have been instructed to use this dashboard as a performance management tool. We have also been sending weekly environmental protection tips to employees to raise awareness. We were proud to receive a CSR Award for Best Environmental Practices in 2015 at the CSR Saudi Arabia Summit organized by Informa.

Energy Consumption and GHG Emissions

Climate change is one of the most pressing challenges of our time. Even though our industry is not a major contributor to climate change, we seek to demonstrate leadership on this front.
Our energy consumption is driven by significant growth in the use of online banking services that require a growing technology infrastructure, and data centers that require large amounts of energy. With a workforce surpassing 1,600 individuals, we also consume a significant quantity of electricity to maintain our offices and the well-being of our staff. Finally, we use fuel for travel between our numerous branches nationwide.

In 2015, we strove to optimize electricity use in our buildings by replacing conventional lighting with LED lighting – more than 300 light bulbs per branch. The Bank also signed an agreement with an external supplier to set up a Building Management System (BMS) in our headquarters and five of our branches in 2016 to better monitor and control the consumption of electricity. We will also aim to purchase energy-efficient IT and office equipment as we replace our older equipment. We are committed to reducing non-essential business travel through teleconferencing and videoconferencing to cut fuel consumption.
In 2015, SAIB consumed 38,610 mWh of electricity, which amounts to 138,996 GJ of indirect energy consumed and 25,251 tonnes of indirect CO2 equivalent produced. SAIB’s indirect energy intensity was therefore 86 GJ/employee, and its Scope 2 GHG intensity was 16 tons of CO2eq/employee.
Because we only have consumption data in mWh for the year 2015, we have also reported our spending on electricity in order to demonstrate the trend in our performance since 2012. As the price of electricity has remained stable for the past few years in Saudi Arabia, we are confident that spending is a reliable indicator of our consumption. In 2015, our electricity spending increased by 12%. This increase can be attributed to the increase in our customer base and workforce, which must drive greater electricity use in our data centers and offices.
Our petrol consumption and associated emissions have increased by 13% since 2014, also likely due to the greater petrol use required to support the travel of more employees. There was no significant increase in the average electricity expenditure or fuel consumption per full-time employee.
Total energy consumption for 2015, including both direct and indirect energy, amounted to 142,219 GJ, while total GHG emissions amounted to 25,474 tonnes of CO2 equivalent produced. SAIB’s energy intensity was therefore 88 GJ/employee, and its GHG intensity was 16 tons of CO2eq/employee.
SAIB continues to digitize its policies and processes, which have traditionally been dependent on paper documentation, in order to reduce its use of paper. Even though SAIB has seen an increase of over 25% in the number of banking transactions from 2014 to 2015, paper consumption at SAIB has grown only by 9% in the past year as a result of the digitization of a number of banking transactions and processes. By default, our ATMs will not print receipts unless a customer opts for a receipt, and messages in ATMs ask customers not to print receipts if not necessary. We segregate, shred, and recycle our disposed paper. In 2015, our total paper recycled increased by 10%, consistent with the percentage increase in our total workforce.
To further reduce our paper consumption and increase recycling in our offices, we ran a staff campaign in 2015 encouraging our employees to “reduce, reuse, and recycle” with messages designed to raise employee awareness about the environmental issues caused by the high consumption of trees.
Presently, all other waste generated by SAIB is disposed of; however, the Bank is currently in the process of developing recycling programs for other materials including plastic and electronics. We are also building a system to measure the total weight of all waste produced by the company for reporting in future years.

Saudi Arabia suffers from both water scarcity and extreme aridity; it is thus forced to rely on finite, diminishing groundwater resources and desalinization of seawater to meet the demands of its population. As the environmental and social costs of these activities are significant, it is imperative that we do the utmost to reduce our consumption of water and thereby preserve the Kingdom’s resources.
With a workforce surpassing 1,600 individuals, we consume a significant quantity of water to maintain our offices and the well-being of our staff. We are working to reduce consumption by increasing awareness among our employees and installing water efficient appliances. In 2015, SAIB conducted an efficiency test at its head offices, and installed water saving tools on all taps and toilets as a result. The new Building Management System (BMS) to be set up in 2016 will also help us to better monitor and control our consumption of water at headquarters.
Despite our efforts to reduce water consumption, total water expenditure per person has more than doubled due to the addition of sanitary services to address siltation in the water at nine of our branches. Unfortunately, we are currently only able to report our consumption of water in terms of our spending on this item. Since the price of water has remained stable for the past few years in Saudi Arabia, we are confident that spending is a reliable indicator of our consumption.

The approved document - Code of Conduct for Board Members and Executive Manager - covers forms of anto corruption and the likes. The Banks Employee Code of Conduct - Section XI - Prevention of Criminal Activites , advises employee not to be involved in any crimal activities or AML transaction/s.