Management approach to sustainable development
The main aspects of management of sustainable development issues in Bank Millennium were included in the growth strategy for 2015-2017 and are implemented in individual areas of the Bank’s operations.
Sustainable development elements in the Bank Millennium Strategy for years 2015-2017
The Bank’s adherence to sustainable development principles has been confirmed by external assessments. Since 2011 the Bank has been in the RESPECT Index consisting of socially responsible companies listed on the Warsaw Stock Exchange. The Bank also received POLITYKA’s 2016 CSR Silver Leaf – a distinction awarded to companies implementing sustainable development measures and it earned a distinction in the “I Respond to Poland – the Ranking of Socially Responsible Companies” conducted by Gazeta Bankowa daily and wGospodarce.pl site. Six CSR activities carried out in the Bank were also published in the report entitled “Responsible Business in Poland in 2015” issued by the Responsible Business Forum.
Oversight, identification and management of economic, environmental and social issues
Bank Millennium achieves its economic, environmental and social objectives on the basis of the plans prepared by the Bank’s Management Board and approved by the Bank’s Supervisory Board with a one-year time horizon and in the medium term (usually three years). Achievement of these plans is subject to regular reviews and assessments. They are made by the Bank’s Management Board, based on information prepared by the entities responsible for their implementation and by the Bank’s Supervisory Board, based on information presented by the Management Board. Based on the current assessment of critical points and the possible unexpected events that may affect the achievement of the assumed objectives, the objectives or the policies used to implement them are adjusted.
These decisions are noted in minutes prepared during the meetings of the Bank’s Management Board and Supervisory Board. They may also be subject to an independent review conducted by the internal audit function. Global assessment of the Bank’s activities, including the management of economic, environmental and social matters, is performed by the Supervisory Board based on the Bank’s published statements. They are analyzed and presented to the Shareholders at the Shareholder Meeting and form the basis for granting a discharge to the Bank’s Management Board on the performance of its duties in the financial year.
Management of risks associated with the impact of environmental and social factors
The following categories of social and economic factors are taken into account in the operational risk management process:
- Human risk – arising from conscious actions or omissions by an employee or a risk arising from relations between the Bank and its employees;
- Litigation risk – associated with the execution of transactions and different aspects of business activity, including products and services;
- External risk – arising from damage to physical property or loss of assets due to natural or unnatural reasons, including risk arising from actions by third parties, such as fraud or, in the case of regulators, implementation of a change that could change the organization’s capacity to continue its business activity on certain markets;
- Organizational risk – risk arising from issues such as project management, non-compliance with regulatory requirements, corporate culture and risk arising from communication and improper market practices.
When analyzing the risks associated with the financing of companies, the Bank additionally identified high risk industries. One of the criteria for a branch to be classified in this category is a negative outlook related, among others, with environmental threats. The Bank has default exposure limits for Clients in respective industry categories, where the limit levels are the most restrictive for high risk industries.
The Bank has in place a process-based approach to operational risk management. Individual risk management levels, scopes of their duties and responsibilities from the basic position up to the Supervisory Board have been identified for this risk type.
The Bank’s Management Board designs and introduces a risk management system and monitors its operation. The Bank’s Supervisory Board oversees the implemented system and assesses its adequacy and effectiveness at least once a year.
Impact of the Bank’s activity on sustainable development and Stakeholder rights
The Bank has identified the key areas of its impact on sustainable economic, social and environmental development and the related risks, challenges and opportunities. The key aspects of the Bank’s impact have been classified by their significance for Stakeholders and the scope of impact.