2021 IBK SUSTAINABILITY REPORT

2021 IBK 지속가능경영보고서

60
 03

Principles and Standards of the Report CONTENTS

This is the 7th corporate sustainability report of IBK and was prepared to transparently
disclose the company’s sustainability management activities and performances in 2021 Industrial
2020 to various stakeholders. It was prepared by reflecting various international ESG
Bank of Korea
(Environmental, Social and Governance) standards, including the Core option of the
Sustainability Report
GRI (Global Reporting Initiative) Standards, as well as TCFD and SASB. It consists of
detailed sustainability management activities and performances for three material
topics and the MA (management approach) for each topic.

Period of the Report

This report was prepared based on financial and non-financial performances from
January 1 to December 31, 2020, and it also contains matters from the first half of
2021 where they may have significant influence on decision-making. For quantitative
performances, data from 2018 to 2020 has been used.

Scope of the Report

This report contains the management activities of the head office, domestic/overseas
branch offices, and overseas offices, etc., of IBK. Financial performances were
prepared based on a consolidation standard in accordance with the K-IFRS (Korean
International Financial Reporting Standards).

Third-Party Assurance
To enhance the credibility and quality of the reported contents, the Korean Foundation
for Quality (KFQ), which is an independent certification-specializing institution, has
verified the report contents. The results can be viewed on pages 112 and 113.

IBK ESG Magazine

We have produced the IBK ESG Magazine, which is easy to read, to deliver IBK's
unique sustainable management philosophy effectively to various stakeholders. We
look forward to your interest and support.

This report is published in Korean and English for communication

with global stakeholders and is produced in interactive PDF format.

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04 IBK SUSTAINABILITY REPORT 2021 05

CEO's Message

IBK has carried out various activities to respond to climate changes. We have established our goal for
First
greenhouse gas reductions and disclosed our performance externally, and, as a result, surpassed the targets
IBK will perform environmental
of the government’s Greenhouse Gas & Energy Target Management System for four consecutive years.
management to lead
As a government-run bank, IBK is leading support for the government’s carbon neutrality plan by playing
environmental friendliness the
the role of market coordinator of the emissions trading system through an agreement with the Ministry of
response to the climate crisis.
Environment and trying to create an ecological system of environmental management by participating in
the development of a guide to green bonds and the implementation of green finance TFT. IBK will continue
its various activities to create a sustainable future as an environmentally friendly, finance-leading bank
through the construction of an environmental management system and participation in various international
initiatives to reduce greenhouse gas emissions and improve energy efficiency.

IBK supports projects that create good jobs through job fairs and the 「i-ONE job」, professional jobs platform
Second
for SMEs, and is making efforts to employ the socially disadvantaged - such as the disabled and students
IBK will carry out responsible from specialized high schools. In addition, IBK is paying close attention to the settlement of a culture
comprehensive management to
of gender equality that enhances employees' competencies, assesses employees solely based on their
fulfill its social responsibility as
performance and ability regardless of their gender, and provides equal opportunities, thereby creating
a corporate citizen.
an environment where the diversity of members is respected. IBK will do its best to continue to faithfully
perform its responsibility as a specialized bank for SMEs and in supporting employee growth within an
inclusive organizational culture that is considerate of all people.

To maintain the trust of its customers, all IBK employees carry out conscious management with a responsible
Third
IBK set a vision of becoming a “Sustainable Bank that Sticks to the Basics” attitude based on compliance with the law and a sense of ethics. IBK is putting resources into managing
IBK will create a healthy, risk and advancing internal control systems by putting top priority on customer value and is continuously
and is striving to promote ESG management.
transparent governance structure
making efforts to enhance integrity. IBK will improve management transparency and strengthen responsible
through proper management.
management through the expanded disclosure of information and will create a healthy governance structure
This year is the 60th Anniversary of IBK. I would like to thank our customers, shareholders, and executives/
through continuous strategies to enhance the shareholder value.
employees, and the small- and medium-sized enterprises that we work with for their support of IBK over
the last 60 years. IBK has been a strong supporter of small- and medium-sized enterprises every time our
IBK will not be afraid of change, but will be reborn as an innovative organization that uses change as a
economy has faced difficulty since its foundation in 1961, such as during the foreign currency crisis in 1997,
stepping stone for growth, assisting in the growth and development of SMEs. In particular, IBK will create its
the global financial crisis of 2008, and the COVID-19 crisis of 2020.
own model that generates both social value and new profits by strengthening support for solutions that raise
awareness of ESG for SMEs that may be disadvantaged in terms of promoting ESG processes as compared to
2020 was an important year for IBK to draw a rough sketch for the next 60 years. IBK started IBK Innovative
conglomerates, so that they are not excluded from the ESG process.
Management to focus its internal capabilities on responding flexibly to rapid internal/external changes and
achieving its new vision as well as the purpose of its foundation: support of SMEs. IBK is internally focusing
We hope that this 2021 Sustainability Report, which contains our sincere ESG philosophy, is helpful. We
its efforts on strengthening credibility, capabilities, human resources, and systems and externally tries
hope for your unwavering encouragement and support for the next 60 years so that IBK can take a great
communication with many stakeholders such as customers, shareholders, and communities, etc.
leap forward as a leading financial group equipped with global competitiveness. Thank you.

Amid the unprecedented global pandemic situation, IBK set a vision of becoming a “Sustainable Bank that
Sticks to the Basics” and is striving to promote ESG management. ESG management, which has emerged
as a new economic paradigm, seems like something new and great, but is part of the regular efforts of
Chairman & CEO Industrial Bank of Korea Yoon Jong-won
IBK, as the company was founded to provide financial support to SMEs and its reason for existence is ESG
management. IBK will establish and implement a goal for each area, environmental, social, and governance,
as detailed below to ensure fundamentally faithful and sincere ESG management in the future.
06 07

Business

60

About IBK 08

Vision and Strategy 10

UN-SDGs and IBK 11

Highlights of IBK’s 60th Anniversary 12

Highlights of COVID-19 14

Support for Stakeholders During COVID-19 16

08 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 09

About IBK

IBK was founded in August 1961 to support smooth economic activity among SMEs and to improve IBK operates 21 local HQs and 635 branch offices across the country. IBK also has 59 business networks
Purpose of Foundation Status of Domestic/
their economic standing by establishing efficient credit systems. IBK, which is short for Industrial Bank of in 12 foreign countries including local corporations in China (8 branch banks and 8 subsidiary banks) and
Korea, is a government-run bank and a strategic financial institution designed to lead the industry and the
Overseas Business Offices Indonesian (32 branches).
(As of December 2020)
development of SMEs in Korea.

IBK Overview Date of foundation Basis of foundation Chairman & CEO

August 1, 1961 Industrial Bank of Korea Act Yoon Jong-won

Total assets (consolidated) Operating profit (consolidated) Net profit for the year

KRW 361,616 billion KRW 2,125 billion KRW 1,547 billion

Qingdao
London Tianjin Yantai
Beijing Shenyang
Tokyo New York
Main Performances
SME Loans SME Loans Market Share WuHan
in 2020 Yangon Suzhou
Shenzhen

180 23.1%
Hong-Kong
Seoul 194
trillion Breakthrough record Hanoi Gangwon 7
New Delhi Manila Incheon 42 Gyeonggi 193
Hochiminh
Annual Report 2020 For the first time in the No. 1 in the banking sector Chungcheong 30
Sejong 2
banking sector Jakarta Daejeon 8 Gyeongbuk 18
Phnom Daegu 27
Please refer to the report above for detailed Penh Ulsan 11
management performance in 2020. Jeonbuk 10 Gyeongnam 27
Gwangju 14
Busan 42
Jeonnam 7

109,212
Jeju 3
Technical Financial Loans Market Share

30.6% (KRW 81.7 trillion)

enterprises subscribed to
retirement pensions
21 635 59
No. 1 in the banking sector Local Domestic Overseas
No. 1 among Headquarters Branches Offices
46 business operators

IBK Ownership of Major Subsidiaries (As of December 2020)

Shareholder 1.2% 1.4% Status of
Composition Export-Import Bank of Korea Korea Development Bank Subsidiaries Company Name Ownership (%) Company Name Ownership (%)
Foreigner Investors 10.1% IBK Capital 100 IBK System 55.6

IBK Securities 83.9 IBK Credit Information 100

63.5% IBK Insurance 100 IBK Service 100

Ministry of Strategy Others 23.8%
and Finance IBK Asset Management 100 IBK (Chinese) Co., Ltd 100
(As of December 2020)

IBK Savings Bank 100 IBK Indonesian Bank 97.5

10 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 11

Vision and Strategy UN SDGs and IBK

The banking industry faces various challenges, ranging from the emergence of new competitors to the IBK is working to achieve the UN SDGs (Sustainable Development Goals), which are common goals of
Vision and Strategy
economic impact caused by COVID-19, prolonged low growth and low interest rates, accelerated industrial humankind, as well as the K-SDGs (Korean-Sustainable Development Goals). The efforts of IBK toward the
(Innovative Management)
restructuring, and big tech. common goals of the world, beyond the country, are part of its duties as a corporate citizen and a strategic
IBK set 2020 as an important turning point to prepare for the next 60 years and pondered how to spend financial institution, and IBK will actively participate in creating a sustainable future for humankind and Korea.
this period wisely. Likewise, IBK established new visions and directions for the concentration of all members’
capabilities to meet the new mid- to long-term vision of the management.
UN-SDGs Detailed Goals of K-SDGs IBK activities

1-2 Achieve substantial security for the poor and vulnerable by minimizing social security blind spots
1-3 Strengthen social services for the poor and the vulnerable 42~49
1-4 Help the poor and the vulnerable strengthen the resilience to economic, social and environmental impacts

3-1 Control the risk of chronic disease and expand health insurance coverage
World's leading financial group 3-2 Promote mental health and prevent drug abuse and misuse
Vision with global competitiveness 70~71
3-4 Prevent and manage infectious diseases
3-7 Reduce the damage caused by environmental pollution
4-4 Increase the actual numbers of youths and adults with adequate technology, such as professional technologies and
Management
job technologies, etc., needed for employment, good jobs, and entrepreneurial activities in keeping with
philosophy IBK leading innovation with the conscious management 44, 46, 72~73
digitalization and technical changes
Innovative finance Conscious management 4-5 Solve the gender inequality equation

• An innovative financial partner that works with customers • A credible bank that complies with laws and 5-3 Respect and value housework
• Improvements to IBK’s competitiveness practices ethical management 5-4 Ensure women’s participation in social activities and equal opportunities 68~71
through changes and innovation • Fulfillment of social responsibility and
5-6 Expand access to core technologies to strengthen women’s empowerment
sustainability management

7-2 Increase clean energy generation

7-3 Save energy and enhance energy efficiency 34~39
Areas of Focus
7-4 Minimize energy consumption in transportation sector

8-2 Strengthen strategies for generating good jobs

8-3 Stimulate growth of SMEs and small business owners
Credibility Ability People System Society 66~73, 88~95
8-4 Ensure equal pay for work of equal value
Valuing customers first Guaranteeing a significant Revolutionizing personnel Advancing risk Generating social 8-6 Protect workers’ right and create a safe working environment
by adhering to the difference in SME finance affairs based on fairness management and internal value through ESG
company’s fundamentals and engagement control systems management 9-2 Improve access to financial services for small businesses
Expanding into new 38~39, 54~65,
and principles business areas and Cultivating talent with Completing the Improving financial
9-3 Establish technological capability and promote the commercialization of advanced technology
88~89
Providing tailored, diversifying future profits future competitiveness digitalization of IBK in the comprehension for 9-5 Eco-friendly industrial activities and technological innovation
integrated services based Maximizing the synergy of Achieving an open and pursuit of life finance underprivileged
on customer demand the IBK financial group diverse IBK Constructing a flexible and populations
Following the Code of rational organizational Expanding its role as a 10-3 Eliminate discriminatory treatment and provide equitable opportunities 66, 68
Ethics and achieving culture corporate citizen through
zero financial accident the fulfillment of social
corruption responsibility

11-6 Reduce the negative environmental influences of cities, including air quality and waste management 34~39

Message for each 12-5 Reduce waste generation by preventing, reducing, and reusing waste
stakeholder Lead changes and innovations in 12-6 Manage businesses’ sustainable management activities 28~29, 39,
Grow with customers based on 12-7 Encourage sustainable green consumption through the certification of green products and expansion of green purchasing 74~76, 88~95
financial industry as a key policy
trust and competency 12-8 Expand environmental education to raise awareness of sustainable development
finance partner
Customers Governments
13-3 Strengthen capability to respond to climate change
22~27, 34~36
13-4 Limit the rise in global temperature to 2℃ compared with the level before industrialization and try to limit rise in
74~76
temperature to within 1.5℃ .

16-4 Reduce illegal funds and arms trade, strengthen the redemption and return of illegally acquired assets,
Fulfill corporate social responsibilities Create a stable and healthy and exterminate all types of organized crimes
78~80, 83~85, 87
as a global corporate citizen work environment 16-5 Reduce corruption and bribery
Society Employees 16-12 Strengthen digital rights protection

17-4 Realize overall development cooperation

9, 90
17-6 Strengthen various types of global partnerships for the sustainable development of developing countries
12 13

Highlights of IBK’s 60th Anniversary

1961~2000 2000~2010 2011~2019 2020

August 1961 Founded IBK and started business (6 HQ and 30 branches) December 2003 Listed on the KOSPI, delisted from the KOSDAQ March 2012 Provided KRW 100 trillion worth of loans to SMEs January Mr. Yoon Jong-won assumed office as the 26th Chairman & CEO
Exceeded KRW 200 trillion in total assets
September 1982 Started issuance of SME financial bonds June 2004 Established SMEs’ Hall of Fame June Exceeded KRW 100 trillion in personal finance
November 2013 Net increase of individual customers by one million per year (personal savings and household loans)
March 1984 Established the SME Integrated Service Center and June 2006 Reached a total of KRW 100 trillion in assets, the first time for
for three consecutive years, achievement of one million
SME Integrated Counseling Window a domestic bank through self-growth July Declared IBK Innovative Management
corporate customers, net increase of IBK ONE banking by
(innovative finance and proper management)
December 1987 Changed English name to IBK (Industrial Bank of Korea) and August 2007 Abolished the joint guarantor system, the first domestic bank to do so one million a year, and achievement of foreign currency
relocated the head office to a newly constructed building performance equivalent to USD 100 billion a year August Recorded an SME loan balance of KRW 180 trillion,
2008 Expanded supply of funds for SMEs during the financial crisis
a first in the domestic financial industry
February 1993 Organized the Excellent SME CEO Exchange Meeting Increased loans to SMEs by KRW 15.6 trillion during the July 2018 Selected by The Banker, ranked among the “Global 100 Banks”
(currently known as the CEO Club) financial crisis Equivalent to a 80% net increase of all bank (ranked 93rd in Tier 1 Capital and 97th in total assets) November Launching of ‘i-ONE Micro Business app’ a life finance platform
loans to SMEs A leader of SMEs to overcome the liquidity crisis for small business owners
November 1994 Listed over-the-counter stock (KOSDAQ)
March 2009 Opened JOB WORLD (a free professional employment portal
June 1998 Carried out the “Total funding campaign to help SMEs”
site for SMEs)
- Poured all energies into helping SMEs during foreign
currency crisis
- Supplied SMEs with special anti-bankruptcy funding worth
KRW 581.7 billion to prevent a chain of SME bankruptcies
- Contributed to the stabilization of the SME financial
market with a KRW 2 trillion net increase in loans to
SMEs amid the serious monetary stringency that caused a
KRW 13.8 trillion reduction in all bank loans to SMEs
compared to the previous year
14 15

COVID-19 HIGHLIGHTS
Efforts made by IBK Everything stops due to COVID-19, but not IBK.
SME financial
support programs

Good Lessor campaign for

the First time in bank circle

Programs to support loan

interest- postponed
Support of life treatment centers companies for soft landing
of Chungju Training Center Domestic first launch of
Field meeting on financial
Support in relation to Covid-19 antimicrobial film coating cards

Exemption of company Customers

in Daegu, Gyeongsangbuk-do
from Electronic Financial Charges
Work from home for all
Launch of 1st ultra-low interest First half of 2020 Family care leave
subsidiary members for a
Recruiting new bank clerks Extended
loans for small business owners first time in commercial bank
Loan for SMEs
Launch of 2nd financial
Fully non-face-to-face process The first fully non-face-to-face
support loans for small
process in Korea Hosting job fairs
business owners

Trend of confirmed cases

2020. 1 2020. 2 2020. 3 2020. 4 2020. 5 2020. 6 2020. 7 2020. 8 2020. 9 2020. 10 2020. 11 2020. 12

Special quarantine for year-end

Occurrence of Covid-19 Declaration of Daegu and Gyeongbuk as specialdisaster areas Continuance of Social distancing (step 1) Level up of Social distancing
and new year

COVID-19 loans COVID-19 loans Work from home Total suspended interest Good Lessor Campaign Extended SME loans

9,643 37.2 96.1

Support for Support worth Reduction of rental fees
Employees KRW billion % support for
333,908 cases KRW
21 trillion
(All branch offices and HQ) Four times the average of
by
50 % (maximum)
total mature loans worth
the five largest banks of Korea
16 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 17

Support for Stakeholders During COVID-19

SMEs Launch of “Haenaeri Loans” for small business owners with less than 10 full-time workers Individual Customers Support credit card members affected by COVID-19 through the postponement of card payments and
long-term card loan payments
Program for innovative growth and special support of small business owners (134 cases equivalent to KRW 1.2 billion as of December 2020)
- Launch of ultra-low interest (1.5%) special loans
Special extension of maturity for up to one year without payment of principal for mature household loans
Operation of an integrated financial-difficulty counseling desk (11,492 cases equivalent to KRW 847.2 billion as of December 2020)
Designation of exclusive employees at the HQ, local HQs, and branch offices to support companies affected by COVID-19
Identification of field trends and support for a broad range of financial difficulties with the establishment of systematic Postponement of payment of “credit loans” and installments of “guarantee-based Inclusive loans” for up to one year
counseling channels (114 cases equivalent to KRW 1.9 billion as of December 2020)

Installation of a COVID-19 damage support unit with support funds for small business owners at the Small Support for individual customers affected by COVID-19 with special interim termination of savings
Enterprise and Market Service (January 4 to June 30, 2021)

Business agreement on supporting companies affected by COVID-19 through a local credit guarantee foundation

Special support fund for COVID-19 Local Communities Support for local government through victim aid cards worth KRW 50 million
Supplying Jincheon-gun, Asan-si, and Daegu Metropolitan City, etc., with aid kits including washing tools, masks,
Support for companies affected by COVID-19 through special import/export financing underwear, blankets, etc.
Extension of maturity with exemption from margin for up to one year, including original period of usance L/C
Reduction of additional interest caused by delayed payment of export drafts and postponement of bankruptcy ‘Spring Flower Dream Event’ to support affected small business owners
registration for up to two months Flower giving event for visitors to promote flower purchases, which have decreased due to fewer graduation ceremonies,
entrance ceremonies, etc., being held
Operation of a program for the financial support of SMEs to help them overcome the liquidity crisis
Supply of 64,000 sets of hand washing detergent and disinfectant, etc., to small business owners and SMEs

Application of special 50% discount to forward exchange p-bonds

Exemption of corporate customers in the Daegu and Gyeongbuk areas from electronic financial charges
Temporary exemption from electronic financial charges for corporate customers in the Daegu and Gyeongbuk areas that
Establishment of contactless processes for company banking and loan processing
sustained large damages due to COVID-19
Contactless loans without visits to branch offices, including ultra-low interest special loans (April 29) and
2nd-round financial support loans for small business owners (June 4)
Supply of a life treatment center for mild COVID-19 patients at the Chungju Training Center

No. of applications received Operation of a program to support the suspension of loan interest for companies to ensure a soft landing
for Corona-related loans (Total support for KRW 232 billion for 67 companies, ongoing support of up to KRW one trillion)
(Unit : persons)

Operation of special credit evaluations Items Schedule Capacity

Postponement of preparation of credit evaluation sheets in the case of companies with extended maturity Life treatment center for
for corporate tax reports and payments From March 12 to April 7, 2020 213
mild patients
333,908 Temporary living facilities for
From April 9 to 27, 2020 174
cases “Allowance for bad debts management” to support companies affected by COVID-19 travelers from abroad
Increased loss absorption capability with additional saving (KRW 340 billion) of bad debt allowance in 2020 as an preemptive
measure against the potential expansion of bad debts following the termination of the interest suspension system

Executives and Preemptive provision of disinfection and quarantine materials to prevent the spread of COVID-19 and
protect employees
Amount supported for
(Unit : Cases, KRW 100 million) Employees Disinfection of all subsidiary offices, distribution of quarantine materials including masks, and installation of
Corona-related loans Cases Amount transparent barriers

1st round of ultra-low interest loans

267,424 78,064 Full-time operation of COVID-19 Emergency TF
for small business owners
Real-time sharing of action guidelines and precautions through Kakao Talk, SMS, and the 24-hour hotline of the Emergency TF
2nd round of financial support of
38,195 6,755
KRW 21055 small business owners
Execution of a BCP (business continuity plan) to respond to COVID-19
billion SME financial support program 18,901 108,031
Execution of documented policies to respond to business suspensions caused by COVID-19
COVID-19 special support fund 1,658 3,257 and to restore and restart the main business

Haenaeri Loans 7,730 14,443

Implementation of the first work-from-home system (including branch offices) for a commercial bank in Korea
Total 333,908 210,550 Grade 3 team leaders or lower grade employees in areas under level 2.5 social distancing
1st : From September 3 to 16, 2020 / 2nd : From December 9, 2020 to February 10, 2021
18 19

ESG Management,
Strategy
60

ESG이사회
2021 ESG Implementation
신설 Strategy 06
20

TCFD Report
ESG 2021 추진방향 22
06
Internal
내부 ESG경영 ESG Management 28
06
External
외부 ESG활동 ESG Management 30
06

ESG 영역별 전략 06
20 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 21

2021 ESG Implementation Strategy Main Subjects

IBK has set the Year 2021 as the first year of ESG management and created the future of IBK through ESG. The goal of each area in
Environmental, Social, and Corporate governance is to become a “sustainable bank that sticks to the basics” centered on the main tasks
of ESG management. We will not forget that being faithful to the purpose of establishment, which is to support small and medium-sized
E Environmental Management to lead environmental friendliness and responses to climate crisis

enterprises (SMEs), is to practice ESG management and promote a win-win relationship continuously with SMEs with ceaseless ideas and Response to climate change Efforts to save energy Expansion of green finance
proactive support for SMEs. The mid-to-long-term goals of ESG management including carbon neutrality will be disclosed after the ESG
• Emission trading market maker • Reduction of greenhouse gas emissions • Green finance products and loans
Committee's decision.
• Expansion of green consulting • Energy-saving buildings • Green finance PF
• Paperless workplaces • Expansion of electric car replacements • ESG bonds

IBK Vision Sustainable Bank that Sticks to the Basics

S Responsible Management to fulfill social responsibility as a corporate citizen

Comprehensive finance Protection of

Innovative growth Respect for employees
and social contributions financial consumers

Goals
• Operation of IBK Happiness • Operation of an exclusive • IBK Changgong • Talent management
Sharing Foundation and IBK organization for financial • IBK 1st Lab • Creation
of a good working
smile Finance Foundation consumers • Provisionof venture capital environment
• Socialcontributions aimed • Response to voice phishing to the cultural contents • Strengthening
of executive/
at stakeholders • Strengthened prevention industry employees capabilities
Environmental Responsible Conscious • Expansion of Inclusive loans of financial fraud • Digital IBK
management management management • Debt relief • Highsatisfaction of
financial consumers
to lead environmental to fulfill social responsibility through a healthy and
friendliness and the response as a corporate citizen transparent governance structure
to climate crisis

Main Subjects
• Comprehensive financial and
G Conscious Management through a healthy and transparent governance structure

social contributions
• Ethical management
• Response to climate change Mid- to long-term
• Mid-to long-term risk Ethical management Establishment of fair trade
• Energy savings • Financial consumer protection risk management
• Innovative growth
management
• Green finance • Establishment of the Code of Ethics • Establishment of risk management • Enhancement of information security
• Establishment of fair trade
• Respect for executives/employees • Strengthening of human rights governance • Strengthening of internal controls
management • Management of major risks
• Introductionof an employee rights • Management of emerging risks
protection officer
Support for SMEs

Support for SMEs

Consulting Research Market development

2021 ESG
Goals Embodiment of ESG in entire management and
Jobs Finance Restructuring
establishment of an ESG management system

Subjects of
Establishment of mid- to Internal External
practice
long-term goals ESG management ESG activities IBK promotes the sustainable growth of SMEs, and it will do its best to create an
environment where ESG management is an opportunity for the new growth of SMEs.
22 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 23

TCFD Report

Nowadays, the global financial market is focused on climate change due to its potential impacts on microscopic & macroscopic financial Physical Risks
stabilization and financial quantification in the area of ESG. The financial risks and opportunities associated with climate change under the Strategy Physical risks are the same as opportunity and risk factors for most domestic companies and are managed
2℃ scenario of the Paris Climate Agreement have drawn much attention, and the FSB (Financial Stabilization Board) announced its TCFD Physical Risks and by the BCP (business continuity planning) system with consideration for direct impacts, such as increased
Recommendations in June 2017 following the establishment of the TCFD (Taskforce on Climate-related Financial Disclosures) upon request by the Transition Risks operational costs for data centers due to a rise in temperature. Impacts on business are monitored in real time.
G20 to create a public notification system for the financial impacts of climate change.
IBK declared its support for the TCFD in June 2020, making it the first domestic financial public institution to do so, and is carrying out step-by-step Strategic Risks
response activities to meet the TCFD Recommendations. The TCFD Recommendations consist of 4 areas (governance, strategy, risk management, Transition risks are important for IBK and are different from those of other domestic financial institutions in
and target/indicator) and 11 detailed indicators for meeting the 2℃ scenario, and IBK is establishing ESG management and formulating a strategy to terms of climate change risk, opportunity analysis, strategy reflection process, etc. Some transition risks faced by
meet the recommendations. IBK are the increased costs associated with the role of market marker caused by price falls, increased investment
in low-carbon facilities such as renewable energy equipment, and increased costs for the implementation of
RE100, including K-REC. These risks are being managed by the corresponding departments.
IBK established its ESG Committee as the top decision-making organization under the Board of Directors As the impacts of climate change on large enterprises and SMEs is different, including the infrastructure and
Governance Structure through a resolution of the Board of Directors in June 2021. It was the first time public financial institution Means of GHG Emission Offset response conditions, managing customer transition risks is considered to be important. IBK has conducted
Establishment of in the country to do so. The ESG Committee regularly (each quarter) reviews and makes resolutions for risks, independent analyses to overcome the limits of use of its domestically disclosed data. IBK analyzed climate/
CERs of UNFCCC Climate
ESG Governance opportunities, and strategies related to climate change based on international standards such as those of Neutral Program environmental risk evaluation methods of foreign governments and financial institutions and, based on
CDP and the TCFD. domestic/foreign risk evaluation factors, deduced the evaluation factors suitable for SMEs.
Voluntary carbon market
Board of Directors (the VERs of GS and VCS, etc.)
IBK is now considering various means Risk Factors of IBK and SMEs for Climate/Environmental Exposure
of offsetting greenhouse gas emissions,
including participating in the Korea
Risk Management Management Energy Agency’s K-Renewable Energy
Governance Committee ESG Committee
Committee Compensation Committee Certificate (REC) pilot project in 2021. Risk exposure of geographical environmental pollution
Unique risks
Risk exposure of product delivery
of SMEs
The ESG Committee consists of one internal director and three external directors in accordance with international
Risk exposure of increasing raw material cost
standards and global initiatives (i.e., an operation focused on external directors is desirable and the chairman
should be elected from among the external directors).
Risk exposure of carbon regulation

The CEO does not participate in the ESG Committee, which is operated with a focus on external directors to Risk exposure of environmental regulation

secure independence, but participates in management meetings on responding to climate change. Internally, Activity risks Risk exposure of Green supply chain
responses to climate change are embodied in overall management by reflecting ESG performance, including
Risk exposure of water usage
such responses, in all bank KPIs, thereby maximizing operational efficiency.
Risk exposure of increasing transportation cost
The ESG Management Team established under the Strategic Planning Department in January 2021 plays
the role of control tower, manages the risks and opportunities of the bank with regard to climate change,
including the establishment of a carbon neutrality goal, and manages ESP application in overall management.
In addition, a group-level climate change response system was established with the organization of the “ESG
Evaluation models were developed based on the company DB of climate and environmental risk factors, with
Implementation Meeting of IBK Finance Group,” which all affiliates of the IBK Finance Group participate in.
the risk exposure level of each business type deduced based on information regarding SMEs possessed by
Through this monthly meeting, information on the opportunities and dangers of environmental risks related
IBK. Businesses were classified into high-, middle- and low-risk groups through matrix analysis. The results, in
to climate change is shared.
descending order, were manufacturing businesses, construction businesses, and other public businesses, and
25% of all customer companies belonged to the high risk group. All analyses were conducted based on the 2℃
scenario, and an analysis based on the 1.5℃ scenario is being considered.
The impacts of climate change may be relatively small for SMEs, the main customers of IBK, compared to
large enterprises that participate in the emissions trading system. Indirect impacts such as the ripple effect and
increases in raw material prices cannot be neglected, however, support for and management of responses to
climate crisis by SMEs are essential tasks of IBK, and IBK reflects new opportunities and risks such as the climate
crisis and green finance, etc., in overall management based on analysis.
24 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 25

TCFD Report

IBK manages the processes of identifying and evaluating the risks of climate change and integrating a IBK manages the quantitative targets it has established based on indicators such as greenhouse gas emissions,
Risk Management management system for all financial & non-financial risks through a horizontal decision-making structure Indicators and carbon intensity, green finance loans, and investment performance to respond to climate change. IBK manages
Climate and focused on the ESG Management Team of the exclusive Strategic Planning Department. Monitoring is done Reduction Targets greenhouse gas emissions indicators with short- and mid-term targets up to 2050, and green finance loans and
Environmental in real time through the constructed ESG Management System, with affiliates notified of all detected risks Performance Achieved investments are managed through the establishment of quantitative targets for 2025 and 2030.
Risk Management through the ESG Implementation Meeting of the IBK Finance Group. IBK participates in the government’s Greenhouse Gas & Energy Target Management System and is reducing
emissions based on greenhouse gas emissions allowances for each year determined by the government. IBK has
over-achieved its targets for four consecutive years since 2017 through company-wide efforts to save energy. In
Structure of the Climate Change Risk Management Organization of IBK
2020, IBK exceeded its emissions reduction target by 2,235 tCO2eq compared with the emissions allowance.

Greenhouse Gas & Energy Target Management System

ESG Committee under the BoD
According to the environmental regulation system for carbon neutrality in governmental ESG policy,
companies* with greenhouse gas emissions exceeding a certain quantity receive reduction targets from the
Reporting and decision
Staff Government government every year.
making on climate-related
environment risks * 1,638 companies and 782 public agencies

ESG Management Team Policy support

Education and feedback
advertisements delivery
• Response to climate-related regulatory policies in Korea and overseas,
Achievement of target
and diagnosis of their impact on IBK Emissions allowance in 2020 Actual emissions in 2020
• Real-time climate risk management across the entire bank through (excess or deficiency)
the ESG Management System
Personal Feedback Information Related 61,789tCO2eq 59,554tCO2eq Surplus achievement (△2,235)
customers collection acquisition institutions

Dissemination and management of Dissemination of information on

information on climate risks climate risks and collaborative response In addition to the indicators and targets for responding to government regulations, IBK has established and
Education environment is managing its own greenhouse gas reduction targets, and is expanding its management scope to cover

Departments within HQ Branches Affiliates intensity (basic sales unit and basic per-capita unit) and Scope 3 emissions. Total greenhouse gas emissions
Corporate
customers
Civil groups increased slightly compared to 2019, but carbon intensity decreased, which indicates an improvement in
• ESG reflected in work
actual emissions efficiency.
*Assessment indexing when
evaluating management • Realizing ESG activities
• Sharing IBK’s ESG vision
• New businesses and in daily living
• Joint promotion of
projects initiated • Initiating branch's own IBK’s Greenhouse Gas Emission in 2020
Financial Group ESG
autonomously campaign
• ESG-related research
and consultation Total emissions Basic sales unit Basic per-capita unit
SCOPE 1 SCOPE 2 SCOPE 32)
(tCO2eq/y)1) (tCO2eq/KRW 100 billion) (tCO2eq/person)

59,554 9,483 50,071 26,321 0.1647 4.3721

Note1) SCOPE 1 + SCOPE 2 2) Nine items including commuting, business trips of executives/employees, and products

As climate and environmental risks are rapidly changing, efforts to receive the latest information rapidly
and to reflect it in the management strategy of the bank are important. For this, close communication with IBK actively manages the following year’s target, which is established in connection with the Greenhouse
governments and external organizations is a very important element of risk management. Gas & Energy Target Management System. IBK established its own 2050 carbon neutrality goal in line with
IBK participated in the study group for “sustainable climate finance” hosted by the Financial Supervisory Service the 2050 carbon neutrality policy of the government through a service to introduce PCAF (Partnership for
in 2019, the Green Finance TF WG1 of the Financial Services Commission in 2020, and the development of Carbon Accounting Financials) and SBTi (Science Based Targets initiative) methodologies and is formulating
green finance model standards with the Korea Federation of Banks. Likewise, IBK is endeavoring to learn detailed reduction strategies as well.
international climate and environmental information and manage risk by participating in various global
initiatives such as the UNEP FI, UN PRB, PCAF, and SBTi as well as the UNGC, which IBK joined in 2006.
26 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 27

TCFD Execution Status of IBK

Classification Item TCFD Implementation Status of IBK Classification Item TCFD Implementation Status of IBK

a) Role of the Board of Directors in relation to the - Establishment of the ESG Committee under the a) Risk identification and evaluation process - Climate and environmental analysis and
Governance risks and opportunities associated with climate Board of Directors Risk Management regarding climate change deducement through an external professional
change agency and development of an evaluation
process with related departments

b) Organizational process to manage the risks of - ESG management control computer system
climate change

b) Role of the management in evaluating and - Participation of management (executive director)

managing the risks and opportunities associated in the ESG Committee
with climate change - Participation of the CEO and executives in the
decision-making process through emergency c) Method of integrating the process to identify, - ESG management control computer system
management meetings evaluate, and manage the risks of climate
change in the overall risk management of the
organization

a) Analysis of the risks and opportunities associated - Diagnosis of climate change risks and a) Indicators used by the organization to evaluate - Greenhouse gas emissions quantity, products,
Strategy with climate change development of carbon finance business
Target/Indicator the risks and opportunities associated with and services, etc.
climate change according to strategies and risk
management processes

b) Impacts of the risks and opportunities associated - Comprehensive impact results b) SCOPE 1, SCOPE 2 and SCOPE 3 - SCOPE 1: 9,483tCO2eq
with climate change on the business, strategies, emissions quantities and related risks
and financial plan of the organization - SCOPE 2: 50,071tCO2eq

- SCOPE 3: 26,3211)tCO2eq

c) Resilience of organizational strategies to various - Impact modeling, deducement of high risk c) Targets to be used by the organization and - Ongoing reduction by 2.5% per year
scenarios related to climate change groups, and risk analysis reflecting various performance compared to the targets for * Reduction by 20% in 2030 compared to 2020
scenarios
managing the risks and opportunities associated
- Analysis of financial impacts and drawing up
with climate change
of management plans for SMEs

Note1) Nine items including commuting, business trips of executives/employees, and products
28 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 29

Internal ESG Management

IBK endeavors to realize its unique ESG management without pursuing temporary trends. We are establishing our ESG management The “Step-by-Step ESG” newsletter is shared with
system as our whole bank shares the strategic direction of ESG management and our employees identify and implement the required ESG Newsletter all employees every Monday, which is designated as
indicators. By establishing a management system to share the implementation of metrics in real time and reflecting ESG performance in “ESG understanding day.” It contains recent news and
via KPIs, we are increasing our implementation capabilities and encouraging employees to participate. IBK is committed to integrating trends related to ESG, IBK activities, future plans, etc.,
ESG management deeply throughout all bank processes by continuously providing diverse training programs and campaigns to increase The newsletter was shared 12 times to date and is
understanding and consensus with respect to our ESG management. used as a communication channel for employees to
share and sympathize with the ESG management of
IBK as well as basic knowledge and refinement of ESG
IBK operates the Task Force Team to promote ESG improvement tasks, which all groups in the departments
management.
Development of ESG within HQ participated in the first half of 2021. After analyzing the current status of IBK, 120 improvement
Management System tasks were identified, with the roles of responsible groups and departments defined. In addition, IBK
has been operating the ESG management control system established to share the implementation of
improvement tasks in real time and to manage them systematically. Once discussions on the K-Taxonomy
and K-ESG have matured, we will apply them to the ESG management control system and upgrade the Campaigns to Expand ‘Green Printers’ campaign
improvement tasks accordingly; thus solidifying IBK's unique ESG management. ESG Management IBK reduces costs by conducting a campaign to
encourage ‘green computers’ on Arbor Day and

Environmental Education Executives In May, IBK hosted a lecture by Mr. Choe Jae-cheol, current chairperson of BIE (Bureau reducing use of papers and toner. IBK creates an
International des Expositions) and former Climatic Change Ambassador of the Ministry of Foreign Affairs, on atmosphere of practicing environmental friendliness
the subject of “New coordinates, 2050 carbon neutrality, and ESG in this time of climate crisis.” even in minor matters in banks.

Employees In April, IBK hosted a lecture by Team Leader Yoo In-sik on the subject of “Green Finance.” IBK
will provide regular environmental education at least once per quarter and expand the target audience to
branch office employees.

ESG practice through learning and sharing

In 2020, executives and employees used about 60,000 books for training, which is equivalent to 900
30-year-old trees. Implemented in 2021, our book donation system promotes the practice of environmentally
friendly management (E) and social contributions (S) by donating books used by executives/employees to
improve their capabilities to the IBK Happiness Sharing Foundation.
ESG Educational Videos IBK produces and broadcasts various types of educational videos to fuel interest in and better perceptions of ESG.
“ESG with IBK,” featuring the concept of ESG and some examples, and “ESG, who are you?,” featuring interviews Practicing energy saving
with ESG staff, are being broadcast in the HQ and branch offices twice a day, four days a week. IBK will continue
IBK is minimizing the unnecessary use of energy by moving up the lights-out time after closing by 30 minutes
to encourage the interest and participation of executives/employees in ESG by occasionally creating such videos.
and by adjusting the water pressure in toilets for energy savings in its offices. In addition, IBK encourages
energy-saving practices by guiding various activities in daily life, such as saving electricity, reducing waste, and
maintaining optimum cooling/heating temperatures.

1) ‘ESG with IBK’

A video about the ESG management
of IBK broadcast in executives
meetings as well as at the HQ and
all branch offices
2) ‘ESG, who are you?’ Short interview
video for hands-on workers in the
ESG Management Team
30 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 31

External ESG Management

There have been growing social voices that financial institutions should play a more active role and carry out interventions in the practice and Declaration of Support for Climate Finance to Achieve Carbon Neutrality
spread of ESG management. IBK is leading participation in various ESG activities to meet social expectations, assuming responsibility for its Participation in IBK participated in a ceremony to declare support for climate finance to achieve carbon neutrality by 2050
roles as a policy financial institution and as a corporate citizen. We ensure that diverse economic stakeholders, including SMEs, are included ESG Events and to demonstrate its will for ESG management with six promises about the practice of climate finance.
and promote ESG-based mutual growth. IBK will provide the social basis to spread ESG management by upgrading internal ESG management
Six Promises of Support for
through participation in various external networks as well as joint efforts.
Climate Finance
Participation in Anti-Corruption Oath Ceremony of UNGC
1 Support for carbon neutrality by 2050
2 Integration of ESG elements across the IBK participated in the 2021 BIS Summit Anti-Corruption Oath Ceremony held by the UNGC Network Korea
entire financial business and Social Investment Forum and pledged to practice anti-corruption and ESG management in its companies.
3 Support for the disclosure of information
on climate change in accordance with ※ BIS : (Business Integrity Society) A UNGC project to encourage joint efforts to prevent corruption, improve anti-corruption
international standards and endeavor to systems, and conduct policy proposal activities
disclose financial information
4 Request standards and endeavor to
disclose financial information
5 Efforts to invest capital in decarbonization Anti-Corruption Oath Ceremony
Joined UNGC Declared support for TCFD Joined UNEP FI (United Nations Participated in industries
Environment Programme Finance Initiative) World Bank 6 Launch of financial products to response 1 IBK will eradicate corruption to strengthen its competitiveness and will lead the improvement of policies
Declared support for UN PRB (United Nations CWI project as an to climate change and systems related to anti-corruption.
Principles for Responsible Banking) observer
2 IBK will manage enterprise risks based on ESG for improved transparency and will try to establish credibility
with stakeholders.
2006. June 2020 March 2021 April 2021 May 2021 June 2021
3 IBK will participate in joint efforts with the central government, local governments, public agencies,
enterprises, the press, civil societies, etc., and will try to create a fair and clean business environment.
Joined PCAF (Partnership for Carbon Accounting
Financials) and SBTi (Science-Based Targets initiative)
Joined CDP signatory agency
P4G Green Finance Hall
P4G is an abbreviation of ‘Partnering for Green Growth and Global Goals 2030,’ and it indicates solidarity
Declared support for climate finance for Green Growth and Global Goals 2030. P4G is a 21st-Century fusion organization wherein government
to help achieve carbon neutrality agencies and enterprises and civil societies in the civil sector, etc., participate in a global consultative group to
Participated in UNGC BIS Summit
respond to climate change and achieve the UN Sustainable Development Goals.
Anti-Corruption Oath Ceremony
IBK introduced its on/offline ‘P4G Green Finance Hall’ and green finance as an ESG management activity at the 2nd
P4G Summit Conference, which was held in Seoul.

IBK has expanded its participation in domestic/foreign standards and initiatives to learn advanced ESG
Participation in management skills and to construct a network with excellent global ESG banks. IBK is concentrating its
Participation in Strategic Participation in the Green Finance Conference
International Initiatives capabilities on the responsible execution of ESG management and participating in various initiatives to meet
Financial Institutions IBK participates in the Green Finance Conference established by the Financial Services Commission, to
the standards required by international societies. (Government) regularly monitor the state of green finance execution and the difficulties of strategic financial agencies, and
Following its declaration of support for the TCFD (Task Force on Climate-related Financial Disclosures) in to make joint efforts for the improvement of systems and the activation of green finance.
UN PRB 6 Principles 2020, IBK joined the UNEP FI and participated in the UN PRB as a signatory agency in 2021. IBK has also
Detailed content consist of
joined the PCAF (Partnership for Carbon Accounting Financials) and SBTi (Science-Based Targets initiative) for
▲ Matching business strategies with the
Expansion of ESG to
carbon neutrality. Becomes good Let’s live gently
Paris Climate Agreement and UN SGDs Individual Customers
▲ Reducing negative influences of IBK implemented “Let’s live gently” marketing for customers with
financial products and services and
and SME
the slogan, “When gentle customers meet a gentle bank.” When
expanding positive influences - UN PRBs are the principles that banks should follow in order to achieve the SDGs (Sustainable Development
▲ Encouraging sustainable practices customers promise to perform environmental protection and service
among customers
Goals) and the goals established in Paris Climate Agreement and secure a sustainable future. activities, etc., and signs up for an installment savings accounts, banks
▲ Partnering with stakeholders to Individual support their promises, provide environmentally friendly gifts, and
achieve social goals - The PCAF and SBTi are global consultative groups that set and verify the greenhouse gas emissions depending on the account number, also supports young women with
customers
▲ Implementing the principles with organic sanitary products. IBK is thereby carrying out environmentally
an effective governance system and reduction targets of enterprises with the goal of limiting the average global rise in temperature to within
friendly activities (E) and making social contributions (S).
responsible banking culture, and
▲ Regularly reviewing the
1.5℃, in line with the Paris Climate Agreement. IBK intends to set and disclose its greenhouse gas
implementation performance of emissions reduction targets by applying the greenhouse gas emissions measurement standards of the PCAF ESG Education (Chief, Future, and Female Manager Clubs)
the principles and guaranteeing
transparency. and SBTi as well as their methods of setting targets and evaluating reduction performance, and will expand IBK planned a contactless (online) lecture on the subject of “SME and ESG” for representatives of
IBK intends to carry out model ESG companies belonging to the SMEs’ Hall of Fame and IBK’s top three clubs, the Chief, Future, and
its application to all assets in the future, starting with initial PF (project financing).
management in the future by following SME Female Managers clubs.
the six principles sincerely.
32 33

ESG
Performance

60

S
Comprehensive Finance and 42
Social Contributions
Protection of Financial Consumers 50
Innovative Growth 54
Respect for Employees 66

E G

Response to Climate Change 34 Corporate Governance 74

Efforts to Save Energy 37 Ethical Management 78
Expansion of Green Finance 38 Mid- to Long-Term Risk Management 81
Special | ESG bond 40 Establishment of Fair Trade 83

IBK
Special | Sustainability Management 88
Support for SMEs
(Small- and Medium-Sized Enterprises)
34 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 35

Environment
Response to Climate Change Role of Emissions
The Ministry of Environment implemented an emissions trading system in 2015 for domestic companies
with excessive greenhouse gas emissions. IBK has played the role of market maker for the system since June
Trading Market Makers 2019. The market maker’s role is to supply the market with liquidity through emissions rights borrowed from

The importance of responding to climate change is gradually increasing with the prolongation of the COVID-19 pandemic. the Ministry of Environment and to set buy and sell prices. In the beginning, the market maker was more
focused on sales, but nowadays it is contributing to price stabilization through purchasing as well due to
Efforts to solve environmental issues are no longer optional but an obligation and the responsibility of members of society.
greater price fluctuation.
The whole world has started to make efforts for the declaration and realization of the 2050 Carbon Neutrality. In order to
(Unit : ton,%)
reduce greenhouse gas emissions and achieve low-carbon green growth, active investment and the reorganization of industrial
structures are required. As a leading bank in carbon finance, IBK has drawn up a roadmap to respond to climate change Trading Quantity ’19. 12. ’20. 12. ’21. 3. Total
internally in order to manage the risks related to the crisis of climate change and to seek new opportunities. IBK is strengthening Trading quantity
528,975 42,878 90,000 661,853
of the IBK
its foundation through the preparation of environmental and energy management systems and the establishment of Trading quantity in
1,236,766 289,473 783,345 2,309,584
environmental policies and is seeking various forms of support to help SMEs participate in the response to climate change. the whole market
Share of the IBK's
42.80% 14.81% 11.49% 28.65%
trading quantity

IBK has been selected as an observer for the World Bank’s Climate Warehouse Initiative (CWI) platform
project, in recognition of our status in the greenhouse gas emissions trading scheme and carbon market
Carbon neutrality
in Korea. This project seeks to strengthen the transparency and efficiency of carbon markets, which
are individually operated around the world. IBK will lead the climate financial market in Korea through
communication and cooperation with global institutions.
Advancement
Green Consulting to IBK began providing green consulting in 2010, the first in the domestic banking industry to do so, and has
Respond To Climate consulted on 435 cases to date. To support SMEs in responding to climate change, IBK provides consulting
Influence analysis Change preferentially to companies which have been allocated with emissions credits, companies wishing to
• Assetportfolio • Declarationof • Achievement of Net-Zero engage in an emissions offset business, and companies requiring carbon management. As requirements
Measurement of decarbonization • RE100, EV100, EP100
for environmental management are increases rapidly for SMEs, IBK will continue to expand specialized
greenhouse gas • Equator Principles -Triple Joiner
emission (PCAF) consulting for them.
Preparation of • Achievement of Re100
• Setting reduction
foundation goal (SBTi)
Structure of Green Consulting Work
• Environmental energy
control system
• Environmental policy Process of IBK to respond to climate change Item Content Of Work Expected Effect

- Establishment of a carbon asset • Stable response system

Carbon asset management strategy and procedure • Emissions trading cost
management - Matching of companies that request savings
emissions trading
Carbon
management
- Support for their preparation of • Generation of profits from
Environmental Management Policy of IBK Emissions offsets
business plans emissions sales
- Support for third-party verification • Consulting cost savings

The executives and employees of IBK perceive environmental management - Arrangement of emissions offset sales
to be the core element of the company’s sustainability management strategy and declare the
following in order to contribute to the creation of an environmentally friendly society and to - Identification of fire risk factors • Elimination of
respond to climate change: - Diagnosis of safety accident risks in management risks
Fire safety management business places • Deducement of

- Education of executives/employees improvement measures for

1. IBK will comply with all domestic/foreign environmental legislation and agreements and do its best to create an business sites
environmentally friendly society.
2. IBK will participate in the response to global climate crisis through active greenhouse gas reduction activities.
- Support for the preparation of • Expansion of product
3. IBK will fulfill its social responsibility through green finance activities to develop environmentally friendly products
and services. Green authentication technical manuals competitiveness
- Support for third-party verification • Consulting cost savings
4. IBK will try to practice and improve environmental management through the construction of an environmental
management system and disclose its performance transparently.
36 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 37

Efforts to Save Energy

IBK has conducted diverse activities early on to practice environmentally friendly management. One IBK is making continuous efforts in various ways to fundamentally reduce greenhouse gas emissions
Efforts to Create
representative environmentally friendly activity is ‘going paperless.’ in order to effectively respond to the climate change crisis.
Paperless Workplaces
Expanded Use of Electronic Documents
Over-Achievement of IBK was included as one of the companies for the Greenhouse Gas & Energy Target Management System in
IBK uses electronic documents in various kinds of work to reduce paper consumption. As a representative
Greenhouse Gas Emissions 2017, and manages greenhouse gas emissions and energy consumption every year. As a result of continuous
example, all branch offices process more than 450 transactions using electronic documents when working
Reduction Targets management, IBK achieved performances that exceeded its greenhouse gas emissions reduction targets for
for customers; the rate of use of electronic documents in branch offices is 76%, and 38 million paper
four consecutive years until 2020. As of 2020, IBK has exceeded its targets (61,789 tCO2eq) by about 3.6%
documents were replaced with electronic documents in 2020. Through electronic document services,
with emissions of 59,554 tCO2eq (equivalent to CO2). IBK will make further efforts to reduce greenhouse gas
customers can reduce the time spent preparing forms, and banks can reduce incomplete sales by preventing
emissions and energy consumption in the future for the next generation.
the omission of handwritten items. Moreover, about 520,000 pieces of paper have been saved (as of March
2021) by substituting closing slips, which are produced when closing business, with images; 22 million pieces Permissible emission amount
70,056
of paper have been saved per year by replacing general facsimiles with electronic facsimiles. 67,937
Actual emission amount
IBK is making efforts to save costs and reduce carbon emissions by reducing the unnecessary use of paper. (Unit : tCO2eq)

For example, the company now uses an electronic approval system rather than paper documents for internal 61,789
60,503 61,392
approvals or reports, and we now send business cards by SMS through an “electronic image business card” service.
59,779 60,990
58,320 59,554
Mobile Electronic Notification and Smart Statement Service
IBK has adopted a mobile electronic notification service to send various bills following digitalization, including
credit card statements, in order to reduce paper consumption, to improve issues such as loss of paper mail,
mistakes in delivery, and reading by other persons, and to save on sending costs.
Mobile electronic notification services are accurate and safe because the content can only be read by the
relevant persons. Notifications are sent first by Kakao Talk. Then, in the event of a sending failure, by SMS,
and if that doesn’t work, a paper document is sent. This ensures that all customers receive notifications. 2017 2018 2019 2020 2021

Mobile Electronic
Item Post Remarks Construction of Energy- IBK constructed various environmentally friendly facilities in its own buildings to reduce CO2 emissions by
Notification
Sending charge (per case) KRW 507 KRW 177 △Savings of KRW 330 Saving, Environmentally reducing energy consumption and waste generation. IBK installed electricity saving and control devices
Friendly Buildings such as LEDs and auto-sensor lighting fixtures, solar heat panels on the exterior walls of the IBK Finance
Tower, and geothermal and photovoltaic equipment in its training facilities in order to encourage the use of
The mobile electronic notification service achieved savings of approximately KRW 136 million over the three
renewable energy. Moreover, in the case of the Chungju Training Center, water pollution has been prevented
months following its launch on February 24, 2021, with the conversion of about 57% of recipients.
through a method of converting sewage into tap water with a non-discharge system in order to reuse good-
quality tap water without any impact on the pristine surrounding environment, including Chungju Lake.
1st attempt In case of failure 2nd attempt In case of failure 3rd attempt
Kakao Talk Text Message Mail

As of December 2020, more than 76,000 customers were receiving credit card statements in digital form.
IBK will continue to practice ESG management in the future by converting various other statements into a
digital format.

Special

Fine Dust Preventive Education Programs for Daycare Centers and Kindergartens

In collaboration with Ecomom Korea, IBK ran fine dust prevention education Ecomom Korea Replacement of Company Starting this year, IBK intends to replace its company cars with electric cars. IBK will install exclusive parking
programs for infants and toddlers at daycare centers and kindergartens Cars with Electric Cars spaces for electric cars and charging stations in its own buildings and, in case of rented buildings, first
• Government-certified green education center
(885 children at 26 institutions in 2020), diagnosed indoor air quality using
• Climate change response and environmentally friendly install them in places where charging stations may be installed or charging infrastructure is available within
professional equipment, and awarded agreement certificates to do its part in education, consulting, and culture campaigns
the national task of solving climate and environmental issues. 10-minute walking distance. Slow-speed charging stations will be installed to minimize the electricity burden
on the buildings.
38 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 39

Expansion of Green Finance

IBK is playing the role of a financial institution in the expanded use of new and renewable energy Program to Support Investments in Environment & Safety
Green Finance Loans
and conversion to a low-carbon economy. IBK supplies individuals and companies with various loan IBK is operating a KRW 2.5 trillion program to support investments in the environments and safety areas to
products and is actively making PF investments for the expansion of new and renewable energy. support SMEs and middle-standing enterprises. IBK supports investment in environmental equipment related
IBK will lead the support for green finance by expanding the issuance of ESG bonds, including to air pollution prevention, greenhouse gas and harmful chemical reduction, and the installation of new
green bonds, in the future. and renewable energy equipment, having provided support worth KRW 1.9297 trillion since launching the
program in January 2019.

Green Finance Products Neulpureunhaneul Bankbook Neulpureunhaneul Loans

IBK is now offering the IBK Neulpureunhaneul Bankbook, a government-supported product that it launched to IBK operates KRW 50 billion worth of products to support energy and environmentally themed enterprises in
garner the interest and participation of all people in solving domestic and foreign climate, environmental and keeping with the government’s efforts to reduce fine dust. IBK has supported enterprises in five areas with
fine dust issues. To help reduce fine dust, IBK is generating continuous interest in environmental protection by KRW 12.1 billion as of the end of 2020: new and renewable energy under the environment/sustainability
selling products that provide special benefits (prime rates and exemptions from charges) when using public themes, environmentally friendly power generation, improvement of energy efficiency, environmental
transportation or environmentally friendly vehicles. These benefits added up to KRW 189.7 billion for 65,809 improvement, and environmental protection.
individual accounts and KRW 508.1 billion for 18,104 corporate accounts as of the end of 2020.
Fund for the Rational Use Of Energy
With its KRW 105.5 billion Fund for the Rational Use of Energy based on the recommendation of the
Korea Energy Management Corporation, IBK has supported SMEs in installing energy-saving equipment
and distributing new and renewable energy needed for energy supply, price stabilization, and effective
implementation of energy and resource projects.

Strategic Environmental Fund

IBK has supported SMEs with its KRW 174.7 billion per year Strategic Environmental Fund based on the
recommendation of the Korea Environmental Industry & Technology Institute to contribute to national
environmental improvements by encouraging the systematic cultivation of environmental industries,
installation of environmental pollution prevention facilities, and distribution of low-emission vehicles.

In the future, IBK will launch additional products that will be beneficial for enterprises performing ESG
Green Card management. IBK will soon launch carbon reduction-guaranteed loans to support enterprises related to new
IBK has been offered the Green Card v2 since its launch in 2016 in order to encourage the spread and practice and renewable energy and guaranteed loans to support enterprises at smart green industrial complexes. IBK
of an environmentally friendly mindset. Green Card is also promoting an environmentally friendly rewards intends to lead the expansion of green finance by supplying various products to enterprises that perform

programs which provides discounts at national parks and natural forest lodges across the whole country. Users environmentally friendly management continuously.

can accumulate eco-money through green consumption such as by using cards and public transportation. As of
the end of 2020, there were 9,283 account holders.

Green Finance PF Expanded investments in renewable and environmentally power generation projects
ESG-Related Fund Products As of December 2020, IBK has provided KRW 155.6 billion in support to five solar power generation
As of the end of 2020, IBK had seven ESG-related fund products with a total balance of KRW 154.5 billion. projects, a representative new and renewable energy source, in keeping with the government’s strategy of
IBK will activate investment in green finance and ESG-related funds by continuously launching new ESG- cultivating new and renewable energy-related industries.
related products, such as Green New Deal and clean energy funds, in 2021. IBK intends to expand its investment in various forms of new and renewable energy, such as hydrogen fuel
cells and wind power generation, with a focus on solar projects with accumulated investment experience.

Investment plan for new and renewable energy (Unit : 100 million won)

Category 2021 2022 2023 Total

New and
1,500 2,500 3,000 7,000
renewable energy
40 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 41

SPECIAL REPORT

ESG Bonds IBK receives investment capital from investors, and as a way of fulfilling its social responsibility
to create a sustainable society using the power of finance, uses such capital for financial product
development and investments to generate social value, such as through the cultivation of IBK has made various efforts to promote “social bonds” since 2017 for the purpose of creating social value,
environmentally friendly industries. Issuance of Foreign- such as job creation and support of SMEs, and it successfully issued social bonds worth US$ 500 million
Currency Social Bonds in June 2020 in addition its issuance of social bonds in August 2018, which were the first in Korea. Social
bonds are issued to support vulnerable groups and for the construction of social infrastructure, crime
prevention, etc. The social bonds issued this time have been used to support small business owners, start-up

• Loan and investment for

companies, social enterprises, and SMEs suffering from COVID-19 and to generate various positive effects,

Management Fund Corporate startupventure companies such as an expansion of the funding base through the external disclosure of social contribution effects and
• Loan and investment for new
activities activity customers acquisition of SRI investors.
and renewable energy
• Loan and investment for
companies that create jobs
• Carbon Disclosure Project • Green bond
Items Issue Date Amount Issued
• Eco-friendly carbon asset • Social Bond • Operation of eco-friendly deposit
management consulting • Sustainability bond and card products June 2020 US$ 500 million
• Operation of SME support Personal • Financing for small business owners Foreign-currency ESG bonds
platform customers • Operation of public deposit and August 2018 US$ 500 million
• Policy projects, including job card products
creation, etc. • Credit recovery and loan for low
credit customers

Efforts to Seek Since its issuance of social bonds in June 2020, IBK has maintained relations with investors through ongoing
Management of IBK has expanded not only investment but also ESG bond issuance to achieve social financing. In the second
ESG Bond Investors conference calls, etc., and disclosed its status of social responsibility fulfillment. In spite of the COVID-19 half of 2020, IBK diversified portfolios and participated in socially responsible management with an increase
ESG Bonds
pandemic, IBK has maintained its transaction relationship with Global SRI to improve its position, having
of KRW 551.1 billion in its Korean-currency ESG bond operations in held-to-maturity accounts. In the case of
issued social bonds for the first time in Korea, and is seeking investors in order to establish a base for ESG
foreign currencies, IBK had invested KRW 67.4 billion in 16 ESG bonds by the end of 2020. As investments in
bond issuance.
socially responsible management are considered important, IBK intends to increase its investment in ESG bonds
in Korean/foreign-currency portfolios. (Plan for 2021: 7.6% in Korean currency and 12% in foreign currency)
Sustainable Bonds IBK issued new ‘sustainable’ capital bonds in March 2020 worth KRW 400 billion (KRW 90 billion worth
of 5-year bonds with 2.43% interest and KRW 310 billion worth of 10-year bonds with 2.87% interest),
the first company in Korea to do so. IBK is aiming at the diversification of the supply market by seeking Share of ESG Bonds in Korean/Foreign-Currency Portfolios
institutional investors interested in investing in social responsibility and is promoting its public character as a (Unit : %) 12
strategic financial institution contributing to the activation of the domestic ESG bond market.
ESG bond certification grade ESG bond (foreign currency)
Acquisition and issuance In addition, in February 2021, IBK issued social bonds that acquired the highest grade from an external certification
ESG bond (KRW)
procedure agency and which are worth KRW 1.05 trillion (senior bonds), the largest scale in the domestic banking industry. 8.6

Since then, IBK has continued to issue social bonds to support SMEs and small business owners suffering from
Description of bond issuance criteria
COVID-19, leading the domestic ESG bond market in the generation of social value through KRW 2 trillion in 5.6 7.6
Description of issuance purpose and
fund use 6.1
funding as of the end of April 2021.
(Unit : KRW 100 million, %, %p) Korean-currency bonds : Held-to-maturity securities account
2.8 Foreign-currency bonds : Available-for-sale securities account
Evaluation of assessment institution 0.1
Evaluation of adequacy of external Amount of Maturity 0.2
Issuer Interest Remarks
assessment institutions Issuance (exercise of call)
2018 2019 2020 2021(Plan)
February 21, 2019 3,000 1.93 3 years Senior
September 11, 2019 6,500 1.7 10 years Subordinate
Acquisition of certification Sustainable bonds Permanent bond
900 2.43
evaluation reports (Social + Green) (5-year call)
March 18, 2020 New type IBK will support promising SMEs with competitive funding through the continuous expansion of ESG bond
Social contribution Permanent bond
3,100 2.87
Effectiveness verification and issuance (10-year call) issuance to meet investor demand in markets that are expected to expand in the future. Likewise, IBK will
Subtotal 13,500
support new businesses and continuously contribute to the activation of ESG bond transactions by issuing
5,500 0.81 1 year
February 17, 2021 Senior the first green bonds in the country, with consideration for the scale of business for which green-bond
Issuance of ESG bonds 5,000 1.1 3 years
Investor attraction and issuance Permanent bond funding is possible among the projects implemented by IBK.
2,000 2.65 New type
(5-year call)
Social bonds March 11, 2021
Permanent bond
3,000 3.11
(10-year call)
April 20, 2021 4,500 0.76 1 year Senior
Post-management verification
Adequacy of fund use and management Subtotal 20,000
External verification Total 35,500
42 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 43

Social
Joint Workplace Daycare Centers with SMEs
IBK is the first domestic financial company to operate joint workplace daycare centers for workers at SMEs in
Incheon and Gumi using empty space in its branch offices in industrial complexes. IBK has provided pleasant
and safe child-care opportunities by expanding the opening of its daycare centers to improve the welfare
of SME workers, and is making continuous efforts to support a balance between work and family life for
Comprehensive Finance and Social Contributions workers at SMEs.
Since the opening of these daycare centers, KRW 1.8 billion has been provided to support the care of 139
babies as of the end of 2020. Last year, IBK converted its childcare centers into emergency childcare centers
Social Contributions because special cautions were required due to the spread of COVID-19. The entirety of each daycare center
IBK is doing its best to fulfill its social responsibility as a government-run bank. It is conducting many sincere social was disinfected by a professional quarantine company (twice a month on average and once a week during
contribution activities in various areas with the establishment of the IBK Happiness Sharing Foundation and IBK Smile the peak period) and IBK did its best to ensure proper quarantine measures to prevent possible harm to
Finance Foundation. children or teaching staff caused by COVID-19 by supporting homes with masks for children.

Photos of COVID-19 prevention measures at daycare centers

IBK Happiness Sharing Foundation (performed an average of twice per month, or once per week during peak periods)

The IBK Happiness Sharing Foundation was established in March 2006 to improve the welfare of SME workers, small business
owners, and underprivileged families, and conducts social contribution activities in diverse areas every year.
In 2020 in particular, IBK led the support for workers at SMEs and the families of small business owners in areas of the country such
as Daegu and Gyeongbuk which experienced great difficulties due to the rapid spread of COVID-19.
The CEO, management, and the IBK affiliates participated in the preparation of resources for support against COVID-19 damages
through voluntary donations. It first supported students in COVID-19 affected areas with scholarships, followed by medical expenses
of underprivileged populations.

IBK Scholarship and Medical Expenses Projects

The IBK Scholarship Project is a representative social contribution activity of IBK wherein the school expenses of high school
and college students who have difficulties in learning due to their household situation are supported. In 2020, IBK supported
SME workers and 708 of their children who were experiencing economic difficulties due to COVID-19 with school expenses
amounting to KRW 1.6 billion. As of 2020, the company had provided KRW 15.2 billion to cover the school expenses of 8,859
persons since its foundation.
The IBK Medical Expenses Project is a project to support the families of SME workers suffering from severe rare or chronic
diseases with medical expenses. In 2020, KRW 1 billion was provided to 287 persons experiencing economic difficulties due to
high medical expenses. A total of KRW 12 billion in medical expenses has been paid for 2,769 persons as of 2020. IBK Hope Design Project
IBK has implemented its Hope Design Project to support small business owners with the design, manufacture,
IBK Mentoring Project and installation of store signs through talent donation. The project was initiated to support small business
Through the IBK Mentoring Project, college students receive scholarships from IBK and provide educational support for the owners who are weak in design and visual marketing with practical help for their businesses in addition to
children of underprivileged populations. It is a representative virtuous-cycle relay service program of the foundation. In 2020, monetary support in order to promote the continuous growth of local commercial areas.
contactless online learning-support mentoring was conducted due to the spread COVID-19, and KRW 100 million was provided The IBK Hope Design Project is aimed at mutual growth with enterprises and communities, the improvement
for 442 students. As of 2020, 6,892 students have participated in the program and received KRW 1.4 billion in total. of social value, and contributions to the activation of local commercial areas, and it will support small
business owners to ensure their continuous growth. IBK has supported 103 small business owners including
Seoul’s Yeomcheongyo Street and at the Gurye 5-Day Market since 2016. In 2020 in particular, IBK
supported merchants at the Jeonnam Gurye 5-Day Market and Daegu Daesindong Socks Alley, who were
suffering from the double difficulties of COVID-19 and floods, with signs and awning screens. IBK intends to
expand its support targets to youth/start-up enterprises, social enterprises, and other SMEs that require a leg
up to jumpstart their growth.
44 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 45

IBK Financial and Economic Education Regular Support for the Welfare Facilities of Local Communities
Support for Local
IBK supported 9,157 persons with financial and economic education worth KRW 1.7 billion until 2020 to IBK regularly supports community-based social welfare facilities centered around 21 local HQs in the country.
Communities
foster a proper consumption culture among children and youths and to narrow the gap in digital financial IBK supports welfare facilities for the elderly, children and living facilities for the disabled, etc., with up to
information among financially underprivileged populations such as the elderly and housewives. In 2020, IBK KRW 1 million a month based on recommendations by branch offices. In addition to simple support, IBK
produced and distributed contactless online education videos due to the impact of COVID-19. intends to construct and expand community networks by listening to the opinions of community residents,
conduct surveys at 250 supported facilities once a year, and occasionally collect opinions through the
Performance of IBK Happiness Sharing Foundation in 2020 (Unit : person, KRW 100 million) establishment of an online communication channel on the website.

Performance in 2020 Total performance

Name of project Number of Number of Remarks
Amount Amount Supported organization Amount of support
persons persons
(Unit : number) (Unit : KRW 1 million) 731
IBK Scholarship 708 16 8,859 152 First support for COVID-19 affected areas 258 258 729
244 663
IBK Medical
287 10 2,769 120 First support for COVID-19 affected areas
Expenses
IBK Daycare Conversion into COVID-19
63 7 139 18
Centers emergency childcare centers
IBK Mentoring 442 1 6,892 14 Contactless online mentoring lessons
IBK Financial 2018 2019 2020 2018 2019 2020
Distribution of COVID-19 contactless
and Economic - - 9,157 17
online videos
Education
Support for COVID-19 affected or
IBK Hope Design 176 5 - - Activation of the Internal Service Club
flood-damaged areas
※IBK Happiness Sharing Foundation received the Prime Minister’s Award in the 2020 Korean SME Conference IBK operates a service club support system at its bank to help the voluntary service activities of executives and
- Selected as an excellent group for its project to support SMEs and small business owners
employees and support communities to take root. Anybody from among the executives and employees of
IBK may organize a service club consisting of two or more persons, conduct service activities freely at social

IBK Smile Finance IBK established the IBK Smile Finance Foundation in December 2009 to respond to the government’s policy welfare facilities requiring help, and receive support for actual expenses. In addition, any social welfare facility
of helping ordinary persons who are experiencing economic difficulties make a new start and to support where voluntary service activities are conducted may be supported with donations of up to KRW 4 million a
Foundation
them in gaining practical independence. year. IBK intends to fulfill its social responsibility by supporting the voluntary service activities of its executives
IBK makes various efforts to help financially underprivileged populations find stability. These include start-ups and employees and by expanding its sharing culture in communities.
and consulting, credit control counseling, and employment opportunities, along with support in preparing
a foundation for economic independence to help them get back on their feet. As of 2020, IBK had the
most branches (19) in the domestic banking industry. It was also the first bank to surpass 20,000 loans, with Active clubs Active persons
(Unit : number) (Unit : number) 817 819
20,525 in total as of the end of 2020, achieved through aggressive support, including donations, every year. 61
53
The largest branches in the banking IBK will continuously try to support ordinary people in gaining practical independence by expanding its 45
sector - 19branches business through the construction of a countrywide network with additional branches and the development
The first 20,000 loans in the of diverse products. 188
banking sector (cumulative)

Locations of the Smile Finance Foundation 2018 2019 2020 2018 2019 2020
*The number of volunteers rapidly dropped due to the
COVID-19 spread.

Seven locations in Seoul Emergency Support for Disaster Areas

(Gangseo, Gwanak, Gwa ngjin, One location in Gangreung
IBK implements emergency support projects for areas requiring national-level help due to disasters. IBK
Guro, Dongdaemu n. Yangcheon,
and Eunpy eong) supplies underprivileged populations and elderly persons living alone with free food by organizing “Very
Four locations in Gyeonggi good food trucks of love,” which have operated in 30 areas around the country since 2012, and supports
(Goyang, Bucheon, Siheung,
Two locations in Daegu
citizens with free food by deploying trucks to the sites of national disasters. IBK had supplied about 2,250,000
and Euijeongbu)
(Daegu Dalseo and Daegu persons with free food (more than 8,700 times) as of the end of 2020.
One location in Daejeon
Seogu) In August 2020, IBK organized a voluntary service club for executives and employees’ to help victims of
One location in Yangsan
heavy rains in the rainy season and carried out service activities with its food trucks in Yeongdong-gun,
One location in Iksan
One location in Busan Chungcheongbuk-do. IBK supplied damage restoration volunteers with free food and victims with packed
meals. Moreover, IBK supplied vulnerable groups suffering from COVID-19 with food boxes. In addition,
One location in Yeosu
IBK supplied severely damaged areas such as Hapcheon, Asan, and Gurye, etc., with free food in relay type
and gave a KRW 100 million bank donation and KRW 100 million collected voluntarily from executives and
employees to the Disaster Relief Association.
46 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 47

Contactless Online Economic Education

Financial Consumer
IBK has improved the accessibility and convenience of financial consumers by creating new online finance
스포츠단 운영
SPECIAL REPORT
IBK has continued activities to communicate with various stakeholders and realize social value
Support Activities
education content for each age group of youths and posting it on YouTube with a URL shortcut. IBK
Operation of through sports. We have run the IBK Altos women's professional volleyball team and IBK shooting
continuously tries to support financially underprivileged populations by providing and implementing various team to lead the revival of sports that had relatively little social interest. We have also sponsored
kinds of educational curriculums, with topics such as smart pocket money management, proper saving Sport
IBK 알토스 Teams
여자배구단 various sports such as women's soccer, Ssireum, biathlon, and hockey for a long time and recently
habits, and various jobs in the financial industry, and video (ZOOM) finance & economics education (one- held a women's Go tournament with the largest prize money in Korea. To nurture promising
company-one-school) for educational institutions and students who have difficulty in accessing education youngsters who dream of becoming the second Yuna Kim and Taehwan Park, we have supported
due to COVID-19. the expansion of the unpopular sport base by providing various kinds of support.

Status of education implemented

The IBK Altos Women’s Volleyball Team has made large contributions to the development and success of
IBK Altos Women’s women’s volleyball. The team made it into the championships six consecutive times, the first team to do so
Times (Unit : times)
Volleyball Team in the history of women’s professional volleyball in Korea, and came second place in the 17/18 seasons. In
Elementary school 53 Total particular, through the “Spike of Love” program, which accumulates donations based on the points scored

Middle school 46 161 in games won, the team has provided about 600 million won to 160 organizations, including social welfare
facilities, over nine years and created synergy with local social contribution projects.
times
High school 78 In 2020, the team practiced diverse contactless sports events to activate sports in the stagnant social
atmosphere caused by the COVID-19 pandemic. As representative cases, the team helped its fans enjoy the
field even in no-audience games by practicing cheering events with an online opening ceremony, online fan
Person (Unit : persons)
meetings, and Zoom Live.

Elementary school 915 Total

Middle school 1,609 5,724

persons
High school 3,200

Contactless Service Activities with Youth Customers of IBK

IBK has carried out joint contactless service activities with Holt Children's Services, Inc., for youth customers.
IBK supplied youths with book cover DIY kits and donated book covers completed at home to children in
vulnerable groups, with 300 persons participating in such activities in 2020.

The IBK Shooting Team won a gold medal at the 2014 Asian Games and the bronze medal at the New Delhi
Operation of a Companion Desk IBK Shooting Team
World Cup Shooting Championship 2019 by maximizing organizational and personal capabilities based on
The companion desk is an exclusive financial services desk that prioritizes financially vulnerable classes such as
excellent teamwork. The team has developed its skills through participation in various domestic and foreign
the elderly, disabled, pregnant women, etc., over number tickets to supply them with improved convenience
competitions for the 2021 Tokyo Olympics, and four players were selected as members of the national team.
in financial transactions. Since the adoption of companion desks in 2017, IBK has tried to ensure convenient
financial transactions for financially vulnerable populations by expanding them to all branch offices in 2020.

Regular Support Event with the Korea Childhood

Leukemia Foundation
IBK has joined regular support events in cooperation with the Korea
Childhood Leukemia Foundation to fulfill its social responsibility. IBK
has garnered interest in social contributions by giving gift cards to the
first 1,000 customers who registered with the foundation for regular
support after opening accounts at IBK and introduced the event
through various PR channels (IBK website, Facebook, applications,
website of the foundation, etc.).
48 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 49

Inclusive Loans Loan for Workers' Livelihood Stabilization Fund

Increase (amount) by 2.25 times The Loan for Workers' Livelihood Stabilization Fund has been provided in 343,369 cases, equivalent to KRW 1,728.2
compared to that of the previous year billion, as of 2020 since its launch in 2008 to support low-income workers based on an exclusive contract with the

Supplied KRW 308.5 billion in Korea Workers' Compensation & Welfare Service. In 2020, 48,863 cases of loans worth KRW 308.5 billion were
IBK was selected as an excellent inclusive loan institution by external agencies three times in 2020, with its recorded, representing a 2.25-fold increase (based on the amount) compared to the previous year.
Awards and achievements (2020)
contribution to the expansion of inclusive loans and practice of comprehensive finance recognized. IBK
48,863 cases In particular, as most specialized workers in blind spots, such as parcel service workers and workbook teachers,
Grand Prize awarded by the Korea Finance
Industry provided inclusive loans worth KRW 747.1 billion in 2020, an increase of 56% compared to the previous have not subscribed to occupational health and safety insurance, they had difficulty accessing the benefits
「Presidential Award of the Korea Inclusive
year, and it will fulfill its social responsibility by expanding support for inclusive loan products. of the Loan for Workers' Livelihood Stabilization Fund in the past. With support expanded since December
Finance Agency」 (Jan. 30)
Grand Prize of the Ninth Inclusive Finance 2020, however, specialized workers with no occupational health and safety insurance may also get loans
「Ministry of Economy and Finance Award」
(4,258 cases equivalent to KRW 33.4 billion as of March 2021). IBK participates actively in the government’s
(Feb. 20)
Best Banker in Korea construction of an employment and social safety network, and started supporting workers with infant children
「Best Inclusive Finance Award」 (March 19)
with child rearing expenses in January 2021 (1,481 cases equivalent to KRW 7.3 billion as of March 2021).

Inclusive Loan Products New Hope Loan

In the case of the New Hope Loan, IBK’s representative Inclusive loans product, KRW 303.3 billion was supplied
in 2020, ranking second in actual delay rate (3.81%) and third in goal achievement level (112.3%) among major
commercial banks(*) and indicating that IBK actively supports and sincerely manages the integrity of the financially
vulnerable class. * KB Kookmin, Shinhan, NH, Hana, and Woori

i-ONE Sunshine Youth Loan

The i-ONE Sunshine Youth Loan is a contactless product designed to support youths such as job seekers,
Debt Relief and Advanced Notice System for Persons Worried About Overdue Payments
social novices, etc., with a low-interest, social stability fund to help them concentrate on job-seeking
Advanced Notice of IBK has tried to prevent the occurrence of overdue payments through the implementation of an advanced
activities. Three banks, including IBK, were selected to handle these loans, and IBK supplied customers with
Overdue Payments notice system for persons worried about overdue payments at the end of December 2020. In order to
19,410 loans equivalent to KRW 74.3 billion as of year-end since the launch in January 2020.
introduce the debt relief system it operates, which includes the postponement of principal repayments and
free loan workout, etc., IBK sends DMs in advance to potential bad debtors (2,407 DMs sent as of 2020).
Lump-Sum Deposit Guarantee
This is a guarantee product for deposit money. If the money is not returned after the termination of a rental
Special Program for the Debt Relief of Debtors Overdue by Small Amounts
contract, the Korea Housing Finance Corporation makes a proxy payment to the lessee. IBK has supplied
IBK has prepared a special debt relief program to support the recovery of debtors who are overdue by small
lessees with KRW 19.6 billion as of year-end since the launch in July 2020.
amounts and are experiencing economic difficulties due to the spread of COVID-19. IBK has tried to ease the
burden of debt through a temporary expansion of debt relief for 148 such debtors with debts not exceeding
IBK Partial Installment Lump-Sum Deposit Loan KRW 10 million.
This is a product designed to support the preparation of large sums at loan maturity through a method of
installment payments for lump-sum deposit loans. KRW 1 billion has been supplied since the launch of the
Burning of Expired Receivables
product in October 2020.
IBK practices comprehensive finance by declining to suspend expiry periods for receivables which have no
practical likelihood of collection and by rapidly burns expired receivables.
i-ONE SME Worker Priority Credit Loan
The i-ONE SME Worker Priority Credit Loan is a contactless product designed to support SME workers with
Scale of burn of expired receivables
small, low-interest loans. Workers may quickly and conveniently get loans within five minutes, regardless of
their yearly income or service period. IBK has contributed to the social security of SME workers by supplying Number of borrowers (Unit : Cases) Amount (Unit : KRW 100 million)
them with 1,907 loans worth KRW 14.4 billion as of year-end since the launch on December 17, 2020. Household loans Enterprise loans Total

Supply Performance of New Inclusive Loan Products in 2020 2018

1,520
2018
111
5,165 4,092
3,645 3,981
Product name Cases Amount (KRW 100 million)
1539 143
i-ONE Sunshine Youth Loan 19,410 743 2019 5,452 2019 4,508
3,913 4,365
Lump-Sum Deposit Guarantee 124 196
1,446 170
Partial Installment Lump-Sum Deposit Loan 8 10 2020 5,545 2020 5,333
4,099 5,163
i-ONE SME Worker Priority Credit Loan 1,907 144
Burn : The action of deleting overdue records, etc., of receivables due to expiration and waiving the receivables
50 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 51

Protection of Financial Consumers Construction of an Active

With the popularization of smartphones, the illegal use of communication services such as fake phones,
malware applications, etc., has increased, and so has a new type of financial fraud, voice phishing. Therefore,
Response System to Voice
IBK is providing a notification service to prevent financial fraud where customers are informed of the risk
Phishing
of voice phishing when remitting funds to someone's account for the first time, and has implemented a
strengthened process to confirm the purposes of financial transactions when opening an account. In addition,
IBK established its Financial Consumer Protection Charter to conduct all management activities from the
viewpoint of financial consumers, and is seeking to enhance its financial consumer protection culture with IBK is constructing an active response system with an AI-based monitoring to prevent financial fraud from
the construction of a financial consumer protection system for all sales procedures, from selection of products becoming more advanced and making financial fraud expectation models more precise. As a result of such
to follow-up management. In addition, IBK has constructed an advanced system to prevent financial fraud 1,114 cases of potential damage efforts, 1,114 cases of potential damage were prevented in 2020, and 63 branch offices received letters of
were prevented in 2020, and
and financial accidents for the safe financial transactions of customers, and is making every effort to supply appreciation and award certificates in relation to the prevention of telecommunications financial fraud.
customers with various services, such as the operation of exclusive desks for the financially vulnerable class 63 branch offices received letters
of appreciation and award certificates
who have difficulty in financial transactions. Remittance
in relation to the prevention of
blocking
telecommunications financial fraud.
Operation of an Exclusive IBK operates an exclusive organization to protect financial consumers and create a safe financial environment
AI monitoring system
Organization to Protect for consumers. The person in charge of financial consumer protection under the CEO manages and
Financial Consumers supervises the stepwise consumer protection system in all processes, from the selection and sale of financial
products to follow-up management, and also works to relieve the inconveniences of consumers. Moreover,
Victim Voice phishing response organization
the Financial Consumer Protection Council holds discussions on the establishment of a strategic direction
and master plan to protect financial consumers, identification of matters to be improved, and development
of products from the viewpoint of consumers. In response to complaints received through the customer
service center and various consumer access channels, IBK is enhancing reliability for financial consumers by Construction of Suspicious IBK actively blocks the creation of fake bank accounts through a strengthened process of confirming the
reinforcing its systems, such as by restructuring the civil complaint system in line with complex and diversified Corporation Verification purposes of financial transactions. In order to prevent the opening of fake bank accounts, IBK has established
changes in the field. Process to Prevent the Opening the first verification process for suspicious corporations in the industry. This involves conducting surveys on the
Financial consumers of Fake Bank Accounts status of business places in order to confirm they are proper businesses through on-site visits in addition to
document checks when new accounts are opened. Moreover, in order to eradicate fake bank accounts, any
person found to have committed telecommunications financial fraud is prohibited from opening an account
Departments in HQ/
Branches Internet, Mobile for three years, and education and PR activities are conducted through various channels in order to improve
IBK Customer Center
the alertness of customers and employees when it comes to fake bank accounts and financial fraud. As a
result of such efforts, cases of fake bank accounts were reduced from 5,464 in 2019 to 3,706 in 2020, with
Financial Consumer Protection/
Support Department the amount of damages reduced as well from KRW 48,378 million in 2019 to KRW 23,475 million in 2020.

Chief Consumer Officer

Financial Consumer Strengthening of the Complaints IBK operates a complaint handling process that covers the receipt of complaints, classification and registration
Protection Council
Chairman & CEO
Handling Process and Construction of complaints, confirmation of facts, and handling and reply procedures. In addition, IBK conducts preventive
of a Financial Consumers’ Rights activities through an analysis of the causes of occurrence and trains for employees after the termination of a
Protection System complaint. The suggestions and complaints of financial consumers are reflected when improving the system,
New Organization IBK is responding actively to financial fraud with the establishment of an exclusive organization for voice and some content is used for the improvement of products and services through an internal review process.
of Financial Fraud phishing prevention tasks that had previously been performed by the Complaints Team. For rapid and Moreover, IBK improved functionality by upgrading the complaint management system and constructed an
Response Team accurate restoration for damages resulting from telecommunications financial fraud, IBK is making efforts advanced system with the application of RPA (Robotic Process Automation) technology to complaint work, a
to protect the valuable assets of financial consumers. It constructed a one-stop support system after the first in the domestic banking industry.
Financial Consumer Support Department absorbed a range of tasks which had been performed by other
departments, from registration of payment suspension to refunding damages.
IBK is strengthening the field-oriented complaint support system it constructed for the prevention and
rapid handling of complaints. IBK changed the person responsible for receiving and reviewing complaints
Financial Consumer IBK became the first public financial institution to acquire CCM (Consumer
from worker level to subsidiary/branch manager level in order to increase the interest of employees in
Concentrated Management Concentrated Management) certification from the Fair Trade Commission in
2017 and succeeded in re-certification with re-acceptance of its excellence. complaints and strengthened the responsibility of subsidiaries and branches for complaints attributable to
Certification System
“CCM Certification” is a domestic certification system that evaluates and them. Likewise, IBK has supplied all employees with contactless complaint prevention training to cope with
certifies that all configuration and sustainability improvement activities the COVID-19 environment. In addition, IBK continues to improve its system and inadequate matters found
of management are performed from the viewpoint of consumers. It has in the complaints handling process and prevents the occurrence of complaints with the establishment of
allowed IBK to show its will to practice CCM and strengthen interest in “Complaints prevention 119” for employees in the business field to report improvements to work processes.
CCM among employees.
IBK is making every effort to supply customers with the specific experiences, 1st Warning 2nd Warning 3rd Warning 4th Warning 5th Warning
products, and services they want as well as all the information they require (Ready) (Attention) (Caution) (Monitoring) (Serious)
with the establishment of its Financial Consumer Protection Charter
Internal complaint Internal complaint Internal complaint Internal complaint Complaint prevention
containing the values of activities of IBK financial group. prevention education at prevention education at prevention education at prevention education education at the HQ for
the local HQ the local HQ for relevant the local HQ for relevant at the HQ for relevant all employees of branch
team managers branch managers branch managers offices where complaints
were raised
52 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 53

Strengthened Financial Fraud Prevention Services Customer Satisfaction and Experience

IBK operates the various safety systems it has constructed to grow into a bank that prevents financial fraud IBK ranked third in the 2020 KSQI (Korean Service Quality Index) Customer
Achievement of
and enjoys the trust of customers for safe transactions. Contact Point area managed by the Korea Management Association
Top-Level Service Quality
Consulting. The KSQI is an index that expresses the level of service quality
Flow of prior discussion Prior Consultation System for the Development and Sale of Financial Products experienced by customers, and service quality is evaluated every year. With
IBK holds prior consultation with the Financial Consumer Protection Department starting from the IBK ranking third out of eight banks, external credibility could be improved.
Application for prior discussion development stage for financial products and establishes marketing policies to prevent consumer complaints
and improve consumers’ rights. In relation to matters disadvantageous to consumers, the Financial Consumer Operation of a Customer VOC(Voice of Customer)
Screening Protection Department seeks solutions through discussions on work supplementation and improvement Satisfaction Improvement IBK receives customers’ opinions through various channels, such as the website, i-ONE Bank, IBK Customer
plans after reviewing related data. Program Center, Customers Postcards, etc., and reflects them in its management activities. IBK gives customers
In addition, it tries to protect consumers’ rights by taking measures such as abolishing or suspending the
Implementation of product feedback on compliments, complaints, and suggestions and uses the results of big data analysis as basic data
sales marketing execution of documents, supplementing the documents, or submitting improvement plans, etc., if prior
for CS activities. In addition, IBK has a service improvement processes based on VOC. IBK selects projects to
consultations are not arranged through regular monitoring. In 2020, prior consultation on the development
be implemented to improve CS based on customer complaints, operates “CS themes” with the participation
Monitoring and sale of financial products was arranged for 570 cases and matters disadvantageous to consumers were
of all employees, and reflects the results in the management evaluations of branch offices.
solved in 18 cases. Monitoring was performed for 492 cases.

Analysis of Dissemination of Implementation of Application of

Strengthening Contactless Security Policy for Resale Phones monthly VOC complaints and selection activities by all employees branch management
As there has been an increasing number of incidents involving resale phones being damaged after complaints of practical actions for every month assessment results
CS improvement
customers’ information has been stolen through the use of COVID-19 loans or disaster support as bait, IBK
has strengthened its contactless security policy for resale phones to automatically block transactions in the
case of i-ONE Bank transactions using different resale phones in order to prevent damages from electronic
Survey of Customer Satisfaction Level
financial accidents. Cases of telecommunications financial accidents have also been reduced through
IBK conducts a survey of its customer satisfaction level every year and uses the results in the diagnosis
financial consumer protection activities such as posting information about major electronic financial fraud
of its service level and education for the improvement of CS. Various auxiliary indicators, such as a
skills and education on the website and sending an e-mail every month.
recommendation indicator, bank preference survey, etc., are used for the multilateral analysis of the customer
satisfaction level, which stood at 91.1 in 2020. IBK undergoes the Customers Satisfaction Level Survey for
Cases of indemnification due to electronic financial accidents (Unit : cases) Public Agencies managed by the Ministry of Strategy and Finance every year in addition to an internal survey
23 and reflects the results in the agency’s management evaluation.

Field-Oriented CS IBK makes many efforts to improve the CS capabilities of the executives and employees of its subsidiaries
5 Education And Consulting and branch offices through field-oriented CS education and consulting. IBK has expanded contactless CS
1 0 0 video education to respond to the COVID-19 situation, provided countrywide “Business office CS leader”
education to strengthen the CS activities of branch offices, and 563 executives and employees of branch
2016 2017 2018 2019 2020 offices completed training four times in 2020.
In addition, IBK provided the “Warm CS companion” education for the protection of the financially vulnerable
Prior Confirmation to Prevent Voice Phishing class, and was able to improve the response capabilities of 592 employees regarding the financially vulnerable

IBK has established a procedure for prior confirmation to prevent voice phishing that customers must go class. Besides, IBK has tried to expand its customer-oriented culture by organizing CS education broadcasts to

through in cases of new contactless loans. If a fraudulent loan is suspected as a result of a customer’s self- introduce various services for protecting the financially vulnerable class as well as excellent cases.
check, the loan request procedure is terminated, and a convenient report function is run the next time
CS consulting for 1:1 customized, intensive consulting through on-site visits to individual branch offices and HQs and
the loan request screen is accessed which automatically contacts related agencies such as the Financial branch offices and HQ contactless videos (44 times, 690 persons)
Supervisory Service, National Police Agency, etc. CS education for Education on customer satisfaction skills tailored to each enterprise and business manners for
transaction enterprises transactions with SMEs
Production and broadcasting of CS education for all branch offices and HQ (48 pieces)
Customer Confirmation to Prevent Fraudulent Remittance CS video education Supplying subsidiary/branch managers or higher-level employees with video content related to
service leadership (6 times per year)
As fraudulent remittances are occurring frequently due to e-mail hacking in foreign-currency transactions, IBK
Education on improving the basic mindset for responding to customers and methods of responding to
operates a system to protect financial consumers and prevent fraudulent remittances. If the country of the Basic CS education course
each complaint case (Training of new bank clerks, youth interns)
remittee and the country of the beneficiary bank are different, or the account number of the remittee is different In-depth CS
‘Mind-up’ education to improve leadership and communication skills at each position
(CS leader education, education about the CS mindset of the HQ and local HQs,
from the previous remittance information (past five years), the transaction can only be made after the customer education course
training for promoted persons, and pre-CEO education)
signs the “Customer check to prevent fraud remittance” in person; in the case of a first remittance to a receiving CS education to protect the Education on internal/external regulations and response skills in relation to financial consumer protection
financially vulnerable class (3 times, 592 persons)
account with no history of remittance from IBK, a guide to prevent fraudulent remittances is provided.
54 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 55

Innovative Growth

IBK is pursuing innovative management through digital transformation to become a world-class INTERVIEW
Interviews with
financial group with global competitiveness. Furthermore, it is leading the promotion of and support
Companies that Participate We have successfully completed attracting investment through direct investment
for competitive companies by operating its startup promotion platform, IBK Changgong, and its
in IBK Changgong from IBK and connections with various investors, and networking between
innovation testbed, IBK 1st Lab. Moreover, IBK supports a relationship of mutual growth with small- companies and support for marketing programs have been the cornerstone of
and medium-sized enterprises and sustainable growth through innovation management that responds our business area expansion.
to various financial demands, such as supplying risk capital and fostering the cultural contents industry, Gomi Corporation Co., Ltd., is a global e-commerce platform wherein marketing
further increasing the competitiveness of the bank. strategy and ad technology are combined. It runs its own online platform which
has been localized to nations such as Vietnam, Thailand, and Chile.

IBK Changgong IBK Changgong is IBK's representative startup nurturing platform. It provides a total financial service for
IBK Changgong supports the growth of innovative startups in Gomi Corporation Co., Ltd.
SMEs based on internally accumulated financial know-how and consulting competency. In particular, it Fifth-round graduate of IBK
connection with the customized investment. Changgong Mapo
supports the discovery, nurturing, and growth of startups in connection with investments/loans, consulting,
IBK Changgong, the
and education/mentoring. It is creating a virtuous circle by efficiently connecting startup entrepreneurs with
Representative Nurturing
major stakeholders in the startup ecosystem.
Platform for Startups and INTERVIEW
Venture Companies
The systematic education program and consulting have been a steppingstone for
our company to take a step forward, leading to successful large-scale
investments that have given us the wings to grow.
OurBox Co., Ltd., provides an on-demand fulfillment service that supplies
customized logistics services to e-commerce businesses using its own platform.

IBK Changgong supports the successful leap forward of companies

OurBox Co., Ltd.
Third-round graduate of IBK with its SME financial know-how accumulated over 60 years.
Changgong Guro

INTERVIEW
Performance of External
Support for Startups
The customized consulting and investment support for marketing, human resources,
IBK has been setting aside KRW 20 trillion
every year as its five-year funding supply and labor from IBK Changgong have been the moonlight that lights a country road
goal starting in 2017 and supports startups Actual CEO who used the Changgong program appear in an ad portraying on a pitch-dark night.
to find solutions to funding shortages. “innovative finance” along with the growth and success of the customers.
Supply goal Lillycover Co., Ltd., is a beauty technology startup that diagnosis customers’ skin based on
Supply performance (Unit : KRW 100M) big data and proposes skin regeneration solutions by providing customized cosmetics.
Goal achievement rate (Unit : %)

200,000 IBK Changgong encourages the growth of startups and venture businesses through various kinds of IBK Changgong supports the innovative growth of companies through Lillycover Co., Ltd.
2017 101.9
203,879 infrastructure support for nurturing as well as financial and non-financial support. As of the end of 2020, customized consulting on the overall management of SMEs. Fourth-round graduate of
IBK Changgong Busan
200,000 it nurtured and supported a total of 243 companies, leading financial support through approximately KRW
2018 123.2
246,360 130 billion in investments and KRW 56.7 billion of loans. In addition, it conducted mentoring, consulting and

200,000 IR (investor relations) activities 3,192 times to support the competitiveness of startups.
2019 119.6 The Daejeon Center, the fourth branch of IBK Changgong,
239,247
is expected to open in the second half of 2021. IBK
The results of IBK’s support for innovative companies can be seen in the history of external awards received
224,000* Changgong Daejeon is located in Daeduk Innopolis, a
2020 127.4 by participating companies. Breathings Co., Ltd. is a fourth-round graduate of IBK Changgong Mapo. The
285,317 research and development district of Daejeon where
company’s “Lung health meter” was awarded the 2021 Innovation Award and Ministerial Award at the universities such as KAIST (Korea Advanced Institute
2021 200,000
World IT Show (WIS). Kitronyx, Inc., is a third-round graduate of IBK Changgong Mapo. It won the 2020 of Science and Technology) and Chungnam National
* IBK raised its funding supply goal by KRW Best Contents Award at the KES (Korea Electronics Show) for its “Pressure distribution measurement system.” University are located alongside a dense population
22.4 trillion for a limited time in 2020 In addition, the CEOs of Artisan & Ocean Co., Ltd., a second-round graduate of IBK Changgong Mapo, and of government-funded research centers. Thus, it is
in accordance with the government's
investment in IBK Foodpang Co., Ltd., a first-round graduate of IBK Changgong Busan, were selected as Asia’s 300 leaders expected to promote the regional economic actively and
under age 30 by Forbes. support the growth of promising innovative startups.
56 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 57

IBK 1st Lab

Tanker Co., Ltd. | First-round graduate of IBK 1st Lab

IBK opened the IBK 1st Lab, a collaborative space with fintech companies, in the IBK Finance Tower in
IBK 1st Lab, a Testbed for Interview with Companies
September 2019. In IBK 1st Lab, new services are developed to improve customer convenience, with the
Innovative Ideas Using an Participating in IBK 1st Lab Tanker Co., Ltd., is a company that processes various information necessary for
participation of many related departments based on digital innovation technology and the ideas of fintech
real estate finance review using artificial intelligence (AI).
Open Innovation Strategy companies, and measures to improve existing work processes efficiently are studied.
The acceptance of new real estate information technology was viewed negatively
in the existing financial industry. However, we are pleased to see innovation taking
place in line with the changing times, thanks to the big decision by IBK.

Tanker Co., Ltd.

CEO Hyun Seo Im

Infosonic, Inc. | First-round graduate of IBK 1st Lab

IBK 1st Lab floor plan Lab and conference room Rest area

Infosonic, Inc., is a company offering a data transmission technology using

inaudible sound called ‘Sonic Code.’
The first-round operation results of IBK 1st Lab for 2020 showed that tests were conducted with 17 companies
Since the ‘Sonic Code’ solution was applied to IBK services, various
based on real banking data, out of which two innovative services were successfully adopted at the bank.
collaborations have been discussed with major financial companies in Korea
and many overseas technology supply contracts have been signed, providing
a big boost to the company’s growth.
Status of commercialization of the IBK 1st Lab first batch Infosonic, Inc.
CEO Hoon-Tack Cho

AI real estate automatic valuation system (Tanker Co., Ltd., Sep. 2020)
- AI analyzes real estate book issuance, government, and IBK regulations simply by entering property addresses
to calculate the borrowing capacity of real estate mortgage loan, within three minutes (used to take more than
Selection of IBK 1st Lab Second-Round Candidates
one hour).
IBK is advertising IBK 1st Lab actively through its website and the channels of external institutions and
Digital identification service (Infosonic, Inc., Nov. 2020) member companies, and regularly recruiting participating companies once a year. In addition, IBK makes an
- Customer identification can be verified with smart bank authentication (i-ONE bank), without needing to
effort to frequently discover and select companies possessing innovative technology and ideas and which can
submit an ID at the branch window, through the connection between the teller’s Tablet PC and the customer's
smartphone via inaudible sound transmission technology. collaborate with the bank.
* Named “Innovative Financial Service” by the Financial Services Commission in Feb. 2020 In January 2021, IBK selected nine companies for the second round of IBK 1st Lab, and it is now looking
for ways to achieve a digital transformation of key work processes and automate work processes using new
digital technologies as well as how to create synergy with subsidiaries .

IBK has adopted and commercialized innovative technology and ideas in the real world, while fintech
SME finance Customer experience
companies have landed additional contracts and attracted investment, thus creating a virtuous cycle for
mutual growth.
Providing innovative financial Fintech is used to strengthen
services, such as introduction of contact points with customers
Successful Investment Attraction and Contracts by Companies that alternative credit evaluation
Completed the Commercialization of IBK 1st Lab

Company Name Production Type Content 「IBK 1st Lab」 On demand selection
Regular (Fintech companies
Total of KRW 1.55 billion Focusing innovation area
Investment attraction selection searched at all times)
(including KRW 1 billion from Mirae Asset Venture Investment, etc.) in the second batch
Tanker Co., Ltd.
Total of seven contracts
Landing a contract
(including the supply of a real estate valuation system to bank A, etc.)
Creation of digital synergy
Total of four contracts (including the supply of technology for sound
Landing a contract Digital innovation technology with subsidiaries of the IBK
wave communication to the Indonesian Tax Authority, etc.)
Infosonic, Inc. introduced in all areas of banking Financial Group
Total of eight cases (including the addition of a function for sound wave
Selection of collaboration
certification in the ATMs of bank B, etc.)
Innovative technology Subsidiaries
58 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 59

Supply of Risk Capital Digital IBK

Risk capital refers to venture capital supplied in return for shares of unlisted companies in the early, growing, DT (digital transformation) has been accelerated to create new value and rapidly change the world via digital
Supply of Risk Capital to
or mature stage, and PE (private equity) capital for the restructuring of companies through business takeover. technology. IBK is driving DT to provide innovative services to diverse stakeholders by upgrading its internal
Promote Technology-Based
IBK is investing with a focus on the promotion of technology-based companies that have not matured in the processes and decision-making systems based on much customer data accumulated over the past 60 years.
SMEs
(Unit : KRW 100 million) market, and is using its strengths, such as technical information owned by IBK, its infrastructure, financial Please follow IBK’s shift to Digital – First IBK for maximizing the customer experience value.
+26.8% support, and know-how, to support SMEs. IBK is investing in companies that own outstanding technologies,
3,307 particularly SMEs that operate in future innovative growth industries such as state-of-the-art manufacturing,
2,608
energy, and knowledge services.
1,855 1,795 1,783
It will supply KRW 1.5 trillion worth of risk capital over three years to become a key player in risk capital, and Innovation of Chatbot Service for Work-Related Inquiries From Employees
has already achieved its first-year supply goal of KRW 330.7 billion in risk capital in 2020. This was a record- Internal Processes In February 2020, IBK launched its Talk Chief chatbot service for work-related inquiries from employees using
breaking amount, representing a 26.8% increase compared to the previous year. AI. The chatbot is a service that automatically provides answers to work-related inquiries through AI that
2016 2017 2018 2019 2020 can understand the inquiries. By using the chatbot, headquarters can focus on responses to complex case
inquiries rather than simple and repetitive questions, and branches can shorten their problem-solving time to
allow employees to focus on their consultation and marketing work.
The Talk Chief chatbot for employees, which previously provided answers to 2,500 questions in two areas
What is the “Talk Chief” business
Support for the cultural contents industry counseling chatbot? (IT consultation and credit cards), is now providing answers to more than 4,000 questions in nine areas after
This chatbot service understands work- steadily learning new content; currently, it can answer 1,100 inquiries from employees a day on average. In
related inquiries from employees and
particular, the most popular service is the automatic sending service for documents required by customers,
IBK is leading the fostering of the cultural contents industry to realize social value and secure new growth provides answers automatically.
Enhancing the Promotion of * Employees ask questions conveniently; which guides customers in preparing required documents easily and conveniently when interacting with
engines through the promotion of culture and art in Korea. It operates a department in charge of cultural
the Cultural Contents Industry as the counseling scope is extended a bank clerk. Furthermore, this chatbot for work-related inquiries from employees will provide the services
content finance, the only one in the banking financial sector, and it supplied KRW 1.2 trillion worth of loans and accuracy is improved, the rank is
promoted. required by employees and raise the work efficiency.
and investment for cultural contents in 2020, playing the leading role in policy finance. Personification is applied to reflect the
IBK has signed a business contract with the Korea Credit Guarantee Fund and Korea Creative Content promotion (Talk Cheif → Talk Assistant
Current Status of Financial Manager → Talk Manager) AI Automatic Real-Estate Valuation System
Support for Cultural Contents Agency to support and promote the innovative growth of K-Contents for the financial promotion of cultural
in the Previous Three Years contents and supported companies to enter overseas markets and produce non-face-to-face and new The AI automatic real estate valuation system can automatically calculate the borrowable amount for real-

(Unit : KRW 100 million) technology fusion contents. Additionally, it proactively promoted a secondary compensation project initiated estate mortgages within three minutes via AI with only the address. It has significantly contributed to the

by the Ministry of Culture, Sports and Tourism to meet the government's policy for nurturing the cultural simplification of the work process of collateral examination, which takes a lot of time, and it has been used
Loans Investments Total
contents industry. in 1,412 cases as of the end of the year since its launch in September 2020.
6,024 IBK has steadily invested in movies and dramas to support the cultural contents industry, which experienced
2018 6,284
260
difficulties due to COVID-19 in 2020. In particular, Deliver Us From Evil and Pawn, which IBK invested in Consulting procedure for real estate mortgage loan
7,007 uncertainty regarding cinema opening, both exceeded the BEP (break-even point), and the drama World of
2019 7,339
332 the Married, the first work of the JTBC drama lineup investment project attempted by IBK and a first for the Required Examination Inquiry of Inquiry
Borrowing
documents of whether Market collateral about loan-
banking and financial sector, achieved the highest viewing rate of all mini-series dramas aired in 2020. Current Manual collateral is price check recognition to-value
capacity manually
11,932 calculated
issuance accepted rate ratio
2020 12,153 In the future, IBK plans to pursue cooperation and promote related investments in discovering excellent
221
content after driving business contracts with major film investment and distribution companies to activate
Automatic
the production of video content, which stagnated due to COVID-19. Furthermore, IBK will play a leading role After AI Address calculation
「AI real estate automatic valuation system」 (3 min.)
system entered of borrowing
in the promotion of the cultural contents industry by helping local video content producers secure intellectual capacity
property rights and driving investment in commercialization support in response to the market expansion of
global OTT (over-the-top) media services.
Development of a Financial Fraud Detection Model
To cope systematically with the increasing number of cases of financial fraud, IBK has developed an AI model
to analyze the big data of 17 million financial transactions with individual customers and detect financial
fraud. This model was applied to the existing monitoring system, and the suspected fraud detection rate
increased by 10.5%p.

Detection rate for

suspected financial fraud | 51.2% (2019, before the
model application)
→ 61.7% (after the model application)
Deliver Us From Evil Pawn The World of the Married
60 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 61

Digital Identification Service INTERVIEW

Individual Customers Foreign Customers
At IBK’s branch offices, identification of customers and banking transactions can be performed using smart
“It is very difficult to visit a bank during working hours because it feels
banking (i-ONE bank) and the previously registered ID card images, without customer's IDs.
awkward.” “There is no place to ask questions during the immigration
When transactions based on real name verification are needed according to the Act on Real Name Financial
process at the airport.” “It is too difficult to install the banking app even if it
Transactions, an ID check must be done. However, real name verification can now be done without IDs at
has all the best functions.” “Please provide essential daily living information,
branch offices thanks to the Special Act on Financial Innovation Support (Feb. 19, 2020). From the launch of
instead of tourist attraction information.”
the service on Nov. 16, 2020 until March 31, 2021, its cumulative use stood at 2,450 cases, which has raised Excerpt from interviews with
convenience and safety for customers and employees at branch offices in the COVID-19 era. foreign customers

④ Check authenticity i-ONE Bank (Global) Re-Development of i-ONE Bank Global Application
and identification IBK has re-developed its smart banking platform for foreigners only to support convenient digital finance
Employee PC
for the increasing number of foreign workers in Korea by improving the existing platform’s inconveniences.
③ Tr
ansm Major improvements included the expansion of multilingual services to 15 languages and the enhancement
itting
custo of specialized services for foreigners such as AI remittance and One Wallet. Also added was a “non-face-to-
① mer
infor
Authentication matio face documentation” feature in which customers can sign up for a new account or electronic financing with
n
request
a simple identification check at a branch office after entering the required information in advance.

Tablet
PC ① Sending authentication request
Version Original Improved
② Mobile phone authentication
Launch date Oct. 2013 Dec. 2020
Branch window Customer
Certificate Accredited certificate Mobile certificate (six-digit password)

Supported languages 4 languages 15 languages

Remittance method SWIFT remittance AI overseas remittances (SWIFT, W/U, I-VARO, etc.)

Specialized services - One Wallet, Anytime Together, communication channels, etc.

FAST Document Submission Service
Using IBK’s FAST document submission service, customers can easily and quickly submit the documents required
for household loan assessments in a non-face-to-face manner through scraping via the use of cloud servers. Foreigner-Only One Wallet and Anytime Together Services
Following the launch of this service on Sep. 2020, it was used in 423 cases as of the end of the year. As On December 17, 2020, the non-face-to-face electronic wallet service, which was previously available only
many documents, including income documents, documents to verify household members, and documents for domestic customers, was expanded to foreign customers, a first in the banking sector, to improve the
providing evidence of tax payment can be now collected automatically with the customer's consent, convenience of foreigners who have difficulty opening foreign currency accounts.
customers need not visit multiple institutions for document issuance, thus increasing convenience. Foreign customers can deposit up to USD 5,000 without opening a foreign currency account through One
Wallet, and services are provided to enable the receipt of foreign currency, overseas remittance, and re-
exchange when required by customers.
A More Convenient IBK Card with Digital Features Foreign remittance, which previously required registration each time, can now be done simply with only one
IBK has considered various methods to provide a more convenient services to customers by combining digital registration, and a foreigner-only shared remittance service is being offered where an additional favorable
features with its card business. A system has been put in place for individual customers so that all banking foreign exchange rate can be applied if more than 30 senders designate the same date as an automatic
services, from card issuance to various declarations, can be processed in a non-face-to-face manner without transfer date. (Launched on Dec. 17, 2020)
visiting a branch at all and related infrastructure is under construction to expand this system to business
customers.
In August 2020, IBK launched its virtual safety card number service for overseas purchases, which provides a
virtual card number that can be used securely in overseas online payments (a previous security vulnerability).
In October 2020, in collaboration with big technology companies, it began offering its simple payment
immediate use service in which cards are automatically registered in a simple payment app and can be used
immediately after card issuance. Additionally, in November 2020 IBK completed the development of its mobile-
exclusive card, which can be registered and used on various simple payment platforms such as Samsung Pay,
Kakao Pay, and Paybook without a physical plastic card, thereby enhancing customer convenience.
62 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 63

i-ONE App For Micro Business Simple Payment Service for Corporate Common Cards
New Digital Platform for
The i-ONE app was launched in November 2020 for Micro Business to provide daily business banking services IBK has introduced a simple payment service for corporate common cards that can be jointly used by
Micro Business
by combining easy and convenient finance with the daily management activities of small business owners. executives and employees by registering an anonymous corporate common card in mobile simple payment
With this app, various daily banking services can be used conveniently in a non-face-to-face manner, including platforms such as Samsung Pay and Paybook. Once the owner of the business completes the simple
integrated queries of personal and business accounts as well as transfer and management tasks including certification procedure for real users, the corporate common card can be used for simple payments. Up
labor, legal, and tax-related tasks. It’s even useful for small business owners whose digital accessibility is low. to 100 users can be registered per common card, and 66,952 registered users had used this service for
In the first half of 2021, a non-face-to-face process for COVID-19 loan-term extensions was established to transactions worth KRW 2.2 billion as of December 2020.
process the extension of loan terms conveniently without a visit to a branch office being required.

Banking Integrated
Queries and fund transfers can be done with both personal
and business accounts in a single app. 66,952 registered Apply for
common Use
Registration of
simple payment
Card-use
via personal
banking users had used this service
※ Note that daily transfer is limited to KRW 5 million. card simple authorization in individual authentication
for transactions worth authentication (representative) smartphones method
Queries and fund transfers can be performed using a simple
Simple banking password without the use of an accredited certificate or one- KRW 2.2 billion as of (actual users) (actual users) (actual users)
time password (OTP). December 2020.

Business Experts provides business knowledge in various fields including

Daily knowledge tax, labor, and legal matters.
banking Business Guidance on
IBK Alpha Series
Information on policy funds of central and local governments
information policy funds specialized for small business owners is provided. As a specialized service for small business owners, the IBK Alpha Series provides the IBK Alpha Briefing, IBK
Business-related knowledge or opinions can be shared between Alpha Commercial Area Information, and IBK Alpha Tax Report services. It supports small business owners
Community
small business owners.
with services for management information, commercial area analysis, and tax reports, which are not easily
Tax evidence is automatically collected and submitted to the tax accessible due to costs and human resource barriers.
Tax evidence
Management accountant in a non-face-to-face manner.
support Work Management task support, such as employee management,
management customer management, and document storage is provided. This service provides mail notifications by automatically collecting and sorting various
IBK Alpha Briefing forms of management information, such as deposit and loan information, for all banks,
card sales, and tax invoices.
This service provides companies and startup entrepreneurs with big data analysis results
IBK Alpha Commercial
that can be used in business operation strategies such as analyses of business feasibility
area information
and commercial area business trends by business sector.

This service dramatically reduces costs by supporting automatic book preparation and
IBK Alpha Tax Report
non-face-to-face tax reports at an affordable cost to small business owners.

Promoting Linkage with the Non-Face-to-Face Service Voucher Project

Banking service Project information Management support In connection with a government project (Ministry of SMEs and Startups) that supports the costs required for
the use of non-face-to-face services such as videoconferencing and work from home to develop a non-face-
to-face work environment and aid in the digital transformation of SMEs, IBK has promoted marketing that
substantially reduced the cost burden on SMEs of Kyungrinara usage fees.
Special

Fostering National Talent Through Industry-University

Collaboration in the Big Data and AI Sectors • Diversification of education programs
• (Period) Support provided twice, once in the first half (March) and once in the
Education • Achievement of goal to foster talent
In 2019, IBK signed MOUs (memoranda of understanding) with the Software • Acquisition of the
second half (September) of 2020
institution suitable for the company
Convergence Education Center at Hanyang University and the AI Research latest analysis trend
IBK Industrial
• (Benefits) Eight months of usage fees are provided if 10% of the fee is paid
Center at Seoul National University for joint research in the big data and AI fields. technology
• Generating creative Bank • Experience of actual field datasets - Government support of KRW 684,000 out of a total of KRW 760,000 (90%)
Six joint research projects were conducted from 2019 to 2020, and collaborative
work performance • Expansion of understanding of the
relationships with various educational institutes will be further extended in Students finance industry by collaborating
• A dedicated letter of invitation is produced and distributed for branch-
2021, including the preparation of an industry-university collaboration with the with on-site workers marketing use.
Seongnam Research Center of AI Graduate School at KAIST in addition to the
two existing universities.
64 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 65

IBK BOX, a Comprehensive Management Support Platform for SMEs Innovative Enterprise Investment BOX
IBK BOX is an abbreviation for “IBK Business Operation eXpert.” It is a management support platform for The Innovative Enterprise Investment BOX is a service for innovative and venture companies that have
SMEs that supports various management activities with digital methods. IBK BOX supports enterprises by difficulty accessing financing through existing finance systems due to low collateral, despite having a
dividing required services largely into three sectors funds, operations, and sales channels to help to reinforce high proportion intangible assets and technology. Companies can prepare and submit an application for
the competitiveness of SMEs. The service was launched on August 1, 2019, and since then, new and affiliated investment and IR materials online quickly and conveniently, a departure from existing complex and difficult
investment procedures. Companies can apply for investment at multiple institutions with a single application,
services have been steadily expanded. Currently, 26 services is provided (as of April 2021).
thereby saving on the costs of searching for venture capital and individual IR time, which was needed in
the past when applying for investment. More than 158 companies had applied for the service as of the
Fund Assistance end of April 2021 since its launch in October 2020. In the future, the service will provide a communication
system where communication between companies requiring investment and investment institutions can be
Innovative Enterprise A service for innovative enterprises to apply for integrated investment with IBK, facilitated, such as by indicating clear reasons for investor rejection.
Investment BOX IBK Capital, and IBK Securities through a single registration application

A service that automatically recommends applicable policy funds for each company
Innovative enterprise
Policy Fund investment BOX
based on customer-specific information and provides assistance on how to prepare Innovative Enterprise in
Recommendations Korea Efficient investment
the application form
Companies selected by the Ministry examination
of Trade, Industry and Energy, and the Verification of IR materials,
A service whereby customers can receive all information at once online, from Ministry of SMEs and Startups, etc. investment screening management
Loan BOX
borrowing limits to loan deposits, without visiting a branch or submitting documents Online applications for Joint investment with
Online
investment investment institutions
Providing automatic preparation of Joint investment made with other
Connection
IR forms and online applications for investors
Operation Assistance
investment
Company information
Fostering companies wishing database
An exclusive service for vendors that enables card payments free of charge anytime, Companies wishing to Venture capital
to receive investment Major shareholders, business
BOX POS anywhere, once the app is installed on the smartphone of a company representative receive investment (VC)
Company and product advertisement, network, Sharing and managing
or employee. recommendation of policy funds, investment history
new customer matching
Investment history management
Work Attendance A service that can comprehensively manage the joining date, retirement date, daily
Management work start and end times, holidays, and working hours of company employees.

Fund A service in which a financial briefing report can be received that summarizes financial BOX POS
Management details related to bank accounts, card usage details and balances at a glance. BOX POS is a terminal service by which payment can be received through various means, including
credit card, pay, and cash, through the installation of a dedicated app on a company representative’s (or
employee’s) smartphone instead of an expensive POS (point-of-sale) card payment terminal. IBK participate
Sales Channel Assistance
in the “realization of a paperless society” by helping businesses through improved convenience and lower
An assistance service in which superior export and import customers of IBK can be costs with a free card payment reader for small business owners, and by sharing electronic receipts instead of
Sales Channel
matched with superior overseas companies proven through partnerships with major paper receipts in response to climate change.
Pioneering
global banks in 20 nations

A service for SOHOs (small offices/home offices) or startups requiring new product
Manufacturer
development or commercialization using ideas to find easily factories equipped with
Network
production facilities.

Monthly Visitors (Unit : persons) Monthly Business Subscribers (Unit : services)

26,859
48,100 50,098

29,794
22,476 9,555
Monthly Monthly
(on average) (on average)
2,309 858 1,945 512

2019 2020 21.01 21.02 21.03 2019 2020 21.01 21.02 21.03
66 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 67

Respect for Employees

IBK’s human resource vision is “proper human resource management, cultivation of talented IBK has provided a recruitment process and criteria for external experts targeting higher positions above
Employee employees, and happy employees” to make a leap forward as a global finance leader equipped
Creation of a New Open
managerial level to secure banking specialization and hired a director of advertising and branding in
Position and Recruitment
Management with global competitiveness. To do this, IBK continues to make efforts in various areas, including
of Talented External
November 2020 through the open position system. Additionally, in August 2020 IBK created an evaluation
recruitment, evaluation, and compensation, the fostering of talented employees, welfare and goal in relation to the “knowledge and know-how sharing” performance management items for specialized
benefits, and organizational culture. Additionally, IBK generates performance to achieve its core Employees
contract employees to create synergy between specialized contract and general employees.
value of customer happiness through its talented, professional employees who have a thirst for
challenge, creativity, responsibility, and a global spirit, as well as its market competitiveness and
ability to touch customers’ hearts. Fair Performance IBK is promoting a performance-oriented company culture by dynamically linking employee performance
Evaluations and evaluations with its compensation system. IBK has created a fair and independent evaluation system through
Recruitment of New Due to the COVID-19 pandemic, the recruitment market has been frozen. Nonetheless, IBK recruited the more
Compensation System evaluations tailored to each type of job and the diversification of evaluations.
Bank Employees than new 400 employees through open recruitment in the first and second halfs of 2020, thereby leading new
IBK performs customized evaluations tailored to each business environment by forming a bottom-up
job creation. IBK has thoroughly complied with government quarantine rules during the entire recruitment
evaluation group reflecting the collective opinions of branch offices, local headquarters, and business
process, and as the safety of job applicants is considered the most important priority, AI-based competency testing
divisions through a five-step process.
and contactless and non-face-to-face interviews were conducted. Additionally, specialized finance and global
areas were newly created at the time of open recruitment to secure specialized, talented employees. Furthermore, IBK operates its compensation system such that the compensation awarded is commensurate with each
IBK’s written examination was refined for each work duty, and in-depth interviews were introduced. In the future, employee’s performance. The results of performance evaluations are reflected in employee ratings and
IBK will faithfully fulfill its role of a government-run financial institution by creating quality jobs regularly. are also used when promoting employees, switching jobs, and selecting candidates for academic training
or dispatch to our overseas offices. IBK also offers differential incentives according to evaluation ratings to
motivate employees and is continuously improving the system by collecting feedback.

Special

Establishment of Data-Based Employee Operation Plan

IBK has developed a system whereby each employee's performance, competencies, and organizational contributions are systematically evaluated through
Joint job fair for the banking sector in 2020 Dialog between the CEO and new employees a human resource scoring and data-based personnel transfer system that is linked with human resource systems such as promotions and transfers.
Additionally, IBK has developed a branch model with the same sales environment conditions after setting indices to reflect optimal personnel calculations
based on the monthly workload and growth potential of the branch using big data. Based on this model, the work environments of branches are
Expansion of Social To fulfill its social responsibility as a public organization, IBK is expanding its efforts to increase employment monitored continuously, and data from this model will be used for regular personnel transfers starting in the first half of 2022.
Equality Recruitment opportunities for socially disadvantaged groups. In 2020, IBK conducted recruitment especially for people
with disabilities and men of national merit and expanded the ratio of preferential merit points for applicants Category HR scoring system Data-based personnel transfer system
with disabilities during new bank employee recruitment. Furthermore, IBK continues to strive for the
Employees subject
All employees whose rank is equal to or lower than the third-level below the head level of the department or branch
expansion of recruitment for socially disadvantaged groups, such as through new special selection targeting to transfer
(prospective) high school graduates. Additionally, IBK provides opportunities for prospective workers Performance, competencies, and organizational contributions, etc., Criteria such as work experience, qualifications,
The main content
to experience practical work and facilities and develop their career by recruiting recent graduates (563 are evaluated and used for promotions. and training histories are evaluated and used for transfers.

graduates in 2020) for its ongoing internship programs. A pilot test is underway, with revisions and
Future plan System development is expected from the second half of 2021.
improvements to be applied in 2022.

Mandatory Ratio End of Dec. 2019 End of Dec. 2020

Category Overages and Overages and ❶ Model for calculating adequate personnel ❷ Monitoring of adequate personnel ❸ Review on HR capacity adjustment
Ratio Ratio Ratio
shortages shortages
Cumulative data used in regular personnel
Men of Development of model by branch sales environment Regular inspection of adequacy of personnel
8.00% 8.07% +10persons 8.16% +22persons transfer every month
national merit
Big data analysis Data visualization Reference data for capacity adjustment
Persons with
3.40% 3.02% △47persons 3.54% +19persons
Disabilities

Through the continuous expansion of recruitment from socially disadvantaged groups, IBK is
fulfilling its social responsibility. It has exceeded mandatory employment ratios for men of national
merit (8.0%) and people with disabilities (3.4%).
68 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 69

In September 2020, IBK established clear criteria for the selection and management of employees who work Positions are newly created for employees subject to the wage peak system through revisions to the job
Establishment of HR Operation for
at distance workplaces to enhance fairness between employees and improve the acceptance of distant work. system to relieve the workload at bank branches and raise the efficiency of employee management. A
Manageent Criteria for Employees Subject to the
Distant work means significant difficulty in commuting due to the distance of the workplace from the special “conscious management” role was newly created for regular personnel appointment in January
Employees Who Work at Wage Peak System
employee's residence. Thus, employees are selected for distant work on a semiannual basis with objective 2021, and employees with this role were assigned to branch offices nationwide. Expanded operation of the
Distant Workplaces
consideration for commuting data such as commuting distance, time, and location of residence. A total credit analysis role also contributed to improvements in bank productivity. Additionally, IBK has operated a
of 1,160 employees as of the second half of 2020 and 1,192 employees as of the first half of 2021 was grievance counter to improve working conditions and created a new 1:1 mentoring program.
selected. For the selected employees, HR welfare and benefits were determined after setting merit conditions
such as distant work bonus, a shortened period of transfer, future reflection of preferred workplace, and
Final position Main roles Responsibilities Personnel operations
preferential treatment in internal contests within the bank and HR pool selection.
Head of
Management consultant, etc. Providing consulting services, etc.
division
Auditing branches, activities’ Actively using know-how
Head of Compliance Manager
compliance with regulations, etc. accumulated during service
department
Credit Analyst
or branch Supporting loan examinations
(loan examination center)
Expansion of assurance positions
Monitoring management/ (internal control, etc.) and
Positions required in HQ
inspections, etc. enhanced operation
Auditing branches, activities’
Team leader Compliance Manager
compliance with regulations, etc. Reducing the work of general
Credit Analyst employees and improvement
Supporting loan examinations of bank productivity
(loan examination center)

Team leader Support of HQ and branches Marketingwork support, etc.

Expansion of Promotional IBK is striving to improve gender equality within the organization such as by expanding promotional
Opportunities for Women opportunities for women with proven performance and competencies. IBK has achieved the remarkable
result of appointing two women as division heads, the first such appointments since its founding, and
System and Program to An outplacement program and related training system were established and implemented to develop

promoting 23 women to branch manager positions, a record-breaking number. The number of female
Support Retired Employees successful job transition by supporting adaptation to environmental change and career development for
employees nearing retirement. The outplacement program is a scheme that supports up to KRW 5 million in
managers promoted through regular personnel appointments in the first half of 2021 was 216, the second
highest in IBK’s history. Before Wage Peak educational costs when employees nearing retirement who worked at IBK for more than 10 years apply for
Support for early adaptation to wage peak
Additionally, for female employees who are team members below the fourth rank, opportunities to take positions and environmental change through
education courses for job transition development. The education courses include the state-sponsored test for
the “prior training for employees at the rank licensing real estate agents, SOHO startups, startups in functional areas, and language courses. The support
various positions are given, and education on work transition for female employees has been promoted of department/branch head or higher.”
steadily to enable them to work in various positions just like their male counterparts. period is for six months before retirement.
The education courses, provided timely for employees nearing retirement, are divided based on the wage
During Wage Peak
Guidance on changed treatment due to
peak period. For employees before wage peak, early adaptation to wage peak positions and environmental
Ratio of female employees promoted this year compared to the average Female the wage peak and education on change change is supported through the “prior training for employees at the rank of department/branch head
proportion for the previous three years management through “training for transition
Male of highly experienced employees.” or higher.” For employees who have reached wage peak, guidance on changed treatment due to the
wage peak and education on change management is conducted through “training for transition of highly
37.8% 48.3%
168Persons 216Persons experienced employees.” When employees turn 59 years old, which is passed the wage peak, IBK supports
After Wage Peak them in choosing their preference between “future job design” and “reemployment and startup education.”
Education on “future job design” or
Three-year IBK is committed to generously supporting employees who have dedicated their lives to the organization in
The first half of “re-employment and startup education.”
average
2021 successfully planning for their old age and post-retirement period.
(2018-2020)
62.2% 51.7%
277Persons 213Persons
Operation of a Retirement IBK has contributed to relieving the financial burdens of retirees by operating a retirement pension plan since
Pension Plan 2011. The value of DB (defined benefit) obligations as of 2020 were KRW 1,047 billion (based on a separate
statement), and that of DC (defined contribution) retirement allowances recognized as expenditures were
KRW 0.58 billion (based on a separate statement).
70 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 71

Great Work
Environment

IBK is committed to creating a work environment where all members are satisfied based on the In the first half of 2020, IBK established Safety Management Guidelines that aim to maintain and improve
belief that “people are the most important asset.” To create a balance between work and life, IBK
Health and Safety the health and safety of workers by creating a safe and comfortable work environment through the
is making an active effort to improve its working conditions and vacation system and strengthen Management for regulation of safety activities. Persons charged with safety management prepare safety management
the health management system for employees. Employees responsibility reports, which include key details regarding the safety management responsibility plan for the
current year, inspection details concerning the safety management responsibility plan in the previous year,
and the status of major incidents by the end of February each year.
Improvement of IBK has prepared a management plan to comply with the Labor Standards Act by running the “52-hour IBK will strive to prevent accidents of not only our employees, but also facility management agents and
Working Conditions workweek policy” and to help a sound working culture take root. workers in construction sites, and will endeavor to create comfortable work environments for all.
As a preliminary preventive measure, the system was revised to prevent inappropriate overtime work through
fraudulent use of personal computers, and a menu for managers was newly established to create an efficient
Assistance in Health Management and Disease Prevention for Employees
working-hour management environment for each branch. As a post-measure, the management evaluation
criteria under “Working Hour Normalization” were revised to include demerits when inappropriate cases of work
Medical checkups - Medical checkups (comprehensive and general checkups, etc.) are conducted every year
occur, and strict personnel measure is being taken against managers depending on the severity of the case. so that the health management of employees can be conducted systematically through
In the future, IBK will do its best to comply with the 52-hour workweek policy thoroughly through work intensive healthcare management of employees with health issues.
collaboration between related departments. - Thorough and comprehensive checkups are conducted for employees over
the age of 30 and who have worked at IBK for more than five years.

Improvement of IBK is steadily improving the vacation system for employees so that they can enjoy vacation more flexibly and
actively realize a work-life balance. Fitness centers
Vacation - Fitness centers are operated at the head office, Hannam-dong office, and Suji IT Center.
Family care vacation newly established for cases of family illness or the need for childcare, and the parental - A medical center that can provide dental services and first-aid for employees are operated
vacation scheme were revised so that both parents can take vacation at the same time. Additionally, the at the head office.
flexibility and convenience of taking vacation have extended thanks to the new two-hour vacation system.

Policy Restructuring for the Coexistence of Work and Family Counseling program - Counseling is provided to employees and their families.
for employees
- Employees can access linked counseling centers nationwide (around 427 centers in
Category The Main content
8 regions) depending on the location of their residence.
Up to 10 days of vaction per year have been newly added for child care or - Various fields are handled, including personal relations, family issues, job stress,
Creation of new family care vaction
taking care of family members due to disease, accident, or aging, and half-day legal and financial issues, etc.
(February 2020)
vaction is allowed to enhance usage.

Expansion of family care vaction Expansion of “family members” subject to care*

(February 2020) * Spouses, (spouse’s) parents, and children → Grandparents and grandchildren added

Expansion of child care vaction Couples allowed to use child care vaction at the same time for the same
Improving the Health Recognizing the need for more faithful health checkups to manage employee health more effectively, IBK
(February 2020) children. Screening Rate has increased the health screening rate by pro-actively implementing early health checkups. In the past,
the high number of people who delayed checkups until the last day of the year deteriorated in the quality
With the creation of the two-hour vaction period, including morning and
Creation of new two-hour vaction
afternoon commuting times, the flexibility and convenience of taking vaction of checkups along with difficulties in managing human resource at sales branches. Through early health
(September 2020)
have been enhanced.
checkups, IBK has been able to complete health checkups for all employees.
Creation of new vaction for miscarriages New vaction created for male employees who’s spouses suffer miscarriage or
and stillbirths (September 2020) stillbirth (three days)
Operation of IBK Great! IBK Great! Good Childcare Center has been established and is operating to create an environment where
Expansion of miscarriage and stillbirth- To protect maternal instincts of employees, the number of vaction days for
Good Childcare Center employees with infants and preschool-aged children can work without worrying about childcare.
related vaction (September 2020) women's in early pregnancy has been extended (from five days to ten days).

(Unit : persons)

Furthermore, IBK established criteria that allow employees donate their compensated vacation voluntarily to Branches Seoul Gyeonggi Incheon
of Busan Daejeon Total
colleagues whose long-term sick vacation is all used up due to the treatment of a severe illness by creating a Operation Hannam Dogok Guro Madeul IFT Ilsan
Pyeong
Suji Bundang Bupyeong
chon
new vacation-sharing system. Since the system was launched in June 2020, employees with No. 1 (pancreatic No. of
children
68 25 40 22 75 49 55 37 41 28 20 20 480
cancer) and No. 2 (leukemia) benefited from the vacation-sharing system as of April 2021.
72 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 73

Strengthening the Competencies of Employees

IBK endeavor to promote talented employees who can lead the digital transformation and IBK sends some of the working-level employees based at its HQ’s departments to professional educational
Strengthening the Work
successfully implement “innovation management.” IBK has the finest talent development program institutes where they are taught the latest financial trends and knowledge. Such institutions include the
Expertise of Working-Level
in the South Korean financial industry, which includes the development of expert human resource Korea Banking Institute and major universities in South Korea as well as associations, media companies,
Employees at the HQ
in many specialty areas along with career development support, global skill cultivation, industry- and conferences and other organizations with educational programs for financial experts. In 2020, 141 IBK
leading training facilities, and educational infrastructure. employees were dispatched to such institutions for further education.

Conducting Skill To foster talented employees who can provide top services with high job competency, IBK has operated Fostering Digital IBK has also made great efforts to strengthen digital competencies to respond to the era of the Fourth

Enhancement for All various training programs and support systems for each position. In particular, IBK created two new training Innovation Among Industrial Revolution. The Digital Level-Up three-year education course (2018 to 2020) for all employees who

Employees Through programs in 2020. One was for the protection of financial consumers to enhance overall sales competency Employees used communication infrastructure has been completed, and other programs on digital insight cultivation,

Tailored Job Training in investment and protection products and the other provides special training for employees who have no scratch hands-on, Python programming, etc., were operated. In 2020, a digital education course in
work experience in business finance to further strengthen the bank’s position as the leading financing bank collaboration with renowned universities in Korea* was created, and superior employees in each field were
for SMEs. selected to strengthen their digital competencies, thus spurring the promotion of digital experts.
Additionally, various systems such as scholarship assistance, qualification certification, and private institute * Graduate School of Data Science at Seoul National University (30 employees), Graduate School of Information at
tuition fees are being operated to motivate self-directed learning. Yonsei University (25 employees), etc.

Head of department Fostering Key Talented IBK has proactively fostered key talented employees who can respond to changes in the business
Bank clerk level Manager level Team leader level
or branch level Employees Equipped with environment preemptively and lead the global era. It also dispatches superior employees to MBA courses in

New bank clerk

Training for employees Training for employees Pre-CEO training Global Competitiveness Korea and overseas and runs overseas benchmarking, overseas training by theme, and language proficiency
Rank promoted to the fourth rank promoted to the third rank Leadership training for
(re) training improvement courses. Moreover, since 2018, it has solidified cooperative relationships with reputable
Training Competency-enhancement Competency-enhancement heads of departments
Future design training universities in Asia with the main theme of fostering global talent for the “completion of the Asian financial
training training and branches
belt.” Currently, IBK has signed MOUs with four universities, one each in Indonesia and Vietnam in 2017,
(Weekday) Job Academy, sales field training, training for reinstated employees, training for employees
Job transferred from headquarters, Financial Consumer Protection Academy (newly-organized),
one in Philippines in 2018, and New Delhi University in India in 2019. Additionally, it has widened its global
Training special training for business finance (newly-organized) HR pool through academic training and language courses in major countries in Asia.
(Weekend) Finance Academy, key job field experts, financial certificate training

Support Scholarship support, certificate acquisition support,

System support for private institution tuition fees (newly-organized), training mileage scheme
Special

Geumsabba FESTA (Fall in Love with Financial Certifications)

Enhancing Training IBK has supported the competency development of employees without interruption by constructing a non-
Performance via Non-Face- face-to-face learning system that can be activated at any time, even during crises such as the COVID-19 Geumsabba FESTA is a program that supports employees in acquiring financial certifications and provides investment-type product education to strengthen
to-Face Channels pandemic in 2020. Existing in-person training methods have been replaced by real-time remote and cyber consulting competitiveness on asset management and improve sales completion. In 2020, 491 employees participated in this program and were assisted
training with of bi-directional communication, and learning and online evaluation systems have been with the study group matching, learning materials, weekly notices, and the production of certification plaques. As a result, even though various examinations
introduced to induce higher participation in education than in the pre-COVID era. were delayed and applications for examinations were difficult due to COVID-19, 43.7% of the employees who took on the challenge of the examinations
succeeded in acquiring certifications.

The number of employees undergoing annual

training increased by 25.7% in 2020 compared to Pre-exam
시험 전 super pass care Post-exam after care
the previous year.
• Providing the basis for learning synergy Ratio of certificates acquired↑
2,923 persons • Various kinds of education and support after
(Operation, etc. of communities to create a Providing a basis to promote
(25.7%) study environment) acquiring certification and product sales
14,313 persons Certification Post*, training on product sales, product sales
• Providing learning materials and exam success
11,390 persons stories providing rewards, etc.
• Sending main notifications related to tests
* Certification of qualification acquired

※ (Target to support certification acquisition) Nationally certified financial planner, Certified Investment Adviser of derivative products

2019 2020
* Based on the number from previous face-to-face training to
non-face-to-face training
74 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 75

Governance
Corporate Governance BoD members

Name Date of birth Position Major career Term

Principles and Policies of Corporate Governance - Bachelor in Economics, Seoul National University
IBK believes that reliable, efficient, and transparent corporate governance is necessary for the organization to grow steadily - Master in Public Administration, Seoul National University
- PhD in Economics, UCLA, USA
and protect the interests of stakeholders, including shareholders. Reliable, efficient, and transparent corporate governance
- (Former) Senior Presidential Secretary for Economic Affairs
can be established and maintained through checks and balances among members, the expertise and diverse viewpoints Dec. 4, 1960 Chairman & Registered and - (Former) OECD Ambassador Extraordinary and Jan 3, 2020,
Yoon Jong-Won
of members, and openness of work handling criteria and procedure and handling results. IBK will continue its sound and (Male) CEO full-time Plenipotentiary to Jan 2, 2023
- (Former) IMF Executive Director
transparent corporate governance management through proper management in the future.
- (Former) Secretary for Economy and Finance to the President
- (Former) Director, Economic Policy Bureau, Ministry of
Strategy and Finance

- Bachelor in Business Administration, Chungnam National

University
Deputy CEO & - MBA, Helsinki School of Economics
June. 27, 1962 Registered and March 20, 2020,
Kim Sung-Tae Senior Executive - (Former) IBK Capital CEO
(Male) full-time to March 19, 2023
Vice President - (Former) Head of the Business Strategy Group at IBK
- (Former) Head of the Consumer Protection Group at IBK
- (Former) Head of the Gyeongdong Group

- Bachelor in History, Korea University

- (Current) Advisor to Samil Accounting Firm
Organizational Chart
Shareholders' general meeting Aug. 25, 1955 Registered/ - (Former) Advisor to Nonghyup Investment & Securities March 27, 2019,
Shin Chung-Shik Outside Director
(Male) Part-time - (Former) President of Nonghyup Bank to March 26, 2022
- (Former) Managing Director, National Agricultural
BoD
Cooperative Federation
(Chairman and CEO, Deputy CEO,
and four independent directors)

- Bachelor and Master of Economics, Seoul National University

Chairman & CEO
- PhD in Economics, University of Chicago
Jan. 25, 1960 Registered/ - (Current) Professor, Department of Economics, Seoul March 27, 2019,
Kim Se-Jik Outside Director
(Male) Part-time National University to March 26, 2022
Governance Committee Management - (Former) Member of the Financial Development Deliberation
Risk Management ESG Committee
Compensation
(Chairman and CEO, Committee Committee, Financial Services Commission
Committee (Deputy CEO and three
Deputy CEO, and three (Deputy CEO and two
(three independent independent directors)
indepenednt directors) independent directors)
directors)
- Bachelor in Public Administration, University of Seoul
- Master in Public Administration, Yonsei University
- (Current) Adjunct Professor, Department of Legal
June. 24, 1958 Registered/ Administration, Graduate School of Public Administration April 8, 2021,
Kim Jeong-Hoon Outside Director
(Male) Part-time and Welfare, Dankook University to April 7, 2024
- (Former) Outside Director at IBK(Feb. 2018 to Feb. 2021)
- (Former) Head at the Audit and Examination Office at the
Organization of the Board of Directors Korean Banking Institute
As IBK’s supreme decision-making body, the BoD (Board of Directors) consists of the CEO, deputy CEO, and four outside
directors. The BoD is concurrently chaired by the CEO according to Article 25-2 of the Industrial Bank of Korea Act. To ensure the
independence of the BoD and as a necessary check against the management because a person who is not an outside director - Bachelor of Law, Seoul National University
- Master of Law, Stanford University
concurrently holds the office of chairperson of the BoD, the number of outside directors is set at more than three directors and
- PhD in Law, Seoul National University
the majority of the total number of board members. The BoD only meets the attendance of a majority of BoD members, and
Oct. 12, 1971 Registered/ - (Current) Professor at Hanyang University School of Law April 8, 2021,
resolutions are passed with the consent of a majority of the BoD members. Jeong So-Min Outside Director
(Female) Part-time - (Current) Member of the Financial Development Deliberation to April 7, 2024
Committee, Financial Services Commission
- (Former) Interpretation member of the Committee on
Operation and Main Roles of the BoD
Statutory Interpretation, Ministry of Government Legislation
The BoD was convened 12 times in 2020, and the average participation rate of directors was 97%. A total of 76 items was on
the agenda or reported. The BoD is the supreme decision-making body of the bank besides the shareholders' general meeting.
It deliberates on items on the agenda and makes decisions from objective and reasonable viewpoints for the sustainable
development of the bank.
76 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 77

The Governance Committee is responsible for improving the BoD’s operational efficiency, functions, The BoD inspects the composition and operating status of the BoD and all committees under the BoD every
Subcommittees Governance and communication with shareholders and other stakeholders. Major deliberations include suggesting Evaluation of the BoD
year before the date of the annual shareholders' general meeting. This evaluation supports the establishment
under the BoD Committee outside director candidates whom the CEO recommends to the Financial Service Commission and and Criteria for Job of the BoD and its committees as the supreme decision-making body of the bank and a check against
appointing executive directors recommended by the CEO.
Performance Evaluation the management team by reviewing whether the BoD and each committee properly fulfill the roles and
The Management Compensation Committee reviews the overall compensation system for executive
Management
directors and evaluates their management performances for compensation. Major deliberations include responsibilities required by statutes and internal guidelines regularly.
Compensation
the evaluation of and compensation for performances of executive directors as well as the review and
Committee approval of their welfare benefits. The evaluation items can be largely divided of three sections: composition, roles and responsibilities, and
Major roles of the Risk Management Committee include comprehensive management of various operation. There are 14 detailed evaluation items for the BoD and 5 items for each committee. These include
uncertainties and possible losses from the bank’s management activities and maintenance of capital the adequacy of the BoD’s size and composition, whether it performs an advisory and supervisory role for
Risk Management
adequacy. The committee makes resolutions on the establishment of basic risk management plans,
Committee setup and allocation of risk limits by the business group or unit, and setup and allocation of investment management, whether ethical obligations and responsibilities are reflected in decision making, the timeliness
and loss limits regarding market risks. of material supply, and the fidelity of materials. The evaluation score is based on a 5-point scale, and
The ESG (Environmental, Social, and Governance) Committee contributes to establish management members of the BoD and committees under the BOD score each item differentially out of five grades.
strategies on ESG topics such as climate change and managing and supervising performances. Major
ESG Committee resolution items include the establishment of ESG management strategies, policies, and goals; current
This inspection is conducted anonymously through an audit of documents. Support department performs
progress status, performance, and the evaluation of ESG management; and revisions to or the abolition detail tasks. The job performance evaluation of the directors is not conducted separately.
of ESG management-related rules.

Qualification Requirements for Directors

Management
Governance Risk Management
(As of June 2021) Compensation ESG Committee
Committee Committee
Committee Passive qualification requirements Active qualification requirements
Yoon Jong-Won
(Chairman & CEO)
● - Those who are not Korean citizens - As for the chairman & CEO, deputy CEO & senior executive
Kim Sung-Tae - Those who fall under any of the subparagraphs of vice president, and director & senior executive vice president,
(Deputy CEO & Senior ○ ○ ○ Article 33 of the Government Officials Act those with extensive experience and knowledge in finance
Executive Vice President) and who will not undermine the bank’s public interest,
Shin Chung-Shik - Those who cannot become executives in healthy management and order of credit.
(Outside Director)
○ ● ○ accordance with the Act on Corporate Governance
of Financial Companies - As for outside directors, those who demonstrate profound
Kim Se-Jik
○ ● ○ expertise and experience in the fields of business
(Outside Director)
administration, economics, accounting, law, and SMEs.
Kim Jeong-Hoon
Outside Director)
○ ○ ○
Jeong So-Min
(Outside Director)
○ ●
* Female chairperson of the ESG Committee for the first time in the finance sector ● : Chairperson Compensation and IBK’s compensation and bonus system for management is operated on the basis of the Guidance on
Bonus System of Innovation in Public Institutions of the Ministry of Economy and Finance and the Budget Guidance for Public

Executives Financial Institutions of the Financial Service Commission. Additionally, it ensures the design and operation
Role of an Independent Due to its specificity as a government-run bank established in accordance with the Industrial Bank of Korea
of reasonable compensation systems according to the management performance evaluations of standing
Auditor Act, IBK does not have a separate executive candidate recommendation committee, CEO management
executives and executive officers through the Management Compensation Committee. Personnel expenses
succession, audit committee, or business management committee (Paragraph 1, Article 24 and Paragraphs
such as compensation for the executives are made fully in cash due to its allocation as a cash budget and are
1 and 2, Article 26 of the Industrial Bank of Korea Act), and the Financial Services Commission appoint an
not postponed according to the principle of setting an annual budget according to related guidelines. The
auditor. The auditor performs audits on IBK’s business and accounting its major role and has the authority to
compensation plan is approved by the Financial Service Commission in advance, and its limit is determined at
select, change, and dismiss external auditors.
the general meeting of shareholders.

Expertise and The BoD consists of members with expertise in each field to secure professionalism and diverse perspectives Management bonuses are set internally according to management performance evaluations, and
Performance Evaluation
Diversity of the BOD and eliminate biases related to specific backgrounds and business careers. The BoD also considers diversity in achievement bonuses in accordance with external management evaluation guidelines for public financial
Index of Executives
terms of gender, age, experience, and background. As of May 2021, there were three outside directors in the institutions. Four indices regarding profitability (net income before provisions, etc.), adequacy (overdue
economic and finance areas and one in the legal area, according to the expertise classification. loan ratio, BIS capital adequacy ratio, etc.), growth (SME loans, general deposits, core deposits, etc.),
The latest trends and issues in the financial and economic fields are reported to the BoD with the aim of and customers (increasing market competitiveness, etc.) are used for internal management performance
enhancing the basic and global capabilities of outside directors. Proactive support is offered for those who evaluations. Additionally, evaluation results such as risk management indicators are reflected to a certain
want to join individual training courses. Due to COVID-19, five education sessions were provided with the extent, thereby directly affecting bonus pay calculations.
theme of major issues of the company in 2020.

Training schedule Training provider Training details

Mar. 4, 2020 Major tasks of the bank and direction of business strategy

Jun. 11, 2020 Major tasks of the bank and direction of business strategy
Strategy and
Aug. 27, 2020 Major tasks of the bank and direction of business strategy
Planning Dept.
Nov. 30, 2020 Major tasks of the bank and direction of business strategy

Dec. 30, 2020 Progress and achievements in 2020 and direction of business strategy in 2021
78 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 79

Ethical Management

As part of sound corporate governance, in 2020 IBK established the IBK Ethics IBK emphasizes human dignity and value in all business activities and has declared its intention to pursue
Strengthened Human human rights management. It also deliberates on matters regarding the establishment of basic plans for
Charter consisting of five themes for the practice of ethical management by the
IBK Finance Group. The Ethics Charter is a statutory form of internal guidelines
Rights Management human rights management through the Human Rights Management Committee. All employees and
that are equally applied to IBK and all subsidiaries. It is the first such charter in the executives actively practice the human rights management declaration, which contains the regulations of
conduct and value judgment criteria of human rights management.
company’s history, which is significantly meaningful.
The Guidelines for Preventing Human Rights Abuses were established in June 2020 to set up detailed
IBK maximized the impact of its external declaration of the Ethics Charter through
criteria for the smooth operation of preventative work related to human rights abuses and to strengthen the
videos and an employee oath at the bank’s anniversary event, and the charter was
executive ability of human rights management. The guidelines consist of general principles, the acceptance
published through on- and off-line channels of all group companies to encourage
of human rights abuse reports, the investigation of cases, the operation of a human rights management
its internalization. subcommittee, the handling of reports, and decisions of the human rights management committee. IBK’s
existing Human Rights Abuse Report Center has been changed to the Human Rights Counseling Center,
Ethical Management IBK has established and implemented its Code of Ethics and Code of Conduct for Employees. To fulfill which is now up and running.
System IBK's core values of “Together with customers, trust and responsibility, passion and innovation, and
communication and teamwork,” regulations of conduct for customers, shareholders, employees, society, An evaluation of factors impacting human rights was conducted to identify real and potential human
and directors are defined. rights risks that may occur in various areas of major businesses and throughout IBK's business activities. The
Additionally, IBK has established and declared its Code of Ethics, which proposes common-practice evaluation results and improvement recommendations will be reflected to develop a human rights-friendly
management system. Out of 132 evaluation indicators in 10 areas, 127 indicators were evaluated for their
standards of ethical management within the IBK finance group. Moreover, to prevent corruption and create Human Rights Management Committee
adequacy, and the organization has viewed this as the normative and institutional basis for the systematic
a clean workplace culture, IBK complies with the prohibition on conflicts of interest, unethical behaviors, June 2020
promotion of human rights management. Moreover, all employees were subject to education on integrity,
and unfair profits.
human rights management, and the prevention of abuses of power. For those who work in contracts and
the management of dispatched employees, additional preventive education on human rights and abuses of
Programs for the Practice Self-diagnosis program Monthly ethical Cyber ethical
power is conducted based on the guidelines to eradicate abuses of power in public areas.
Clean contract system
of Ethical Management for ethical compliance practice theme management training
Tightened Inspections Inspections on the trade of financial investment instruments have been tightened to prevent employees from
Monthly diagnostic items In this program, the IBK ensures the IBK produces animated engaging in insider trading through undisclosed or internal information. In a bid to observe the Financial
are provided to inspect ethical items that transparency of the films on critical ethical
on the Trade of Financial
Investment Services and the Capital Markets Act more strictly, IBK has extended the scope of inspectees
whether IBK’s Code employees should adhere contract process and management activities Investment Instruments
to are selected through fairness of transactions and registers them as
to fund sellers at branch offices and shortened the reporting cycle from an annual and quarterly basis to a
of Ethics and Code of
Conduct for employees is contests every month when entering into employee training courses monthly basis. Moreover, a four-step self-inspection checklist, including investment amount by position and
being practiced. and then published and contracts. on the cyber-training job connection, was introduced to enhance the monitoring of ethics and compliance.
observed through the center.
bank’s intranet.
Sales verification process of financial investment instruments

1 2 3 4
Customer
Check whether Check whether Check for Inspection for
subject to the stock account trade for the investment in unfair trade
report is held month is present work-related
companies

Anti-Corruption
Education of employees To raise employees’ awareness about corruption and graft, and to encourage transparent
Education about the Anti-Graft and fair work, in-person education was provided to the executive teams, and special Introduction of the IBK’s Ethics Officer seeks to protect and uphold the rights and interests of employees by reporting sexual
Law broadcasting education was provided to all employees regarding the Anti-Graft Law.
Ethics Officer harassment or unjust damages, including bullying in the workplace, without the need to worry about
secondary damage. Because such a system has been adopted for the first time in IBK, the office will be
In-person education on In accordance with the customized ethical education completion system, in-person manned by external experts whose expertise and independence are ensured and will be directly under
Ethics and Compliance education is given to newly recruited clerks and employees subject to promotion for
the immediate control of the CEO. Through this system, ethical and human rights management will be
for each stage of the each stage of the life cycle.
life cycle strengthened, and corporate governance will be maintained more transparently and soundly.

Providing education on Various opportunities to complete the ethical education courses are given to employees, Strengthened Measures IBK has strengthened measures against sexual harassment in order to create a healthy work environment.
ethical and right-way including mobile education for persons in charge of related positions via regional HQs, Sexual harassers are strictly punished by applying the zero-tolerance principle, and employees who cause
Against Sexual Harassment
management through online lecturing through a cyber training center, and in-person education by external
secondary damage, such as spreading rumors of sexual harassment rumor denouncing victims, are also
various channels institutions to help employees understand and implement ethical management.
subject to disciplinary action. Furthermore, IBK is constantly striving to eradicate sexual harassment at work
by further reinforcing preventive activities.
80 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 81

Mid-to Long-Term Risk Management

The Ethical Rules of Business Conduct refer to the basic principles of sales activities for eradicating unethical IBK is focusing on managing various uncertainties and risks arising from business activities in an
Ethical Rules of Business
business conduct. IBK established the Ethical Rules of Business Conduct in September 2018, and an integrated and systematic manner. This effort secures financial soundness and security, protect the
Conduct Practice Day educational event called the Ethical Rules of Business Conduct Practice Day is held semiannually for all rights of depositors, and maximize shareholder value, thereby fulfilling our role as a state-run bank
employees. Through this event, bank employees are reminded of the basic principles that they should under all circumstances.
observe, and IBK is striving to creating a business culture based on the protection of financial consumers’
rights and interests.
Risk Management The risk-related decision-making system of IBK is centered on the BoD and comprises the Risk Management
Governance Committee, Risk Management Council, and Risk Management Group. The Risk Management Group consists
Reports of IBK operates a variety of reporting channels to receive and handle reports ethical violations and present
of the Risk Management Dept. and the Risk Review Dept. It is responsible for the execution of the Risk
ethical violation solutions when employees face ethical conflicts. Through the operation of these reports, IBK is committed
Management Committee’s policies. With a governance sytems established to optimize risk management,
to preventing intentional or negligent illegal behaviors and their ensuing impacts on the bank as well as
systematic risk management can be achieved covering the current status of major risk factors, causes and
eliminating illegal or unfair behaviors that can harm trust in the bank.
countermeasures in the case of sudden increases in risk, crisis analysis results, and internal capital adequacy
evaluation results. Such management status is reported to the Risk Management Committee and the
Whistleblowing system
management regularly, enabling immediate communication of and response to risk.
IBK operates a whistleblowing system to prevent financial accidents and minimize the losses arising from
such accidents and to enhance its corporate image as a financial bank of high integrity that fight corruption.
Our employees are encouraged to report on abnormal behaviors such as embezzlement, malpractice,
bribes, violations of laws regarding real-name financial transactions and money laundering, unjust orders
of superiors, etc. Real name reporting is done in principle, but an anonymous reporting is also available if
necessary. IBK keeps all reporting contents and identities private.
In August 2020, employees in all departments and branches underwent education to internalize and
promote the whistleblowing system. In particular, education was conducted to deliver information on the
protection of whistleblower identities to ensure the confidentiality of the reported content as well as details
on preferential treatment and compensation for whistleblowers to resolve any doubts employees might have
regarding the confidentiality of the whistleblowing system.

Risk Management IBK is expanding its range risk management to all possible major risks it may face in business. The scope
Process encompasses not only financial risks concerning credit, markets, operations, interest rates, and liquidity, but
Self-cleanliness Reporting violations Public interest also non-financial risks such as compliance. IBK selects risk measurement methods based on the features
report of the Anti-Graft Law disclosure of each risk and checks its risk management status every month, thereby monitoring the effectiveness and
adequacy of risk measurement methods and policies.

When bribes are received regardless This is a system for reporting acts of This is a system for reporting, petition,
of the employee’s own inclinations, graft or violations of work-related tip-off, indictment, or prosecution Risk management process
this system protects employees by laws in frequent areas of corruption as regarding public interest infringement STEP 01
returning or donating the bribes specified in the Anti-Graft Law. or concerns that public interest
Risk
voluntarily. infringement acts may occur, or recognition
providing clues to investigations about
• Allowable limits for each risk are set and observed.
acts that infringe public interest. • Risks and profits should be balanced adequately.
• When risks and profit opportunities are contradictory, profits should be considered within the
range of the allowable limits of risk.
STEP 02
• Risks should be managed comprehensively, including subsidiaries.
Risk
Risk policy • Risks should not only be managed by category, but also integrated for enterprise management.
measurement
• How various market volatilities have an impact on all or part of the portfolios are analyzed
regularly.
• Organizations responsible for risk management, sales division, and transaction check and
payment shall maintain their independence, and they shall be operated separately.
STEP 03
• Risk measurement and reporting should maintain unified indexes and consistency.
Monitoring
control
82 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 83

Risk Areas to Be
IBK preemptively pursues sound financial management that can lead to robust growth. IBK is focused on
managing its BIS ratio, non-performing loan ratio, and allowances for bad debts, and it is working hard to
Establishment of Fair Trade
Managed Intensively upgrade its risk management standards and improve its execution capabilities. IBK realized a BIS capital adequacy
ratio of 14.82% in 2020, which provided a solid foundation for the steady performance of policy finance even
during the prolonged COVID-19 pandemic. Additionally, with the early introduction of the Basel Ⅲ regulatory
BIS capital adequacy ratio (Unit : %) IBK is strengthening information security and internal controls to establish sound and transparent
Tier 1 capital ratio
reform (end of December 2020), IBK has secured the capacity to support SME loans by easing capital burdens.
corporate governance. The bank will continue to develop its system and procedures related to
Common equity tier 1 ratio Regulatory ratio*
Our systematic credit evaluation model, which reflects changes in the financial environment and regulations,
information security and internal controls to comply with laws, promote sound management, and
is used for the overall business of the bank, including decision-making for loans and the identification of
2019 14.47 13.00 protect shareholders and other stakeholders.
quality indices. Moreover, we secure quality and create appropriate profits through the consistent inspection
11.97 (14.00)**
10.3
11.00
of risks in each area.
Enhancement of
2020 14.82
(12.00)**
Current status of risk management promotion
Information Security
12.82 9.50
• Improvement of loan interest competitiveness for blue-chip companies
11.13 (10.50)**
Improvement of loan
• Expansion of loan proportion for sectors where growth rate is high and Securing Information As channels for financial transactions become more diversified (online, smartphones, etc.), reacting in advance
insolvency rate is low
* Minimum ratio 8.0% + Capital conservation portfolios • Ensuring preemptive total loss-absorbing capacity by upgrading Protection Infrastructure to protect the personal information of financial consumers and customers has become critical. IBK is striving
Reasonable
buffer 2.5% + Countercyclical capital buffer 2.5% insolvency rate prediction models
management of to reinforce its information protection infrastructure and build a systematic security system that can protect
** Including 1.0% of D-SIB (Domestic • Re-development of corporate credit rating models
Systematically Important Banks) allowances for bad customer information and prepared the company for unforeseen situations that could be detrimental to it. IBK
(SMEs, micropayment-based, specialized lending)
debts Credit rating system • Expansion of big data rating use
is doing its best to ensure that not even one case of customer information infringement or leakage occurs.
innovation (loan examination, product development, etc.)
• Preemptive management of potentially insolvent companies through
the expansion of companies subject to early credit ratings
• Strengthening the audit of credit rating for preemptive integrity
Reinforcement to manage management
Strengthening Legal IBK is responding thoroughly to information protection and information security policies designated by
expected insolvent • Enhancing inspection of the credit risk of loan customers through the Compliance Activities on law. To comply with the FSC’s audit plan on information protection, IBK conducted an in-house audit on
companies expansion of customers subject to audit
• Periodic inspections and timely audits on the top sectors of SME loans Information Protection 65 key categories, including information protection. IBK was assessed to be adequate in all categories.
• Strengthening the role of the Risk Management Council (identification IBK also conducted an inspection of the security level and a verification of the security adequacy of its
Improvement of Re-establishment of of pending issues and rapid execution)
• Introduction of optimal methodology for internal capital allocation currently operating work system. Additionally, IBK regularly checks compliance with the Electronic Financial
executive ability of control tower roles of risk
(Return on investment: RAROC, etc.)
risk management management • Strengthening venture capital support and management, consulting to Transactions Supervision Standards and the Information Security Basic Directive and improves insufficient
reduce risk-weighted assets
areas. Finally, IBK has also inspected the information protection management systems of companies it has
• “Finding hidden operational risks” together with all employees
• Support of systematic risk management for overseas branches and invested in as a part of restructuring its overall information protection infrastructure.
Field-oriented risk
subsidiaries
management • Credit audit by reflecting on-site voices (communication enhancement
and improving convenience)
Information protection audit
• Improvement of operational risk management due to expansion of An audit on 106 inspection categories was performed in accordance with the
Strengthening operational
undertaken by affiliate
non-face-to-face transactions FSC’s annual audit plan to protect information. The results of the audit were
Strengthening risk management • Enhancement of system on guidance to the special business processing organizations of the Financial
procedure
reported to the FSC, and IBK passed all categories.
internal controls Services Commission
and response to • Development of the IBK principle for sound management of
regulations Thorough response to operational risks (PSMOR)
regulations, such as Basel III • System development due to the introduction of Basel III Security-level inspection : Construction of IBK My-Data Systems
Inspection/Verification
market risk regulations and 26 other inspections
of the adequacy of the
Security adequacy verification : Obtained qualified ratings of security measures
security measures built into
(e.g., construction of IBK Broadcast IPTV Systems) that IBK had set up on its own
the work system
Managing IBK manages current important risks while preemptively defining and managing risks that could have a significant initiative

Emerging Risks impact on the years to come. As the volume of data-based financial transactions continues to increase, the
complexity of credit rating continues to grow due to the many and diverse ways in which transactions are made. Tightened compliance Every quarter : 25 categories such as PC passwords
To address this challenge, IBK has combined a model that uses big data to upgrade the approval process of non- standards on information Every month : Improved standards deemed inadequate in 34 categories
protection (e.g., rules on bringing in/taking out IT equipment) and obtained qualified ratings
face-to-face loans with its loan limit strategy, thereby enabling preemptive risk management.
The insufficient response to the climate crisis along with strengthened environmental regulations is likely to
lead to a depreciation in the company’s asset value and possible investment losses. Thus, IBK will consider its
Inspections of information Inspections of 8 IBK subsidiaries such as IBK System Co.
response to the environmental crisis from a long-term viewpoint. Climate risk measurement, management
protection systems of were carried out in Dec. 2020.
and stress tests will be adopted from a long-term viewpoint, and internal evaluations will also be conducted IBK subsidiaries All audit results are shared, and best practice cases are awarded.
using management items combined with a big data model.
As demands from various stakeholders regarding corporate social responsibility have increased, ESG
regulations have been reinforced globally, and monitoring by stakeholders has also expanded. Various Strengthening the IBK is operating and strengthening its information protection system in accordance with ISO 27001, which is
management activities that do not take ESG into consideration may serve as various risk factors in such areas Information Protection the international standard for information protection, as well as the ISMS (information security management
as the environment, strategy, and law. Thus, ESG risks should be reviewed and responded to preemptively Management System system) standard, which is the local information protection certification. Through a review by an outside
in the IBK’s management activities. While responding to internal ESG risks, IBK will also strive to faithfully agency, IBK was assessed as having adequate levels in overall management categories such as information
fulfill the purpose of its founding, which is to support SMEs by continuously maintaining a system that can protection policies for Internet banking and smart banking, access control, and risk management.
minimize the ESG-related risks of SMEs. Accordingly, IBK has been able to increase public trust in its information protection system.
84 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 85

By making its information protection system more robust through the operation of a year-round cyber To provide effective education on information protection, awareness of information security has been raised
24X365 Cyber Expanding Education
security control room, IBK is increasing its competency for responding to external cyber-attacks. IBK has through online education customized for each job, and to strengthen the expert competencies in digital
Security Control established action plans for each phase of a cyber-crisis and built a response system to fend off cyber- and Communication on security for employees responsible for information protection, a course for fostering information protection
attacks such as DDos attacks, thereby enabling the company to keep information security breaches to zero. Information Protection experts has been created. Additionally, basic security education is provided for newly recruited employees
In particular, with the increase in cyber attacks on financial institutions and enterprises in 2020, such as and the employees of partners whose security awareness leaves them relatively vulnerable. In other words,
indiscriminate DDoS and ransomware attacks, some damage has been reported, but IBK has experienced various efforts have been made to build security awareness.
no damage thanks to its comprehensive defense against two DDoS attacks. Additionally, IBK has conducted
response training hosted by the National Intelligence Service for emergent DDoS attacks, and it was given
Type Target Course
a superior grade in all areas, including detection, response, analysis, and recovery, in the “blind practical
training for infringement response” conducted in collaboration with the Financial Security Institute. Online education Executives Three courses including finance IT internal controls

General staff Six courses including personal credit information protection

Inspection and Removal IBK is preventing the likelihood of security threats from the early stages by checking and eliminating security
of Security Weak Points vulnerabilities in its key critical systems. To be able to respond preemptively to the recently emerging AI-
IT group Nine courses including understanding of secure coding
in Key Systems powered hacking attacks, IBK has conducted blind hacking simulations that have greatly improved the
company’s responsiveness. Additionally, it is making diverse efforts to eliminate security weak points, such Information
12 courses including financial security encryption techniques
as the early removal of risk factors through regular security vulnerability checks, inspections for personal Protection Dept.
information left exposed on internet websites, and inspections of password settings for shared folders.

Guide to information • Guidance to precautions regarding the inflow of malicious emails

Results of Vulnerability Inspections of Internet Banking Infrastructure protection issues and • Guidance to preventive measures against COVID-19-related
precautions All employees cyber attacks
Category Inspection Target Inspection Content Remarks • Introduction of the latest hacking cases including ransomware
and DDoS attacks
Information 284 items including
protection Internet banking whether a specialized
management infrastructure Internet banking-related
system Education on personal
organization is operated
credit information Cases of personal information violation as well as how to process
protection All employees
tasks related to personal credit information, etc.
Open websites
51 items including whether
33 sites including
unauthorized users are
Internet banking
authenticated

DBMS Safety of Personal IBK has conducted an impact evaluation of its new personal information processing system to determine
50 systems including 31 items including account Financial Information Processing whether the Personal Information Protection Act is being observed and conducted an impact evaluation of its
fund systems and password management Security Institute work system. Targeting ten systems where new personal information processing systems have been applied,
including the development of a customer rate-of-return evaluation system, 84 items were inspected, including
securing the safety of personal information processing, and a satisfactory level was acquired for all items. The
Network
current status of technical and managerial personal information processing conducted under consignment by
equipment 50 machines including 74 items including logging
banking DMZ settings companies that provide personal information is managed and supervised regularly, and IBK has fully committed
itself to the secure handling of personal information through various other efforts.

Information
protection 55 systems including 41 items including adequacy Strengthening Personal The Customer Information Protection System was put in place to prevent excessive use and querying of
system firewalls of security policy settings and Credit Information customer information, thereby monitoring the adequacy of querying tasks conducted by all employees. As

Management IBK enters consignment contracts for personal and credit information, it manages and supervises the relevant
companies regularly to prevent loss, theft, and leakage of the personal information of customers. In addition,
Server
when personal information is provided to external parties, customer information is used securely after careful
590 servers including 159 items including directory
In-house deliberation on the security management contract and consent forms through a prior agreement procedure.
credit card servers and file rights settings
Every month a “Day to Practice Personal and Credit Information Protection” is held and a newsletter is
published to remind all employees of the importance of personal credit information protection.
86 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 87

Strengthening of Internal Control

During organizational restructuring in the first half of 2021, IBK created new Internal Control Supervision IBK operates an efficient compliance monitoring system to ensure fairness in business activities and prevent
Compliance
Department, which will play the role of control tower for internal control. IBK will do its best to become a illegal and unfair behaviors. Employees should comply with the Code of Ethics established by the bank
trusted bank for customers through inspections on whether legal regulations are being observed by branches
Monitoring System in performing their duties, and IBK should conduct management supervision and education regularly so
and the headquarters and the practice of conscious management via the pre-management and supervision that its executives and employees can fulfill their responsibilities as good managers to protect customers,
of risk factors related to internal control. shareholders, and the bank assets.

Corporate Governance The decision-making system for internal control consists of the Internal Control Committee, the Internal Compliance Monitoring System
of Internal Control Control Working Council (newly established in 2021), and a compliance officer under the BoD. The
Inspection of whether relevant regulations and
compliance officer supervises internal control-related tasks, having a position and authority equivalent to Prior review and requests for correction in terms of
internal control standards are being observed and
legal compliance for major tasks
those of executive officers and the group head. The bank supports the job performance of the compliance corrective actions to be taken
officer through its Compliance Department, Internal Control Supervision Department, and Anti-Money
Preparation and distribution of manuals for compliance with Establishment, revision, and operation of the Code of
Laundering Department to ensure the independence of the compliance officer so that he/she can perform internal control standards Ethics for employees
his/her job and compliance tasks efficiently.
Education and advice for employees in relation to compliance Cooperation with and support of supervisory authorities,
with laws and administrative guidance inspections and related departments

Compliance Education IBK is striving to strengthen employee competencies regarding compliance and internal control through
for Employees education customized to each position and job. Additionally, educational content has been developed using
various media such as drama, newsletters, and cyber-training, to help employees understand compliance and
internal control more easily, thereby raising the interest of employees.

Enhancement of The risk of money laundering in financial transactions is identified, analyzed, and evaluated, and a money
Anti-Money Laundering laundering risk evaluation system through which management levels are differentiated according to risk is
- Final responsibility for internal control of the bank now up and running.
Board of Directors - Establishment of basic policies regarding the development and Efforts
operation of the internal control system To promote AML (anti-money laundering) in more detail in every sector, in 2020 IBK established its new
AML Monitoring Team within the AML Department, and personnel were added to provide a foundation for
improving the accuracy of monitoring. In particular, the IBK Global AML system was developed in mid 2020 to
- Consultation on major policies related to internal control
Internal Control block money laundering risks in advance. An electronic process has been established to enable differentiated
The current status of - Discussion of measures to raise awareness of legal compliance among
Committee
the internal control employees, etc. customer due diligence according to risk levels following the customer risk evaluations that take place before
system and its
operation is inspected financial transactions, and real-time monitoring is up and running to prevent transactions with prohibited
at least once a year persons and those on the watch list. Additionally, a system has been developed and is being operated by the
regularly, and the Internal Control - Prior review of and consultation on the committee's agenda on the table
results are reported. Working Council - Sharing of current agenda and issues related to internal control headquarters to support overseas branches in meeting the requirements of competent local authorities.

- Inspections on whether internal control standards are being observed

- Supervision of internal control-related tasks
Compliance Officer
- (When necessary) Reporting of investigation results regarding violations of
standards to the Auditor

Internal
Compliance Control AML
Department General Department
Department

※ Employees have the primary responsibility for work-related internal control, and they should fully understand and comply with regulations
and internal guidelines in the performance of work.
※ Employees and executives who manage organizations and tasks should supervise internal control related to the organizations and tasks
they are concerned with.
88 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 89

SPECIAL REPORT

Sustainability IBK is a specialized bank for SMEs, the economic foundation of Korea, which it was established to
promote. IBK’s SME-related financial know-how accumulated over the last 60 years is its unique
Survey of SMEs
Management strength, differentiating the company from other financial institutions. Based on this, IBK is trying
Support for to promote and develop SMEs. IBK is constantly conducting surveys and research on SMEs to fulfill its founding purpose of supporting SMEs
SMEs IBK has tried to become a foundation for promoting creative and innovative SMEs with multi- and is helping to ensure the sustainability management of SMEs by offering various consulting programs
faceted support across the financial and non-financial sectors. Furthermore, IBK will strive to create based on its accumulated expertise and experience.
a virtuous-cycle economic structure in Korea, by which coexistence and balanced development
between conglomerates and SMEs can be realized.
Survey of SMEs As prescribed in the company’s founding principles and in Article 33-3 of the Industrial Bank of Korea Act-
“The Industrial Bank of Korea shall conduct research and surveys on, and business guidance services for, small-

Consulting support for SMEs and medium-sized enterprises”—the IBK Economic Research Institute is operated directly under the CEO and
conducts survey and research tasks based on the field-oriented data analysis. With the attitude of “leading
research,” “field-oriented research,” and “open research,” the research institute provides a future role model for

IBK has provided free for SMEs in various areas, including ESG management support, since 2011 to the bank not only for the growth and advancement of IBK but also for national development.
Consulting for SMEs strengthen their competitiveness and sustainable growth. It is a diffrentiated ESG activities by IBK. In 2020, the research institute studied various pending economic and management issues with the major

Field-oriented, specialized consulting in areas outside the control of SMEs, such as business strategy, HR, mission of responding to IBK’s innovation management and COVID-19. In particular, it helped many major

labor, family business succession, taxes and accounting, mergers and acquisitions, and legal matters have economic agents, including SMEs, to establish a plan for economic activities through the “2021 Economy and

been provided by 50 expert business consultants from global consulting firms and accountants from large Business Environment Forecast” report.

accounting firms who have assisted in a total of 8,975 consulting cases since 2011. The institute also conducted a financial status survey of SMEs, a statistical survey certified by the government
for the purpose of publishing up-to-date statistical data applicable to SME support and financial studies, and
awarded excellent researchers in SME areas with the IBK Academic Award to activate SME-related research.
IBK consulting performance

Core value

Think Tank
Innovation transformation
Cham-Jo-eun consulting Hope consulting Companion consulting consulting The best
2,163 cases 3,165 cases 2,403 cases
8,975 oriented towards the future and leading change
Yearly performance 7,731
Cumulative performance 6,494
5,328
4,240
3,165
2,163 Frontier Trust Research
1,311
742
182 1,166 1,237 1,244
1,002 1,075 1,088
852
560 569
182 We will be a future-oriented We will always be with
We will constantly raise issues
and visionary IBK Economic customers as a trusted
’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 and provide solutions.
Research Institute. companion of SMEs.
90 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 91

Support for Sales Channel Pioneering Job Fairs IBK held 60 job fairs from 2009 to 2020 to assist in job matching between SMEs and job seekers. Around
240,000 job seekers and 3,324 companies participated in the job fairs, and 5,105 job seekers found new
jobs. In particular, contactless job fairs have also been held in which all programs, such as AI competency
Support for Sales Channel IBK has promoted various sales channel support projects targeting Korean SMEs facing difficulties in sales tests and non-face-to-face video interviews, were conducted in a non-face-to-face manner to cope with the
Pioneering for SMEs in channel pioneering. These include supporting SMEs in entering Market Luxury Maru, producing a Home & COVID-19 pandemic in 2020.
Korea and Overseas Shopping advertisement video for SMEs, and recommending the best SME products of the month in the Korea
Economic Daily.
Support to Ensure SME IBK was selected as the 16th Voluntary Business for Win-win Relationship after signing a work contract
The sales channel support project Market Luxury Maru for SMEs promotes SME products by establishing and
Human Resources Through with the Ministry of SMEs and Startups and the Korea Federation of Small and Medium Business on August
operating markets in major train stations (*Seoul Station, Daejeon Station, Dong Daegu Station, and Gwangju
the Selection of Voluntary 5, 2020, to secure superior human resources for SMEs and resolve the problem of youth unemployment.
Station) through a contract with KORAIL. As of the end of 2020, IBK had supported 192 companies in entering
Business for Win-win It executed contract tasks in three areas: financial assistance for job creation, job-linked support, and
the market to achieve sales worth KRW 2.7 billion per year.
Relationship enhancement of job awareness.
IBK supports export SMEs through financial consulting and preferential foreign exchange rates and fees for
enterprises selected by relevant organizations, such as the Ministry of SMEs and Startups. It also opened online Contract Tasks Major Achievements (Aug. 5 to end of Dec. 2020)
export and import exhibitions in collaboration with overseas partner banks for the first time in the domestic
• Expansion of IBK Job Plus loan amounts and beneficiaries (up to KRW 1.6 trillion)
banking sector to pioneer overseas sales channels for SMEs, and web seminars for global entry were conducted
- Amount of support: KRW 183.4 billion
jointly with Amazon while support was expanded for payment services of overseas online shopping malls. Financial assistance for
• Expansion of recipients of co-growth and cooperation loans from the Korea
job creation
In 2021, IBK has supported the export payment service of the Buy Korea B2B online export platform run Federation of Small and Medium Business
- Amount of support: KRW 79.3 billion
by KOTRA (Korea Trade Investment Promotion Agency) to encourage online and non-face-to-face exports,
expanded the payment services of overseas online shopping malls, and driven matching services for export and • Collaboration in operating the job support platform for SMEs
import companies in connection with overseas partner banks. IBK will continue to attempt various support Job-linked support • Financial awards to SMEs upon recruiting (KRW 500,000 per employee)
projects in the future. - KRW 2,153 million in support for 589 SMEs

• Promotion of the IDEA contest to herald SMEs in 2020

• Production and sharing of content to improve awareness of SMEs
Enhancement of
Job Support job awareness
- Production of advertising video for participating companies in the non-face-to-face
job fair (51 companies)
- Recruitment briefing session conducted with HR teams of SMEs (16 companies)

IBK’s job support project started from listening to requests at a meeting with SME CEOs regarding the difficulty
Job Support Project of finding new employees for a workplace. Accordingly, the Youth Employment Project for SMEs was launched
Financial Assistance Job Filling Fund through the Employment-Linked Financial Assistance Program
in 2009 to strengthen SME competitiveness by supporting the recruitment efforts of SMEs, and IBK has
Programs IBK created the Job Filling Fund, worth KRW 60 billion as of Sep. 2018, to support the employment costs of
launched various job support projects since, such as an online recruitment portal and job fairs.
SMEs and had provided a total of KRW 10.4 billion in support as of the end of 2020. The Job Filling Fund is
a scheme to provide enterprises employing full-time employees with KRW 500,000 through i-ONE JOB for
Project to Create IBK has recorded a cumulative 100,000 new employees hired through the Youth Employment Project for each new employee retained for at least three months. It has been expanded and improved to support KRW
100,000 New Jobs SMEs from 2009 to 2017. The project was restructured as the Project to Create 100,000 New Jobs in 2018. 1 million for enterprises employing socially disadvantaged persons, such as persons with disabilities, persons
IBK has re-developed its recruitment portal system and created a job-filling fund to strengthen its foundation who graduated from specialized vocational high schools, and recipients of the basic livelihood since 2021.
for business promotion, and has thus matched around 20,000 new employees with SMEs every year since.
Loan Products to Support Win-Win Job Creation Enterprises
Recruited personnel (Unit : persons, cumulative) IBK has set its own loan amount limits to respond to the government's job creation policies, enhance the

62,405 self-reliance of SMEs, and lead the win-win enterprise ecosystem. As such, IBK launched the IBK Job Plus
Loan, a low-interest loan for enterprises that create and maintain jobs, and through it has loaned a total of
KRW 1,085 billion (2,618 loans). Additionally, with the low-interest Mutual-Growth Cooperation Loan for
42,071
SMEs based on contracts among middle standing enterprises, public institutions, and conglomerates, IBK has
loaned a total of KRW 302.1 billion (864 loans) to enterprises that create and maintain jobs.
21,047

Plan for a Recruitment To support the Korean government's New Deal project, the theme of the 2021 Job Fair was set as the
2018 2019 2020 Support Project in “Korean New Deal,” and IBK is preparing to hold three job fairs for each sector. It has also developed Digital
Connection with the and Green New Deal enterprise-dedicated recruitment online booths inside at the i-ONE JOB to support the
Korean New Deal recruitment of Korean New Deal companies and advertise the New Deal project
i-ONE JOB Platform i-ONE JOB is a job platform for SMEs. It provides matching assistance in job search and hiring for SMEs through
for SMEs a system for the convenient, one-stop management of enterprise-recruiting procedure such as opening jobs,
Opening May July October
searching for job applicants, and managing successful job applicants. Additionally, job applicants can use many
Event theme Employment and the social safety net Green New Deal Digital New Deal
additional services free of charge, such as resume consulting and consulting on jobs with current employees.
92 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 93

Financial Support for SMEs

IBK has expanded financial support for SMEs experiencing financial difficulties due to COVID-19. As a Promoting mutual growth agreements for Green New Deal support
Expansion of Financial result, IBK was the first company in the banking sector to record a loan balance of KRW 180 trillion. It also Mutual-growth agreements for Green New Deal provides financial support for collaborative enterprises
Support for SMEs maintained the greatest market share in Korea, strengthening its status as the leading bank for SME financing. wishing to invest in energy savings and greenhouse gas reductions to participate in the government’s Green
(Unit : KRW 100M, Balance) New Deal policy. In keeping with this policy, IBK has signed mutual-growth agreements with nine companies,
1,867,769 beginning with Emart, and supplied loans worth KRW 116.8 billion.
1,627,274 Support for Regional SMEs
Compared to the
previous year, With the aim of promoting balanced regional growth and creating jobs to revitalize local economies, IBK has (As of Dec. 2020, Unit : KRW 100M)

KRW set and implemented an additional supply target for proactive funding support for regional SMEs. As a result,
Company name Net increase of deposits Net increase of loan limit Remarks
2.4 trillion the supply of funding had exceeded KRW 25.7 trillion as of the end of Dec. 2020 (support target in 2020: KRW
Increase Emart 54 81 June. 2020
18.5 trillion). Additionally, 73 regional industrial complexes were selected as strategic areas to receive preferential
Daesang 10 30
End of 2019 End of 2020 treatment for loan schemes such as the loan-to-value ratio. IBK has signed contracts with local governments
KEPCO Energy Solution 100 100 Aug. 2020
located in 68 non-metropolitan regions to lead the support for low-interest policy fund loans.
Hyundai Construction
50 100
Equipment
Support for Social Enterprises Hyundai Engineering &
150 300 Sep. 2020
Construction
IBK has actively expanded its support for social enterprises that develop or provide social services or contribute to
Hyundai Development
job creation for the vulnerable class. As of the end of Dec. 2020, about KRW 221.6 billion (loan balance) had been 75 75
Company Oct. 2020
supplied. Moreover IBK is expanding various kinds of assistance for social enterprises. For example, it now provides Amore Pacific 22 22
consulting services to strengthen the self-reliance of social enterprises and has newly created and is operating interest LG Innotek 200 400
Nov. 2020
reduction rights to alleviate the financing costs. Doosan 30 60
Sum (9 cases) 691 1,168 -
Mutual-Growth Cooperation Loan

IBK raised the annual loan limit to IBK has contributed to create low-interest loans based on deposit funds from institutions and conglomerates Promoting mutual growth agreements for the expansion of ESG
for the purpose of mutual growth between conglomerates and SMEs. Although COVID-19 in 2020, with the
KRW 1.2 trillion for the first time In line with the growing demand to introduce ESG management to SME partners in the supply chain and
since the project started in 2008, active promotion of sales targeting institutions and conglomerates, IBK has contributed to expanding its sales
expand ESG management for conglomerates, IBK has promoted mutual growth agreements for expansion
fulfilling its role as a policy finance base by signing work contracts with 40 institutions related to major business customers, CMS, and mutual
of ESG to broadly support ESG management at small and large companies. IBK will continue to lead the
institution. growth. In particular, in 2020 IBK raised the annual loan limit to KRW 1.2 trillion for the first time since the
spread of ESG culture among SMEs in an attempt to expand mutual-growth agreements in 2021.
project started in 2008, fulfilling its role as a policy finance institution. ※ Eligible loan recipients expected to increase

(Unit : KRW 100M)

Net increase of deposits Net increase of loan limit Month

(As of the end of 2020, Unit : Enterprise, KRW 100M)
Lotte E&C* 15 30 Jan. 2021
Annual net Annual net No. of Hyundai Construction
Category Deposits Loan limit The introduction of the 100 200
increase increase customers Equipment Apr. 2021
Institutions 15,211 5,416 23,245 7,130 64 Partner Support Scheme, Lotte Chilsung Beverage* 50 100
Collaborative Channels, and
Conglomerates 29,440 2,300 60,321 4,920 109 Fair Trade Principles Hyundai Electric 50 100 May. 2021
Sum 44,651 7,716 83,566 12,050 173 IBK runs a dedicated fair trade unit LG Chem 100 100 Jun. 2021
and is implementing an autonomous Samsung Heavy Industries 50 200
compliance program for fair trade to Aug. 2021
realize fair and free competition and
S&I Corp. 100 100
consumer protection. IBK is advancing LG U+ 100 250 Sep. 2021
together with its partners through
fair trade. As such, it has prepared
SK Magic 100 200
Nov. 2021
behavioral principles that should be CJ Olive Young 100 200
observed by partners, such as the
protection of worker's rights, prohibition
Lotte Chemical 100 200
of illegal solicitation, and compliance Lotte Himart 100 200 Dec. 2021
with fair trade, and allows partners to
comply with the principles voluntarily.
Lotte Foods 50 100
Total (13 enterprises) 1,015 1,980 -

* Lotte E&C and Lotte Chilsung Beverage were mutual growth agreements for Green New Deal, but green investment cases have also been
included under mutual growth agreements for the expansion of ESG.
94 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 95

Support for Restructuring

IBK is not only providing restructuring programs but also expanding various other support activities, including In Sep. 2020, IBK and Korea's SMEs and Startups Agency launched the Preemptive Restructuring Support
new fund assistance and debt adjustment, through contracts with other institutions for the sustainability
Business Agreements Program, which comprehensively supports business consulting, new funds, debt adjustment, etc., for
management of SMEs in crisis. for Preemptive enterprises requiring restructuring.
Restructuring Support IBK discovers and recommends SMEs and supports debt adjustments, such as extensions of loan maturity
dates and interest rate discounts, with the Korea's SMEs and Startups Agency supporting new fund loans
Restructuring Support Rapid financing is supplied jointly with other banks in the banking sector for enterprises with temporary
and business consulting. Through this program, new funding worth KRW 3.5 billion was supplied to 11
Policies and Current liquidity problem, and IBK unilaterally supports pre-fast track loans, thereby leading solutions to enterprise
companies as of the end of March 2021, and assistance in debt adjustment, including extension of loan
Status financial crises. Furthermore, IBK supports change-up (workout) in collaboration with creditors or alone for
maturity date, was provided for debts worth KRW 46.6 billion.
companies showing warning signs of insolvency as it steadily strives for management normalization.
In Aug. 2019, IBK signed on to the SME Value-Up Program, which helps address temporary liquidity problems,
IBK supports 400 new enterprises per year. As of the end of 2020, 715 enterprises participated in programs
along with KODIT (Korea Credit Guarantee Fund), and has since supplied new funding worth KRW 8.5 billion
for the normalization of management. In particular, IBK plays the role of host bank for 67% of rapid
to 27 companies and assisted debt adjustment of up to KRW 89.4 billion as of the end of March 2021.
financing cases and 69% of workout cases in Korea, acting as a faithful companion to enterprises by
supporting them when they are in trouble.

Restructuring consulting
Customized Recovery First step Second step Third step
Record of new restructuring New Restructuring Records
assistance
(Unit : Companies, KRW 100M)
Support Program Pre-Fast Track Quick financial Change-up → Corporate
(Unit : companies) support rehabilitation proceeding Value-up program
End of 2018 End of 2019 End of 2020
No. of No. of No. of Single support Shared bank Shared support by Structural improvement
Amount Amount Amount
361 407 319 companies companies companies • Companies with support finance creditors program
Change-up 200 8,204 184 6,988 110 2,786 temporary lack • Companies with • Company with insolvency
of liquidity temporary lack symptoms and financial
Rapid financing 104 4,158 170 6,836 118 6,068 of liquidity Corporate structure
bankruptcy
’18 ’19 ’20 innovation fund
Pre-FTP 57 2,477 53 2,660 91 4,372
Total 361 14,839 407 16,484 319 13,226

Record of ongoing restructuring Current Status of Ongoing Restructuring (Unit : Companies, KRW 100M)
assistance (Unit : companies)
End of 2018 End of 2019 End of 2020
Conclusion
No. of No. of No. of
Amount Amount Amount
653 702 715 companies companies companies
The goals of IBK are to help SMEs overcome resource and competency limitations and support SMEs in
Change-up 419 21,748 397 19,982 336 15,671
achieving sustainable growth. IBK will ceaselessly consider its financing role in resolving various problems
Rapid financing 172 7,482 249 11,219 259 12,746
’18 ’19 ’20 that SMEs face in the growth stage and become the main partner in the stabilization of the SME financing
Pre-FTP 62 2,932 56 2,304 120 5,393
market. IBK will always be with SMEs as a faithful-financing partner in challenge of growth.
Total 653 32,162 702 33,505 715 33,810

Introduction of IBK is operating a consulting service for restructuring to help SMEs in crisis find solutions through in-depth
Restructuring Consulting conversations and by sharing difficulties. It is thus not only guiding enterprises in implementing restructuring
measures, but also linking to and supporting various restructuring programs.
A change-up program is introduced to companies that are reluctant to undergo restructuring or which are
facing difficulties regarding how to restructure to help those companies improve their financial structure
through the sale of idle assets. Additionally, for companies with difficulty in financing due to high loan
ratios but which have ample enough technical assets to attract external investment, IBK requests investment
recommendations from fund management companies in relation to enterprise innovations.
※ Record of investment attraction for the Enterprise Structural Innovation Fund : attracted 20 companies with investments worth
Record of consulting (Unit : companies) KRW 379 billion.
Although the number of cases of restructuring consulting, which had been 100 cases on average, dropped
55 83 111 59 to just 59 in 2020 due to COVID-19, IBK will expand its consulting assistance further by introducing suitable
systems for the contactless era, such as non-face-to-face consulting.
’17 ’18 ’19 ’20
96 97

Appendix
ESG Management,
Strategy
60

Definition of Stakeholders 98

Materiality Assessment 100

Economic, Environmental, and Social Data 102

GRI Index 108

SASB Report 110

Third-Party Assurance 112

Major Awards, ESG Evaluation Grade 114

98 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 99

Definition
이해관계자 참여 of Stakeholders

In consideration of the impacts on and importance of the sustainability management of IBK, the six major
Direction of Stakeholder stakeholder groups were defined as SMEs, individual customers, employees, communities, governments,
The process of Selecting STEP 01 IBK identifies core stakeholder groups related to the direction of sustainability management
Participation and shareholders and investors. Additionally, IBK operates communication channels to encourage the Stakeholders and Selection of and its core activities. IBK selects core stakeholder groups that have a significant impact on
Stakeholders sustainable growth areas, such as the ESG management of IBK and generation of social value.
participation of stakeholders to identify the expectations of each stakeholder group and share diverse views. Collecting Opinions
IBK intends to reflect active communication with stakeholders in the management strategy and practice and
construct an ESG management system.
STEP 02 IBK operates communication channels to hear and share the opinions of diverse
Participation of stakeholders for its sustainable growth. IBK seeks continuous communication through the
Stakeholders general meeting of shareholders, customer panels, and communication postcards.
Policies for Stakeholder IBK has defined the participation of its stakeholders with minimal requirements to promote mutual
Participation communication and collaboration.

IBK promptly provides transparent information to its core stakeholders, including SMEs, individual customers,
STEP 03
employees, communities, governments, and shareholders and investors. IBK collects and shares data on the results of communication with diverse stakeholders
Sharing of
for the sustainability management of IBK.
Stakeholder Issues
IBK operates opinion collection channels through which stakeholders may freely participate anytime,
anywhere, irrespective of whether a significant business issue has arisen or not.

IBK protects the right to know by providing information concerning the history, key content, and
STEP 04 IBK hosts occasional discussions on issues related to sustainability management, which
countermeasures of any significant issues as soon as they arise.
Reflect to could have a significant impact on IBK, and reflects core issues to the construction of its
ESG Management ESG management system.

Stakeholders Stakeholders
SMEs Individual Employees Communities Governments Shareholders
customers and investors

Communication Communication Government office inspection

IBK Changgong VOC (Voice of Customer) Communication postcard IBK Happiness Sharing Foundation General meeting of shareholders
channels channels Joint cooperation program
Public institution management
IBK 1st Lab Survey of customer satisfaction levels Leaders’ club IBK Smile Sharing Foundation Annual report
performance report
Business agreements with
Mutual growth agreement WIN Class Pending issue briefings SME Joint Workplace Daycare Center Sustainability report
related institutions

SME consulting One-Stop counseling service Human Rights Counseling Center Sports teams Green Finance Council IR website

Manager club i-ONE Bank Labor-Management Council Online community communication channel IR conference

i-ONE JOB Customer Service Center Insider report system Public notices

IBK BOX
100 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 101

Materiality Assessment

IBK assessed the materiality of the report based on the “Context of sustainability,” “Importance,” “Participation Materiality Assessment Matrix
Materiality Assessment of stakeholders,” and “Completeness” reporting principles of the GRI (Global Reporting Initiative) Standards.
Process To identify material issues related to the sustainability management of IBK, IBK evaluated international
sustainability management trends, corporate vision and strategies, global financial industry, media exposure,
etc., from a comprehensive perspective. IBK also prioritized material issues through surveys of and interviews

Impact
with stakeholders. IBK identified six material issues, which were divided into the categories of E (Environment),
2 Comprehensive finance
S (Social) and G (Governance) and reported. and social contributions

1 Ethical management

Identification of Issue Pool 3 Expansion of digital finance

STEP 01 IBK identified the status of its sustainability management through an analysis of sustainability management issues
and international standards and identified external viewpoints through benchmarking of advanced financial
enterprises and media research. IBK identified the direction and major performances of its sustainability management Customer satisfaction
4 and experience
activities through a review of internal documents such as management performance and business reports, etc.,
Response
surveys of employees, and interviews with stakeholders. By doing so, IBK created an issue pool of 21 material issues 5 to climate
having a significant impact on the sustainability management of IBK. 6 change

Great work
Benchmarking of Advanced
Analysis of Global Standards Analysis of Current Status Media Research environment
Companies

• GRI Standards • Management performance reports • Identification of sustainability • Identification of major news and

• DJSI (Dow Jones Sustainability • Business reports and audit reports management strategies, activities, issues in areas related to the
Indices) • Annual Report and performances in domestic/ economic, environmental, social,
• ISO 26000 • Surveys of executives/employees foreign financial industries and governance structures of IBK
• Sustainable Development Goals • Annual report on governance • Analysis of report subjects

(UN SDGs, K SDGs) structure and annual report on and priorities of sustainability
• TCFD, SASB wage system management reports of
14 peer-group enterprises Relevance

Definition of ESG Issues in the Report

Prioritization of Issues
Stakeholder Impact
STEP 02 To select material issues from the pool that should be consistently managed, IBK evaluated the interest levels of Material Issue
SDGs (Sustainable
Page
Individual Shareholders Development Goals)
stakeholders and business impacts in the four areas of strategy, finance, operation, and reputation. This process SMEs Employees Communities Governments
customers and investors
enabled IBK to understand the impact of each issue on our business and to prioritize issues in accordance with
22~27,
stakeholder perspectives. E 5 - Response to climate change ● ● ● ● ● ● Goal 7, 9, 11, 12, 13
34~39

2 - Comprehensive finance and

social contributions
● ● Goal 1, 17 42~49

3 - Expansion of digital finance ● ● ● Goal 4. 9, 16 56~65

Materiality Assessment Results S
4 - Customer satisfaction and
STEP 03 IBK selected 6 material issues out of the 21 issues obtained through comprehensive consideration of the impacts of experience
● ● ● ● Goal 12, 16 50~53

IBK on stakeholders according to business relevance and social impact. IBK organized the Table of Contents of the
2021 Sustainability Management Report of IBK by dividing the issues according to ESG themes and has disclosed
6 - Great work environment ● ● ● ● Goal 3, 5, 8, 10 70~71

major related activities and performances in this report.

G 1 - Ethical management ● ● ● ● Goal 16 78~80
102 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 103

Economic Data Economic Data – ESG

Credit Ratings Issuance of ESG Bonds

2018 2019 2020 Unit 2018 2019 2020

Short-term Long-term Short-term Long-term Short-term Long-term Foreign-currency ESG bonds US$ 100 million 5 - 5
Moody’s P-1 Aa2 P-1 Aa2 P-1 Aa2 Korean-currency sustainable bonds KRW 100 million - 3,000 10,500
S&P A-1+ AA- A-1+ AA- A-1+ AA-
Fitch F1+ AA- F1+ AA- F1+ AA-
* The long-term grades of Moody’s and Fitch are the same as the national credit grade and are maintained at a higher level compared to commercial banks (as of end of March 2021). Operation of ESG Bonds

Unit 2020
Creation of Economic Value (Unit : KRW billion)
Balance of Korean-currency ESG bonds KRW 100 million 19,500
2018 2019 2020 Balance of Korean-currency bonds KRW 100 million 315,934
Total assets 289,509 318,111 361,616 Ratio of ESG bonds % 6.10%
Operating profit 2,396 2,227 2,125 Balance of foreign-currency ESG bonds KRW 100 million 1,069
Net income for the year 1,764 1,614 1,547 Balance of foreign-currency bonds KRW 100 million 12,497
Ratio of ESG bonds % 8.56%
* Korean-currency bonds : Based on held-to-maturity securities accounts
Distribution of Economic Value (Unit : KRW million)
Foreign-currency bonds : Based on available-for-sale securities accounts (Based on the exchange rate at the corresponding yearend).

2018 2019 2020

Shareholders and investors Dividends 410,107 382,614 372,933
ESG Finance - Green finance (Unit : KRW trillion) ESG Finance - Inclusive Loans (Unit : KRW 100 million, based on new loans)
Executives and employees Wages 1,198,515 1,240,847 1,333,999
Executives and employees Welfare expenses 8,351 8,766 6,836 2020 2020

Government Corporate taxes 635,189 625,976 538,993 Green finance (Performance of supply in 2020) 2.2 New Hope Loan 3,033
Enterprise loans (Total supply in 2020) 71.7 Loan for Workers' Livelihood
3,085
Stabilization Fund
Share of support for green areas 3%
Operating Profit for Each Country (Unit : KRW million) Sunshine Loan Youth 743
* Performance based on 85 items of the Green New Deal according to the joint
2018 2019 2020 standard of new deal investments, etc. (new and renewable energy, environmentally Sunshine Loan 17 309
friendly generation, smart farms, etc.)
Operating profit of IBK (Chinese) Co., Ltd. 26,212 29,115 10,801 * IBK will subdivide green finance following the application of K-Taxonomy. Saitdol Mid-Interest Loan 182
Net income for the year of IBK (Chinese) Co., Ltd. 17,491 24,794 9,058 Convenient Mid-Interest Loan 95
Operating profit of IBK Indonesia - -13,182 -30,036 ESG Project Financing House Mortgage Free Workout 14
(Unit : KRW billion)
Net income for the year of IBK Indonesia - -18,201 -39,430 Personal Free Workout 7
2020
New and renewable energy 64 Mid-Interest Credit Loan 4
Payments to the Government (Unit : KRW million) Total 7,471
Environmental infrastructure 188

2018 2019 2020 Ratio of ESG PF 17.70% Ratio of Inclusive loans 5.20%

Calculated corporate tax amount 410,512 322,082 335,733

Tax credit 6,040 13,265 16,941
(Unit : KRW 100M,
Finalized tax amount 404,471 308,816 318,792 ESG Investments (Unit : KRW billion) ESG finance - Innovation growth
based on new loans)

2020 2020

BIS Leverage Ratio (Unit : KRW billion) New and renewable energy 168 Fund for startup 285,317
Environmental infrastructure 238 Risk Capital 3,307
2018 2019 2020
Cultural content 11,932
(Basel Ⅲ) Tier 1 capital 19,629 21,109 24,073
(Basel Ⅲ) Total exposure 317,090 343,728 385,454
(Basel Ⅲ) Leverage ratio 6.19% 6.14% 6.25%
104 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 105

Environmental Data Employees Data

GHG Emissions * Based on whole company Number of Executives and Employees (Unit : persons)

Unit 2018 2019 2020 2018 2019 2020

SCOPE 1 emissions tCO2eq 12,432 11,384 9,483 Male Female Male Female Male Female
SCOPE 2 emissions tCO2eq 48,558 46,936 50,071 Total number of employees 6,010 7,143 6,181 7,341 6,256 7,490
SCOPE 1+2 tCO2eq 60,990 58,320 59,554 Conditions of
Executives 3 0 2 0 3 0
SCOPE 3 Purchased products & services tCO2eq 8,050.46 5,988.63 5,365.37 contract
Regular workers 5,296 3,728 5,498 3,874 5,581 3,968
SCOPE 3 Capital goods tCO2eq 101.23 282.23 165.34
Contract workers 711 3,415 681 3,467 672 3,522
SCOPE 3 Business trips tCO2eq 1,290.11 926.30 845.49
Position Executive 3 0 2 0 3 0
SCOPE 3 Employee commuting tCO2eq 12,124.70 8,127.99 5,595.72
1st rank 56 7 56 5 53 3
SCOPE 3 Total tCO2eq 21,566.50 15,325.15 11,971.92
2nd rank 312 12 317 11 337 20
3rd rank 1,626 443 1,599 554 1,527 674
Energy Consumptions * Based on HQ, IFT
4th rank 1,734 1,366 1,828 1,425 1,905 1,512
Unit 2018 2019 2020 Clerk 1,568 1,900 1,698 1,879 1,759 1,759
Electricity MWh 13,395.64 13,839.55 13,199.98 Contract worker 711 3,415 681 3,467 672 3,522
Sunlight kWh 26,082.00 24,882.00 23,665.00
Gas m3 855,065 825,926 879,840 New Employees (Unit : persons)

2018 2019 2020

Water Consumption * Based on HQ, IFT
Male Female Male Female Male Female
Unit 2018 2019 2020 Total new employees 280 267 276 350 176 218
Tap water ton 64,067 72,789 78,148 Age group < 30 years 170 204 196 179 128 117
≥ 30 years and < 50 years 109 63 74 163 43 89
≥ 50 years 1 0 6 8 5 12
Waste Discharge * Based on HQ, IFT
* The number of newly recruited employees in general full-time positions was disclosed in the 2019 Report, whereas the total number of newly recruited employees was disclosed in the 2021 Report.

Unit 2018 2019 2020

Recyclable waste Blank paper ton 92.22 91.9 77.9
Diversity (Unit : persons)
Recyclable waste Newspaper ton 82.1 87.1 73.3
Recyclable waste Scrap paper ton 96.7 101.1 93.7 2018 2019 2020
Recyclable waste Cans ton 4.5 2.91 3.7 Veterans employees 922 1,076 1,106
Recyclable waste Plastic ton 17 16.6 13.6 Disabled employees 308 379 454
Recyclable waste Bottles ton 9.8 10.4 9.4 * Including regular and temporary workers
Recyclable waste Total ton 302.3 310 271.6
General waste ton 180 195.6 286.8
Current Status of Parental Leave (Unit : persons)
* General waste calculated as 75 L = 19 kg and 100L = 25kg in reference to the enforcement policy of the volume-rate waste disposal system of the Ministry of Environment (November 30, 2017)
** Water and waste usage have increased as the demolition and improvement work of deteriorated facilities have been conducted since February 2019 due to the old Headquarters
building (which was built in 1987). 2018 2019 2020
Male Female Male Female Male Female
Total number of employees taking parental leave 11 1,284 27 1,277 33 1,358
Purchase of Environmentally Friendly Products
Employees returning from parental leave 4 526 15 449 22 528
Unit 2018 2019 2020
Purchase of LED lights KRW million 0 250 478
Environment-friendly specifications of transactions KRW million 499 372 470
Deposit for Retirement Pension
Total KRW million 499 622 948 Start date of retirement pension 11.12.28 Unit 2018 2019 2020
Defined Benefit (DB) Current value of payables KRW billion 852 992 1,047
Environmental Law Violations Defined Benefit (DB) Subscribed employees Person(s) 12,652 12,954 12,907
Defined Contribution (DC) Retirement benefit expense KRW 100 million 2.5 3.7 5.8
Unit 2018 2019 2020
Defined Contribution (DC) Subscribed employees Person(s) 402 659 789
Cases of environmental laws violations Case(s) 0 0 0
106 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 107

Employees Data Customers and Communities Data

Safety & Health Customer Satisfaction Level

Unit 2018 2019 2020 Unit 2018 2019 2020

Cases of industrial disasters Case(s) 0 0 0 Self-surveys Point(s) 91.4 91.4 91.1
Cases of safety accidents Case(s) 0 0 0 Korea Standards Association (KC-SQI – Service Quality Index) Point(s) 75.4 75.4 75.9
Application of flexitime Person(s) 2,042 2,204 2,619 Korea Management Association Consulting
Point(s) 72.5 75.6 76.9
Application of work-from-home Person(s) 0 0 9,643 (KCSI – Customer Satisfaction Index)
* Number of employees using flexitime (staggered commutes, optional work, and flexible work) - Overlapped calculation for employees belonging to more than one flexible work systems Korea Management Association Consulting
Point(s) 92 94 94
** Application of work-from-home in 2020 in keeping with the national crisis caused by COVID-19 (KSQI – Service Quality Index)

Details of Social Contribution Project Budget (Unit : KRW million)

Strengthening Capabilities
2018 2019 2020
Unit 2018 2019 2020
Community benefit 50,316 40,541 18,114
Total participating executives/employees Person(s) 13,153 13,522 13,746
Inclusive loans 32,958 41,559 49,501
Total executive/employee education costs KRW million 21,706 22,775 14,933
Academy & education 9,739 10,645 11,713
Total per capita education costs KRW million 1.7 1.7 1.1
Environment 310 510 10
Total executive/employee education time Hour(s) 2,062,709 2,712,611 2,711,756
Total per capita education time Hour(s) 156.8 200.6 197.3 Culture, art and sports 10,862 11,318 5,518

* Subjects of training: All expected education/training costs Global 1,456 1,126 159
** Time of publication of 2019 Report and change of calculation method for education time (in consideration of the acceptance criteria and mean learning time of the Ministry of Employment and Labor)
Total 105,641 105,699 85,015
*** Due to the limitation of face-to-face education because of COVID-19 pandemic, the total education cost for employees decreased.
* Social contribution project budget decreased in 2020 due to COVID-19.

Strengthening Ethical and Human Rights Management

Unit 2018 2019 2020 Details of Donations (Unit : KRW 100 million)

Participants in ethical education Person(s) - 10,907 11,035 2018 2019 2020

Ethical education time Hour(s) - 23,631 25,748
Total donations 468 411 267
Participants in human rights education Person(s) - 10,907 11,035
Political donations 0 0 0
Human rights education time Hour(s) - 3,635 4,046
* In Korea, political donations by corporations are prohibited in accordance with the Political Funds Act. IBK had prior discussions on the subjects and adequacy, etc., of donation support
* Mandatory cyber-education on ethics and human rights from 2019 (face-to-face education conducted in 2018) based on the “Donation operation standard,” and it follows laws strictly so that funds related to IBK are not used as political donations, voting-related funds, lobby funds, etc.

Strengthening Information Security Management

Support for Social Enterprises (Unit : KRW million)
Unit 2018 2019 2020
Executive/Employee training time Hour(s) 69,792 71,070 73,398 2018 2019 2020
Participating executives/employees Person(s) 11,422 11,644 12,028 Material purchases for social enterprises 1,519 1,584 1,509
Supplier trainees Person(s) 1,454 1,420 1,479
Customer information leakage accidents Case(s) 0 0 0

Practice of Labor Relations

Current status of IBK’s memberships in associations
Unit 2018 2019 2020
Council on Financial Korea Money and Finance
Subjects for labor union membership Person(s) 13,153 13,522 13,746 Korea Federation of Banks
Information Protection Association
Members of labor unions and labor-management negotiations Person(s) 9,963 10,467 10,435
Ratio of labor unions and labor-management negotiations % 75.7% 77.4% 75.9% Korea Chamber of Commerce Korea International Trade
Global Finance Society
and Industry Association
* IBK Senior Union was established in 2019 to improve the welfare and rights of employees subject to wage cap.
Council on International
Korea Employers’ Federation UN Global Compact
Turnover Financial Cooperation

Unit 2018 2019 2020

Employee turnover Person(s) 349 257 170
Total turnover rate % 2.65 1.90 1.24
108 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 109

GRI Index

Universal Standards (GRI 100) Topic-specific Standards

Classification Disclosure Indicators Page Remark Economic Standards (GRI 200)
102-1 Name of the organization 8
Classification Disclosure Indicators Page Remark
Annual Report,
102-2 Activities, brands, products, and services 8 201-1 Direct economic value generated and distributed 102
Business Report
102-3 Location of headquarters 115 Economic performance 201-2 Financial implications and risks and opportunities due to climate change 22-27 TCFD Report
102-4 Location of operations 9 201-3 Defined benefit plan obligations and other retirement plans 105
102-5 Ownership and legal form 8 203-1 Infrastructure investments and services supported 43-44
Indirect economic impacts
Annual Report,
203-2 Significant indirect economic impacts 88-95
Organization 102-6 Markets served 9 Anti-corruption 205-2 Communication and training about anti-corruption policies and procedures 78
Business Report
Profile 102-7 Scale of the organization 8
102-8 Information on employees and other workers 105
102-9 Supply chain 93
102-10 Significant changes to the organization and its supply chain - No significant change Environmental Standards (GRI 300)
102-11 Precautionary principle or approach 23-24, 82
Classification Disclosure Indicators Page Remark
102-12 External initiatives 30
Energy 302-1 Energy consumption within the organization 104
102-13 Membership in associations 107
Water and Effluents 303-3 Water withdrawal 104
102-14 Statement from senior decision-maker 4-5
Strategy 305-1 Direct greenhouse gas emissions(scope 1) 25, 37, 104
102-15 Key impacts, risks, and opportunities 4-5
305-2 Indirect greenhouse gas emissions(scope 2) 25, 37, 104
102-16 Values, principles, standards, and norms of behavior 78-79
Ethics and Integrity Emissions 305-3 Other indirect greenhouse gas emissions(scope3) 25, 104
102-17 Mechanisms for advice and concerns about ethics 80
305-4 GHG emissions intensity 25
Annual Report of
102-18 Governance structure 22, 74-76 305-5 Reduction of GHG emissions 25, 37
Corporate Governance
102-19 Delegating authority 24 Waste 306-2 Management of significant waste-related impacts 104
102-20 Executive-level responsibility for economic, environmental, and social topics 22, 24, 74-76 Environmental compliance 307-1 Non-compliance with environmental laws and regulations 104
102-22 Composition of the highest governance body and its committees 24
102-23 Chair of the highest governance body 74-76
102-24 Nominating and selecting the highest governance body 74-76 Social Standards (GRI 400)
102-26 Role of the highest governance body in setting purpose, values, and strategy 22, 24, 74-76
Classification Disclosure Indicators Page Remark
102-27 Collective knowledge of highest governance body 76
401-1 New employee hires and employee turnover 105-106
Governance Annual Report of Employment
102-28 Evaluating the highest governance body’s performance 77 401-3 Parental leave 105
Compensation System
403-3 Occupational health services 71
102-29 Identifying and managing economic, environmental, and social impacts 22, 24
Safety Management
102-30 Effectiveness of risk management processes 24, 81-82 Responsibility Report
Worker participation, consultation, and communication on occupational
102-31 Review of economic, environmental, and social topics 22 403-4 - Task Force Team to establish
health and safety a measure for complying
Annual Report of
102-34 Nature and total number of critical concerns 74 with safety duties
Corporate Governance
Occupational health Safety Management
Annual Report of and safety 403-5 Worker training on occupational health and safety -
102-35 Remuneration policies 77 Responsibility Report
Compensation System
Annual Report of
403-6 Promotion of worker health 71
102-36 Process for determining remuneration 77 Prevention and mitigation of occupational health and safety impacts Safety Management
Compensation System 403-7 -
directly linked by business relationships Responsibility Report
102-40 List of stakeholder groups 98-99
Safety Management
102-41 Collective bargaining agreements 106 403-9 Work-related injuries 106
Stakeholder Responsibility Report
102-42 Identifying and selecting stakeholders 98-99 404-1 Average hours of training per year per employee 106
engagement Training and education
102-43 Approach to stakeholder engagement 98-99 404-2 Programs for upgrading employee skills and transition assistance programs 69, 72-73
102-44 Key topics and concerns raised 98-101 Diversity and
405-1 Diversity of governance bodies and employees 68, 105
102-45 Entities included in the consolidated financial statements 8 equal opportunity
102-46 Defining report content and topic boundaries 100-101 Article 4 (Guarantee of
102-47 List of material topics 101 Freedom of Association and
Freedom of association and Operations and suppliers in which the right to freedom of association and
407-1 - Collective Bargaining) in the
102-48 Restatements of information 105 collective bargaining collective bargaining may be at risk Human Rights Management
102-49 Changes in reporting - Not applicable Regulations
Reporting 102-50 Reporting period 2 Article 5 (Prohibition of
102-51 Date of most recent report 114 Forced and Child Labor) in the
Practice Child labor 408-1 Operations and suppliers at significant risk for incidents of child labor -
Human Rights Management
102-52 Reporting cycle 2, 114 Regulations
102-53 Contact point for questions regarding the report 115 Article 5 (Prohibition of
102-54 Claims of reporting in accordance with the GRI Standards 2 Forced or Operations and suppliers at significant risk for incidents of forced or Forced and Child Labor) in the
409-1 -
102-55 GRI content index 108 compulsory labor compulsory labor Human Rights Management
Regulations
102-56 External assurance 112-113
Human rights assessment 412-2 Employee training on human rights policies or procedures 106
103-1 Explanation of the material topics and its boundary 100-101 Operation with local community engagement, impact assessments,
21,34,42,53 Local communities 413-1 45
Management 103-2 The management approach and its components and development programs
54,70,78 Public policy 415-1 Political contributions 107
Approach
21,34,42,53 Substantiated complaints concerning breaches of customer privacy and
103-3 Evaluation of the management approach Customer privacy 418-1 84-85
54,70,78 losses of customer data


110 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 111

SASB Report

IBK served public notices according to the Financial Industry Accounting Standards of the US Sustainability Accounting Standards Board (SASB) for the
first time this year in order to subdivide the financial impacts of sustainability management and carry out smooth communication with stakeholders. IBK
intends to gradually expand and subdivide the range of public notices in accordance with SASB.

Disclosures crossing multiple Sector Standards

Topics of SASB Public Notice Code Category IBK’s Response Page Topics of SASB Public Notice Code Category IBK’s Response Page

Number of participants in financial

FN-CB-230a.2 Due to covid-19, the number of education to financial
Description of approach to identifying Establishment of fair trade Financial inclusion & literacy initiatives for unbanked,
Data security FN-CF-230a.3 83-85 FN-CB-240a.4 vulnerable class has decreased. IBK provided non-face-to- 44, 46
and addressing data security risks - Strengthening information security capacity building underbanked, or underserved
FN-EX-550a.3 customers face online economic education to 5,724 persons.

Disclosure of credit exposure of industries accounting for -

FN-CB-510a.2
Description of whistleblower policies Ethical management more than 2% of the total portfolio by business sector
Business ethics FN-AC-510a.2 80
and procedures - Reporting whistleblowing system
FN-IB-510a.2
(Unit : KRW million, %)

Incorporation of Manufacturing 1,115,828 45.24%

Percentage of gender and racial/
environmental, social, Commercial and industrial credit Household loan 397,419 16.11%
ethnic group representation for FN-CB-410a.1
Appendix - Employees Data and governance exposure, by industry
Employee diversity & FN-AC-330a.1 (1) executive management, Wholesale and retail 349,166 14.16%
Contract conditions and personnel by 105 factors in credit analysis
inclusion FN-IB-330a.1 (2) non-executive management,
rank are disclosed by gender. Real estate industry 207,592 8.42%
(3) professionals, and
Construction industry 62,900 2.55%
(4) all other employees
Total sum 2,466,254 100%

Description of approach to incorporation

Incorporation of
FN-AC-410a.2 of environmental, social, and governance IBK Industrial Bank is not one of the global systemically
environmental, social, and ESG bonds 40-41
FN-IB-410a.3 (ESG) factors in investment and/or wealth FN–CB-550a.1 G-SIB score, by category important banks (G-SIBs). Instead, it discloses the current 102
governance factors
management processes and strategies status of the BIS leverage ratio (Basel III).

Systemic risk Description of approach to

management incorporation of results of mandatory
and voluntary stress tests into
FN-CB-550a.2 TCFD Report 22-27
SASB - Commercial Banks capital adequacy planning, long-
term corporate strategy, and other
business activities
Topics of SASB Public Notice Code Category IBK’s Response Page

(1) Number of data breaches (1) 0 case, (2) 0%, (3) 0 case 83-85, 106 (Unit : KRW million)
(2) percentage involving personally
Data security FN-CB-230a.1 Number and value of checking and No. of customers Deposit amount
identifiable information(PII)
(3) number of account holders affected FN-CB-000.A savings accounts by segment : -
Personal 16.13 million people 64,596
(a) personal and (b) small business
SMEs 1,952,024 64,680
Disclosed by the number of loan cases -
Number of loans outstanding qualified
for companies whose annual sales are
FN-CB-240a.1 to programs designed to promote small
less than KRW 1 billion
business and community development
65,685 cases Activity Metrics (Unit : KRW billion)
Financial inclusion &
Loans amount
capacity building Value of loans by segment :
Disclosed by the loan amount for - Personal 38,515 Annual Report 2020
Amount of loans outstanding qualified FN-CB-000.B (a) personal, (b) small business,
companies whose annual sales are P37
FN-CB-240a.1 to programs designed to promote small and (c) corporate SMEs 186,777
less than KRW 1 billion
business and community development Corporate 8,172
KRW 28.638 trillion

※ Based on loans for companies whose annual sales are less than KRW 1 billion
Number of unique consumers with Total number of credit card members as of end of 2020 : Annual Report 2020
1. For SMEs whose annual sales are less than KRW 1 billion based on the 2019 Annual Financial Statement (Borrower category - SME sole proprietorship, SME corporation, Cooperative) FN-CF-000.A
credit card accounts 8.8 million accounts p62
2. (Borrowers among SME sole proprietorship, SME corporation, Cooperative) Balance in the balance sheet of SMEs loans including KRW and foreign currency loans
3. No. of cases is calculated based on the balance (excluded if there is no balance after signing a credit line loan contract)
4. Excluded in case of KRW 0 sales and if the annual financial statement of enterprise is not registered.
112 IBK SUSTAINABILITY REPORT 2021 BUSINESS ESG MANAGEMENT, STRATEGY ESG PERFORMANCE APPENDIX 113

Third-Party Assurance Limitations

The completeness and responsiveness of sustainability performance in the Report has inherent limitations due
to its nature and the methodology used to determine, calculate and estimate its performance. In accordance
with the terms of the contract, assessment is conducted based on provided data and information without
KFQ has been requested by Industrial Bank of Korea to conduct an independent assurance on the 2021 verification for original data of specified performance information which is out of assurance scope.
Dear Stakeholders of Sustainability Report for Industrial Bank of Korea (further 'the Report'). KFQ has responsibility to provide an
Industrial Bank of Korea opinion of independent assurance in accordance with scope of assurance, based on standard, methodology Findings and Conclusions
and limitations stated in this Assurance Statement. KFQ was not involved in the process of preparing the Report As a result of the above assessment, we confirm that the content of this report fulfills the requirements of
and the information and presentation of data within the Report is the responsibility of Industrial Bank of Korea. the ‘Core option’ of GRI Standards and secured reasonable basis to assurance level of Type 1 in accordance
with AA1000AS v3. Within the scope of the assurance activities above, we could not find further significant
error or inappropriate information from the final Report against the following principles:
Standard and Scope of Assurance
• Inclusivity : Whether Industrial Bank of Korea is actively identifying stakeholders and enabling their
The assurance was planned and carried out to verify the activities and performance of the organization
participation in establishing an organization’s material sustainability topics, and the developing strategic
disclosed in the report in accordance with following criteria based on international standard, AA1000AS v3,
countermeasures.
AA1000APS(2018) and GRI standards
– Industrial Bank of Korea is collecting opinions from various stakeholders including Small and medium enterprises,
• Compliance with AA1000AS individual customers, employees, local communities, governments, investor through communication channels such as
- Application of Type 1 (Adherence to Principles of Inclusivity, Materiality, Responsiveness and Impact) with Moderate Level Stakeholders’ meeting, Customer Panel, Labor-management Council. Omission of major stakeholders was not found.
• Compliance with GRI standards according to the criteria of “Core Option”
• Materiality : Whether each topic is considered in overall sustainability management activities by identifying and
- GRI Standard reporting principles
prioritizing the most relevant sustainability topics in consideration of impact on the organization and stakeholders.
- GRI Universal Standards
– Industrial Bank of Korea conducted a materiality assessment in terms of stakeholders’ interest and business
- Topic Specific Standards
impact. They identified important issues, derived priorities, and reported sustainable management activities and
- Management Approach for Topic-specific Standard performance without omission of major issues.
- Economic Performance: 201-1, 201-2, 201-3 - Training and Education: 404-1, 404-2 • Responsiveness : Whether Industrial Bank of Korea has established a communication process with stakeholders
- Indirect Economic Impacts: 203-1, 203-2 - Diversity and Equal Opportunity: 405-1
to respond to the needs, interests, and expectations of stakeholders that affect sustainability performance.
- Anti-Corruption: 205-2 - Freedom of Association and Collective Bargaining: 407-1
– Industrial Bank of Korea has been reporting activities and performance that addresses needs and concerns of
- Energy: 302-1 - Child Labor: 408-1
stakeholders which were identified from materiality assessment process and responds to their opinion by taking
- Water: 303-3 - Forced or Compulsory Labor: 409-1 into consideration for its overall management.
- Emissions: 305-1, 305-2, 305-3, 305-4, 305-5 - Human Rights Assessment: 412-2
• Impact : Whether Industrial Bank of Korea has considered sufficient aspects of the impact of material topics
- Waste: 306-2 - Local Communities: 413-1
- Environmental Compliance: 307-1 - Public Policy: 415-1 based on its understanding of related stakeholders’ concerns.
- Employment: 401-1, 401-3 - Customer Privacy: 418-1 – KFQ confirms that Industrial Bank of Korea is identifying and monitoring for impact of material topics of
- Occupational Health and Safety: 403-3, 403-4, stakeholders such as distribution of economic value and human right and reporting them to the extent possible.

403-5, 403-6, 403-7, 403-9

Recommendation for improvement
KFQ recommends following developmental approaches in order to systematize sustainability management in
Methodology the future and to disclose results of the report effectively
In order to assess credibility of sustainability performance of the Report, we reviewed the process and system • In order to reflect stakeholders’ interest more balanced and timely, we recommend more various type of
for preparation of the Report, as well as available data and information. Non-financial information was stakeholders participate in materiality assessment on selecting management activities and accomplishments to
reviewed based on internal data of Industrial Bank of Korea, such as latest sustainability report, disclosed be disclosed.
Business Report and compared with information from media and internet. Financial information was • In the future, we anticipate Industrial Bank of Korea actively discloses mutual impact between newly
investigated whether data in the Report are correctly reported from DART (Data Analysis, Retrieval and established ESG committees and key stakeholder groups. The action allows stakeholders to fully understand
Transfer System), an Electronic Disclosure System managed by Financial Supervisory Service. The assurance IBK’s efforts for ESG management.
was solely assessed on document review and on-site visit was not conducted during this assessment. Validity
of report descriptions and processes for materiality assessment, identifying issues considering stakeholders,
data collection and management, and the Report preparation are assessed through interview during
document verification. It was confirmed that the findings from above steps such as error, inappropriate
June, 2021
information and ambiguous expressions are properly complemented by Industrial Bank of Korea.
Seoul, Korea

Competency and independence

The assurance team was organized in accordance with KFQ's internal regulations. KFQ has no conflict of
interest which could threaten the independence and impartiality of verification, other than providing third- CEO
party audit services in the Industrial Bank of Korea business.
114 IBK SUSTAINABILITY REPORT 2021

Major Awards, ESG Evaluation Rating

Details of main awards in the previous three years

Received the Korea Inclusive Finance Agency Chairman’s Award in the “13th 2020 e-Daily Korea Financial Industry Awards” held by e-Daily

Received the Minister of Strategy and Finance Award in the “Inclusive Loan Awards” held by Financial News

Received the Minister of Strategy and Finance Award in the “9th Petty Loan Awards” held by Financial News

Received the inclusive Loan Award in the “9th Korea Best Bank Awards” held by Sedaily

Received the Best Product Development Award (smart movable asset mortgage loan) in the “Best Banker Awards” held by Sedaily

2020 Received the Social Science - Financial Supervisory Service Governor’s Award and Best Product Development -
Korea Federation of Banks Chairman’s Award from Sedaily
Received a Plaque from CDP KOREA during the “2019 Climate Change” (carbon management honors (financial part))
Selected as an excellent call center of Korea in the call center category of the “2020 KSQI (Service Quality Index)”
held by the Korea Management Association Consulting (for 14 consecutive years)
Received the Service Innovation Award in the “Internet Echo Awards 2020” under the IBK Global Homepage
Received the Promotion Content Award in the enterprise category of the “13th Korea Communication Awards”
held by the Korea Internet Communication Association

Received an award in the bank category at the Smart App Awards 2019 hosted by the Korea Internet Professional Association
Received an award in the enterprise category at the 2019 Korea Internet Communication Awards hosted
by the Korea Internet Professional Association
Received the CEO’s Award in the smart finance category at the 2019 Korea Economy TV Awards hosted by Korea Economy TV
2019
Received the Minister of Environment Award at the 2019 Korea Climatic Management Awards hosted by Energy Economic News

Received the Best Social Contribution & Enterprise Finance Award at the 2019 Korea Best Banker Awards hosted by Sedaily

Received the Financial Supervisory Service Governor’s Award at the 8th inclusive Loan Forum and inclusive Loan Awards hosted by Financial News

Received the Minister of Environment Award at the 2018 Korea Climatic Management Awards hosted by Energy Economic News

Received the Integrated Award at the 2018 Global Financial Awards hosted by Korea Economy TV
2018 Received a Minister of Strategy and Finance Citation at the Excellent Professional National Treasury Bond
Dealer Awards hosted by the Ministry of Strategy and Finance
Received the Minister of Strategy and Finance Award at the 7th Inclusive Loan Awards hosted by Financial News Translation required.

2020 ESG Evaluation Rating

Inquiries about this report

Integrated rating Environmental Social Corporate governance
Please use the contact points below for additional information or inquiries
about this report.

Date of publication July 2021

Publisher Yoon Jong-won
Department 79 Eulji-ro, Jung-gu, Seoul, Strategic Planning Department,
Headquarters of IBK Industrial Bank
Tel. 02-729-3480
Email ibkesg@ibk.co.kr
※ The latest report is the 2019 IBK Sustainability Report; a report was not published in 2020.
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