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Company’s Initiative in Implementing Sustainable Financing to Support The Achievement of Sustainable
Development Goals
Sustainable Performance
Overview 2017
Providing Economic Benefits
Conservation
Financial Literacy
Cross Reference GRI Standard Index with
Financial Services Sector Supplement
of school programs, and the development of developers
through the Housing Finance Center (HFC). To provide
better service to the customers, the Company provides
digital-based products and services. The Company has
also synergized the digital banking with its flagship
product, i.e. Housing Loan, through the BTN Property
Portal service.
implemented various sustainable financing initiatives to
support the achievement of sustainable development
goals. The Company ensures the business conducted is
pro-environment and pro-community, through the policy
of environmentally friendly credit as part of environmental
risk management, the acceleration of digital banking
transformation in banking products to save more paper,
delivery of inclusive banking products and services that can
reach all levels of society, and consistent implementation
of Partnership and Community Development Programs
(PKBL) to support the improvement of people’s lives and
to encourage national economic growth.
In 2017, PT Bank Tabungan Negara (Persero) Tbk. enters
the 2nd Phase of Transformation, the digital banking
period. This transformation is a strategic step for the
Company in supporting the achievement of the national
program targets initiated by the Government, because
there are still about 11.4 million Indonesians who do not
have houses. Thus, so the Company has an opportunity
momentum to increase capacity. On the other hand,
by 2020, Indonesia will enter the ASEAN Economic
Community (AEC), which will lead to intense competition.
Thus, the Company established a digital mindset to create
a more effective and efficient business pattern.
A series of strategic programs have been implemented
to support this transformation in terms of business
process digitalization, infrastructure, to human resources.
The Company has performed improvement of business
process, from the accelerated Standard Operating
Procedure (SOP), standardization of On the Spot Checking
process which applies the compliance principle, and
changes of brand activity and organizational structure,
as the Head Office is currently acting as a conceptual
strategist, the Regional Offices as Operational Strategic,
and the Branch Offices as Sales and Service. To support
the improvement of the business process, the Company
also enhances the capacity and capability of human
DIGITAL BANKING TRANSFORMATION FOR SUSTAINABLE BUSINESS
Digital Banking Transformation for Sustainable Business
01 COMPANY’S INITITATIVE IN IMPLEMENTING SUSTAINABLE FINANCING TO SUPPORT THE ACHIEVEMENT OF SUSTAINABLE DEVELOPMENT GOALS
Bank BTN Digital Services, Source: Herwin Gunari
Sustainability Report 2017
Company’s Initiative in Implementing Sustainable Financing to Support The Achievement of Sustainable
Development Goals
Sustainable Performance
Overview 2017
Providing Economic Benefits
Conservation
Financial Literacy
Cross Reference GRI Standard Index with
Financial Services Sector Supplement
32
In order to support and realize the sustainable development goals (SDGs) starting on September 25, 2015, it is necessary that all industry sectors take roles to perform strategic steps to promote harmony between the economic, social, and environmental aspects into the company’s business Therefore, the Company as one of the agents of development is committed to implementing the sustainable financing initiated by the Financial Services Authority (OJK) with Sustainable Finance Roadmap and the Financial Services Authority Regulation No. 51/POJK.03/2017 on the Implementation of Sustainable Finance.
Sustainable finance is a comprehensive support of the financial services sector to create sustainable economic growth by harmonizing the triple bottom line principle, i.e. economic, social, and environmental. In the implementation, there are eight principles, i.e. (1) Responsible Investment, (2) Strategy and Sustainable Business Practices, (3) Social and Environmental Risk Management, (4) Good Governance, (5) Informative Communication, (6) Inclusiveness, (7) Priority Sector Development, and (8) Coordination and Collaboration.
The Company has applied these principles to the Company’s business activities. In the Responsible Investment Principles and Social and Environmental Risk Management Principles, the Company has committed to managing the environmental risk management through an environmentally friendly credit policy, which is a credit rating that takes into account the results of the Environmental Impact Assessment (AMDAL) before deciding to grant credit to a project. The policy is stated in Circular Letter No. 17/ DIR/CMLD/2016 on March 31, 2016, on Standard Operating Procedure Commercial Loan paragraph 4.1.3.3 point j, i.e. ‘Environmental Management Effort or Environmental Monitoring Effort (UKL/UPL) and/or Environmental Impact Assessment (AMDAL) if required by the local government, or required in a Location Permit or Land Use Permit’. In addition to the AMDAL consideration, the Company also conducts on-site monitoring to ensure that the debtor or developer fulfills environmental requirements.
In implementing the Principles of Strategy and Sustainable Business Practices, in 2017, the Company accelerated the transformation of digital banking as a strategy to support the Company’s business growth and as the Company’s initiative to minimize negative impacts to the environment through paperless saving. The initiatives include synergizing digital banking with the Company’s flagship product, i.e. Housing Loan, through BTN Property Portal service, adding Smart Branch, increasing transaction using Electronic Channel, providing Digital Solution Application that enables customers to conduct digital payment transactions, and establishing BTN Zone in several universities to encourage cashless society in the millennial generation. In addition, the sustainable business strategies and practices are also implemented through Partnership and Community Development Program (PKBL), BUMDes (Village-Owned Enterprises) and Farmers Entrepreneurship Program, Program Keluarga Harapan (PKH) through the provision of PKH cards to fulfill the education-related needs, Social Assistance Program (Bansos) in the form of savings, and the Social Forest Program that provides access to forest communities to manage forest areas in order to improve the lives and welfare of the people.
The Company implements the BUMDes (Village-Owned Enterprise) and Farmers Entrepreneurship Programs as part of applying the Priority Sector Development Principle to improve the people’s welfare and economy, BUMDes, and Entrepreneurship Farmers are some of the priority programs initiated by the Ministry of Village, Development of Disadvantaged Regions, and Transmigration (Kemendes PDTT), in cooperation with the Ministry of Agriculture, Ministry of SOEs, and Banking. These programs’ objective is to finance BUMDes business, thus encouraging villagers to manage the economy autonomously. The Company as an SOE Bank, is involved as an accelerator that incorporate agriculture and develops BUMDes by providing financing schemes support to provide management training and access to financial inclusion to BUMDes.
Company’s Initiative in Implementing Sustainable Financing to Support The Achievement of Sustainable
Development Goals
Sustainable Performance
Overview 2017
Providing Economic Benefits
Conservation
Financial Literacy
Cross Reference GRI Standard Index with
Financial Services Sector Supplement
As the implementation of the Governance Principles, the Company has integrated the sustainability aspects into the principles of TARIF (Transparency, Accountability, Responsibility, Independence, and Fairness). In the Sustainability Report, all reported information relating to economic, social, and environmental aspects are adequate, clear, accurate, accountable, and accessible to all stakeholders. In carrying out the sustainability aspect, the Company complies with applicable regulations, such as employment-related regulations, customer data confidentiality, waste management, and the implementation of the Partnership and Community Development Program in accordance with the Minister of SOEs Regulation PER-02/ MBU/7/2017 dated July 5, 2017 on the Second Amendment to the Minister of State-Owned Enterprises Regulation No. PER-09/MBU/07/2015 on Partnership and Community Development Program. The application of the fairness principle is realized by the fair treatment of all stakeholders and provides an opportunity for all stakeholders in conveying topics related to sustainability issues to involve the stakeholders.
To support the government’s program in enhancing the accessibility of financial services to reach all levels of society, thus accelerating the economic progress, social welfare, and reducing gap levels, the Company also implements the Inclusive Principle. The Company provides inclusive and sustainable banking products through TCASH-BTN Cermat Service, provides mortgage facilities for informal workers (BTN Housing Loan for Gojek Partners and BTN Micro Housing Loan for associations and communities). The Company also develops Micro, Small, and Medium Enterprises (MSMEs) through KUMK and KUR (People’s Business Credit) schemes, digital banking services development, and various financial literacy programs such as Savings of BTN SimPel (Student Savings) and Property Entrepreneurship Literacy Training.
With the many challenges faced, the Company needs synergy through collaboration and cooperation with stakeholders. Therefore, the Company also applies the Coordination and Collaboration Principle. Given the challenges in regulatory and licensing issues, the Company has approached the Regulators and Local Governments to facilitate permits to build houses and buildings. The Company also approached the National Defense Agency (BPN) on how to use unproductive land into housing. In addition, in 2017, the Company also collaborated with students from 25 Universities in Indonesia in the Property Literacy Training program, which aims to improve their skills in building property business to accelerate the improvement of economic prosperity.
Through the Sustainability Report, the Company has made this report as continuous dialogue process. Thus, this report is a Company’s media in implementing Informative Communication Principles. The report discloses the business and performance impacts of the Company that are not only related to economic achievements, but also concerns the Company related to the social and environmental aspects. Through this report, the Company’s stakeholders, i.e. shareholders, customers, employees and unions, partners, Government and Financial Authorities, business organizations, communities, and the media can also convey their wishes to the Company.
In addition to the implementation of these sustainable financial principles, the Company has also performed a series of other initiatives to achieve the sustainable development goals. The programs include supporting better education, supporting strengthening financial inclusion, creating a viable employment system, facilitating equitable infrastructure development, and enhancing community entrepreneurship programs.
4
Company’s Initiative in Implementing Sustainable Financing to Support The Achievement of Sustainable
Development Goals
Sustainable Performance
Overview 2017
Providing Economic Benefits
Conservation
Financial Literacy
Cross Reference GRI Standard Index with
Financial Services Sector Supplement
SUPPORTS FINANCIAL INCLUSION STRENGTHENING • TCASH-BTN Cermat Service • Provision of Housing Loan Facility for Informal Worker • Expanding Access Point of Equitable Financial Services • Developing Electronic Channel • BTN SimPel (Student Saving) Savings • Property Entrepreneurship Literacy Training
CREATING A VIABLE AND EQUITABLE EMPLOYMENT SYSTEM • Sustainable and Non-Discriminatory Jobs Creation • Elimination of Forced Labor, Child Labor, and Discrimination • Equality in Remuneration and Employee Welfare
FACILITATING EQUITABLE INFRASTRUCTURE DEVELOPMENT • One Million Houses Program for the People • Road Repair and Arrangement • Development of Worship Space in Various Areas of Indonesia • Provision of Health Facilities and Infrastructures
IMPROVING THE COMMUNITY ENTREPRENEURSHIP PROGRAM • Community Economic Development Through Karanganyar Village Economic
Center (Balkondes), Village Tourism Center of Pottery Industry • BUMDes and Farmers Entrepreneurship Programs • Improving Access to Financing of Micro, Small and Medium Enterprises
(MSMEs) and People’s Business Credit (KUR)
SD Gs
F RA
M W
OR K
Company’s Initiative in Implementing Sustainable Financing to Support The Achievement of Sustainable
Development Goals
Sustainable Performance
Overview 2017
Providing Economic Benefits
Conservation
Financial Literacy
Cross Reference GRI Standard Index with
Financial Services Sector Supplement
6
6
Company’s Initiative in Implementing Sustainable Financing to Support The Achievement of Sustainable
Development Goals
Sustainable Performance
Overview 2017
Providing Economic Benefits
Conservation
Financial Literacy
Cross Reference GRI Standard Index with
Financial Services Sector Supplement
61.9 kWh/hour
Environmental risk management policy in
loan disbursement
Rp20,847,165 million
Company’s Initiative in Implementing Sustainable Financing to Support The Achievement of Sustainable
Development Goals
Sustainable Performance
Overview 2017
Providing Economic Benefits
Conservation
Financial Literacy
Cross Reference GRI Standard Index with
Financial Services Sector Supplement
Salary Ratio of Entry Level Employees to
Minimum Wage 1.45
Social ovErviEw
SOE Synergy Program to Improve Community’s Lives: 1. Social Assistance (Bansos) 2. Program Keluarga Harapan (PKH) 3. Village-Owned Enterprises
(BumDes) 4. Farmers Entrepreneurship
Provision of Housing Loan Facility for Informal Worker
Employee Training Program
Average Training Hours
22.17 hours trained/ participant
MURI record as pioneer of property entrepreneurship literacy with the most participants in Indonesia
12,000 participants
Company’s Initiative in Implementing Sustainable Financing to Support The Achievement of Sustainable
Development Goals
Sustainable Performance
Overview 2017
Providing Economic Benefits
Conservation
Financial Literacy
Cross Reference GRI Standard Index with
Financial Services Sector Supplement
69 Development of Environmental Friendly Credit Disbursement
70 Environmental Friendly Banking Operations (Green Banking)
74 Go Green Program
63 Economic Value Distribution
64 Management of Indirect Economic Impacts
66 Empowerment of Local Suppliers
02 COMPANY’S INITIATIVE IN IMPLEMENTING SUSTAINABLE FINANCING TO SUPPORT THE ACHIEVEMENT OF SUSTAINABLE DEVELOPMENT GOALS
06 SUSTAINABLE PERFORMANCE OVERVIEW 2017
25 Significant Changes to the Company
25 Certifications and Awards in 2017
30 Bank BTN Brief History
32 Significant Events in 2017
36 Company’s Vision, Mission and Corporate Culture
38 Company’s Business Activities
40 Company’s Organization
42 Company’s Shareholding
46 Company’s Supply Chain
46 Company’s Organizational Scale
46 Association Membership
ABOUT THE COMPANY
50 Corporate Governance Structure
57 Anti-Corruption Training and Communication
57 Whistleblowing Reporting Mechanism
68
Company’s Initiative in Implementing Sustainable Financing to Support The Achievement of Sustainable
Development Goals
Sustainable Performance
Overview 2017
Providing Economic Benefits
Conservation
Financial Literacy
Cross Reference GRI Standard Index with
Financial Services Sector Supplement
102
94
82 Recruiting the Best Personnel
83 Employee Turnover
85 Harmonious Industrial Relations and Freedom of Association
86 Performance Assessment System and Employee’s Career Development
87 Remuneration System and Employee’s Welfare
89 Employee Engagement Survey
93 Employee Complaint Management
94 95 Providing Sustainable and Inclusive Products
97 Disclosure of Products and Banking Services Information
97 Innovation of Products and Banking Services
97 Prioritizing Customer Privacy and Data Security
98 Marketing Communication
102
104 Provision of Housing Loan Facility for Informal Workers
105 Support for Micro, Small, and Medium Enterprises (MSMEs) Development
109 Strengthening of Financial Service in Low Population Provinces and Disadvantage Regions
110 The Development of Digital Banking Services
113 Financial Literacy Program
121 CSR Vision and Mission
121 Company’s CSR Program Implementation
134 Funds Realization for Community Programs
138 CROSS REFERENCE GRI STANDARD INDEX WITH FINANCIAL SERVICES SECTOR SUPPLEMENT
144 FEEDBACK FORM FOR STAKEHOLDER
Sustainability Report 2017
Company’s Initiative in Implementing Sustainable Financing to Support The Achievement of Sustainable
Development Goals
Sustainable Performance
Overview 2017
Providing Economic Benefits
Conservation
Financial Literacy
Cross Reference GRI Standard Index with
Financial Services Sector Supplement
Company’s Initiative in Implementing Sustainable Financing to Support The Achievement of Sustainable
Development Goals
Sustainable Performance
Overview 2017
Providing Economic Benefits
Conservation
Financial Literacy
Cross Reference GRI Standard Index with
Financial Services Sector Supplement
PRESIDENT DIRECTOR’S STATEMENT [Gri 102-14] 03
“Digital Banking Transformation For Sustainable Business” We consider sustainability as a pro-community and pro-environment concept, in line with the running of Company’s business process. Therefore, We are committed to always carry out accountable business, through the consistency by providing economic benefit to all stakeholders, maintain environmental sustainability through the provision of credit that takes into account environmental risks, and run the Partnership and Community Development Program to continuously improve the quality and welfare of the community.
Sustainability Report 2017
Company’s Initiative in Implementing Sustainable Financing to Support The Achievement of Sustainable
Development Goals
Sustainable Performance
Overview 2017
Providing Economic Benefits
Conservation
Financial Literacy
Cross Reference GRI Standard Index with
Financial Services Sector Supplement
Sustainability Report 2017. This year, We continue
to maintain our commitment to deliver the eighth
Sustainability Report. This report demonstrates
our commitment to implementing the principle of
sustainability, i.e. business integration with a commitment
to preserving the environment and to improving the
quality and welfare of the community.
We recognize that the targets of sustainable development
goals must be supported by accountable business
activities, i.e. by continue to take care of the sustainability
aspect. Therefore, We, as one of the actors in Indonesia’s
banking industry, is committed to implementing the
sustainable financing initiated by the Financial Services
Authority (OJK) with Sustainable Finance Roadmap
and the Financial Services Authority Regulation No. 51/
POJK.03/2017 on the Implementation of Sustainable
Finance.
transformation or survival period. This phase succeeded
in making the Company as the market leader in Housing
Loans (KPR) in Indonesia. In 2016, We are going through
the second phase of transformation (2016—2019), i.e.
digital banking period, with the expectation to bring us
as the global industry leader, i.e. the leading housing
bank in Indonesia with world-class service. In 2017, We
continue to transform the digital banking by providing
various programs and initiatives. This transformation
is necessary to face the high competitiveness in the
banking industry, and to increase service to customer
and community. We have conducted various acceleration
of the digital banking transformation, as follow:
1. BTN Property Portal, which is an integration between
digital banking with the Company’s flagship product,
i.e. Housing Loan (KPR) that facilitates prospective
borrowers to apply for housing loans online.
2. Developing Smart Branch with various services to
facilitate customers’ needs.
customers to perform digital payment transactions.
5. Establishing BTN Zone in several universities
to encourage cashless society in the millennial
generation.
increasing demand for housing because there are still
many low-income communities (MBR) that are unfit to
get credit (unbankable); regulatory and licensing issues;
and the increasing competition with other banks related
in terms of mortgages. To face these challenges, We
have implemented various strategies, including:
1. Focusing on providing service to MBR.
2. Improving services with digital banking, one of which
by presenting the portal property.
3. Enhancing the skill and soul of HR marketing.
4. Collaborating with Regulators and Government
to facilitate the permit to build houses and
buildings, through the provision of rewards to Local
Governments that provide the best service.
5. Collaborating with National Defense Agency (BPN) on
how to use unproductive land into housing.
6. Planning to develop multifinance.
Company’s Initiative in Implementing Sustainable Financing to Support The Achievement of Sustainable
Development Goals
Sustainable Performance
Overview 2017
Providing Economic Benefits
Conservation
Financial Literacy
Cross Reference GRI Standard Index with
Financial Services Sector Supplement
Dear distinguished stakeholders,
economic growth. Therefore, We, as one of the State-
Owned Banks constantly provide economic benefits to all
Company’s stakeholders by continuing to create positive
business growth. In 2017, We succeeded in recording
the current year earnings of Rp3,027,466 million, which
experienced an increase of 15.60% from 2016, which
was Rp2,618,905 million. With the increase, We directly
improve the economic benefits to all stakeholders
(shareholders, employees, suppliers, the Government,
and the community) through the distributed economic
value of Rp19,654,406 million, which increased by 14.93%
compared to 2016, i.e. Rp17,100,730 million.
In 2017, We also developed the economic community of
Tourism Village of Pottery Industry Center by establishing
Karanganyar Village Economic Center (Balkondes), a
tourism-based platform to improve the local economy
and empower and develop the Human Resources
through the activities development in the surrounding
area. This creates a positive economic impact on the
Karanganyar Village economy, i.e. the development of
skills for pottery artisans through coaching and training
in order to increase economic income for the people of
Karanganyar Village.
As a Bank who is very concerned with sustainability, We
also focus on the housing construction by empowering
and relying on local products (domestic products) as
building materials. This becomes our solid commitment
to supporting the economy of domestic companies.
Dear distinguished stakeholders,
implemented a commitment to managing environmental
risks through the application of environmentally
friendly credit. As a bank with a business focus in the
Housing Loan sector, We do not finance the mining,
forestry, power generation, and other similar sectors
that have a significant effect on the environment. In
lending to developers, We put our attention on the
results of Environmental Impact Assessment (AMDAL).
Furthermore, We also conduct monitoring or review
through direct filed inspection to ensure that the
prospective debtors meet all relevant environmental
regulations. In addition, We also require that with every
house that we build, there must be reforestation, planting,
fasum (public facilities), and fasos (social facilities).
In banking operations, We also do our best to preserve
the environment. In 2017, We participated in the Earth
Hour campaign and managed to save electricity usage
of 61.9 kWh/hour. We are continuously managing waste
by the Sewage Treatment Plan (SWP) method and
continuously conducting wastewater measurements at
the Head Office to ensure that the waste generated is still…