Environmental and Social Management System (ESMS) at ONE Bank Limited

Introduction

ONE Bank Limited has established an Environmental and Social Management System (ESMS) to ensure that environmental and social risks are effectively managed throughout the lending operations of the bank. The Sustainable Finance Unit (SFU) is responsible for overseeing the implementation of the ESMS and coordinating with different departments and branches of the bank.

Identifying Environmental and Social Risks

Relationship Managers from Branches/Corporate Asset Marketing & SME Division identify E&S risks in a client’s operation by:

• Conducting site visits
• Collecting documents
• Talking to clients or relevant officials
• Filling out the Environmental and Social Due Diligence (ESDD) checklist
• Collecting additional information as necessary
• Documenting findings in the Credit Memorandum

Categorizing E&S Risks

The ESDD Procedure Online Tool (OBL Connect) is used to categorize E&S risks based on sector-specific guidelines and best international practices. The tool provides two parameters:

• Overall E&S Risk Category
• DoE category (Green, Orange A & B, or Red)

Transaction Types Requiring Additional E&S Due Diligence

The following transaction types require additional E&S due diligence:

Hazardous Goods or Commodities

• Retail trade with hazardous goods or commodities
• Agriculture activities involving crop production, animal farming, poultry, and dairy
• Small enterprise category with hazardous activities

In such cases, a Third-party Environmental and Social Impact Assessment (ESIA) may also be required.

Monitoring and Review

The SFU will monitor and review the E&S categorization and ESDD reports for all transactions to ensure compliance with regulatory requirements and internal policies.