Together with our subsidiaries, we’ve established the Sustainable Finance Framework (SFF) to support our sustainability commitments and provide clear guidelines for identifying, selecting, and reporting eligible sustainable finance projects.

In 2024, we disbursed PHP78.36 billion in sustainable finance loans, an 80% increase from 2023. This includes PHP52.27 billion in green finance and PHP26.09 billion in social finance. Our SF portfolio has grown significantly, boosting its positive environmental and social impact and supporting the UN SDGs. Strategic investments and sustainable lending practices drive progress toward an inclusive and low-carbon economy.

Sustainability-related product development

On products and services, we introduced the Wave Mastercard made from 100% recycled PVC. Our issuance of over 250,000 recycled PVC cards saved about 1.3 tons of plastic, or 20,000 plastic bottles. Following this success, we launched the All-Access Debit card, also made from 100% recycled PVC. Moreover, we switched to Green PIN for activating debit cards, which cut down on the need for physical PIN mailers, thereby reducing paper usage.

Assessment of ESG risks in financing activities

Our Environmental and Social Risk Management System (ESRMS) is designed to identify, assess, and manage ESG risks associated with our banking operations and financing activities. The ESRMS encompasses the Bank’s lending and financing activities, investment activities, operations, and supply chain. Over the last three years, our wholesale portfolio’s exposure to high-risk industries, as defined in our ESRMS, has consistently declined, while exposure to low- and medium-risk industries has progressively increased. This shift reflects our strategic commitment to exiting coal and expanding our sustainable finance portfolio.

Group credit risk in ESG

At Security Bank, we’re actively planning the implementation of changes in credit risk assessment to directly incorporate ESRMS knowledge. We’re conducting further studies based on collected data to ensure alignment with regulatory expectations and industry best practices. Our aim is to mitigate any material financial, reputational, or regulatory risks arising from failure to minimize the negative impact of our operations on the environment or ensure healthy and safe premises for our stakeholders.

One example of how our Risk Management Group manages credit risk is through an Independent Risk Assessment (IRA), which is the pre-approval evaluation of select WBS accounts with identified weaknesses or higher than normal credit risk by the Independent Credit Risk Assessment Department. In scope credit proposals are subject to IRAs which evaluate the soundness of credits by documenting risk issues, assessing alignment of account plans with industry risk-reward portfolio actions, and providing recommendations on risk mitigations and credit structures to ensure portfolio quality.

ESG risk management oversight

ESG risk management oversight from the Board resides with the Risk Oversight Committee (ROC) which reviews, approves, and ensures the effective implementation of the Group’s risk management framework.

ESG risk is embedded in the Bank’s comprehensive Risk Management Framework. The Bank has a comprehensive Risk Management Framework in place across all risk areas. ESG risk is embedded across these activities as a BAU. Our ESRMS document references specific frameworks, as applicable. For example, credit policies and procedures are found in the Credit Policy Manual, accordingly referenced. The Bank’s Risk Management Framework is mature, regularly updated to consider best practices and regulatory requirements.

Our people are central to our customer-centric vision. Through our Employee Value Proposition (EVP), “YOU matter,” championed by our Human Capital Management (HCM) segment, we created a nurturing work environment that equips our people with the tools and education they need to thrive. These initiatives by HCM align with SDG Goal 3: Good Health and Wellbeing and SDG Goal 8: Decent Work and Economic Growth, ensuring that our commitment to employee welfare and sustainable practices are deeply intertwined.

Transforming the employee experience

In 2024, we enhanced our cloud-based HCM platform, HeRO (HCM Employee Resources Online). Key improvements included:

• • Automated pre-employment documentation for seamless onboarding.
• • Goal check-ins, continuous feedback loops, and 360-degree performance reviews, reinforcing career growth and accountability.
• • Simplified annual Performance Bonus (PB), Merit Increase (MI), and Promotion (Promo) exercises, with auto-generated letters for greater efficiency.

Building a diverse, inclusive, and safe workplace

We promote a diverse and inclusive workplace, ensuring that hiring and promotion decisions are based on merit, skills, and qualifications, with no gender preferences in recruitment policies. While we don’t have formal gender ratio targets, we continue to assess and refine our approach to employee engagement, diversity, and inclusion. In 2024, we employed a total of 10,074 people.

Most of our employees come from nearby communities, particularly for branch operations, leveraging local market familiarity and professional networks. Employees have access to grievance reporting mechanisms through the Whistleblowing Program and Speak Up channels, ensuring concerns are addressed without fear of discrimination or retaliation. To continuously improve workplace satisfaction, we conduct annual engagement surveys, such as the Glint “My Voice Matters” survey, to gather insights and drive meaningful improvements.

Engaging and developing employees

We invest in our people, equipping them with the skills, knowledge, and opportunities to grow both professionally and personally. In 2024, we launched several impactful learning and development programs:

• • In our Ability to Execute (A2E) Workshop, we trained over 1,000 leaders with essential execution skills, and certified A2E trainers for future rollouts. To reinforce learning, we introduced Team Talks, a social learning initiative, achieving 91% participation and incorporating a Team Talks Rewards Program to sustain engagement.
• • Our Hyper-Personalized Learning Pathways (HPLP) strategy optimized LinkedIn Learning (LiL) for self-directed, 24/7 learning, particularly for leadership development. With 5,086 employees connecting their Individual Development Plans (IDPs) to HPLP courses, this initiative saved PHP3 million in training costs, 654 man-days, and 2.5 full-time equivalent employees, while increasing course offerings by 14%.
• • Since 2021, Learn for a Cause has transformed employee learning into scholarship opportunities. For every hour spent on LinkedIn Learning (LiL), PHP2 is donated to support scholars of SB Foundation’s Regalo Mo, Kinabukasan Ko program. Since its inception, Learn for a Cause has supported 16 scholarships.

Security Bank consistently adheres to good corporate governance principles of fairness, accountability, and transparency in all its dealings, ensuring a high degree of integrity in the conduct of all its affairs. In 2024, we received the 3 Golden Arrow Recognition for Excellence in Corporate Governance from the Institute of Corporate Directors (ICD), proving our commitment to ethical governance practices, which have been a cornerstone of our operations.

In carrying out its advocacy of good corporate governance, Security Bank has implemented a Governance System that encompasses the three critical pillars consisting of: (1) the Board of Directors that provides direction for business and risk strategies, organization, financial soundness and governance; (2) Senior Management that carries the implementation of strategies and initiatives set and approved by the Board; and (3) an internal control system which covers the implementation of key control functions such as Risk Management, Compliance and Internal Audit.

The Bank’s Board-approved Manual of Corporate Governance (the “Manual”) embodies the corporate governance rules and regulations of the BSP, the SEC, the Philippine Stock Exchange (PSE), and global best practices, ensuring disclosure and transparency to uphold the rights of the Bank’s stockholders and other stakeholders, and instilling awareness in directors, officers, and employees of their responsibilities to conduct business in a safe and sound manner at all times.

As mandated by the Bangko Sentral ng Pilipinas (BSP), the Bank audits all its business units/operations/sites groupwide, including subsidiaries. The audits are performed by the Bank’s Internal Audit. Compliance with the anti-bribery and corruption policy requirements, as well as ethical behavior policy requirements covered in the Bank’s corporate governance policies (such as personal investment policy, conflict of interest policy, code of conduct, etc.) are incorporated into Internal Audit’s regular audits of business units, functions and key processes. In these audits, Internal Audit verifies whether controls and practices (inclusive of monitoring and detection systems, and enforcement and responses to corruption incidents) align with the Bank’s anti-bribery and corruption standards, the Bank’s corporate governance policies, applicable laws, and regulatory expectations.