As we will be celebrating the 30th anniversary of our founding next year, we look back with pride on what we have achieved. Since its establishment, the Bank has been a leader in the local banking sector and we are now providing comprehensive banking and financial services to more than 80 percent of all households across Mongolia.

As the nation’s largest and leading bank we aim to create a positive impact on social, economic, and environmental sustainability we are working to ensure that the UN Global Compact’s Ten Principles are at the heart of much of what we do at Khan Bank every day. The Bank is committed to such fundamentals as supporting communities where our employees and customers live and work with contributions and real efforts. We are also focused on acting with transparency and supporting our highly ethical, environmentally conscious, and socially responsible employees across our business.

During the reporting period, an important step Khan Bank took in sustainability was the launch of our first Sustainable Development Policy and introducing customers to environmentally friendly products and services. Khan Bank also made significant investments in digital banking services, offering its customers multiple channels for remote banking services during this critical time brought on by COVID-19.

In the future, as the leading commercial bank in Mongolia, we will strive to lead local businesses in developing sustainable development initiatives, share our best practices, and make tangible contributions to social wellbeing and the economy.

Sincerely yours,

JOHN BELL
CHIEF EXECUTIVE OFFICER

Khan Bank, with over 6,300 employees throughout the country, is the largest commercial bank in Mongolia, growing by 300 more employees than last year. As the third largest employer in Mongolia, the Bank is recognized for its noteworthy contributions to people’s lives as well as the country’s social and economic growth. Khan Bank prioritizes all kinds of equality in its day to day decision-making processes. As of September 2020, female employees accounted for 66 percent of all employees and 40 percent of senior management. On average, 600-700 employees were on maternity leave throughout the year, coming close to numbers from the previous year.

This year, Khan Bank took an important step in paying greater attention to sustainability we developed and launch our first Sustainable Development Policy. We included all of the Ten Principles of UN Global Compact, and the Bank’s most core policies are being changed to include sustainable development clauses, with these processes to continue.

As we reported last year, all of Khan Bank’s internal policies and procedures are consistent with Mongolian laws and regulations, including Khan Bank’s human resource policies, Code of Ethics, employment agreement and contract, and internal labor procedures. Khan Bank is compliant with all human rights and eligibility standards, and committed to providing equal opportunities for all candidates, employees, and customers, regardless of age, race, religion, social status, marital status, disability, political party affiliation, political views, sexual orientation, job title, position, financial status, or education.

As a gender-inclusive and socially responsible employer, Khan Bank guarantees an equitable, safe, and healthy work environment, and ensures that our day-to-day business activities are conducted in an appropriate manner. The Bank's headquarters, Khan Bank Tower, which was financed and built by the Bank, is equipped with eco-friendly features and smart control systems. The building provides a professional and up to date, environmentally friendly, cost and time efficient space for employees.

The Bank does not allow any sort of illegal employment or labor, and complies with all of the international conventions adopted by the UN and the International Labor Organization.

Still, we are paying attention to employee welfare, Khan Bank is also deeply committed to protecting customer rights. Every Khan Bank branch serves seniors, persons living with disabilities, and pregnant women without making them wait in line.

Khan Bank has safety regulations and emergency response procedures for the movement of customers in the case of an emergency, in addition to having a Business Continuing Plan (BCP) in place.

As we reported last year, employee human rights are ensured by our HR policies and procedures. We put an emphasis on the wellbeing of our employees and have a number of different policies and approaches to ensuring that the Bank is a happy and welcoming place for our employees, to support them in maintaining a healthy work/life balance. Such policies and procedures are continuously implement and include:

- Balanced Life Program (BLP): In order to ensure that employees are happy and satisfied with their job and employment at Khan Bank, and to encourage their healthy and active lifestyle, we launched the BLP in 2011. Within the program, various clubs were created by employees, such as the Hiking Club, Dancing Club, Cooking Club, English Speaking Club, Cyber Sport Club, Book Lovers Club and Publishers’ Club. They run various activities on a regular basis with some funding provided by Khan Bank HR.
- Paid leave
- Flexible work schedules
- Savings program dedicated to Khan Bank employees with discounted conditions
- Paid internships
- Social Development Fund for each department, to be used for team building activities, events, and socializing
- Regular health screenings for employees
- Scholarship program for employees to support their academic and career development, and scholarships for their children, to help release some of the financial burden of university tuition
- Aid and assistance for employees for family-related issues: In the event of an employee's family hardship or severe medical problems, the Bank grants paid/unpaid leave with one-time aid, determined on a case-by-case basis
- In order to improve the physical and mental health of employees, who are usually seated in front of a computer, the Bank partners with fitness centers to provide discounted gym memberships
- In-house doctor located at the Bank's headquarters

As for Khan Bank’s contributions to supporting the human rights of the Mongolian public, Khan Bank Foundation carries out many annual projects and campaigns targeting healthcare needs. Furthermore, the Bank provides financial support to students in financial need through scholarships, and encourages rational decision-making and consumer choices through financial knowledge sharing activities.

The year 2020 was a challenging year for all countries due to the COVID-19 pandemic. As part of its corporate social responsibility mission, Khan Bank has joined the fundraising campaign initiated by the National Emergency Commission to prevent the possible outbreak of the novel coronavirus (COVID-19) by supporting the commission's public health operations. Khan Bank donated a total of MNT 124 million to this fundraising effort.

During the reporting period, the Human Resources Department made changes to operational policy and procedures in accordance with the Bank’s Sustainable Development Policy. In response to the COVID-19 pandemic, we shortened the business hours of all branches and provided opportunities and conditions allowing almost 80 percent of our head office employees to work from home.

The largest and most impactful campaigns initiated and organized by the Khan Bank Foundation are the National Campaign Against Cancer, implemented every year since 2011, and the Campaign Against Hypertension, implemented since 2017.

Cancer is the second leading cause of death in Mongolia. In 2014-2018, 29,397 new cases of cancer were registered in our country, and 20,063 people died of cancer, according to the National Cancer Center of Mongolia. The last five years of cancer research have shown that in Ulaanbaatar (Mongolia's capital), where half of the Mongolian population lives, the mortality rate is lower than the national average, while the rate is much higher in rural areas.

There are some unfortunate statistics showing that 80.1 percent of liver cancer deaths, 86.5 percent of gastric cancer deaths, and 50.6 percent of cervical cancer deaths were diagnosed late, in stages III and IV. However, it’s possible to monitor, treat, and prevent cancer 73 percent of the time. That is why the National Cancer Center (NCC) and Mongolian National Broadcaster, together with the Khan Bank Foundation, have been implementing the National Campaign Against Cancer across the country since 2011, to provide the population with the opportunity to fight cancer, to get preventive examinations, and to increase public awareness of preventative healthcare.

Since the first year, the campaign team has conducted cancer screening for over 20,000 people in nine Ulaanbaatar districts and 21 provinces throughout Mongolia, and has performed 100 emergency surgeries financed by MNT 160 million contributed by the Khan Bank Foundation. The campaign team reaches out not only to urban residents but also rural residents through state hospitals in the provinces. Through the campaign’s activities, 10,238 doctors and medical professionals in rural areas have received training, and 130,500 people received free medical check-ups and/or medical assistance since the campaign's first year through 2019.

In 2019, through the National Campaign Against Cancer, a total of 4,573 people were screened; 15 cases of cancer, 264 cases of cancer development, nine cases of cancer re-occurrence, and 54 possible cases of cancer were detected; and 671 biopsies, 27 tissue analyses, and 11 surgeries were done. The campaign's activities are focused on raising awareness of such diseases among the public, how important prevention is, and how prevention and discover in cancer's early stages can lead to a full recovery.

During the World Cancer Day, on the 4th of February 2020, Khan Bank Foundation and the National Cancer Center produced a video with the theme “I am and I will”, in which celebrities and influencers raise awareness regarding cancer. A Facebook profile photo frame, posters, Facebook story, press releases, social media posts, and radio broadcasts were prepared and distributed to the public.

The Khan Bank Foundation has always focused on and supported public health issues, which is the basis for the establishment of the National Campaign Against Cancer. As the cancer campaign has reached the target groups of the campaign's partners and created momentum from its successful implementation, Khan Bank Foundation has established a second public health campaign, the Campaign Against Hypertension. The Campaign Against Hypertension was initiated in 2017, and has been implemented every year since then.

A key variable that triggers cardiovascular disease, which is the main cause of death in Mongolia, is hypertension. At the initiation of the Third State Hospital, supported by Khan Bank Foundation funding and carried out in partnership with the Public Health Institute, the Campaign Against Hypertension is being carried out to prevent disease prevelance and to provide free health screenings, knowledge, and cardiovascular health tips to the public.

Through the campaign, 1,500 doctors and medical professionals in rural areas have received training, and 15,068 people have received free medical check-ups and/or medical help since its first year.

In 2019, the Campaign Against Hypertension was succesfully carried out in June and July in Uvs, Khovd, and Bayan-Ulgii provinces, where cardiovascular disease is highly prevalent, reaching 5,000 residents. The campaign team has been celebrating World Heart Day with Ulaanbaatar residents on September 29th each year since 2017, providing free screenings and awareness-raising knowlegde to 5,000 people. Under the “Be a Heart Hero” slogan, the team celebrated World Heart Day at the Central Square of Zuunmod soum, Tuv Province, on September 28, 2019. Doctors from Ulaanbaatar led training workshops for rural area doctors and nurses.

The Khan Bank Foundation implements small-scale projects and funds projects and events that fight cancer under the scope of the National Campaign Against Cancer. Below are some of the projects that have received Foundation support:

Khan Bank employees participated in Kick-off Against Cancer, an awareness-raising and fundraising competition for cancer prevention research carried out through a friendly football competition held on August 24, 2019. The competition was organized by the National Cancer Center of Mongolia, in partnership with Bayangol Football. Khan Bank contributed to the cause along with eight local football teams and teams from foreign countries (Peru and Scotland), and a team of embassy representatives.

Diet during and after cancer treatment is as important as treatment itself. Khan Bank Foundation financed the publication of Lemons Against Cancer NGO’s “Diet During Cancer Treatment” booklet in 2019, to raise awareness that diet is important in fighting cancer. Traditional Mongolian staple foods mostly consist of carbohydrates, wheat, and fatty meat. Many people who overcome the tragedy of cancer often return to their old eating habits after treatment, which can lead to the re-occurrence of cancer. A total of 2,500 booklets were printed and two information sessions were held at the Children's Cancer Treatment Department of the National Children's Health Center and at the Gerontology Center.

In addition to these campaigns, Khan Bank Foundation implemented the annual Khan Environment project in 2020, benefitting the neonatal unit of the Parental National Center (PNC) operated by the Ministry of Health. The Khan Environment project renovated the first and second floor of the neonatal unit and brought joy and comfort to patients receiving treatment.

Khan Bank operates with consistent human rights definitions and realizes the importance of education, both academically and personally. The Khan Bank Foundation, the unit of Khan Bank responsible for CSR and sustainability, provides Khan Bank Foundation scholarships every year. In 2019, a total of 65 scholarships were provided to university freshmen who came to the city from rural areas of Mongolia.

Moreover, Khan Bank Foundation has been implementing the RISE Freshman Development Program since 2018, with the slogan “Let’s learn and develop together”. This program is dedicated to first-year university students to give them tips on succeeding in an academic environment, to offer mentoring, and to facilitate a smooth transition into new university student life in Ulaanbaatar, and to engage in an academic environment with passion, dedication, skills, and a positive attitude. In 2018, a total of 800 students were involved in the program, and a total of 1,000 students were involved in 2019.

The 2019 RISE program was particularly important and special, as the entire launch event for the RISE program supported the UN's Sustainable Development Goals (SDGs), promoted sustainability, and raised awareness about the environment. The organizers encouraged participants to bring their own cups and avoided the use of plastic. The Khan Bank Foundation cooperated with eco-friendly cooperatives, such as Nogoon Tsartsaa, a waste management training organization and call center, and Zero Waste Mongolia, a Mongolian Zero Waste organization, to reduce waste produced by the launch event, and to sort all the waste to send it to recycling facilities.

The RISE program is a comprehensive program that helps freshmen students develop themselves throughout the academic year. For instance, in March 2020, Khan Bank Foundation organized two online courses for RISE program students. Online courses were offered to 75 students in subjects such as personal development and essay writing in English as part of the RISE training and growth program, presented in cooperation with Dale Carnegie Mongolia and Universal Language Center.
Students gained self-confidence, built up their communication and leadership skills, and learned about the value of self-representation, having a positive attitude, and understanding stress management through the online course presented by Dale Carnegie Mongolia. Students who successfully fulfilled the 12 hours of online training received a global certificate.

The second online course, "How to write an essay in English", was developed in collaboration with Universal Language Center. One of the things that made the training more effective was that in addition to an online lesson, each student received detailed feedback from the instructor on the essays they wrote. The students learned an advanced level of grammar, were introduced to the five types of questions asked for the IELTS Writing Task, and how to write letters and essays for scholarship and college applications.

In May-June 2020, the Khan Bank Foundation organized the Book Review competition for participants of the RISE Freshman Development Program. Students were challenged to share their impressions of one of seven different books in a thoughtful and eloquent manner, and improve their writing skills. Being able to write down impressions and reflections from a book of 200-300 pages on a single page, in the most articulate and clear way, is an important skill for developing critical thinking and effective communications.

A total of 50 students participated in the competition, and a two-stage selection process was conducted. A team of professional judges worked together to review the submissions, and the competition winners and special recognition recipients were selected.

Each year, the best Khan Bank Scholarship recipients meet to exchange experiences. In November 2019, this event was held at Khan Bank Tower and was attended by all of the program’s best students, as well as participants from the RISE Freshman Development Program. During the meeting, the young people exchanged information and had a productive day with interesting presentations and discussions among the students, teachers and mentors invited by the Khan Bank Foundation.
Khan Bank Foundation implements projects and programs that will benefit the welfare of Mongolian society and its communities. One of the priority sectors that Khan Bank Foundation focuses on and supports is the vulnerable communities of Mongolia, especially low-income, female-headed households. For instance, in May 2020, Khan Bank Foundation started financing the Urkh Ger - Nogoo (Household - Vegetable) project. The project’s aim is to improve the vegetable food security and nutrition indulgence of single female-headed households with low income – working directly with a total of 20 households. Khan Bank Foundation financed the procurement of the necessary plants and seeds, as well the printing of guidelines on how to grow vegetables. The Urkh Ger - Nogoo project is being implemented by Ekh Ursiin - Enerel Movement NGO and the Ulaanbaatar Women's Council. Khan Bank Foundation also financed the project in 2009-2012, during which 350 households from nine districts in Ulaanbaatar participated and saw improvements in their income.

All of Khan Bank's policies are in accordance with the Labor Law of Mongolia, domestic labor regulations, international standards, and are free from any political, social, or external influence and pressures. Also, we made necessary changes to our human resources policy and procedures that were related to Khan Bank’s Sustainable Development Policy.

Khan Bank ensures that there is no pay gap between genders and provides equal opportunities for skill-based career advancement. From the standpoint of labor safety and creating a healthy working environment, internal and external audit reviews are performed regularly, in accordance with international standards, to ensure the functional and stable operations of the Bank.

The Khan Bank Board of Directors have been involved and engaged in all 17 Sustainable Development Goals since the Bank’s rejoining of the United Nations Global Compact (UNGC). The immediate outcome of such positive interest from the Board is approval of the Bank’s internal Sustainable Development Policy in January 2020. This policy includes all 10 principles of the UNCG, and those principles will be embedded in all relevant regulations, rules, and laws. Specifically, human resources and labor regulations will be upgraded, and other principles will be explicitly included.

The Bank is committed to promoting engagement with every employee, listening to their voices in decision making process at all levels, and taking annual employee engagement surveys for the improvement of our day to day human resources operations.

Total compensation of sales employee includes incentives based on performance, while providing a basic fixed-wage range. Salary calculations are always monitored, paid on time, and operated under a policy of wages being systematically increased to motivate employees and provide sustainable employment.

Khan Bank offers the opportunity for senior university students to enroll in a paid internship at the Bank to build real life, practical experience. Occasionally, Khan Bank offers employment opportunities to exceptional students after their internship period has ended. Also, we offer the opportunity for the children of employees to apply for university scholarships. Khan Bank has a Training and Development Department operated under the guidance of the Vice President of Human Resources, and the department offers employees at all levels equal opportunity for training and development. During the reporting period, we launched an online training platform bank-wide, giving all employees access to self-development, sustainable development, and information about all services and products.

At Khan Bank we incorporate specific norms for the prevention of sexual harassment in the workplace, and address for such complaints. Under the above-mentioned principles, Khan Bank currently employs a total of 6,300 employees, including contractual employees and employees on long term leave.
Employee social insurance, health insurance, and tax payments are made in accordance with the applicable laws and regulations of Mongolia, and the Bank provides equal opportunities to employees on leave to return their jobs.

During COVID-19, Khan Bank supports and implements remote working policy to ensure the safety and health of our employees and provides the possibility of employment to stay-at-home moms, allowing them to work from home.

Khan Bank strives to lead the banking sector in environmentally friendly and socially responsible practices, and to contribute to the nation's economy and social well-being. In order to do so, Khan Bank approved an internal sustainability policy in January 2020.

Khan Bank’s sustainability policy includes establishing sustainability in four key areas of banking: sustainable financing, sustainable operations, sustainable investment, and sustainable partnerships.

Khan Bank's loan operation procedures focus on supporting eco-friendly, green businesses and projects. In doing so, the Bank collaborates with international financial institutions to learn from their experiences and best practices, improve its loan operations, and implement sustainable development goals into its banking activities.

In terms of sustainable operations, Khan Bank Foundation has been organizing training and campaigns for employees to encourage the efficient consumption of water, paper, and electricity, as well as waste management, and to raise awareness about environmental issues. For instance, Khan Bank Foundation developed an online course for new employees and for employees who are going to conduct loan analysis. The online course provides an overview of the importance of sustainability and explains in detail Khan Bank’s internal sustainability policy. Moreover, Khan Bank Foundation partnered with Mongolian FM radio station to come up with a simple audio promo about sustainability. This promo was shared not only with all headquarter employees, but is also available for listening on Khan Bank’s online learning platform.

In terms of sustainable financing, Mongolia's commercial banks signed a declaration to implement the Sustainable Finance (ToC) Program in 2013, to encourage the environmentally friendly and socially responsible financing of loans. Under the activities and initiatives of the ToC program, since 2015, all commercial banks operating in Mongolia have been implementing the eight principles of sustainability established by the Mongolian Sustainable Finance Association.

The Bank’s Relationship Managers, who are responsible for loan application analysis, have to receive training on sustainable financing and environmental impact analysis methodology and basic knowledge about sustainable development. Khan Bank is in the testing stage for an online course to expand the effect, scope, and access of this training, so that it can reach all of the Bank's Relationship Managers, regardless of when they were first hired, and all other employees of Khan Bank.
Khan Bank has membership in many organizations as part of its business and sustainable development and CSR objectives, and works to develop CSR and sustainable development in Mongolia, and to share the experience it has gained with others.

Khan Bank is contributing to ways to collaborate with organizations and project beneficiaries within the scope of its sustainable development policy.

As part of the process of developing the sustainability policy of Khan Bank, the Bank updated and automated the loan evaluation process. This upgrade resulted in increased numbers of business loan applications evaluated.

From June 2019 to August 2020, a total of 350 applications were evaluated through environmental and social risk assessment by an Environmental Officer. Such results indicate a great kick-start to our long-term policy goals.

Every year, the nation’s Leader Bank (Manlai Bank) is selected and honored as a role model and leader for other banks under the ToC program. Khan Bank was selected as the Leader Bank in 2019, and worked closely with the Mongolian Sustainable Finance Association throughout the year to make a significant contribution to the development of sustainable finance in Mongolia.

In addition to increasing stakeholder awareness, human resource development is important for the development of sustainable finance. In 2018, the Mongolian Sustainable Finance Association created an e-learning platform with seven modules to provide comprehensive knowledge on sustainable finance. In 2019, Khan Bank activated the e-learning platform as part of its Leader Bank activities and organized a pilot training program for a total of 38 employees, cooperating to create a training platform open to ToC member organizations and the public.

The Mongolian Sustainable Finance Association organizes a forum every year to report to stakeholders on the work done through the program. In December 2019, Khan Bank, in partnership with the Mongolian Sustainable Finance Association, organized the annual event and presented the ToC Program Report, providing a broader understanding of the program to non-banking stakeholders and sharing information. During the event, the Leader Bank of 2020 was announced and Khan Bank handed over its flag to Capitron Bank. Also during the forum, Khan Bank was named the Bank with the Best ToC Office and Bank with the Best Environmental and Social Management System in 2019.

Khan Bank contributes to the fight against global warming and desertification through the Khan Bank Foundation’s annual Khan Bank Forest project, which has planted 25,000 trees nationwide with the help of its branch employees, regular customers, and partner organizations since 2007.
Khan Bank also spreads awareness about ongoing climate change and the SDGs in a bi-weekly newsletter called the “2030 Newsletter”.

Khan Bank prohibits its employees and the organization itself from being involved in corruption and bribery involving the Bank's operational procedures, and puts integrity first in its daily operations. A shared definition of responsible ethical conduct is provided in the Khan Bank Code of Ethics, which is introduced to and signed by each employee.

Khan Bank established its Anti-Money Laundering and Counter-Terrorism Financing Regulation in 2014, and ever since, has been continuously updating it in accordance with international standards and new regulations.

Khan Bank adopted its Anti-Bribery and Corruption Policy on February 17, 2020, and developed the document accordance with international standards and domestic laws. The policy defines principles for identifying and preventing potential bribery and corruption in order to protect the integrity and reputation of Khan Bank, and clearly communicates anti-bribery and corruption principles both to internal and external stakeholders. It clearly expresses Khan Bank’s commitment to prohibiting bribery and corruption, and to being in compliance with applicable laws and regulations.

Anti-corruption regulations are also reflected in the Bank's Code of Ethics, internal labor procedures, and employment agreement, and the consequences of violations and negligence are explicitly defined and explained to Bank employees. According to domestic laws and regulations, there is a complete ban on corruption, including bribery, and these principles and rules are applied to all Khan Bank employees.

Quarterly internal and annual external audit reviews are regularly conducted by the Bank to prevent employee and senior management involvement in corruption and bribery.

New employees are provided with training on the importance of ethical behavior and integrity in the banking industry, to help them adapt to the Bank’s culture of honesty and equality from the very start.

Khan Bank receives an external audit each year from internationally recognized authorities and announces its results to the public through our media channels.

Since 2018, Khan Bank has been publishing a sustainability report for partner organizations and public access. Khan Bank’s 2019 Sustainable Development Report has been published and is available here. The Sustainable Development Report was initiated and prepared for the first time in 2018, and was more of an overview for all previous years. However, the 2019 report was upgraded and discloses all of the work that Khan Bank has been doing in the sustainability field.

In 2019, Khan Bank was ranked fourth among the top 100 entities in Mongolia and named Taxpayer of the Year for consecutive years, in recognition of its business ethics, transparent reporting, prompt tax payment, and continuous contributions made to the Mongolian economy.

We received an external evaluation report in 2019 from International Finance Cooperation regarding company governance, with the goal of assessing current development and to analyze future possibilities for improvement, as Khan Bank always strives to improve and bring its business model in line with international demand and trends.

For internal training participation, in accordance with the 2020 annual training plan, the Khan Bank Compliance Department will conduct online training on fighting bribery and corruption for all bank employees, and training participants will be tested on the subject.