STRENGTHENING OUR GOVERNANCE

NBK added two new independent directors to our board this year and continued our development of a broad range of ESG-related good governance policies and practices. This year’s report describes all the structures and performance of our ESG leadership and oversight along with our more than 25 ESG-focused policies, statements and charters.  NBK published a new comprehensive Human Rights Statement this year, in keeping with our commitment to fundamental human and labor rights. NBK also strengthened our support of sustainable finance projects through the launching of our Sustainable Financing Framework and initiated integrating ESG-related risks to our risk management framework, all of which are detailed in this year’s report.

I am proud to share with you here on our website – as well as in our downloadable 2021 Sustainability Report, “Strategic Growth Towards a Sustainable Future” – our sixth consecutive sustainability report, highlighting our commitment to improving NBK’s Environmental, Social, and Governance performance.

We take pride in the progress we have achieved in implementing the highest standards of corporate governance whilst embedding sustainability as an integral part of our corporate culture and operations. We will continue meeting our promises to achieve responsible and sustainable growth and to share our successes with the communities in which we operate.

Once again, this year, we have organized our report to be focused on Environmental, Social, and Governance (ESG) factors, while also including sections that reflect the importance we place on our employees and our customers as part of our ESG initiatives.

We also continue our alignment with our six key sustainability focus areas as well as key national and international visions, standards, and frameworks – most notably the Kuwait National Development Plan (KNDP), UN Sustainable Development Goals (SDGs), and the Global Reporting Initiative (GRI) standards.

Our six sustainability focus areas that have guided our work over the past several years are:

1. Serving Customers
2. Caring for Our Environment
3. Contributing to Sustainable Economic Development
4. Respecting and Developing People
5. Giving Back to the Community
6. Leading in Governance

This year, we are most gratified to have fully moved into our new LEED-Gold-Certified headquarters office tower. The reduced environmental impact from this building will provide a lasting contribution to Kuwait and the larger environment, one that we look forward to continuously improving upon through our careful operations.

NBK will continue to fulfill our responsible role in supporting the global objective of low-carbon emissions and mitigating the risks of climate change whilst delivering progress on other sustainability initiatives. We have set specific goals for sustainable business, and are keen on embedding climate-related considerations as part of our business model in the future.

On behalf of the Board of Directors, I extend my gratitude to all NBK stakeholders who were involved in continuously supporting and enabling our sustainability practices.

In conclusion, we hope that this section of our website and the accompanying Sustainability Report prove to be valuable tools for you, our cherished stakeholders, in understanding our ESG efforts and we look forward to receiving your feedback.

Nasser Musaed Abdulla Al–Sayer
Chairman of the Board of Directors

Environmental Stewardship

• Moved into and achieved LEED Gold Certification for our NBK Headquarters Building
• Reduced plastics consumption by 64%
• Increased paper recycling rate 1.7% to achieve 100% paper recycling – 84.5 tons
• Established new baseline year for energy and water consumption using new headquarters building post-COVID

Social Development & Investment

Customers:

• Superior external financial stability long-term ratings:  Moody’s A1, Standard & Poors A, FitchRatings A+
• 94% Customer Satisfaction Rating
• 56% Net Promoter Score
• Reduced Consumer Banking turnaround time for resolving complaints by 20%
• Launched Weyay Bank, the first digital bank in Kuwait
• Achieved NBK Mobile banking activation rate of 59% – a 28% increase over 2021
• Received “Innovation in Digital Banking Award–Middle East 2021” from The Banker
• Earned three new ISO 27001 Data Security Certifications: Information Technology, Security Techniques, and Information Security Management Systems

Employees:

• Achieved 0 recordable or lost-time safety incidents
• Provided more than 41,000 hours of employee training
• Increased investment in employee training 71% compared to 2020 – over KD 1,000,000
• Increased our Kuwaitization rate by 2.6% up to 74.6% – with 9% more Kuwaitis at the Senior Manager level and above
• 30% of all managers and 45% of all employees are women, increased women in management by 11%

Community:

• Contributed KD 17,705,000 in total to community programs, with major contributions to NBK Children’s Hospital
• Strengthened Governance
• Published new NBK Human Rights Statement
• Added two independent directors to the Board of Directors
• Selected for the FTSE4Good Index

Strengthened Governance

• Published new NBK Human Rights Statement
• Added two independent directors to the Board of Directors
• Selected for the FTSE4Good Index

NBK's governance practices and financial performance have been shared in NBK's Annual Reports since our incorporation in 1952. Beginning in 2008, we also published annual Corporate Social Responsibility (CSR) Reports. Originally, these CSR reports focused primarily on our community giving initiatives in Kuwait, while also highlighting our key environmental programs. We are now releasing this 2021 NBK Sustainability Report as our sixth consecutive comprehensive Sustainability Report. This continues the commitment that we have undertaken since 2016 of transparently communicating our approach to the full range of sustainability-related impacts, issues, and opportunities of interest to our stakeholders – including all three Environment-Social-Governance (ESG) dimensions. All our 2016, 2017, 2018, 2019, 2020, and now our 2021 sustainability reports have been aligned with the core option of the Global Reporting Initiative (GRI) guidelines; our 2019 and 2020 reports as well as this 2021 report are also aligned with the United Nation's Sustainable Development Goals (UNSDG), the Kuwait National Development Plan (KNDP), and Boursa Kuwait Sustainability Disclosure Guide.

Building on the foundation of our decades of outstanding customer service, robust financial stability, and extensive community giving, NBK has worked proactively since 2016 to evolve our sustainability performance to address the full range of today’s stakeholder expectations regarding Sustainability and ESG (Environmental, Social and Governance) performance and disclosure. Since 2016, we have developed and followed our framework of six Sustainability pillars, each with specific goals:

• Contributing to Economic Development
• Serving our Customers
• Leading in Corporate Governance
• Respecting and Developing our People
• Caring For our Environment
• Giving Back to our Community

This year’s sustainability report highlights the goals we have in each area, the specific practices we have put in place, the results we achieved throughout the year, and the status of our progress toward fulfilling each goal.

Again this year, NBK conducted a broad range of engagement initiatives with all our major stakeholders to solicit their views about which ESG areas are most material for us – including surveys, letters, emails, phone calls, social media platforms, trainings, partnerships, reports, meetings, environmental projects, and intensive dialogue sessions. This enabled us to develop an exhaustive ESG Materiality Matrix of our sustainability priorities. What emerged were 14 material topics with five major areas of highest priority: Governance, Digital Products and Services, Customer Experience and Satisfaction, Environmental Impact, and Youth Inclusion.

NBK is dedicated to developing and engaging our employees.  This year’s sustainability report shares the range of talent management initiatives we have in place along with our programs for leadership and management development.  We continued to provide clinical health services to our employees as well as extensive support and communication associated with the COVID pandemic, including a safe return to work program.  The effectiveness of our efforts at engaging employees is reflected in our 87% Sustainable Engagement score in Kuwait (and 83% Group-wide), well above comparative benchmarks. NBK is also heavily invested in training for our employees, providing over 41,000 hours of standard training this year and more than 833,000 hours of “Digital Mindset” training to support all of our employees in transitioning to a digital culture with an emphasis on agility and innovation.  Our diversity and Kuwaitization initiatives also achieved further progress, with increasing numbers of Kuwaitis and women in management.  Finally, we published a new Human Rights Statement this year as part of our continuing commitment to advancing labor and human rights both at the bank and more broadly.

NBK continued and significantly expanded our digitization initiatives throughout the marketplace this year.  We opened Weyay Bank, the first end-to-end digital bank in Kuwait that has a strong focus on youth; in addition, we operated a wide range of digital programs and services that were increasingly embraced by our customers and significantly improved the customer experience.  These digital efforts led to numerous awards including Best Consumer Digital Bank, Best Online Product Offerings, Best Mobile Banking App, Most Innovative Digital Bank, and Best Bank in Innovation in Digital Banking in the Middle East. We also continued strengthening our information security.  For the 3rd year in a row, we experienced zero data breaches or losses.  Our specific data security policies and practices also helped us achieve three new ISO 27001 information security certifications. Overall, customer satisfaction remained high at 94% (up from 93% last year), and this year’s report details the range of customer services we provided and specific customer reactions to them.

NBK fully moved into our new LEED-Gold certified headquarters building in 2021, and our staff returned to more normal working patterns.  Therefore, we will be using 2021 as our new baseline year for assessing our energy and water consumption improvements going forward.  Our new headquarters building and our sophisticated environmentally responsible operations of it are already showing significant reductions in environmental impact.  We achieved 100% paper recycling for the first time ever this year, reduced our plastics consumption by 64%, and used 26% fewer printing cartridges.

For decades, ever since our founding, NBK has contributed substantial investments to our community in the areas of healthcare, education, and youth.  This year we continued all of that, and in line with our deepened understanding of the role Kuwait’s leading national financial institution should be playing, we also increased our contributions for programs that promote financial inclusion and access to finance, increase local procurement, leverage social media and community awareness, and support women’s empowerment.  NBK increased our community investment by nearly 20% this year, up to a total of nearly KD 18,000,000.  This year’s report details the dozens of worthy causes and organizations to which NBK contributed, headlined by our continuing support of major healthcare organizations and youth and education initiatives. NBK stands as a signatory in solidarity with the U.N.’s Women’s Empowerment Principles, increased women in management by 11% this year, and supported a range of programs for women and girls throughout the year.  Finally, NBK provided more than KD 15,000,000 in loans to SME’s (a 15% increase over 2020) and purchased KD 82,000,000 from local suppliers (84% of all purchases and a 23% increase over 2020).