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We pledge toDO MORE.Detailed Sustainability Reportfor the financial year ended31 December 2019AIB Group plc
CKINGA SUSTAINABLEFUTUREABOUT THIS REPORTThroughout this report, “AIB Group”, “AIB”, “the Group””the bank” or “we” refers to AIB Group plc and its subsidiaries.This is AIB’s fourth Sustainability Report, reporting onnon-financial activity, focusing specifically on the year ended31 December 2019. Information on activity before and afterthese dates may be included by way of context, in particularfor the first quarter of 2020.In 2019, with the help of KPMG, we completed our thirdmateriality exercise, outlined on page 20, engagingour key stakeholder groups: our customers, our people,investors, government and society, and regulators. Fromthis exercise we identified the material topics that were ofmost importance to them. This report focuses primarily onour performance against these material topics.AUDIENCE FOR THIS REPORTThis report is aimed at our various stakeholder groups whowant to know more about our sustainability approach andperformance in 2019.REPORTING STANDARDSThis report has been prepared in accordance with theGlobal Reporting Initiative (GRI) Standards: Core option.It includes a GRI Content Index. This is provided on pages84-93 so that readers can easily find specific data related tothe GRI Standards.Our sustainability site contains links to our related policiesand codes, which are referenced in this report.www.aib.ie/sustainability. Throughout this report we makereference to information contained in our Annual FinancialReport 2019 (AFR 2019). This is available ce has been provided by Deloitte on our preparationof the Detailed Sustainability Report in accordance with theGRI standards. Their independent assurance statement is onpage 95 of this report.Pà2à
�3àSUSTAINABILITYAT AIBTogether with our c. 2.8 millioncustomers and 9,520 employeesacross AIB, we are inextricably linkedto the societies in which we operate.We are committed to backingsustainable communities and makinga positive contribution to society.With scale, comes challenge and opportunity toensure we make a positive contribution to themarketplace, creating long-term value for ourcustomers, colleagues and the communities wherewe live and work.As a bank, we have three core functions whichare fundamental to modern-day life: to convertdeposits and savings into financing for ourcustomers; to manage this credit process and therisks associated with it; and finally to facilitate dayto-day payments safely and efficiently.By doing these tasks well, we will make ameaningful contribution addressing many of thecurrent and emerging issues in society includingfunding home creation, supporting jobs andenterprise and enhancing overall access to financeand financial inclusion.Climate change is one of the greatest challengesof our time, and the role of finance to support thetransition to a low-carbon economy cannot beunderstated or underestimated. While this issuerequires a long-term outlook, action is requiredNOW, which is why AIB has placed this issue atthe heart of our strategy, pledging to DO MOREin addressing the climate change agenda, whilechallenging ourselves to deliver meaningful socialand economic value to our customers, employeesand communities.By doing these tasks well, we will make ameaningful contribution addressing many of thecurrent and emerging issues in society includingfunding home creation, supporting jobs andenterprise and enhancing overall access to financeand financial inclusion.Central to everything we do, we will continue to beguided by our purpose: To back our customers toachieve their dreams and ambitions.AIB is a financial services groupoperating predominantly inIreland and the United Kingdom.We provide a range of servicesto retail, business and corporatecustomers, with market-leadingpositions in key segments. AIBis our principal brand across allgeographies. In Ireland, EBS is ourchallenger brand and Haven is ourmortgage broker channel.
DUCTIONENGAGINGRESPONDINGRISK06 An Introduction from ourChief Executive Officer,Colin Hunt17 Our Customer First Approach24 Climate Action78 Managing Sustainability Risk18 O ngoing StakeholderEngagement36 Better Banking Experiences79 Risk Management43 Economic and Social Inclusion80 Sustainability and Risk60 Responsible and ResilientTechnology83 2020 Areas of Development10 A Message from the Chairof our Sustainable BusinessAdvisory Committee,Helen Normoyle12 The Value We Create13 Our Strategic Approach14 Our Sustainability Strategy15 2019 Performance Summary20 Materiality Exercise21 Governance67 CultureHCONCLUSION05GLOBALREPORTINGINITATIVE INDEX85 Global Reporting Initiative(GRI) Content IndexPà4à06CONCLUSION &ASSURANCE95 Assurance Report
INTRODUCTIONENGAGINGRESPONDINGRISKGRICONCLUSION01 INTRODUCTIONAN INTRODUCTION FROM OUR CHIEF EXECUTIVE OFFICER, COLIN HUNT A MESSAGE FROM THE CHAIR OF OUR SUSTAINABLE BUSINESS ADVISORY COMMITTEETHE VALUE WE CREATEOUR STRATEGIC APPROACHOUR SUSTAINABILITY STRATEGY2019 PERFORMANCE SUMMARYHPà5à
INTRODUCTIONENGAGINGRESPONDINGRISKGRICONCLUSIONAN INTRODUCTION FROM OUR CHIEF EXECUTIVE OFFICER, COLIN HUNTAN INTRODUCTIONFROM OUR CHIEFEXECUTIVE OFFICER,COLIN HUNTHPà6à
INTRODUCTIONENGAGINGRESPONDINGRISKGRICONCLUSIONAN INTRODUCTION FROM OUR CHIEF EXECUTIVE OFFICER, COLIN HUNT“ CLIMATE CHANGE IS NOT THE MOST IMPORTANTISSUE OF OUR TIME, IT’S THE MOST IMPORTANTISSUE OF ALL TIME. AT AIB, WE ARE ACUTELYAWARE THAT WE ARE ONLY AT THE BEGINNINGOF OUR SUSTAINABILITY CHALLENGE AND THATTHERE IS A GREAT DEAL MORE TO DO.”COLIN HUNTAIB Chief Executive OfficerHPà7à
�8àAN INTRODUCTION FROM OUR CHIEF EXECUTIVE OFFICER, COLIN HUNTAs I reach my first anniversaryas CEO of AIB, I am delighted tointroduce our 2019 SustainabilityReport, updating you on ourprogress through the year andsetting a clear direction forsustainability within AIB over thenext strategic cycle. Being CEO ofAIB brings both responsibility andopportunity to make a differenceto our customers, colleagues,communities and other stakeholders.With over 2.8 million customers, AIB holds adistinctive role and responsibility in society, witha unique opportunity to make both a meaningfuland positive impact in an increasingly challengingand complex world. It’s a responsibility we takeseriously, and that we action through our purpose,which is to back our customers to achieve theirdreams and ambitions. When our customers thrive,so too do we. It’s a shared ambition, creatingshared value.Over the last 12 months, I have been increasinglyvocal about my ambition for AIB to play a leadingrole in responding to the greatest challenge of ourtime – climate change. Notwithstanding the corebusiness of AIB in the successful delivery of dayto-day banking activities, this existential issue is atthe heart of our sustainability strategy, pledgingto Do More.Before looking ahead, I want to recognise theprogress made in 2019 as we continued to listen andrespond to the social, economic and environmentalissues that matter to our stakeholders.On a positive note we continued to support ourcustomers and the economy with funding for8,200 new homes, including c. 900 social housingunits. Our new lending volumes increased toover 12.3bn, supporting the economies in whichwe operate. We have also continued to focuson financial inclusion with the extension of ourVulnerable Customer programme outlined on page53. In addition, our continued investment into ourdigital platforms enabled our customers to managetheir finances safely and securely.However, we have to Do More. We must continueto ensure our customers get the best possibleexperience from us, continuing to listen andrespond to them – improving how we serve themand learning from our mistakes, see page 41. Ourpeople are the heartbeat of this business, andtheir engagement and support is critical for oursuccess. That’s why this issue forms part of theCulture Evolution Programme which we are activelyembedding through the business, see page 69.As we look to the future, challenges andopportunities remain, both in the short and longerterm. Throughout 2019, AIB has been increasinglyvisible in demonstrating the role we can and willplay in addressing the issue of climate change in“ OVER THE LAST 12 MONTHS, I HAVEBEEN INCREASINGLY VOCAL ABOUTMY AMBITION FOR AIB TO PLAY ALEADING ROLE IN RESPONDING TOTHE GREATEST CHALLENGE OF OURTIME – CLIMATE CHANGE.”Ireland. It is THE existential issue of our time – andwe know that we must do all we can to respond andadapt our lives around the necessary changes. Weannounced a 5bn Climate Action Fund, a GreenBond Framework and support for Ireland’s secondClimate Finance Week, the theme of which wasInnovation & Collaboration.In 2019, we achieved the Business in the Community– Business Working Responsibly Mark, retained ourleadership status on the Carbon Disclosure Project(CDP) Climate List and were recently named GreenLarge Organisation of the Year at the Green Awards.It was a great honour for me to represent AIB in theUN Headquarters in New York as the only Irish bankto become a Founding Signatory of the UNEP FIPrinciples for Responsible Banking. In addition, AIBwas also the first Irish bank to become a Supporterof the Task Force on Climate-Related FinancialDisclosures (TCFD). These are commitments thatrepresent the seriousness of the challenge, and theambition we have to lead the market in Ireland’sresponse to this issue.
INTRODUCTIONENGAGINGRESPONDINGRISKGRICONCLUSIONHAN INTRODUCTION FROM OUR CHIEF EXECUTIVE OFFICER, COLIN HUNTFounding Signatory of the Principles for ResponsibleBanking announced in September 2019.Supporter of the United Nation’s SustainableDevelopment Goals (SDGs) and its agenda foraction on improving the wellbeing of presentand future generations.Supporter of the Task Force on Climate-RelatedFinancial Disclosures, developing voluntary,consistent climate-related financial risk disclosuresfor use when providing information to investors,and other key stakeholders.AIB was the first recipient of the: Business in theCommunity Ireland, Business Working ResponsiblyMark for Group-wide operations.Sustainability is now a central part of AIB’s strategy.We are responding to the issues that matter to ourstakeholders, holding ourselves to account for theprogress we are making to meet and exceed theirexpectations of us.Although the transition to a low-carbon economywill take time, there are areas where we can movemore quickly and we are actively looking at theopportunities within our economy and societywhere we can support the adoption of low-carbonsolutions. We look forward to bringing these to themarket through 2020.As we progress the next phase of our sustainabilitystrategy, we are committing to Do More to acceleratethe required transition, while continuing to enhancethe economic and social value we create through theservices we provide.I want to thank the Sustainability Business AdvisoryCommittee and Helen Normoyle as Chair for theircontinued focus and challenge as we move into thenext phase of our work.COLIN HUNTAIB Chief Executive OfficerColin Hunt speaking atour third SustainabilityConferencePà9à
INTRODUCTIONENGAGINGRESPONDINGRISKGRICONCLUSION A MESSAGE FROM THE CHAIR OF OUR SUSTAINABLE BUSINESS ADVISORY COMMITTEE (SBAC) MESSAGE FROM THE CHAIRAOF OUR SUSTAINABLE BUSINESSADVISORY COMMITTEE,HELEN NORMOYLEHelen Normoyle speaking at ourthird Sustainability Conferenceduring Climate Finance Week 2019HPà10à
�11à A MESSAGE FROM THE CHAIR OF OUR SUSTAINABLE BUSINESS ADVISORY COMMITTEE (SBAC)Across the globe, the requirementfor businesses to focus theirattention on the wider impact theyhave on the economies, society andenvironment in which they operatehas never being greater; and, at thesame time, customers, colleagues,investors and regulators expectgreater levels of transparency in howbusinesses report on these matters.“ WE ARE, HOWEVER, ACUTELYAWARE THAT WE HAVE MORE TODO. A TRULY SUSTAINABLE BANKIS ONE THAT IS TRUSTED AND, AS ARESULT, HAS THE SOCIAL LICENCETO OPERATE THAT IT NEEDS TOSURVIVE AND TO THRIVE.”As Chair of the SBAC, I am pleased to presentour fourth Sustainability Report which has beenassured by Deloitte in accordance with the GlobalReporting Initiative (GRI) standards. In this report weare introducing for the first time our sustainabilityambitions and targets so that all of our stakeholderscan clearly see the progress we are making on thisevolving and critical journey. At the end of 2019 weundertook an extensive stakeholder engagementexercise, completing a materiality exercise withc. 800 stakeholders, see page 20. We wanted tounderstand the current macroeconomic issuesthat they believe are important for us to respondto, in addition to what they would like us to do inorder to regain their trust. We have framed our keyperformance indicators in the context of the issuesthat are most important to them and to us.Over the past 12 months AIB has made considerableprogress on building out its strategic andoperational sustainability agenda, as highlightedthrough the many examples in this report. AIB is abank at the very heart of the Irish economy, and astrong economy requires a healthy environment.That’s why AIB has made climate action a primaryfocus of our refreshed sustainability strategy. Werecognise that dealing with climate action is notstraightforward – we need to balance the economicand social considerations of transitioning to a lowcarbon economy with the growing urgency broughtforth by climate change. A period of transition withinnovative support is required for our customers andcolleagues to enable a notable and orderly shift to alow-carbon ec
reference to information contained in our Annual Financial Report 2019 (AFR 2019). This is available at https://aib.ie/investorrelations ASSURANCE Assurance has been provided by Deloitte on our preparation of the Detailed Sustainability Report in accordance with the GRI standards. Their independent assurance statement is on page 95 of this report. 2
