Dear our esteemed stakeholders:
I am pleased to reaffirm Aladin’s commitment to support the Ten Principles of the United Nations Global Compact (UNGC) in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our progress in integrating the UNGC’s Principles in less than one year since our first product was introduced publicly. While there are still many gaps to address during this process, I am confident that our continuous commitment to the Principles and to the broader sustainability agenda is beneficial for Aladin, our customers, employees, partners, shareholders, and communities in which we operate.

Sincerely yours,

Dyota Mahottama Marsudi
President Director

PT Bank Aladin Syariah Tbk (“Aladin”) has developed a strategy framework for sustainability that serves as a guideline in designing and implementing sustainability-related programs and activities. The strategy framework consists of four pillars, and two of the pillars: “Grow with Our People” and “Leave No One Behind” touch the bank’s commitment to uphold the principles of human rights for all of the bank's key stakeholders: staff, partners, clients, and communities.

Based on the Strategic Framework Pillars, Aladin Bank has taken the following initiatives in 2022 in relation to the human rights principles.
1. Introduce Codes of Conduct which covers, among others, fair and wisdom treatment; managing good relationship with customers; equal opportunity to express views or complaints; harassment and sexual harassment; and whistle-blower terms.
2. Introduce digital financial products and services mainly to underserved and unserved segments of the population, as we strongly believe that all Indonesians have the right to have access to basic financial services.
3. Create a “breastfeeding-friendly office” by providing women staff with a comfortable and private room to express breast milk and access to a fridge to store the milk.
4. Create praying rooms to allow staff to pray according to their religious beliefs.
5. Introduce an exclusion policy which highlights our commitment to not engage with nor finance any activities that are deemed, among others, in violation to human rights principles specifically in production or activities involving harmful or exploitative forms of forced labor/harmful child labor.
6. Participate in several corporate social responsibility programs which are targeted towards improving the livelihood of local communities, including access to decent jobs and basic healthcare.

1. Past incidents of human rights abuses: no alleged incidents of human rights abuses reported to date.
2. Any on-going investigations, legal cases, rulings, fines and other relevant events related to human rights: Aladin is not subject to any investigations, legal cases, rulings, fines and other relevant events related to human rights.
3. Providing financial services to the underserved and unserved segments: As of September 30, 2020, total financing outstanding to MSMEs (underserved segment) was around IDR 300 billion, which represents 96% of the total financing outstanding.

Aladin’s commitment to uphold the UNGC’s labor principles is reflected under our Grow with Our People Strategic Framework Pillar. The objectives of this pillar are to (i) foster the career development of staff; (ii) improve the living standard of all staff, and (iii) ensure the staff safety and rights are well protected. Topics that are covered under the pillar include Employee Rights & Equal Opportunities, Staff Safety, and Talent Management & Retention.

Based on the Grow with Our People Strategic Framework Pillar, Aladin has taken the following initiatives in 2022 in relation to the labor principles.
1. Create the Remuneration and Nomination Committee that is tasked to evaluate the bank’s remuneration policy, evaluate the suitability of the remuneration policy with the implementation of the policy, and provide recommendations for improvement to the Board of Commissioners.
2. Introduce Codes of Conduct which covers conflict of interest; abuse of position; abuse of information; fair and wisdom treatment; financial difficulties; equal opportunity to express views or complaints; communication via e-mail; harassment and sexual harassment; abuse of alcohol or illegal substances in the workplace; dress code; and whistle-blower terms.
3. Develop and introduce the Staff Safety Policy to protect the safety of staff from natural disasters and workplace hazards.
4. Conduct a regular socialization to all staff related to staff safety.
5. Implement a flexible working arrangement to reduce the employee mobility in order to mitigate the spread of the COVID-19 virus, while also reducing the carbon emissions.
6. Implement a gender equality practice by creating a “breastfeeding-friendly office” by providing women staff with a comfortable and private room to express breast milk and access to a fridge to store the milk, as well as by having an equal proportion of women at the senior management level position.
7. Create praying rooms to allow staff to pray according to their religious beliefs.
8. Introduce a multipurpose financing program with subsidized interest rates and no financing charges for all staff with the aim of improving the staff’s financial wellbeing and retaining employees.
9. Conduct an annual employee satisfaction survey to identify the level of satisfaction of staff, determine any gaps in relation to human capital management, and address these gaps.
10. Organize various events to improve the staff’s engagement, including regular sports activities, town hall meetings, and other corporate events.
11. Organize various training sessions for staff and offer relevant professional certifications to selected staff to increase their skills.
12. Implement a staff performance management system to manage career development of all staff in an objective manner.
13. Allow staff to take at least 14 days of annual leave versus the 12 day minimum annual leave sanctioned by the government, on top of other special leaves such as paternity and maternity leave, sick leave, hajj pilgrimage leave, and emergency leave due to death of family members.

1. Gender composition of the senior management team: 50% of senior management (director and chief levels) are women.
2. Occupational hazards: 0% rate of occupational injuries to date.

Our commitment to protect and preserve the environment is reflected under the Act with Conscience for the Planet Strategic Framework Pillar. The target of this pillar is to reduce our own footprint and to ensure resource conservation by measuring our environmental footprint and implementing an effective energy management system.

Initiatives that we have pursued in 2022 in relation to the environment principles are as follows.
1. The launch of our first digital banking products in early 2022 is also aimed at eliminating the needs of our customers to travel.
2. Publish our emissions data in the 2021 Sustainability Report.
3. Setting sustainability-related targets that are focusing on environmental aspects, which comprise of:
a. Environmental-friendly financing to MSMEs and retail is at least 5% of the total productive loans.
b. Achieve net zero emissions by 2050.
4. Development of the Environmental and Social Risk Management policy.
5. Measure operational emissions, including the scope 3 emissions from staff mobility and staff travels.
6. Digital signatures in place to reduce the use of paper.
7. Start preparing for the implementation of Indonesia Green Taxonomy as planned by the regulator.
8. Partnering with several institutions to carry out various environment-focused programs:
a. Sinar Utama Nusantara (SUN) Foundation, an NGO that supports renewable energy sources as sources of power in remote areas in Indonesia, with the objectives of supporting green tourism and providing access to renewable energy, particularly small-scale solar power plants, in a number of tourism spots in Indonesia;
b. Rekosistem, a waste management company, to support the bank in managing its operational wastes, including separating organic and inorganic wastes, as well as residues.
c. Jejakin, a startup emission calculation provider, to calculate scope 1, 2 and 3 emissions of the bank’s operational activities;
d. Plastic Bank Indonesia to collect plastic wastes from the coastlines and ocean in selected areas in Indonesia; and
e. Yayasan Kehati to plant bamboo seedlings in a deforested mountainous area in Central Java

1. Volume of recycled waste from operational activities: 259.75 kg (2021).
2. Volume of operational waste managed through black soldier fly production system: 51 kg (2021)
3. Amount of CO2 saved from landfills and incineration as a result of segregation & operational waste management: 278.73 kg of CO2 (2021).
4. Total greenhouse gas emissions: 118.71 tons of CO2e (2021).

Aladin is committed to preventing all kinds of fraud and corruption, and we take proactive action to minimize any loss resulting from such incidents. As expressed in the Code of Conduct, Aladin requires all employees to act in honesty and with high integrity and professionalism in order to take an active role in protecting and safeguarding the bank’s assets, customers’ funds, and stakeholders’ interests by complying with all internal policies, as well as the applicable laws and regulations. It is expected that every employee plays an active role in fraud and corrupt practices prevention, among others, by submitting complaints/informing on fraud indications.

Anti fraud and anti corruption measures that we have put in place include:
1. Putting in place an anti-fraud management system. The anti-fraud management is implemented in accordance with the Regulation of the Indonesian Financial Services Authority Number: 39/POJK.03/2019 dated 19 December 2019 on the Implementation of Anti-Fraud Strategy for Commercial Banks, and it is specifically handled under a special unit called the Anti-Fraud Management (AFM) Unit which reports directly to the President Director.
2. Implementation of Internal Control Policy, Anti Money Laundering Policy, Anti Fraud Procedure, and technical guidance on anti fraud in payment system
3. Implementation of Codes of Conduct which covers, among others, conflict of interest; abuse of position; abuse of information; integrity and accuracy of data and transactions; data and information confidentiality; breach of law, regulation, standard, and guideline; banking system integrity; required knowledge and compliance; prohibited actions for parties with internal information; anti bribery and corruption; money laundering and terrorism financing; computer crime; and whistle-blower terms.
4. Requirement for all suppliers to commit with the bank’s Integrity Pact.
5. Improve internal control, especially the 4 eyes principles, to ensure that the maker, checker and approver system runs effectively.
6. Implement reporting of operational risk incidents/events and implement a sanction mechanism for fraud perpetrators.
7. Establish zero tolerance for fraud and determine Key Risk Indicator (KRI) for fraud both internally and externally and report it to the senior management on a regular basis.
8. Implement a gratification control by requiring all employees to sign the Employee Integrity Pact prior to starting their work at the bank.

Past cases of corruption and fraud: no confirmed cases of corruption and bribery found to date.