OUR PROGRESS IN 2024 Cascading Sustainability Principles Across Our Value Chain To reinforce our commitment to promoting sustainable supply chain practices and assessing vendor alignment with sustainability principles, we launched the Vendor Sustainability Questionnaire in Q1 2024, targeting all “Strategic” and “Specialised” vendors. The initiative achieved a strong 96% response rate, providing the following valuable insights: SUSTAINABLE SUPPLY CHAIN We embrace our responsibility to set a positive example for our vendors and suppliers. As a leading financial institution, the expectations we set in environmental management, human rights, business ethics, and more cascade across our supply chain, driving our partners to elevate their practices and align to industry best practices. In setting these standards, we are guided by three areas of impact: Many of the solutions we implement operate at the intersection of these focus areas. For example, our pioneering cloud-based procurement system streamlines the procurement process, enhances transparency, and reduces reliance on paper and other natural resources. Similarly, we continually refine our vendor sustainability questionnaire to more effectively screen for vendor-specific risks in governance, environment, and social responsibility, with the outcomes of these assessments directly influencing transaction, vendor and client acceptance decisions. We take a similarly stringent approach to managing climaterelated risks across our supply chain. Through periodic assessments that leverage scenario analysis, we assess our portfolio exposure to physical and transition risks related to climate change, guiding proactive decision-making on this vital issue. Digital Innovation Ethical Vendor Engagement Sustainabilityrelated Considerations Responsible Supply Chain 22 out of 23 vendors have implemented key sustainability policies, including those related to environmental stewardship, social responsibility, anti-corruption, whistleblowing, code of conduct, health and safety, and procurement/purchasing practices. Among these 22 vendors, eight have adopted specific policies focused on sustainable procurement and purchasing. OUR PERFORMANCE In 2024, our overall expenses rose significantly by 48.03%, with a nearly 50% increase in funds allocated to local suppliers. This substantial rise underscores a strategic shift towards greater local sourcing, aimed at strengthening local economies, mitigating supply chain risks, and leveraging more favourable terms. Data Type/Year 2020 2021 2022 2023 2024 Spending on Local Suppliers (RM million) 218.1 211.9 159.9 206.0 309.0 Total Spending on Suppliers (RM million) 226.5 235.3 173.2 235.0 347.8 Proportion of Spending on Local Suppliers (%) 96 90 92 88 89 OUTLOOK In 2025, we aim to strengthen collaboration with our vendors to enhance cost efficiency and drive sustainability, ensuring long-term resilience and readiness to meet future demands. Bank Islam Malaysia Berhad ◆ Integrated Annual Report 2024 178 Sustainability Statement
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