Regulation on the Environmental and Social Risk Management (ESRM) System

The regulation on the Environmental and Social Risk Management (ESRM) System has been developed to implement the norms and regulations of the Bank's Environmental and Social Risk Management (ESRM) Policy, to determine whether the planned and/or ongoing activities of the Bank's customers comply with the Bank’s ESG requirements and determine the conditions for providing financial resources to the Bank's customers.

The regulation denotes the organizational structure, responsibilities, and capacity of each function in more detail. In addition, the regulation describes how to conduct ESG assessment of projects/activities of clients while lending and/or investing properly and key roles who participate in those processes.

Regulation on Environmental and Social Risk Management System were developed, approved, and implemented in the banking activities of JSCMB «Ipoteka-Bank» to ensure the fulfillment of tasks set out by the Policy.

According to the ESRMS, the Bank provides the following functions:

• Inclusion of E&S data in the bank's credit cycle, including in the monitoring process;
• Functioning of the reporting mechanism on E&S aspects;
• Functioning of the procedure and mechanism for communication with external parties;
• Ensuring information disclosure and consultation with the public (informing stakeholders).

In addition, according to the environmental and social risk management system of the Bank, constant and strict control is established to prevent forced labor and child labor, including at the cotton-picking company. An official statement was posted on the bank's website.