SCB SUSTAINABILITY FRAMEWORK

Sustainability Governance

To ensure adherence to the Sustainability Policy and framework with systematic deployment, the Bank has specified sustainability governance structure tasked with roles and responsibilities from the Board to business units in order to embed sustainability thinking as part of SCB culture and work process.

Sustainability Governance Structure

Integrated Approach

To promote and support bank-wide implementation adhering to Sustainability Policy while integrating sustainability concepts and practices into its business operations, the Bank has laid out the following ‘5C’ approach: 

Products and Services

The Bank continues to develop and improve SCB Easy application to become a truly digital bank. In 2018, SCB Easy application underwent further iteration and improvement to ensure maximum stability, security and speed while delivering lifestyle solutions that  truly meet the needs of today’s consumers. New features, such as online account opening using biometric technology on mobile phones, online cheque services, lending and insurance services were added. Moreover, the Bank introduced chatbot technology to LINE application under SCB Connect account, the first in Thailand to merge banking services with social media technology. With SCB Connect, customers conveniently receive account activity and payment alerts, check overdue payments and remaining balances for credit cards, debit cards, and loans without any fees.

Customer Experience

Customer Relationship Management

With the challenges from technological advancement, the banking industry has been revoluntionalised to the point where banks are expected to offer more than standardized financial services. Thus, it has become crucial to understand customer needs at great depth to deliver products and services that are specifically tailored to each customer segment. SCB employs advanced analytics technologies to manage and analyse customer behaviour data with the goal of delivering better customer experience and helping customers realise their full potential.

The Bank strives to be a universal financial service provider that delivers the right products and services to meet customer needs. Therefore, the Bank classifies customers into 3 main segments –Corporate segment, SME segment, and Retail and Wealth segment, with the following management strategy:

People Management 

Talent Attraction and Retention

“People and culture” are at the heart of business success. To attract and retain talent as well as building a strong culture under today’s intense competition and rapidly changing business environment, an organisation must constantly reassess and ensure that its workforce management approach remains effective. In addition, the organisation must seamlessly link personal development, career advancement, compensation, culture, and working environment into an integrated management approach. In 2019, the Bank reviewed and reformulated its people strategy to prepare for challenges and opportunities that may arise both at present and in the future. SCB’s people strategy consists of four key components.

Workforce Management

To keep its workforce management approach in strategic alignment with the business direction, the Bank focuses on proactive recruitment, capability enhancement at both organisational and individual levels to uplift employees’ skill sets, as well as ensuring adequate and suitable manpower to operate in the digital age. These factors will enable the Bank and its people to grow together sustainably. 

Succession Planning

Having a well-defined career path is a powerful incentive to attract and retain talent as well as enhancing productivity which creates a clear bottom-line impact to the business. Thus, the Bank pays particular attention to talent management and succession planning. A succession management framework has been put in place to fill vacancies of key positions, from both strategic and potential impact perspectives, through a systematic succession planning process. Candidates are assessed based on knowledge, capabilities, skill sets, and experiences that are required for a particular position in conjunction with leadership skills and cultural fit. In 2019, the Bank had reviewed and completed succession plans for key positions at the senior management level.

Performance Management

To manage and motivate employees to perform their best and contribute to the goals of the organisation, as well as driving behaviours to align with the organisation’s values, requires fair and competitive compensation, appropriate promotion, and effective personal development planning. Accordingly the Bank has adopted a best-in-class performance evaluation system as part of its performance management system.

Culture and Mindset

Organisational culture is not only a set of shared values that drives the organisation forward, but also a factor that attracts candidates to join and be part of the organisation.

Amid technological advancement and rapidly changing consumer behaviour, the Bank implemented the SCB Transformation program in order to adapt to the new business environment and to create new digital experience for customers. Moreover, with its commitment to truly meeting the needs and adding value for customers, the Bank launched an initiative to build Agile Organisation culture in 2019. To become an agile organisation requires the Bank to change the organisational structure, transform work processes, and shift employee’s mindsets to revolve around the four SCB core values. 

Internal Rotation  

The Bank creates career advancement opportunities for employees at all levels by encouraging internal rotation to facilitate cross-functional learning and skill building. This internal rotation also ensures adequate manpower for the Bank’s future business strategy in addition to giving employees an opportunity to grow together with the Bank in a sustainable manner. For an effective employee rotation and transfer, the Bank has conducted strategic workforce planning and analysis in terms of both quantity and quality by applying a manpower model based on key manpower driver of each business unit, such as sales revenue, transaction volume, and number of customers This analysis enables business units to assess whether they have adequate manpower relative to the amount of work and can effectively plan for resources accordingly.

Communicating with employees and preparing them for internal rotation is another important matter for which the Bank has established a clear approach and procedure. The initial step is to conduct capabilities screening and then provide training necessary for the new positions through a variety of learning formats. Then, employees will receive on-the-job training prior to permanently assuming the new roles and responsibilities. Thereafter, the Bank will continue to monitor and provide additional training to ensure that employees can succeed and reach their full potential in their new roles.

Diversity and Inclusion

The Bank places an emphasis on respect for labor rights and fair treatment of employees without discrimination against gender, skin colour, race, religion, culture or education. This non-discrimination practice has been stated clearly and explicitly in the Bank’s Code of Conduct and communicated to all employees to encourage employees to treat one another fairly and respectfully. Moreover, employees are given complete freedom to join the Bank’s labor unions which are organised into three unions: management labor union, general employee labor union and service employee labor union. The objective of the labor unions is to forge strong relationships between the Bank and employees with a commitment to protecting the rights and fair benefits for members and employees by considering joint interests of all parties.

In addition, SCB respects individual differences and supports equal rights of all by providing opportunities to people with disabilities to illustrate their capabilities and creatively make contributions to oneself and to others. By the end of 2020, SCB hired and provided job opportunities to 239 people with disabilities through two types of support including directly employing 16  people with disabilities whose skills are suited to work in roles and responsibilities within the Bank. Similarly, the Bank also works with different foundations to support jobs creation of 223 people with disabilities.

Organizational Health Measurement and Index

Although the Bank has given priority to developing employee capabilities and building positive attitudes toward change from job rotation and technology adoption, it is the Bank’s assessment on employee engagement that is the key indicator for becoming an employer of choice. Therefore, the Bank has assessed level of employee engagement by using the Organisational Health Index (OHI) as a measurement of the Bank’s current strength and readiness for future changes. In doing so, The Bank has engaged a leading global consulting firm to conduct the assessment to ensure neutrality and impartiality.

Health and Safety

A positive and safe work environment is fundamental to sustainable development of an organisation. The Bank develops and follows safety, occupational health, and environmental practices for employees, contractors and suppliers by complying with applicable laws and global standards and to prevent any incidents or accidents that may affect employees, customers, suppliers and contractors operating at the Bank’s premises as well as safeguarding the Bank’s reputation and credibility.

In 2022, the Bank reviewed and announced the latest version of the Occupational Health and Workplace Safety Management Policy which requires all employees to take ownership on safety issues as well as revising the safety, occupational health, and environmental guidelines to be in line with international standards. The Policy and guidelines have been communicated to all branches nationwide to guide workplace safety management. The Bank also assigns branch employees to perform safety self-assessment with the Bank’s Safety and Security Management Unit responsible for advising, following up on the assessment results and supervising the work to improve workplace safety. The key goal is to ensure that every employees come to work and return home safely every day at every workplace.

The Bank regards safety as the duty and responsibility of all employees. Employees must consider their own safety and that of their colleagues, as well as complying with safety and occupational health practices. The Bank places an emphasis on educating employees on safety issues by developing an online training course which offers convenience and accessibility. This safety training course is part of a mandatory training that all employees must complete before the end of their probation periods with the target of all employees successfully completing the safety training course. The Bank also runs a continuous employee safety awareness campaign through a variety of communication channels.

 Anti-crime Policy and Measures

The Bank focuses on improving its operations relating to Anti-Money Laundering and Counter-Terrorism and Proliferation of Weapon of Mass Destruction to align with business context in the digital age as well as changes in laws and global practices. To this end, the Bank continues to use technologies to improves its operational systems such as Know-Your-Customer, and processes to be up-to-date and optimally efficient.

To ensure the effective establishment and implementation of an anti-money-laundering and anti-terrorism financing-supporting culture, SCB has promoted ‘Prevention, Detection, and Investigation’ as a framework and adopts Anti-Money Laundering and Counter-Terrorism and Proliferation of Weapon of Mass Destruction Financing Policy to which all employees are required to strictly adhere to. SCB has identified the procedure for customer identification. The Bank conduct Know Your Customer (KYC) and Customer Due Diligence (CDD) by requesting identification documents or relevant documents, filling and updating information for both new and existing customers, particularly high risk customers who must declare the source of fund/ revenues and specific objectives of the transaction.

Risk Management

Risk Governance

At management level, the Bank’s Risk Management Committee is assigned with roles and responsibilities to formulate risk strategies in alignment with the Board of Directors’ given direction,while overseeing the overall risk management of the SCB Financial Group. In 2018, the Bank established the Risk Oversight Committee which is an executive committee, mostly consisting of independent and non-executive directors, with the chairperson being an independent director. The Risk Oversight Committee's roles and responsibilities are to provide recommendations to the Board of Directors regarding the direction for risk management. It is to make sure that the direction aligns with the Bank’s business strategy and complies with the risk management framework. This is to ensure that internal risks are managed and monitored at an appropriate level within the identified risk appetite. Moreover, the Risk Oversight Committee also provides reccommendation to the Board of Directors for fostering an organisational culture that constantly considers risk and operates accordingly. At the same time, Risk Management Committee at management level also has roles and responsibilities in providing recommendations on risk management policy, risk management and control framework to Risk Oversight Committee and the Board of Directors for overseeing the SCB’s Financial Group’s overall risk management.

Risk  Management  Framework

When viewing the overall of risk management structure, the Bank has adopted the “Three Lines of Defense” governance framework to increase efficiency and accuracy in every processes. Hence, there are collaborations among internal functions, from the Board of Directors to employees. Furthermore, the Bank also applied the Risk Control Self-Assessment (RCSA) as a tool to identify the preliminary risk. The results are then presented to the Risk Oversight Committee and the Board of Directors for further consideration and conducting risk assessment at organisational level.

Data Governance and Cyber Security

Data Governance

The Bank focuses on becoming a data-driven organisation to create distinctive customer experience by applying insights from data analytics to facilitate policy and strategy decision making as well as pushing the boundary of product and service innovation.

Because data lie at the heart of competitiveness, the Bank has developed SCB Data Governance Framework to ensure maximum efficiency and effectiveness in data management. The Bank also set up the Data Governance Office whose key responsibilities are to keep abreast of regulatory requirements and best practices in data governance and apply them to the Bank’s operations. The Data Governance Office works with relevant internal business units to ensure that the Bank’s data handling processes, procedures, and approaches effectively protect confidential information, whether relating to customers or the Bank itself. 

Data Privacy Protection

The Bank respects privacy rights and places high emphasis on preventing any misuse of customer personal information, which includes releasing customer information to other parties that may constitute a privacy violation. Policies, guidelines, and systems to protect customer data security have been established to explicitly define roles and customer data access for each level of employees in accordance with the “Three Lines of Defense” practice. The Bank also ensures that such systems are secure through careful design and extensive testing in addition to ensuring that data classification, data storage and destruction, system access control, and employee access rights are kept up-to-date.

Moreover, if disclosure of customer data to a third party is needed for marketing purposes, the Bank will obtain explicit consent and give customers the rights to opt out. The consent form will be a standalone document separated from an application form with clearly stated purposes, data recipients, and channels to obtain information on data recipients. In the event that customers want to stop receiving communication from the data recipients, Customer Centre is available to assist customers 24 hours a day. 

In 2019, the Bank received no complaints relating to the loss of customer data and four complaints concerning breaches of customers privacy. Accordingly, the Bank has verified the complaints and taken actions to improve relevant procedures and standards.

Cyber Security

Information security, data confidentiality and customer privacy are of utmost importance to the Bank as dictated by today’s business context where most information and data are stored in anelectronic format. Thus, the Bank has established SCB Financial Group Information Security Policy in which employees of SCB and its subsidiaries, including those in probationary periods and on temporary contracts, as well as all suppliers and consultants, must follow the IT security practices based on the concept of Confidentiality-Integrity-Availability (CIA) triad. Duties and responsibilities related to development, adoption, and compliance to the Information Security Policy are stated in the policy with the Technology Committee performing roles and responsibilities in reviewing and evaluating the Bank’s cyber security systems to ensure that the systems in place are adequate to support the Bank’s strategies. In addition, there is audit function performs audits on cyber security performance and make recommendations for further improvement.

In addition, the Bank has also taken a proactive cyber security approach, for instance, Cyber security Threat Intelligent Surveillance along with continuous improvement in technologies, employees, and processes to monitor, assess, and prevent potential cyber security threats. To prevent cyber security risks arises from internal operation, the Bank has applied machine learning technology to monitor employees’ behaviour, identify hackers, and predict events that may pose security risk to customers’ or the Bank’s data.

To manage and prevent potential risk associated with third-party service providers, the Bank has established the IT Outsourcing Policy, which also applies to cloud-computing services, to ensuredata security, integrity, and customer protection. The Bank identifies the level of approval authority for each type of IT outsourcing, performs an annual audit, and reports the results to the Bank of Thailand to ensure that services provided by vendors are held to the same standard and accountability as if the Bank were to provide the services ourselves. To prepare for emergency and ensure that, in such event, systems can be recovered within an appropriate timeframe, the Bank has developed the IT Contingency Plan in conjunction with the Business Continuity Plan. Processes, procedures, guidelines are clearly specified, along with roles and duties of business units responsible for executing, testing, and reviewing the IT Contingency Plan to ensure continuous improvement and maintain its relevance within the prevailing business context.

Human Rights

n addition to its attention on internal labor rights, the Bank is aware of the need to manage human rights issues throughout the business value chain. The risk of human rights violations can manifest itself in various forms and can happen to employees, customers, communities and suppliers  such as workplace discrimination, violation of customer privacy, social risk from financing infrastructure development or real estate projects as well as human rights violations on the part of suppliers, e.g. labor disputes. Such human rights risk can lead to impact on both the overall business and the Bank’s reputation. Therefore, the Bank has issued the Human Rights Policy to respect and comply with all human rights laws and principles both at the national and global levels. In doing so, the Bank has developed and applied the Human Rights Management Framework throughout the value chain and abided by the UN Guiding Principles on Business and Human Rights (UNGP). 

Moreover, to conform with global standards on human rights risk assessment, the Bank has reviewed and improved its human rights practices as well as conducting a human rights risk assessment. The objectives of this assessment are: to assess risk and set appropriate control or impact mitigation measures for human rights risk; to monitor, review, and report the implementation effectiveness; and to specify governance structure, role, and responsibilities of business units involved in the human rights management process. The Bank is committed to upholding human rights practices for all activities that may have human rights impact and preventing human rights violations.  The assessment covers all of the Bank’s operations, subsidiaries, joint ventures and supply chain. Relevant stakeholders, both internal (e.g. employees) and external (e.g. suppliers, contractors, and community) as well as vulnerable groups (i.e. children, indigenous people, migrant labor) –  that may be or have been impacted by its activities are included as part of the process. 

The Bank is committed to upholding human rights practices for all activities that may have human rights impact and preventing human rights violations.  The Bank aims to conduct human rights risk assessment once every three year in order to comprehensively assess the risks emerged from the Bank's both direct and indirect operations as well as identifying appropriate mitigation measures.

Transparency

Tax Strategy

SCB ensures strict compliance with relevant laws and regulations both at domestic or international level. The Bank has adopted Tax Policy which is applied to all SCB and all subsidiaries. The policy is aligned with SCB’s strategy in seeking to maximize shareholder value whilst demonstrating responsible tax behavior to all stakeholders. 

Networks and collaborations for sustainability 

Sustainable development requires multi-sectoral collaboration and efforts to achieve the common goals. SCB, therefore, seeks to play its role in helping to advocate developments of public policies, supports to organizations or activities that promote financial accessibility and literacy, low-carbon economy as well as building community capacity by creating balance in economic, social and environmental dimensions. Advocacy of public policies or supports to any organizations must align with the Bank’s principles and commitments toward governance and responsibility to the environment and society. The Bank will not lobby or work with any external organizations on lobbying issues which contradict the Bank’s ESG principles and approaches.