The objectives of the MCRBi’s Sustainable Finance Framework (SFF) are to achieve strategic resilience incorporating                              sustainability in the way the Bank conducts business; integrate environmental and social governance (ESG) and                                        sustainability principles in financial products and services; embed sustainability principles when making decisions,                                assessing relationships and creating products; align business operations with the Social Development Goals (SDGs);                              support the principles of the U.N. Global Compact; and strengthen leadership in responsible finance locally, regionally, and                  nationally.

              Existing and emerging (E&S) risks are the potential negative consequences to the Bank that result from its impacts or                            perceived impacts. Among the E&S risks being confronted by the Bank as a result of climate change includes flash floods,                    fluctuating electrical power supply, drought and other natural calamities.

              MCRBi’s risk appetite for Environmental and Social Risk is “Low to Medium”. The Bank has set 10% of its total loan portfolio                for sustainable finance.

              The Bank has crafted its E&S Risk Management System (ESRMS) that will serve as guidance in managing E&S risks related                    to sustainable finance. The ESRMS is a set of policies, procedures, tools, and internal capacity to identify and manage the                    Bank’s exposure to environmental and social risks of its clients. The identification, assessment, measurement, control, and                  monitoring of E&S risks are embedded in its policies and procedures. Furthermore, the ESRMS is aligned to its credit risk                      and operational risk management.

              The duties of the BOD related to the ESRMS are aligned under Section 143 of the MORB. In addition, the Senior                                        Management is tasked to ensure effective implementation of policies, procedures and processes, implement a loan pricing                  framework and report periodically to the BOD.

              Sustainable Finance Instruments (SFIs) may include loans that fund or will fund the Sustainable Finance Portfolio (SFP) that                conform to the SFF such as:

                                     •       Gender and development
                                     •       Smallholder farmer associations; and
                                     •       Cooperatives engaged in production, retail, wholesale and trading.
                                     •       Regulatory relief or a moratorium to borrowers affected by the natural calamities and pandemic.
                                     •       Small scale farmers or financing of infrastructure, equipment, facilities or technology aimed at reducing                                                      food loss and waste., improving productivity and access to markets of small-scale producers or supporting                                                farmers to food security.
                                     •       MSMEs engage in distribution and trading of generics and drugstores that sell generic products.
                                     •       Individuals with a purpose of access to affordable and quality technical, vocational and tertiary education,                                                  including university.