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We pledge toDO MORESUSTAINABILITY REPORTfor the financial year ended31 December 2020AIB Group plc
WELCOMETO OUR 2020SUSTAINABILITYREPORTThroughout this report, ‘AIB Group’, ‘AIB’, ‘theGroup’, ‘the bank’ or ‘we’ refers to AIB Group plcand its subsidiaries. This is AIB’s fifth SustainabilityReport, reporting on non-financial activity, focusingspecifically on the year ended 31 December 2020.Information on activity before and after these datesmay be included by way of context, in particular forthe first quarter of 2021.201. INTRODUCING02. ENGAGINGREPORTING STANDARDSThis report has been prepared in accordance withthe Global Reporting Initiative (GRI) Standards:Core Option. It includes a GRI Content Indexlocated on p.87-90, with all statements referencedback to the body of the report for context andfor ease of reading. This is the first time we arereporting on our progress on commitments madeagainst the Task Force on Climate-related FinancialDisclosures (TCFD) and the United NationsEnvironment Programme Finance Initiative (UNEPFI) Principles for Responsible Banking.to information contained in our Annual FinancialReport 2020 (AFR 2020). This is available e cover image, taken by Lisa McMahon of KilkeeBealaha Camogie Club, shows Erin (6) and Ava (2)McMahon who spent much of the first lockdownon the beach at Whitestrand in Doonbeg, Co. Clarepracticing camogie.ASSURANCEThe image was selected as the winner of‘The Toughest Season’ photo competition, earningKilkee-Bealaha Camogie Club a 1,000 O’Neillsvoucher, and was subsequently chosen as the frontcover image for AIB’s book of the same name.Assurance has been provided by Deloitte on ourpreparation of our Sustainability Report in accordancewith the GRI standards. Their independent assurancestatement is on p.101 of this report.Our sustainability site www.aib.ie/sustainabilitycontains links to all our related policies and codeswhich are referenced throughout this report.Throughout this report we also make reference03. RESPONDING04. REPORTING & ASSURINGHPàThrough our ongoing engagement with ourstakeholders, supported by a dedicated materialityexercise, we identify the issues and opportunities thatmatter most to our stakeholders. Our sustainabilitystrategy and this report are structured around thematerial topics and provides information regardingour performance and response to these issues overthe last 12 months.à
SUSTAINABILITYAT AIBSustainability has been, and continues to be,integral to AIB.We recognise that our success depends on thesuccess of our customers, employees, suppliers,and the economy & communities we serve. Givenour scale and impact in the Irish economy, our rolecomes with significant responsibility to the peopleof Ireland.Some see banking as a purely transactional service,for all. Despite the unprecedented challenges that COVID-19providing capital to support day-to-day living in bothhas presented across all aspects of society and the economy,consumer and corporate life; managing savings andthe recovery provides an opportunity to rebuild economiesdeposits securely; and facilitating day-to-day bankingand communities in a more sustainable and inclusivetransactions safely. However, the role of banking goesmanner. Ireland has an opportunity to close the gaps ofdeeper – it enhances livelihoods, supports homemakers,social inequality that currently exist across the country.enables jobs, and facilitates communities and society toflourish. Banking serves the ecosystem of our daily lives.AIB IS AFINANCIALSERVICESGROUPWe operate the following brands:MerchantServicesBold commitment and action are required on all fronts at thismoment of change. AIB is inextricably linked to the successAnd it is to our future ecosystem that banking must beof the economy, society, and the communities where weWe provide a range of services to retail, businesssustainable, adding value and creating a positive long-termwork and live. We are committed to taking such bold action,and corporate customers, including banking, wealthimpact. It makes real and meaningful support in addressingmaking a positive, sustained impact through our business,management, mobile payment and card acquiring.the many challenges and opportunities that face society.guided throughout by our purpose: to back our customersThe AIB Group operates predominantly in Ireland andto achieve their dreams and ambitions.the United Kingdom, with the exception of our cardAs a financial institution at the heart of the Irish economy,acquiring joint venture, AIB Merchant Services, whichoperating within a local and global context, the lastis based in Ireland and serves a global customer base.12 months have only served to reinforce how importantWe are committed to supporting the transition to a low-it is to ensure AIB remains a sustainable business that workscarbon economy and backing sustainable communities.01. INTRODUCING02. ENGAGING03. RESPONDING04. REPORTING & ASSURINGHPà3à
OUR SUSTAINABILITYJOURNEYPledged to become Carbon Neutralin our Operations by 2030Sustainable Communities becomesAIB’s 5th strategic pillarAchieved CDP Climate A Leadership RatingAchieved CDP Climate A- Leadership RatingAwarded Chambers IrelandOutstanding in Sustainability 2020Main sponsor of Climate Finance WeekPublished a defined list ofExcluded Business ActivitiesPledge to Do More CommitmentIssued 1st Green Bond for 1bnGreen MortgageSigned the Low Carbon Pledge toreduce emissions by 50% by 2030Published Responsible Supplier StandardsFounding Signatory of the UNEP FIPrinciples for Responsible BankingLaunched a Socially ResponsibleInvestment Bond FrameworkCommitted 5m to community causes for COVID-19Establishment of Energy,Climate Action & Infrastructure teamAchieved CDP Climate A Leadership RatingAchieved CDP Climate A Leadership RatingSupporter of the TCFD (Commitment todisclose climate-related financial risks)Group-wide certification to ISO 14001 & ISO50001 (Energy & Environmental Mgt. Standards)Sponsorship of UCD Chair in BehavioralEconomics DCU Chair in Data AnalyticsAchieved the Business Working Responsibly MarkNamed Large Green Organisation of the YearProcured 100% renewable energyCompleted materiality exercisewith 1,400 Stakeholders1st Sustainability Conference2nd Sustainability Conference3rd Sustainability ConferenceMain Sponsor of 3rd Climate Finance Week1st Sustainability Report2nd Sustainability Report3rd Sustainability Report4th Sustainability Reportbased on refreshed materiality exerciseEstablishment of SustainableBusiness Advisory Committee (SBAC)Partnerships with FoodCloud and SOAREliminated Plastic Coffee Cups & Disposables(12.5m items)01. INTRODUCING2019201802. ENGAGING03. RESPONDING04. REPORTING & ASSURING2020HPà20174Launched new COVID-19 propositions andadditional supports for vulnerable customersà
CONTENTS01. INTRODUCING02. ENGAGING03. RESPONDING04. REPORTING & ASSURING07 AIB at a Glance18 Ongoing StakeholderEngagement24 Climate Action87 Global Reporting Initiative(GRI) Content Index08 CEO Introduction19 Materiality Process10 SBAC Chair Message20 2020 Stakeholder Engagement11 The Value We Create12 Awards and Ratings21 Stakeholder CollaborationSummary13 Sustainable CommunitiesStrategy & 2020 Progress22 Commitments44 Economic & Social Inclusion91 Task Force on Climate-relatedFinancial Disclosures62 Future-Proof Bank92 UNEP FI PRB –Self-Assessment & Reporting98 Non-Financial Information101 Assurance Report14 Our Sustainability Targets15 Our Corporate GovernanceStructure01. INTRODUCING02. ENGAGING03. RESPONDING04. REPORTING & ASSURINGHPà5à
601. INTRODUCING02. ENGAGING03. RESPONDINGAIB AT A GLANCE08CEO INTRODUCTION10SBAC CHAIR MESSAGE11THE VALUE WE CREATE12AWARDS AND RATINGS13SUSTAINABLE COMMUNITIES STRATEGY & 2020 PROGRESS14OUR SUSTAINABILITY TARGETS15OUR CORPORATE GOVERNANCE STRUCTURE04. REPORTING & ASSURINGHPà01INTRODUCING07à
AIB AT A GLANCEAIB is a financial services group. We were incorporated in Ireland in September 1966 as a resultof the amalgamation of three long established banks: the Munster and Leinster Bank Limited(established 1885), the Provincial Bank of Ireland Limited (established 1825) and the Royal Bankof Ireland Limited (established 1836).OWNERSHIPOPERATIONSPURPOSEAIB Group plc is a publiclyquoted holding companyon the main markets ofthe Euronext Dublin andLondon Stock Exchangesafter undertaking an initialpublic offering in June 2017.Our current issued ordinaryshareholding is 2,714,381,2371shares – the Irish State hasa significant shareholding(71.1% – 1,930,436,543Ordinary Shares) through theIreland Strategic InvestmentFund and the balance is heldby other shareholders.A Relationship Frameworkdocument details ourrelationship with theIrish State.Our most significantoperations are in Ireland andthe United Kingdom where weoperate a retail, corporate andbusiness banking offering. Wealso operate US Syndicated& International Finance andbranch activities in our NewYork office. We operate inIreland predominantly, wherewe hold market-leadingpositions in key segments.To back our customersto achieve their dreamsand ambitions.VALUESCUSTOMERFACINGSEGMENTSLOCATION OFOPERATIONSRetail BankingIrelandBRANDSDrive progressMerchantServicesShow respectCorporate,Institutional &Business Banking (CIB)IrelandUSABe one teamSTRATEGICPRIORITIESMortgages, personal,SME and corporatelending, paymentservices, credit cardservices and deposits.9,356 Employees3End-to-end credit 103,264m Totalaverage assetsRefocused branchnetworkWhere we providenon-core bankingproducts, for examplegeneral insurance, wetypically partner withmarket leaders. 14,971m Total capitalresourcesAIB UK 2,371m Totaloperating income 1.1bn OperatingContribution4 (bysegment – RetailBanking 51%, CIB 40%and AIB UK 9%)UKAIB Group plc Annual Financial Report (AFR) 2020, p.361.Refer to AFR 2020 p.350, 61, 316 (including debt and equity split), 60 and 267.3Average employees in 2020.4Before impairments and exceptional items, and excludes Group segment loss.You can find our AFR 2020 at /results-centre/2020-annual-financial-results.203. RESPONDING04. REPORTING & ASSURINGHPà02. ENGAGINGàFuture of workProduct gapsOwn the outcome101. INTRODUCINGSCALE OF THEORGANISATION2 1,527m Totaloperating expensesEliminate complexity7MAIN PRODUCTS& SERVICESAIB GB businessmodelSimplificationSustainableCommunities
AN INTRODUCTION FROMOUR CHIEF EXECUTIVEOFFICER, COLIN HUNTThe climate emergency did not appear in 2020.It is the issue of our generation, which is why AIBhas been a vocal and active leader in pursuinga sustainable agenda for our business, ourcommunities, and through the products we serveour customers.For many, we are at inflection point in our local and globalAs Ireland’s leading digital bank, we have been there tosocieties, asking ourselves how we want to live in thesupport our customers, but we also continue to placefuture? How we want to re-build our economy and ourgreat value on the presence of our branches in thecommunities? And what kind of world do we want to live in?communities in which we operate. They are part of thelifeblood of our high streets, so we will protect and re-These are the questions we are asking ourselves at AIBimagine them for how they will be used by our customersand we believe that we have a duty and responsibility toand our people in the future.We are fundamentally committed to supporting thetransition to a low-carbon economy, reducing our ownthe people of Ireland and the world at large, to enable anaccelerated transition to a more sustainable future. This isAs the pandemic engulfed our economies, we moved fastcarbon footprint, and helping our customers to do the same.not just the right thing to do, it’s the only thing to do.to give help where it mattered most. We worked closely withWe have made significant progress in building a climate-our customers as they faced into the evolving challengesresilient business and expanding our range of products toThat means more than just addressing issues aroundand granted over 66,000 payment breaks on mortgages,address environmental issues.climate. It’s about ensuring that we have a fair, responsiblesmall business and personal loans in 2020. We re-assignedand inclusive social infrastructure – at both a global levelemployees to contact centres and kept over 99% of ourThe importance we place on this issue was acknowledgedand in our local communities. This means adapting to thebranch network open for business across our communities,with the addition of Sustainable Communities to ournew environments in which we operate and also showingwith priority hours to support the most vulnerable; andstrategic pillars in Q1 2020.leadership in what that change will be.we moved over 80% of our workforce to remote workingovernight. We didn’t get it right all the time but weWe’re seeing the transition take place already. For ourresponded quickly in areas where we fell short.being Net Zero by 2030, the first Irish bank to do so in thisand being in a position to support our loved ones whereBOLD COMMITMENT AND ACTIONARE REQUIREDpossible. In the future, this means we will do what we canBold commitment and action are required at this momentus in both the development of our Net Zero targets and anto re-think how we operate to allow flexibility to continue,of change: environmentally and socially. Progressiveimplementation plan that includes upcoming regulatorywhile also ensuring that our culture is maintained, and thechange is required on all fronts if we are to be the bank thatrequirements and the groundwork to create a pathway towellbeing of our people is paramount.supports a diverse customer base. The climate challenge isdeliver these Net Zero goals. We will continue to build out onunlike anything any of us have encountered in our lifetime,this work in 2021 and beyond – ambitious targets need to beFor our customers, there has been an inevitabletherefore AIB’s ambition remains steadfast to its continuedmet by deliverable action plans.acceleration to digitalisation and banking remotely.leadership in this space.02. ENGAGING03. RESPONDING04. REPORTING & ASSURINGHPàfrom home, finding greater balance in our daily lives01. INTRODUCINGWE HAVE COMMITTED TO OUR OWNOPERATIONS BEING NET ZERO BY 2030In November last year we committed to our own operationscolleagues, COVID-19 has enabled all of us to work flexibly8“ WE ARE AT AN INFLECTION POINT INOUR LOCAL AND GLOBAL SOCIETIES,ASKING OURSELVES HOW WE WANTTO LIVE IN THE FUTURE?”àtimeframe. We completed a body of work in 2020 to assist
WE ARE SUPPORTING OUR CUSTOMERSIN THE TRANSITION TO A GREENER, MORESUSTAINABLE ECONOMYIT’S ABOUT SUSTAINABILITY IN ITSBROADEST SENSEIn December we were re-accredited withWe’re also developing solutions to help customers retrofitthought of as just climate change. This is why we areNotwithstanding this progress and recognition, we knowinclusion on the CDP Global ‘A list’ (Leadershiptheir homes and businesses, and already we are seeingcommitted to making a positive contribution to society andthat we can and must do more to advance the sustainabilitystatus) which recognises companies leading ongrowing demand from our customers for more sustainablethe communities in which we live and work. Our role andagenda in Ireland.environmental transparency and action.products and support as they transition to more energy-importance in the construct of our cities, towns and villagesefficient homes and businesses. In 2020, we continuedand what that means is not lost on us.The programme for the newly formed Government focuseson rebooting the Irish economy, accelerating the green-target by almost 0.5bn. Green mortgages accounted forAs an employer we’re connected through our people;agenda and delivering solutions to the housing crisis. For14% of our new mortgage lending in Ireland, and we areour physical presence on high streets enables face-to-the recovery to emerge and for the aftermath to lead tocontinually looking at ways to diversify our product offeringface advice, support and friendships; and our support fora better Ireland, all of these issues must be addressedfor retail and corporate customers.grassroots activities from sport to the arts to educationsimultaneously. We recognise, as a financial institution at thecontinues. Diversity of experience is critical to a thrivingheart of Ireland’s economy, that we are well positioned to bea key driver and supporter at all levels.In July, AIB was included in the FTSE4 GoodBy 2030, we have set out our ambition for green and transitionsociety. As we think about how Ireland can emerge strongerIndex Series which identifies companieslending to represent 70% of new lending and will be Net Zeroand fairer after COVID-19, prioritising diversity and inclusiondemonstrating strong environmental, social andby 2040 (excluding the agriculture sector, which we are workingwill be paramount.governance practices measured against globallyto the 2050 timeline of the national Climate Action Plan).recognised standards.This is the decade for change and AIB is committed to beinga change-maker to enable action and meaningful progress.AIB passionately believes in sustainability and theWE’RE WORKING WITH PARTNERSimportance of building a bank that thinks in generations,We are building from strong foundations, but the climatenot years. Therefore, sustainability is our strategy and notemergency will not be solved by organisations actingan addition to the strategy.on their own independently, it requires collaboration,engagement and urgency from all sides to make theLOOKING AHEAD; WE PLEDGE TO DO MOREnecessary difference. This is why we have partnered withWe are pleased that our progress has also been recognisedAIB was awarded ‘Outstanding Achievement innational and global movements such as Business in theby industry. In July, AIB was included in the FTSE4Good IndexSustainability’ by Chambers Ireland/Business inCommunity Ireland (BITCI), United Nations EnvironmentSeries which identifies companies that demonstrate strongthe Community as well as the Excellence in theProgramme Finance Initiative – Principles for Responsibleenvironmental, social and governance practices measuredEnvironment award at the Annual SustainableBanking and support the Task Force on Climate-relatedagainst globally recognised standards. We were awardedImpact Awards 2020.Financial Disclosures. We will continue to seek out other‘Outstanding Achievement in Sustainability’ by Chambersappropriate strategic opportunities to keep movingIreland/BITCI as well as the Excellence in the Environmentforward and have our voice heard on this issue ofaward at the Annual Sustainable Impact Awards 2020. And ingenerational importance.December we were also re-accredited with inclusion on the02. ENGAGING03. RESPONDING04. REPORTING & ASSURINGHPà01. INTRODUCINGenvironmental transparency and action.As articulated in our strategy, sustainability can’t beto grow our green lending exceeding our 1bn yearly9CDP Global ‘A list’ which recognises companies leading onàCOLIN HUNTAIB Chief Executive Officer
A MESSAGE FROM THE CHAIR OF OURSUSTAINABLE BUSINESS ADVISORYCOMMITTEE (SBAC) – HELEN NORMOYLEWe’ve heard so many times that 2020 was a yearlike no other and it looks like 2021 is shapingfor much of the same as countries continue tomanage the impact of the ongoing pandemic, inaddition to progressing their vaccine rollout. Likeother banks and businesses, AIB too has had tocope with the challenges before us and do ourvery best to serve our customers, colleagues,investors, and local communities across themarkets in which we operate. Throughout thistime, creating a more sustainable future for theBank and the communities in which we operatecontinued to be a key area of focus for AIB.As Chair of the SBAC, I am pleased to present our fifthThe pandemic has not only been a health crisis of ac
AT AIB We operate the following brands: We provide a range of services to retail, business and corporate customers, including banking, wealth management, mobile payment and card acquiring. The AIB Group operates predominantly in Ireland and the United Kingdom, with the exception of our card acquiring joint venture,
