ESG Management

ESG POLICY

KB PRASAC adopts comprehensive environmental and social performance requirements for critical areas of environmental and social sustainability that all business activities are required to meet to minimize the negative environmental and social impacts. KB PRASAC uses its best efforts to ensure that the business, clients, and partners follow and comply with the standards​ of environmental and social performance requirements of the bank. The critical areas of environmental and social performance requirements are as follow:

• Labor and Working Conditions
• Health, Safety, and Security
• Resource Efficiency and Pollution Prevention and Control
• Natural Resources and Biodiversity Conservation
• Land Acquisition, Restrictions on Land Use, Displacement and Involuntary Resettlement
• Indigenous Peoples
• Cultural Heritage

ESG PERFORMANCE

INDICATORS	2020	2021	2022	2023	2024
Governance
Number of Board Members	9	6	7	7	7
Number of Independent Directors	3	3	3	3	3
Audit Committee (% of Independent Director)	40%	75%	75%	75%	75%
Risk Committee (% of Independent Director)	33%	75%	75%	75%	75%
Remuneration and Nomination Committee (% of Independent)	20%	75%	75%	75%	75%
Number of Executive Management	7	5	8	10	10
Environmental, Social and Governance Policy	Environmental, Social and Governance Policy is in place
Human Resources Management
Total Staff	9,042	9,330	9,573	10,224	10,269
Number of Women Staff	1,842	1,948	2,037	2,325	2,439
Number of Management	308	322	312	338	351
Number of Management as Women	22	26	24	32	28
Number of Credit Officers	5,333	5,506	5,594	5,746	5,549
Number of Staff Trained	9,992	6,242	18,463	33,480	40,629
Benefits	Medical Program, Health and Accident Insurance, Maternity Benefit, NSSF, etc.
Number of Staff Employed for ≥1 Year	8,004	8,269	8,643	9,179	9,568
Number of Staff Exits	1,444	875	806	789	762
Financial Inclusion
Total Loan Portfolio (USD)	3,028,193,427	3,748,358,425	4,350,085,163	5,066,477,344	5,176,566,268
Group Loan Portfolio (USD)	377,042	178,644	101,891	44,292	0
Non-Income Generation Loan Portfolio (USD)	1,076,311,574	1,312,960,614	1,604,608,142	2,004,981,283	2,250,598,170
Educational Loan Portfolio (USD)	581,335	472,555	1,028,170	1,734,000	1,371,399
Home Improvement Portfolio (USD)	346,941,003	453,670,525	580,109,380	719,774,489	862,516,258
MSME Loan Portfolio (USD)	3,027,671,850	3,747,777,989	4,343,929,301	4,696,798,258	4,307,888,630
Deposit Balance (USD)	2,111,913,760	2,615,212,433	2,777,244,980	3,110,201,229	3,530,116,790
Total Number of Depositors	627,188	660,976	713,811	838,970	978,568
Total Number of Borrowers	442,833	465,149	502,094	548,810	575,951
Number of Borrowers as Women	348,435	362,630	389,769	422,527	441,746
Number of Borrowers in Rural Areas	397,547	419,339	455,099	496,978	521,297
Number of Individual Borrowers	441,836	464,681	501,846	548,701	575,951
Number of Borrowers as MSME	442,714	465,111	501,993	544,070	448,091
Number of New Borrowers	92,460	80,589	94,252	64,414	83,035
Number of Branch Offices	182	182	182	192	188
Number of Branch Offices in Rural Areas	134	134	132	135	135
Number of ATMs and CDMs	141	141	163	239	288
Number of KB PRASAC Mobile Users	31,139	56,723	168,791	459,388	562,439
Social Responsibility to Clients
Customer Centric	Comply with Cambodia’s BFI Code of Conduct, Universal Standards for Social and Environmental Performance Management, and Client Protection Standards
Expense for Calamity Program (USD)	6,349	5,457	5,574	5,696	3,749
Total Number of Complaints Received	461	479	612	694	2,171
Percentage of Client Complaints Resolved	93%	98%	99%	100%	100%
Client Retention Rate	86.91%	87.79%	89.76%	96.88%	91.15%
Social Responsibility to Communities
Library Project (Building)	41	42	44	45	46
Number of Library Users as Students	141,005	141,265	170,787	171,102	171,385
Total Expense for Social Activities (USD)	707,271	213,285	319,110	786,369	140,104
Environmental Responsibility
Fuel Consumption (USD/FTE)	422	412	457	483	495
Electricity Consumption (USD/FTE)	137	122	126	138	171
Amount of Green Loans Disbursement (USD)	Not Measured	51,809,860	1,224,944	42,077,134	51,961,558
Number of Green Loans Disbursement	Not Measured	4,944	325	2,192	2,413
Loan Outstanding in Exclusion Area	0.0%	0.0%	0.0%	0.0%	0.0%
Loan Outstanding in ADB Financing Exclusion	n/a	n/a	n/a	0.0%	0.0%
Loan Outstanding in Standard E&S Risk Categorization	69.1%	77.1%	59.1%	28.6%	36.2%
Loan Outstanding in Low E&S Risk Categorization	27.6%	20.9%	38.8%	70.1%	63.3%
Loan Outstanding in Moderate E&S Risk Categorization	3.2%	2.0%	2.1%	1.3%	0.5%
Loan Outstanding in High E&S Risk Categorization	0.0%	0.0%	0.0%	0.0%	0.0%

BUSINESS EXCLUSION LIST

• Production or activities involving harmful or exploitative forms of forced labor/child labor
• Production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements
• Production or trade in weapons and munitions
• Production or trade in alcoholic beverages (excluding beer and wine)
• Production or trade in tobacco
• Trans boundary trade in waste or waste products
• Gambling, casinos and equivalent enterprises
• Trade in wildlife or wildlife products regulated under CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora)
• Production or trade in radioactive materials
• Production or trade in or use of unbounded asbestos fibers
• Purchase of logging equipment for use in primary tropical moist forest
• Commercial logging operations for use in primary tropical moist forest
• Production or trade in wood or other forestry products from unmanaged forests
• Production or trade in products containing PCBs
• Production or trade in pharmaceuticals subject to international phase outs or bans
• Production or trade in pesticides/herbicides subject to international phase outs or bans
• Production or trade in ozone depleting substances subject to international phase out
• Production, trade, storage, or transport of significant volumes of hazardous chemicals, polychlorinated biphenyls, or commercial scale usage of hazardous chemicals
• Drift net fishing in the marine environment using nets in excess of 2.5 Km in length
• Production or activities that impinge on the lands owned or land acquisition or other property or claimed under adjudication, by indigenous peoples, without full documented consent of such peoples
• Businesses involved in the production, processing or distribution of illegal drugs
• Pornography or the provision of products or services of a substantially similar nature
• New coal mining projects or expansion of existing coal mining business
• Building of new coal power plants or expansion of existing coal power plants

ENVIRONMENTAL CHECKLIST

No.	Screening Questions(If answer to any of the questions is Yes, exclude from ADB financing)	Yes	No	If Yes, please brief proactive prevention or solution of borrower/KB PRASAC recommendations
1	Business/activity area adjacent to or within any of the following environmentally sensitive areas:Cultural heritage siteLegally protected area (core zone or buffer zone) WetlandMangrove   EstuarineSpecial area for protecting biodiversity
2	Businesses located in an existing compound which has been previously classified as contaminated land and has not conducted any remediation actions
3	Businesses located in an existing compound but is known to be susceptible to climate-risks such as floodplain
4	Business/activity that can result in a change of land use
5	Business/activity that could result in conversion or degradation of modified habitat
6	Business/activity requiring removal of vegetation including grasses, shrubs or trees
7	Business/activity involving works adjacent to, within, or over a surface water body
8	Business/activity that could result to reduction of community water resource (e.g., water competition between irrigation and communities existing requirements)
9	Business/activity related to mining and gas industries
10	Business which involves large construction activities (e.g., those that require more than six months of continuous daytime work except residential structures)
11	Business/activity producing more than minimal pollution or health and safety risks: – Equipment producing air emissions (i.e., requiring continuous emissions monitoring systems or other similar monitoring systems) – Equipment producing wastewater discharge (i.e., requiring discharge permits) – Equipment requiring hazardous substances/chemical inputs
12	Business/activity requiring the installation of a thermal power generator

INDIGENOUS PEOPLES AND INVOLUNTARY RESETTLEMENT CHECKLIST

No.	List of Screening Questionnaires(If answer to any of the questions with * is Yes, exclude from ADB financing)	Yes	No	N.A	If Yes, please brief proactive prevention or solution of borrower/KB PRASAC recommendations
I.	Indigenous Peoples (1)
1	Are there indigenous people present in or use the business area?
2	Will the borrower’s business benefit indigenous peoples? (eg: job creation, infrastructure development, skill training…)
3	Will the borrower’s business negatively affect the livelihood system of indigenous peoples? (eg: traditional agriculture farming, animal husbandry, fishing, hunting…) *
4	Will the borrower’s business indirectly or directly affect the belief, cultural and traditional practices of indigenous peoples? *
5	Will the borrower’s business cause physical displacement from traditional residential or occupied land (collective land, residential land, shifting cultivated land, sacred ancestral land, cemetery land, traditional consuming forest land…) of indigenous peoples? *
6	Will the borrower’s business include commercial development of natural resources (minerals, forests, water…) within residential, occupied, or customary lands of indigenous peoples? *
7	Will the borrower’s business include commercial development of cultural resources (handicraft, architecture, art…) and knowledge of indigenous peoples that will affect cultural integrity, identity and community of indigenous peoples? *
II.	Involuntary Resettlement (2)
1	Will there be land acquisition using eminent domain law? *
2	Will there be permanent or temporary loss of shelter and residential land due to land acquisition? *
3	Will there be permanent or temporary loss of agricultural and other productive assets due to land acquisition? *
4	Will there be losses of crops, trees, and fixed assets due to land acquisition? *
5	Will there be permanent or temporary loss of businesses or enterprises due to land acquisition? *
6	Will there be permanent or temporary loss of income sources and means of livelihoods due to land acquisition? *
7	If land or private property is purchased through negotiated settlement or willing buyer-willing seller, will it result in the permanent or temporary removal or displacement of renters, or leaseholders? *
8	If land or private property is purchased through negotiated settlement or willing buyer-willing seller, will it result in the permanent or temporary removal or displacement of informal land-users (people without legal rights on the land) or squatters? *
9	Will there be permanent or temporary restrictions in land use or access to legally designated parks or protected areas and cause people or any community to lose access to natural resources, communal land, and communal facilities and services? *
10	Will there be utilization of government land or any public land or property, which will require the permanent or temporary removal of informal occupants or users (residential or economic)? *
11	Any estimate of the likely number of persons that will be displaced by the business?