strength in community - bank of china · fast facts: our group in hong kong (as at 31 december...

Corporate Social Responsibility Report 2011

Strength in Community

Contents

1. AboutthisReport.....................................................................................................................................................4

1.1 ScopeandFrameworkoftheReport................................................................................................4

2. ChiefExecutive’sMessage..................................................................................................................................5

3. CorporateSocialResponsibilityattheGroup.........................................................................................6

3.1 CSRGovernance............................................................................................................................................6

3.2 FocusAreasin2011.....................................................................................................................................6

3.3 RecognitioninHangSengCorporateSustainabilityIndexSeries.................................... 7

4.OurBusiness..................................................................................................................................................................8

4.1 BusinessHighlightsin2011....................................................................................................................9

4.2 SolidReturnwithSustainableGrowth..............................................................................................9

4.3 EconomicImpact........................................................................................................................................10

4.4 EnhancingSustainableGrowth:ESGAnalysis.......................................................................... 10

5. CorporateGovernance...................................................................................................................................... 11

5.1 CorporateGovernancePolicy............................................................................................................. 11

5.2 CorporateGovernanceFramework................................................................................................. 11

5.3 BoardofDirectors...................................................................................................................................... 12

5.4 RiskManagement...................................................................................................................................... 12

6. StakeholderEngagement................................................................................................................................ 13

6.1 Customers...................................................................................................................................................... 13

6.2 Employees..................................................................................................................................................... 13

6.3 Shareholders..................................................................................................................................................14

6.4 Investors......................................................................................................................................................... 14

6.5 StakeholderEngagementandCSRReporting.......................................................................... 14

6.6 LookingAhead............................................................................................................................................ 14

7. OurPeople................................................................................................................................................................ 15

7.1 Training............................................................................................................................................................ 15

7.2 EmployeeBenefits..................................................................................................................................... 16

7.3 EmployeeHealthandSafety............................................................................................................... 16

7.4 Work-lifeBalance........................................................................................................................................ 16

7.5 CaseStudy:BOCHKthroughtheEyesofaManagementTrainee................................ 16

8. OurCommunity..................................................................................................................................................... 17

8.1 FabricoftheCommunity...................................................................................................................... 17

8.2 CommunityAccess................................................................................................................................... 18

8.3 CaringforourCommunity:theDynamicVolunteerTeam................................................ 19

8.4 BOCHKCharitableFoundation........................................................................................................... 19

8.5 CommunitySupport................................................................................................................................ 19

8.6 CorporateCitizenship.............................................................................................................................. 19

8.7 EducationalProgrammes...................................................................................................................... 20

8.8 Sports,ArtsandCulture.......................................................................................................................... 21

8.9 CaseStudy:WahFuEstate-WahKwaiEstateBranch.......................................................... 22

9. EnvironmentalPerformance........................................................................................................................... 23

9.1 EnvironmentalHighlightsin2011.................................................................................................... 24

9.2 EnergySavinginKeyBuildings.......................................................................................................... 25

9.3 WaterSavinginKeyBuildings............................................................................................................ 25

9.4 OtherEnvironmentalInitiativesandVoluntaryCodes......................................................... 25

9.5 EnvironmentalStandardsandSchemesAdoptedin2011................................................ 26

10.SupplyChainandProcurement................................................................................................................. 27

11.SelectedAwardsandRecognition...............................................................................................................28

11.1Customer-centric...................................................................................................................................... 28

11.2CorporateGovernanceandInvestorRelations......................................................................... 29

11.3SocialResponsibility................................................................................................................................. 29

11.4EnvironmentalProtection..................................................................................................................... 29

11.5InnovationandCreativity...................................................................................................................... 30

1.1ScopeandFrameworkoftheReportThisreportprovidesanannualsummaryofthesustainabledevelopmentandcorporatesocialresponsibility(“CSR”)activitiesofBOCHongKong(Holdings)Limited(“theCompany”)anditssubsidiaries(comprisingBankofChina(HongKong),NanyangCommercialBank,ChiyuBankingCorporationandothers,collectivelyreferredtoas“theGroup”)duringthe2011calendaryear.

TheGrouphasmadeasignificantprogressofitsCSRmeasurementandreportingin2011.ThisreportisitsfirststeptowardsadoptionofglobalCSRreportingstandardsandistheGroup’sfirstreporttofollowtheGlobalReportingInitiative(“GRI”)G3.1Guidelines.

TheG3.1GuidelinesallowtransparentandreadyaccesstoourstakeholdersandbringallconceptsofsustainabledevelopmentandCSR–includingfinancialgovernance,shareholdertransparency,communityresponsibilityandsocialwork–togetherinonecohesivedocument.

1.AboutthisReport

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CorporateSocialResponsibilityReport2011

2. Chief Executive’s Message

At the Group, sustainability is the core belief of how we manage our business and plan for our development. We also recognise the importance of driving the sustainable development of society and environment which allows us to continue to thrive on. We are, therefore, committed to promoting CSR development and strengthening the relationships with our stakeholders as part of the Group’s sustainability strategy.

Banking is a pivotal sector in Hong Kong, especially given its status as an international financial hub. As a major leading banking group in Hong Kong, we are well aware of the important role we play in supporting the stability of the financial system. We are committed to conducting our business in a sustainable and responsible manner with robust governance and risk management in place. We endeavour to safeguard our solid foundation to support the Group’s long-term growth and generate greater value for our customers, employees, shareholders and the community as a whole.

While the Group has long been promoting CSR in different aspects of its operation, we enhanced our efforts in recent years to further demonstrate our vision in CSR. We consider the fulfilment of our social responsibility as crucial for creating and maintaining our long-term core competitiveness and increasing the value of our brand. A CSR Committee was set up and the Group’s CSR policy was formulated in 2010. This policy guides the Group in fulfilling its CSR commitment and in contributing to the sustainable development of the economy, society and environment. In 2011, we continued to drive our CSR development by strengthening our CSR governance and formulating our CSR policies in specific areas. We played an active role in contributing to the well-being of society. Amid the challenging operating conditions in 2011, we maintained our balanced growth strategy and delivered another year of solid results. We also continued to invest in our business and people to better serve our customers’ needs and to support the Group’s long-term development.

In addition to focusing on our business, we believe it is as important to enhance the communication with our stakeholders about our sustainability strategy. We understand that CSR is an evolving topic which covers a wide range of areas and CSR reporting involves more systematic data collection. We seek to advance our work in connection with CSR and to enhance the disclosure of CSR-related information on a continuous basis. Through this report, we hope to share our commitments by articulating the work we are doing, including financial governance, shareholder transparency, community responsibility and social activities. We aim to be open and transparent about our progress and continuous improvement. Going forward, we will continue to align our strategy with sustainability and to step up our efforts to integrate the CSR development into different facets of our business.

He Guangbei

Vice Chairman & Chief Executive

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3.CorporateSocialResponsibility attheGroup

FortheGroup,CSRmeansconductingbusinessinaresponsibleway.Thisapproachbenefitsourinternalandexternalstakeholdersaswellasthewidereconomy,societyandtheenvironment.Thefulfilmentofoursocialresponsibilityiscrucialforcreatingandmaintainingourlong-termcorecompetitiveness,forgingcloserrelationshipswithourstakeholdersandenhancingthevalueofourbrand.

WeaimtodemonstratethatCSRisembeddedinourbusinessoperationsandstrategyaswemovetowardsourcorporatevisionofbecomingthepremierchoiceforcustomers,employeesandshareholders.Wealsocontributetotheeffortsofgovernmentandworkwithothersinthefinanceindustrytoenhancesustainabledevelopmentandinternationalbestpractices.Weseektodevelopamutuallybeneficialrelationshipwiththemandtheircommunities.

Sustainable finance:Recognisingtheimportanceofenvironmentalprotectionandethicalbusiness,wehaveincorporatedenvironmental,socialandgovernance(“ESG”)factorsintoourlendingandcreditpolicies,toensuremoresustainablebusinessgrowthforboththeGroupandthecommunity.

1 2Stakeholder engagement:TheGrouphasasoundpolicyofengagingcustomers,employeesandshareholders.Wehavealsoidentifiedareastoimprovedialoguewithawiderrangeofstakeholdergroupsinfutureyearsbydevelopingalong-termstakeholderengagementplan.

3.1CSRGovernanceIn2010,theGroupsetuptheCSRCommitteetobringtogetherthemanystrandsofourCSRworkunderonesupervisorystructureoverseeingandapprovingallCSRactivities.TheCommitteeischairedbytheChiefExecutiveandiscomprisedofseniormanagementandthechiefexecutivesofthesubsidiaries.Itsresponsibilitiesincludestipulatingsocialresponsibilitystrategiesandpolicies,overseeingtheirexecution,andreviewingandperiodically

reportingprogresstotheBoard.TheBoardiscommittedtoundertakingCSRbystrengtheningrelationshipswithitsstakeholderswithaviewtocontributingtothesustainabledevelopmentoftheeconomy,societyandenvironment.

AppropriateinternalandexternalassessmentmechanismsaresetuptoassessthepracticeofCSRonaregularbasisinordertoimproveouroperatingperformance.EachkeydepartmentisallocatedspecifieddutiestocarryoutCSRwork.

3.2FocusAreas in20112011wasanimportantyearinourCSRdevelopmentwithsignificantprogressinvariousareas.WeenhancedourCSRreportingprocesstoshareourCSRpracticeandresultswithstakeholders,includingcustomers,employees,shareholders,communitiesandindustrypeers.Throughouttheyear,oureffortsfocusedonthefollowingareas:

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3.3RecognitioninHangSengCorporateSustainabilityIndexSeries

includedasaconstituentoftheHangSengCorporateSustainabilityIndexSeries,whichevaluatestheenvironmental,socialandcorporategovernanceperformanceoflisted

companiesinHongKongandtheMainlandofChina.Ourrankingmovedup14placesto18thin2011.

3.CorporateSocialResponsibilityattheGroup

TheGroup’sperformancewithregardtocorporatesustainabilityhasearneduswiderecognition.Fortwoyearsinarow,BOCHongKong(Holdings)Limitedhasbeen

Our people: WerecognisepeoplearetheGroup’smostimportantasset.Weinvestedheavilyinstafftraininganddevelopment,asaresultreceivingbothexternalrecognitionandpositiveresponsetoourstaffengagementsurveyin2011.ThislaysasolidfoundationfortheGroup’ssustainabledevelopmentinthelongterm.

Community: Weattachgreatimportancetothecommunitiesweoperatein.Thisenhancesourlong-termviabilityandfulfilsourresponsibilitiesasaleadingfinancialinstitutioninHongKong.WecontinuetopromoteeconomicandsocialsuccessofourmarketsthroughallourbusinessdecisionsandpayparticularattentiontoCSRinitiativesinsocietyasawhole.

Environmental protection: Ourcommitmenttoenvironmentalsustainabilitywasformalisedin2011asweformulatedtheGroup’sEnvironmentalPolicy.Westrivetominimiseourenvironmentalimpactbyreducingourcarbonfootprint,usingresourcesmoreefficientlyandeffectivelyandpromotingenvironmentallyresponsiblebusinesspractices,servicesandproducts.

Supply chain: TheGroup’sCSRpolicieshavemoresignificantimpactwhenappliedthroughoutoursupplychain.OurnewSustainableProcurementPolicyandSupplyChainCodeofConductextendourCSRreach.ToassesstheperformanceofsuppliersbasedonournewCodeofConduct,weconductbothsupplierself-auditandphysicalon-siteaudits.

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TheCompanywasincorporatedinHongKongon12September2001toholdtheentireequityinterestinBankofChina(HongKong)Limited(“BOCHK”),itsprincipaloperatingsubsidiary.Asat31December2011,BankofChinaLimited(“BOC”)held66.06%equityinterestintheCompany.

TheCompanyisaleadinglistedcommercialbankinggroupinHongKong,asrankedbyassetsandcustomerdeposits.With266branches,572ATMsandotherdistributionchannelsinHongKong(asat31December2011),theCompanyanditssubsidiariesofferacomprehensiverangeoffinancialproductsandservicestopersonalandcorporatecustomers.

Inaddition,theCompanyanditssubsidiarieshave29branchesandsub-branchesintheMainlandofChina(asat31December2011)toprovidecross-borderbankingservicestocustomersinHongKongandtheMainland.

BOCHKisoneofthethreenote-issuingbanksinHongKong.BOCHKisappointedbythePeople’sBankofChinaasthesoleClearingBankforRMBbusinessinHongKong.On13July2010,BOCHKwasauthorisedastheClearingBankofRMBbanknotesbusinessfortheTaiwanregion.

4.OurBusiness

Fast Facts: Our Group in Hong Kong(asat31December2011)

266branches

572ATMs

branchesinpublichousingestates

26

publichousingestatessolelyservedbyourbranches

16

3millioncustomers

Morethan

RMBbusiness

Insurance

Mainland business

Person

albanking

Corporate banking

Treasury

inHong

Kong

Our key services

Personalbanking

Corporatebanking

Treasury

Insurance

Mainlandbusiness

RMBbusinessinHongKong

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4.1BusinessHighlightsin2011

Achievedabalancedgrowthinloansanddepositsandmaintainedahealthyloan-to-depositratio

Implementedaproactiveinvestmentstrategytosecurerisk-adjustedreturnandliquidity

MaintainedleadingmarketpositionsintheRMBbusiness,HongKongresidentialmortgagebusiness,insurancebusinessandHongKong-Macausyndicatedloanmarket

SignificantadvancementinRMBbusinesswithconspicuousgrowthanddevelopmentinRMBdeposit-taking,lending,tradesettlement,creditcardbusiness,lifeinsurance,treasuryproductsandfundsdistribution

Enhancedourservicingcapabilityforcross-bordercustomersandexpandedourclientele,includingcorporateclientsandwealthmanagementcustomers,throughclosecollaborationwithourparentbank,BOC

4.2SolidReturn withSustainable GrowthTheCompany’sphilosophyistopromotesustainablegrowth.Ourbalancesheetischaracterisedbyourpredominantlypersonalandcorporatebankingbusinessmodelandprudentbusinessstrategy.WemaintainedastrongcapitalpositionwithaCapitalAdequacyRatio(“CAR”)of16.90%asattheendof2011,demonstratingourcommitmenttobeastablefinancialinstitution.

Ourloanbookgrew14.10%anddepositsincreasedby11.60%fortheyear.TheGroup’stotalassetsgrew4.70%toHK$1.74trillion.Asset

qualityfurtherimprovedwithaclassifiedorimpairedloanratioof0.10%,amongthelowestinthemarket.OurconsistentlystrongfinancialratioshaveledtoourStandard&Poor’slong-termcreditratingupgradebytwonotchesfromA-toA+in2011.

Sustainablegrowthallowsustomaintainstrengthinourcommunities.Althoughthemarketconditionistough,theGroup,ourbalancesheetandourwell-entrenchedbranchnetworkremainstrongandstable,helpingustomaintainhighqualitybankingservices.

4.OurBusiness

13.0816.17

16.85 16.1416.90

12.23 10.86 11.64 11.29 12.51

Core Capital Ratio

* as at 31 December

%

Capital Adequacy Ratio

2007 2008 2009 2010 2011

Capital Adequacy Ratio

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4.3EconomicImpactAsaleadingbankinggroupinHongKong,wearecommittedtocontributingtotheeconomy.Throughtherevenuewedelivered,wecansupportpayrollstoouremployees,dividendstoshareholdersandtaxestogovernment,aswellascontinuingourservicetothecommunity.In2011,weachievedrevenuesofHK$30.85billion,up12%in2010,andearnedHK$24.68billionprofitbeforetax.ThetotaltaxpaidaccountedforHK$3.9billion.

Wealsoseeprovidingbankingservicestothecommunityasourimportantroleinfacilitatingeconomicdevelopment.TheGroup’sleadingpositionisdemonstratedbythesizeofourassetanddepositbase.In2011,weheldHK$1.1trillionindepositsforourcustomers.OurtotaladvancestocustomersgrewtoalmostHK$700billion.WeprovideloanstoindividualsandenterprisestomeettheirfinancialneedsandtosupportthesustainableeconomicgrowthofHongKong.

BeingthesoleRMBclearingbankinHongKong,BOCHKgivesfullsupporttothefurtherdevelopmentoftheRMBmarketinHongKongaswellasinotheroffshorelocations.Ithasplayedanessentialroleinsettingupasophisticatedfinancial

infrastructureforRMBbusiness,providingsmoothandefficientclearingservicestotheRMBparticipatingbanks,andensuringsufficientRMBliquidityfordailysettlements.

4.4Enhancing SustainableGrowth: ESGAnalysisTheadoptionofESGmetricsinanalysinginvestmentdecisionsisbecomingwidespread–similarly,theanalysisofsuchcriteriapromisestodelivermorerobustandlong-termsustainablecreditmanagement.

WefurtherenhancedourGreenLendingPrinciplesandCSRCreditApproach,whichoutlinehowwepromotesustainabledevelopmentoftheeconomy,societyandenvironmentthroughvariouscreditriskstrategies.Differentcreditrisk

strategiesareadoptedfordifferentcounterpartiesorcredittransactionsdependingonthelevelofsocialorenvironmentalimpacts:

1 Supportisgiventothosecorporateorbusinessactivitieswithpositiveenvironmentalimpactsthroughengaginginvariousgreenlendingprogrammes.

2 Credittransactionsorcounterpartieswithsignificantnegativeenvironmentalimpactsareprudentlyassessed.Wewillsuspendsuchrelationshipsifmaterialprogresstowardscomplianceorrelatedcertificationcannotbeachievedwithinareasonabletimeframe.

3 Credittransactionsdirectlyengagedinmanufacturing,salesandpurchaseoflethalarmsandweaponsareprohibited.

4.OurBusiness

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Key Figures 2011/2010

HK$ Mn 2011 2010 (at 31 Dec 2011) (at 31 Dec 2010)

Revenues 30,846 27,508

Operatingcosts 7,862 9,584

Taxpaid 3,867 3,052

Profitbeforetax 24,680 19,742

Costtoincomeratio 25.49%* 34.84%

Totaladvancestocustomers 699,379 613,219

* ShouldtheimpactofLehmanBrothers-relatedproductsbeexcluded,thecoreratiowas34.56%,oneofthelowestintheindustry.

5.1Corporate GovernancePolicyTheCompanyrecognisestheimportanceofhighstandardsofcorporategovernanceandmaintainsaneffectivecorporategovernanceframeworkwhichdeliverslong-termsuccessoftheGroup.TheCompanyisalsostronglycommittedtoembracingandenhancingsoundcorporategovernanceprinciplesandpractices.Theestablishedandwell-structuredcorporategovernanceframeworkdirectsandregulatestheethicalconductoftheCompany,therebyprotectingandupholdingthevalueof

5.CorporateGovernance

shareholdersandstakeholdersasawholeinasustainablemanner.

5.2Corporate Governance FrameworkTheBoardisatthecoreoftheCompany’scorporategovernanceframeworkandthereisacleardivisionofresponsibilitiesbetweentheBoardandtheseniormanagement.TheBoardisresponsibleforprovidinghighlevelguidanceandeffectiveoversightoftheseniormanagement.TheBoardhasestablishedfourstandingBoardCommitteestoassistinperforming

itsresponsibilities.EachoftheBoardCommitteeshasawell-definedMandateandmakesrecommendationstotheBoardonrelevantmatterswithinitsscopeofresponsibilitiesormakesdecisionsunderappropriatecircumstancesinaccordancewiththepowerdelegatedbytheBoard.

TheBoardalsoestablishesadhocIndependentBoardCommittees,wheneverneeded,toreviewandapproverelevantissuesinviewofgoodcorporategovernance.TheIndependentBoardCommitteescomprisealltheIndependentNon-executiveDirectorsoftheCompany.

The Company’s corporate governance framework

The Board of Directors

RiskCommittee

NominationandRemuneration

Committee Management

StrategyandBudgetCommittee

AuditCommittee

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5.3BoardofDirectorsTheBoardconsistsof12members,ofwhichfivearenon-executivedirectorsandfiveareindependentnon-executivedirectors.The

5.CorporateGovernance

chairmanoftheBoardisanon-executivedirector.TheBoardactshonestlyandingoodfaithsothatdecisionsaremadeobjectivelywithaviewtodeliveringlong-termandmaximumshareholdervalueand

fulfillingitscorporateresponsibilitytootherstakeholdersoftheGroup.During2011,nineBoardmeetingswereheldwithanaverageattendanceof88%.

5.4RiskManagementTheGroupbelievesthatsoundriskmanagementiscrucialtothesuccessofanyorganisation.Initsdailyoperations,theGroupattachesahighdegreeofimportancetoriskmanagementandemphasisesthatabalancemustbestruckbetweenriskcontrolandbusinessgrowthanddevelopment.Wehavebuiltarobustriskmanagementorganisationalstructurewithacomprehensivesetofriskmanagementpoliciesandprocedures.Wehaveappropriaterisklimitstoidentify,measure,

Meetings of Standing Board Committees During 2011

Standing Board Committee Number of members Number of meetings Average attendance

AuditCommittee 6 5 97%

NominationandRemunerationCommittee 5 5 84%

RiskCommittee 4 8 94%

StrategyandBudgetCommittee 5 6 97%

monitorandcontrolrisksthatmayarise.TheprincipaltypesofrisksinherentintheGroup’sbusinessesarecreditrisk,interestraterisk,marketrisk,liquidityrisk,operationalrisk,reputationrisk,legalandcompliancerisk,andstrategicrisk.WehavebegunformalmeasurementofourownESGrisks.WealsomeasureandincorporateESGfactorswhenassessingoursuppliersandcreditrisksofourcustomers.

TheGroup’sriskmanagementobjectiveistoenhanceshareholdervaluebymaintainingriskexposures

withinacceptablelimits.TheGrouphasadefinedriskappetitestatementapprovedbytheBoard,whichisanexpressionofthetypesandlevelofriskthattheGroupiswillingtotakeinordertoachieveitsbusinessgoalsandtomeettheexpectationsofitsstakeholdersunderacontrollablerisklevel.

FormoreinformationonBOCHK’scorporategovernance,pleaserefertoour2011annualreportortheCompany’swebsite.

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6.StakeholderEngagement

TheGrouprecognisesthefundamentalimportanceoftransparencyandaccountabilityandiscommittedtoengagingwithstakeholders.Weaimtomaintainconstantcommunicationwitharangeofstakeholders.

Insecondquarter2011,wedevelopedalong-termstakeholderengagementplan.TheGroupidentifiesitsstakeholdersas:

Customers EmployeesShareholders

and the investment community

Government and regulators Supply chain Community

Ouron-goingstakeholderengagementeffortscouldbeoutlinedasfollows:

6.1CustomersTheGroupregularlyconductscustomersatisfactionsurveysandfocusgroupdiscussionswithcustomersegmentsincludingmass-market,wealthmanagementandcorporates.Weemploydifferentmethodstogatherinformationoncustomersatisfactionandstrivetoimproveourservicelevels.Weconductcustomersatisfactionsurveys,organiseseminarsandvisitourcorporatecustomerstogaina

betterunderstandingofourcustomerneeds.

TheGrouphassetupafaircomplainthandlingprocessforcustomerstovoicetheiropinionsandprotecttheirinterests.Complaintsaboutfrontlinestaffareinvestigatedindependently.ComplaintsrelatedtoinvestmentproductsarehandledbyaninvestigationteamwhichreportstotheChiefRiskOfficer.

Inrecognitionofourexcellenceincustomerserviceandprovisionofareliableserviceplatform,theGroup’sCallCentrereceived9awardsbytheHongKongCallCentreAssociation(“HKCCA”),

includingtheHKCCAAwards–GrandAwardoftheYearin2011.BOCCreditCard(International)LimitedhasreceivedtheISO10002CertificationfromHongKongQualityAssuranceAgencysince2008,signifyingourcompliancewiththeinternationalstandardofcustomercomplaintmanagement.

Wehavecommissionedthirdpartyresearchintocustomersatisfactiontofurtherimproveourcustomers’experience.ThesurveyreportbyNielseninApril2012revealedthatthemajorityofourpersonalandcorporatecustomersweresatisfiedwithourservicequality.

6.2EmployeesWeplacegreatemphasisonhavingtwo-waycommunicationsbetweentheGroupandouremployees.Toensurefairandreasonabletreatmentforemployees,theGroup’sHumanResourcesPolicystatesclearlythemechanismforaddressingouremployees’needsandconcerns.Adedicatedemployeehotlineisinplacetogatheremployeefeedbackandopinions.In2011,BOCHKconductedan“onlinestaffengagementsurvey”tobetterunderstandstaffopinionsandenhanceourpoliciesandmeasures.HavingthemostextensivebranchnetworkinHongKong,theGroupvaluesthevoiceofourfrontlinestaff.Ourseniormanagementmakesconstantvisitstodifferentbranchesandhasface-to-faceinteractionwithourstaff.

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6.3ShareholdersTheBoardattachesahighdegreeofimportancetocontinuouscommunicationwithshareholders,particularlythroughdirectdialoguewiththemattheCompany’sannualgeneralmeetings.Shareholdersareencouragedtoactivelyparticipateinsuchmeetings.

AttheCompany’s2011annualgeneralmeeting(“AGM”)andextraordinarygeneralmeetingheldon25May2011,theChairmanoftheBoard,theChairmanoftheNominationandRemunerationCommittee,theChairmanoftheRiskCommittee,theChairmanoftheStrategyandBudgetCommittee,membersoftheAuditCommittee,seniormanagementoftheCompanyandrepresentativesoftheexternalauditor,PricewaterhouseCoopers,werepresenttorespondtoenquiriesraisedbyshareholders.Atotalof825registeredshareholdersandtheirauthorisedproxiesand117authorisedcorporaterepresentativesholdinganaggregateof10,359,163,269shares,representing97.98%ofthetotalissuedsharecapitaloftheCompanywerepresentatthe2011AGM.

6.StakeholderEngagement

6.4InvestorsTheCompanyaimstopromoteeffectivecommunicationwiththeinvestmentcommunitytoenhancetheirknowledgeandunderstandingofourdevelopmentandstrategies.In2011,theCompanyhadover270meetingswithinvestorsandanalystsacrosstheworldwithtotalattendancesofover780.Thesemeetingswereheldthroughglobalroad-shows,internationalinvestorconferences,companyvisitsandconferencecalls.TheCompanyiswidelycoveredbymorethan20securitiesresearchinstitutions.

WehighlyvalueinvestorfeedbackandcommentswhichareimportantfortheformulationoftheGroup’sgrowthstrategiestoenhanceitsshareholdervalueandtoensureitssustainabledevelopment.

TheInvestorRelationsCommittee,chairedbytheChiefExecutiveandconsistingofotherseniorexecutives,isresponsiblefortheformulationandoversightoftheCompany’sinvestorrelationsstrategiesandprogrammes.TheeffectivenessoftheinvestorrelationsprogrammesisreviewedbytheBoardandtheInvestorRelationsCommitteeonaregularbasis.

6.5Stakeholder Engagementand CSRReportingAnumberofinterviewswereconductedinassessingthecontentforthisCSRreport,whichhasadoptedtheformatofGRIreporting.Theintervieweesincludedarangeofstakeholdersincludingseniormanagement,branchlevelmanagement,juniorstaff,customersandshareholders.Stakeholdersforinterviewwereidentifiedbytheirrelevancetotheorganisationandtheirlegitimacy;theiravailabilityforin-depthinterviewsandtheirknowledgeoftheGroupanditsoperations.

6.6LookingAheadWewillcontinuetoraiseawarenessamongstourstakeholdersabouttheimportanceofethicalandresponsiblepracticewithinourbusiness.Atthesametime,weaimtoimprovethetwo-wayflowofinformationbetweenourbusinessandstakeholdergroups.TheGroupwillkeepstakeholdersinvolvedintheformulationofourlong-termdirectionandstrategybylisteningtotheiropinionsandsuggestionsonourcurrentandfuturedevelopment,andhelpingthemunderstandouroverallprogress.

Ourstakeholderengagementplandevelopedin2011willimproveourstakeholderengagementthroughamorestructureddialoguewithbothinternalandexternalstakeholders.

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7.OurPeople

Weunderstandtheimportanceofastableemploymentenvironmentforourpeopleandremaincommittedtothisevenduringtheglobalfinancialcrisis.Comparedtotheendof2010,ourheadcountmeasuredasfull-timeequivalentsroseby4.8%in2011to14,475.

CSRhelpsincreasethesenseofbelongingamongourstaff,hasapositiveimpactonstaffmoraleandcreateslong-termvaluefortheGroup.ItisapriorityfortheGroupintheyearahead.

TheGroupconductedan“onlinestaffengagementsurvey”tocollectstaffopinionin2011,asoutlinedinthestakeholderengagementsection.Thepurposewastoensurethevoicesofstaffmembersarefullyheard,enhancemanagementpoliciesandmeasures,andupgradetheworkingenvironment.Thesurveywasmetwithanoverwhelmingresponse.

Operating Practice

OurapproachtohumanresourcemanagementisgovernedbyourStaffCodeofConductwhichisreviewedandapprovedbytheManagementCommitteeannually.Ourstaffhandbookprovidesguidelinesfornon-discriminationandfairpracticeintheworkplacewith"CodesofPracticeonEmploymentRelatingtotheSexDiscriminationOrdinance,DisabilityDiscriminationOrdinanceandFamilyStatusDiscriminationOrdinance",whichpromotesequalopportunities.

In2010,weimplemented“GuidelinesforSex/Disability/FamilyStatusDiscrimination”toreflectthevalueoftheGroupasanequalopportunityemployer.AllstaffarerequiredtoadheretotheGuidelines.WehavealsoreviewedtheGuidelinesinresponsetotherecentenactmentofHongKong’sRaceDiscriminationOrdinance.

7.1TrainingWeunderstandthatpeoplearecriticalassetsfortheGroup.Wearecommittedtoprovidingthemwithlearningopportunitiesandacongenialenvironmenttogrowanddevelop.In2010-11,weweregrantedthehonourableawardstatusof“ERBManpowerDeveloper1st”bytheEmployeesRetrainingBoard.

TheGroupinvestsheavilyinstafftraininganddevelopmenteveryyearthroughdiverseandmulti-facetedtrainingprogrammes.Inordertoenhancetheleadershipandstrategicthinkingcapabilitiesofourmanagementstaff,wehaveemployedvariousprogrammesofferedbyrenowneduniversitiessuchasPekingUniversity,TsinghuaUniversity,ColumbiaUniversity,

OxfordUniversityandtheRichardIveySchoolofBusiness.Inaddition,wenominateoutstandingtalenttoenrolltheEMBAprogrammesofferedbyrenowneduniversitiesinHongKong.

WecontinuetonurtureourfuturetalentthroughourManagementTraineeProgramme,OfficerTraineeProgrammeandSummerInternshipProgramme.WealsooffersummerinternshipswhichincludeworkexperienceintheMainlandbranchesofBOC.

TosupporttheGroup’ssustainablegrowth,weadoptanintegratedapproachtoencourageourstafftolearnanddevelopthroughvariousoptionssuchasin-housetrainingprogrammes,jobrotationprogrammesandonthejob

trainingundertheguidanceandcoachingoflinemanagers.WeofferwellstructuredcurriculumtonewstaffincriticalrolesoffrontlinebusinessestoensurethattheyarecompetentandtheirvaluesarealignedwiththeGroup’sethicalstandardsinexecutingbusinessactivities.

RespondingtotheGroup’sriskandcompliancemanagementapproach,welaunchedtwobank-widetrainingprogrammesthroughthenewlydeployed“MyLearning”electronicportalcoveringthetopicsofOperationalRiskManagement,CodeofConduct,Anti-MoneyLaundering,InformationSecurity,CustomerDataProtection,FraudsandForgeryPrevention.

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7.2EmployeeBenefitsTheGroupiscommittedtoprovidingitsstaffwithcompetitiveremunerationpackages.Wecontinuetoreviewandrefineourremunerationandbenefitspolicytakingmarketpracticesintoaccountandincompliancewithrelevantregulatoryrequirementsincludingasoundremunerationsystem.Ourstaffarerewardedbasedonperformance.Forsalesstaff,theincentivescheme,whichisscore-driven,isdesignedinawaythattakesintoaccountbothsalesperformanceandcompliance/control.

Appreciationandrecognitionareimportanttomotivatestaff.We,therefore,identifyandrewardoutstandingperformersanddistinguishedstaff.

Ourprovisionofcompetitivemedicalschemestostaffexemplifiesourcaringattitude.Meanwhile,ourheadquartersstaffbenefitfroma

subsidisedcanteenthatoffersbreakfast,lunchanddinnerinbothChineseandWesternstylesatBankofChinaTower(“BOCTower”).Forthosenon-headquartersstaffwhocannotenjoythisbenefit,amealallowanceisprovided.

7.3EmployeeHealth andSafetyInordertoenhanceoccupationalhealthandsafetyinBOCHK,ourCorporateSafetyDivisionorganisedatotalofeightcoursesincludingabasicfirepreventionprogramme,occupationalhealthandsafetyseminarsandthefirstaidcertificationprogrammein2011.267participantsattended3,184traininghoursintotal.Inadditiontoformaltrainingprogrammes,robberypreventionexerciseswereconductedin65branchescovering1,111staff.Ourstaffareprovidedwithfreebodycheck-upsonaregularbasis.

7.4Work-lifeBalanceWebelievethatmaintainingagoodwork-lifebalanceisimportanttoouremployees.Differentrecreationalactivitiesareprovidedforourstaffandtheirfamilymembers.Inpromotingenvironmentalprotection,wehavearrangednineeco-toursofthe“HongKongGeoparkCharityGreenWalk”forourstaffandtheirfamilymembers.OurstafffundayatHongKongDisneylandinNovember2011enjoyedaphenomenalturnout,with99%ofstaffenrollingandnearly30,000staffmembersandtheirfamiliesparticipating.Educationalworkshopsbyfinancialprofessionalswereorganisedtoteachouremployees’childrenimportantfinancialconcepts.WealsopromoteareadingculturebyorganisingvariousbookfairsatBOCTowerandBankofChinaCentre(“BOCCentre”).Moreover,toadoptfamily-friendlyemploymentpractices,weprovidemaleemployeeswithpaidpaternityleave.

SharonLaujoinedBOCHKasaManagementTraineeaftergraduationin2011.ShewasattractedtoBOCHKbecausesheconsideredthebanktobebothprofitableandsociallyresponsible.ShebelievedthatasBOCHKcontinuestogrow,thiswouldbringhermorecareeropportunities.

SincejoiningBOCHK,shehasbeenmostimpressedbythebank’speople-orientedcorporateculture.Fromherownexperience,shesawthatthebankhad

BOCHKthroughtheEyesofaManagementTraineeSharon Lau

demonstratedstrongcommitmenttonurtureyoungbusinesstalentandfutureleaders.TheManagementTraineeProgramme,particularlythe12-monthrotationexperience,hasbroadenedherexposurewithinBOCHKandtothebankingindustryinHongKong.Moreover,thementorshipprogrammehasenabledhertotakeadvicefromseniorcolleaguesandtostrengthenhersoftskillsintheworkplace.SheisdelightedtoworkatBOCHKbecauseitisacaringorganisationwhichvaluespeopleandrelationships.

7.OurPeople

7.5 Case Study

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8.OurCommunity

ThesustainabilityoftheGroupisfundamentallyrelatedtothesocialandeconomicsustainabilityofthecommunityandHongKong’spositionasaninternationalfinancialcentre.

OurCSRPolicyguidesustopromotethedevelopmentoftheHongKongeconomyandsociety.Guidedbytheoperatingconceptofconformingwithsocialethicsandpublicwell-being,theGroupsafeguardstheinterestsofconsumers,employeesandthecommunity.Itactivelyparticipatesinsocialwelfarerelatedinitiativesandalsoencouragesemployeestoparticipate.Itpromotessportsdevelopment,supportsartsandculture-relatedactivities,donatestoandsponsorseducation-relatedprojects,andtakespartincharitableevents.

Branch Locations

8.1Fabricofthe CommunityAsaleadingbankinggroupinHongKong,weattachgreatimportancetoourcommunityandconsiderthefulfilmentofsocial

responsibilityascrucialforcreatingandmaintainingourlong-termcorecompetences.Wetreasuretherelationshipswehavedevelopedwiththecommunitywherewegrowourbusiness.Asacommunitybank,wecontinuetorationaliseour

branchnetworktobettermeettheneedsofthegeneralpublic.Wenowoperate26branchesinpublichousingestatesandin16publichousingestateswearetheonlybankpresent.

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Elderly and Disadvantaged

TheCensusandStatisticsDepartmentoftheHKSARGovernmentprojectsthatby2036,thenumberofpeopleagedover60willincreaseto2.9million,growingfrom18.9%ofthepopulationin2011to33.2%.Statisticsalsodemonstrateatrendthatahigherpercentageoftheelderlyisreceivingsocialsecuritypaymentsthanyoungerpeople.

BOCHKhasanumberofinitiativestohelptheelderlyandthecommunity:

Fortheelderlyagedover65,BOCHKoffersafreeBOCFastCashCardandspecialadviceonhowtouseATMssafelyandsecurely.BOCHKalsomakesvisitstoelderlycentrestoteachtheelderlyhowtouseATMs.

BOCHKhasbecomealeadingproviderofthenew“ReverseMortgageProgramme”launchedbytheHongKongMortgageCorporation.UndertheProgramme,theelderlycanpledgetheirself-occupiedresidentialpropertyinHongKongassecurityforamortgageloantoenjoygreaterfinancialflexibilityafterretirement.

Weofferaservicechargewaivertovulnerablegroupssuchasseniorcitizensaged65oraboveaswellasthosereceivingtheComprehensiveSocialSecurityAssistance.

8.OurCommunity

newlyrenovatedbrancheshavealreadyincorporatedbarrier-freefacilities,suchasslopingplatforms,inordertofacilitatedisabledcustomerstoenterthebranches.Wherethisisimpossibletoinstall,helpbellsareprovidedasalternatives.Inaddition,thereareCustomerServiceAmbassadorsinourbranchesprovidingassistancetoanycustomersinneed.

ATM Services

ForATMservices,allnewlyinstalledorreplacedATMsaredesignedwiththeheightofbothkeypadsandscreenssuitableforwheelchairaccess,incompliancewithHongKongAssociationofBanks(“HKAB”)guidelines.

Inaddition,alloftheGroup’sATMsfeatureprotrudingsymbolswhichimprovetheaccessibilityofATMservicesforthevisuallyimpaired.Around92%ofATMshavesoftkeypads,whichfulfilstherequirementofHKAB.WhensettingoutthenetworkstrategyofATMs,weensurethatthereisatleastoneATMwithsoftkeypadsateverysite.

Internet Banking Services

ForInternetBankingServices,BOCHKhasdesignedfunctionsforvisuallyimpairedcustomers,includingthesupportofscreenreadersandprovisionforfontresizingaswellasfulfilmentofbestpracticeguidelinesonnavigationandcontentpresentation.

WehaveimplementedanumberofmeasurestoassisteligibleHongKongcitizens,particularlytheelderly,inregisteringfor“Scheme$6,000”oftheHKSARGovernmentwitheasyaccessviaourbranches,CallCentreandInternetBanking,andtohelpthemtoreceivepaymentsthroughbanktransfer.TheinitiativewasextendedtohelpretiredHongKongelderlyintheMainlandtoregisterandcollecttheirHK$6,000handoutfromtheGovernment.

Specialproceduralhandlingforaccountopening,sellingprocesses,designandplanningofthebranchesandATMshasbeensetupandcontinuouslyreviewedforgroupofcustomerswithspecialneeds.Wehaveintroducedriskprofilingforallcustomers,toensurethattheelderlyorothervulnerablegroupsareawareoftheproductfeaturesandriskprofileoftheirinvestmentsandwhetherthisisinlinewiththeirriskappetite.

8.2CommunityAccess

Branches

Attheendof2011,theGroup’sservicenetworkinHongKongcomprised266branches,including133wealthmanagementcentresand21dedicatedMainlandcustomerservicecentres.Asstipulatedbyourbranchdesignguidelines,“barrier-freeaccess”isakeyelementinourbranches.All

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Call Centre Services

Multi-linguisticcapabilities–Cantonese,Putonghua,English,JapaneseandIndonesian–havebeenestablishedinthecallcentresoftheGrouptohandlecustomerenquiriesandrequests.

8.3Caringforour Community: theDynamic VolunteerTeamTheGroupestablishedthe“DynamicVolunteerTeam”in2006tofacilitateemployeeparticipationinvariouscommunityandvolunteeractivities,includingcleaningelderlyhomes,organisingfoodeventsforunderprivilegedfamilies,runningbasicandenjoyableartclassesforchildrenandorganisingcareerseminarsforsecondaryschoolstudents.

In2011,the“GuidelinesforBOCHKVolunteerTeam”,andthevolunteerteammemberdirectoryinitiativeswereestablishedtofurtherformalisethevolunteerforce.Thenumberofregisteredvolunteerstaffhasdoubledsince2006,withover1,000registeredvolunteersnowcontributingtheirtime.Allstaffreceiveonedayannualleaveforvolunteeractivities.

In2011,theDynamicVolunteerTeamcollaboratedwithTungWahGroupofHospitals,PoLeungKuk,Methodist,TheBoys’andGirls’

ClubsAssociationofHongKong,YanChaiHospitalandHelpingHandtoconductninevolunteereventsoffering24serviceactivities.

8.4BOCHKCharitable FoundationRootedinHongKong,BOCHKhasbeenservingHongKongwithadedicationtodevelopingharmoniousrelationshipswithdifferentsectorsofthecity.Overtheyears,bydonatingtoandworkingcloselywiththeBOCHKCharitableFoundation(“TheFoundation”),acharityorganisationregisteredasanindependentlegalentityinHongKong,wehavebeenactivelyparticipatinginadiverserangeofcharitableactivities,coveringeducationandsports,artsandculture,environmentalprotection,socialwelfareandassistancetotheneedyinHongKongandtheMainlandofChina,toshareoursuccesswiththecommunitiesweserve.

8.5Community SupportTheGroupisactiveinsupportingthewelfareofHongKong’ssociety,throughourowncampaignsandthroughsupportoftheHongKongCommunityChest(“theChest”)andothercharitableinstitutions.

In2009wedesignatedHK$90millionofthenetproceedsfrom

thesaleoftheBeijing2008OlympicGamesHKDCommemorativeBanknotetosetupthe“BOCHK’sCaringHongKong–AHeartWarmingCampaign”,withtheobjectivestoassistthedisadvantagedgroupsandtobuildaharmoniouscommunity.UndertheCampaign,weapprovedHK$85millionbytheendof2011to78large-scaleprojectsofsocialwelfareagenciesandcharitiesoftheChestandtheHongKongCouncilofSocialServices.Over900,000peoplehavebenefitedfromthesedonations,coveringthenewimmigrants,theaged,theunderprivilegedandsingle-parentfamilies.

8.6Corporate CitizenshipRecognisingtheneedtoenhancecorporatecitizenshipandCSRinthecity,BOCHKhascommittedasaleadsponsorofthe“CorporateCitizenshipProgramme”organisedbytheHongKongProductivityCouncil(“HKPC”)fortwoconsecutiveyears.Theaimoftheprogrammeistoencourageenterprisestoadoptsocialresponsibilityprinciplesintheirbusinessstrategiesandmanagementphilosophies.Theprogrammealsodevelopedanumberofinitiativestoenhanceyoungpeople’sawarenessoftheresponsibilityofmoderncorporations.

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8.7Educational Programmes

Nurturing Future Talent

Since1990,theFoundationhasprovidedHK$14.43millionforscholarshipsandbursariestonineuniversitiesinHongKong,benefitingatotalof1,540students.Wealsoorganisedthe“SummerInternshipProgrammeforTertiaryInstitutionStudents”.In2011,theseventh“InternshipProgrammeforFinancialProfessionalsintheMainlandofChina”washeld,togetherwiththe“SummerInternshipProgrammeforTertiaryInstitutionStudents”,offeringuniversityandtertiaryinstitutionstudentstheinternshipopportunitiesatthebranchesofBOCintheMainland.

Inaddition,theGroupsponsoredthe“CSRCUMBAConference2011”organisedbytheFacultyofBusinessAdministrationoftheChineseUniversityofHongKong(“CUMBA”)underthethemeof“GlobalPartnershipforaSustainableFuture”.Morethan250delegatesfromover50organisationsofvariousbusinessdomainsparticipatedintheconferencetosharetheirexperienceandaspirationsofCSRfulfilment.

Financial Workshops for Children

BOCHKactivelypromotesfinancialliteracyinthecommunity.Forexample,BOCHKandBOCGroup

conservationfromworld-classexperts.Thisprojecthasbeenwellreceivedbytheeducationcommunity,witheightparticipatingschoolsinthefirstphaseandwillbegraduallyextendedtoallschoolsinHongKong.

In2009,wespearheadedthe“HongKongGeoparkCharityGreenWalk”,whichbroughttogethertheimportantelementsofenvironmentalprotectionandcharity.AsatMay2012,84eco-tourswereorganisedformorethan8,100customers,citizens,staffmembersandtheircompanionstobetterunderstandHongKong’sgeo-conservation.Inaddition,morethan260newimmigrants,membersfromsingleparentorlowincomefamilies,youthsandseniorcitizenswereinvitedtotakepartinthe“HongKongGlobalGeoparkofChinaIn-depthTour”andexplorethegeologicalwonders.

In2011-2012,wesponsorthe“1000EnvironmentFriendlyYouthAmbassadorsAction”organisedbyeightnationalauthoritiesofthePRC,includingtheMinistryofEnvironmentalProtection,MinistryofEducation,MinistryofScienceandTechnology.Theprogrammeaimstoarousethepublicawarenessofpollutionpreventionandencouragethepublictoactivelyparticipateinenvironmentalprotectionthroughenergyconservationandemissionsreduction.

LifeAssuranceCompanyLimitedcontinuedtosponsorthe“KiddieSky”GreenKidsBankingProgrammeandKidsGardensetupbytheDepartmentofChildEducationandCommunityServicesoftheHongKongInstituteofVocationalEducation,teachingchildrenabouttheoperationofbanks.

BOCHKsponsored“Children’sFinancialManagementSeminarandSurveyFindingsRelease”.Duringtheseminar,weinvitedprofessionalstoshareviewsandvaluableexperienceonhowtocultivatechildrenacorrectattitudetowardsfinancialmanagement.

Environmental Education

Environmentaleducationisanotherkeyfocusofourcorporateresponsibilityinitiative.WepartneredwiththeAssociationforGeoconservation,HongKong(“AGHK”),inestablishingthefirst-ever“HongKongGlobalGeoparkofChina–PrehistoricStoryRoom”,featuringlifeonearthattheBOCTowerinOctober2011.Variousvaluablefossilsandmodelsaredisplayedinaninteractiveway.Morethan64,850visitorsandover360visitingorganisationswererecordedasatMay2012.Wealsosponsorthe“GlobalGeoparkE-Classroom”jointlyorganisedbytheAgriculture,FisheriesandConservationDepartmentandtheAGHK.Thefirst-everE-Classroomprovideslocalandoverseasstudentswithanonlineplatformtolearnmoreaboutgeo-

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BadmintonisapopularsportinHongKongandoneofthesportsinwhichHongKongenjoysanOlympicpresence.HongKongfieldedonemen’ssinglesplayerandtwowomen’ssinglesplayersintheBeijing2008SummerOlympicGames,aremarkableachievementforacity.

WeareaproudpatronofbadmintoninHongKong,andhavedonatedmorethanHK$12millionforthesportinthelast13years,benefitingover920,000participants.

WecontinueoursupportwithadonationofoverHK$4milliontothe“BadmintonDevelopment&TrainingScheme2011-2014”.TheSchemeincludescompetitions,fundays,trainingcourses,rewardprogrammesanddemonstrationsessions,withover80,000peopleparticipatingin2011.

Tofurtherpromotethesignificanceofenvironmentalprotection,theGroupsponsoredthe“PowerPlant”,alarge-scaleinternationaloutdoorsoundandlightexhibitionpresentedbythe39thHongKongArtsFestival.Awiderangeofenvironmentallyfriendlymaterialswereusedinartinstallations,andover23,000visitorswererecordedduringthe21daysofexhibition.

EmbracingLOHAS(LifestylesforHealthandSustainability)canhelpreducethecarbonfootprintinourdailylife.The“LOHASAtelier”setupinChaiWanunderthe“LOHAS@BOCHK”IntegratedEnvironmentalEducationProgrammerecordednearly9,000visitorsduringtheperiodfromNovember2010toMay2011.Morethan2,300and1,000participantstookpartrespectivelyinthe150“LOHASWorkshops”and

the“LOHASCarnival”complementedbyawasterecyclingcompetitiondesignedforthelocalsecondaryandprimaryschoolstudents.In2011BOCHKsponsoredthe“ECOLITYGlobalYouthSummitonSustainability”heldbyAIESEC,withtheaimofencouragingover120globalyouthrepresentativestoformulatecreativegreeninitiativesthroughaBusinessPlanCompetition.

8.8Sports,Artsand CultureTohelpraisepublicinterestinsports,wehavesupportedthe“BankofChinaHongKongSportsStarsAwards”forsixyearsinarowandsetupthe“BestoftheBestHongKongSportsStarsAward”inrecognitionoftheexcellentperformanceofHongKong

athletes.IntheonlinepublicvotingoftheHongKongSportsStarsAwards2011heldin2012,werecordedatotalofover63,000votes.

TheFoundationalsoadvocatesthe“SportforAll”messageinthecommunitythroughsponsorshipofthe“FestivalofSport”from2007formorethan500,000participantsoverthepastsixconsecutiveyears.

For10consecutiveyears,theFoundationhasalsosponsoredthe“HongKongIsland&KowloonRegionalInter-schoolSportsCompetition”,thelargestschoolsportscompetitionofitskindinHongKong.Werecordedover79,000athleteenrolmentsfrom269schools,participatinginmorethan8,400matchesofthiscompetitionin2011.

80,000+

participantsin2011

HK$4million+donationtoBadmintonDevelopment&TrainingScheme2011-2014

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Artandcultureenrichourlifeandenhancecreativity.In2011,theFoundationsupportedthe“DunhuangCultureandPreservationStudySeries”organisedbytheUniversityofHongKong.Ledbyscholarsandexperts,universitystudentsvisitedDunhuangonastudytourtogainadeeperunderstandingofChineseculturalheritage.Twopublic

seminars,students’reportingsessionsandexhibitionswereorganisedwithover2,600participants.

In2011,BOCHKsponsoredthe“HongKongInternationalConductingCompetitionforChineseMusic”tohelpidentifyconductingtalentsandpromotethedevelopmentofChineseorchestralmusic.Inaddition,nearly

1,500peopleparticipatedinthe“ConductorDemystifiedWorkshops”,the“ArtofManagementwithaBatonSharing”SessionsandFinalCompetition.Attheendof2011,BOCHKspeciallypresented“YundiRedRomanceRecital”.Attheconcert,YundiplayeduniquetraditionalChinesemusicontopofChopin’sclassicalpieces.

WahFuEstate-WahKwaiEstateBranch

TheWahFuEstateinHongKongwasbuiltin1967.Itconsistsof18blocksofPublicHousingandseveralschools.WahKwaiEstatewasbuiltin1990andconsistsofsixblocksofPublicHousing.

AcrossWahFuEstateandWahKwaiEstate,thereare10,300apartmentsranginginsizefrom28.3sqmto71.8sqmandapopulationof29,100.

Itisvitalforthecommunitytohaveaccessto

bankingservices,includingcashwithdrawal,moneyexchange,etc.Currently,BOCHKistheonlybankservingtheestates.Theelderlyarethemaincustomersegment,with70%ofthebranchcustomersaged65orabove;10%aredomestichelpers.Beingacommunitybankandhavingconsideredthecharacteristicsoftheresidents,BOCHKendeavourstoprovideproductsandserviceswhichmeetthebankingneedsoftheresidentsintheestates.

Wah Fu and Wah Kwai in numbers

Population 29,100

Apartments 10,300

Apartmentsize 28.3-71.8sqm

BankbranchesinWahFuEstate 1(BOCHK)

Source:HongKongHousingAuthority

8.OurCommunity

8.9 Case Study

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9.EnvironmentalPerformance

TheGroup’sEnvironmentalPolicyoutlinesourapproachtopreventing,managingandwherepossible,reducingtheenvironmentalimpactsgenerated,directlyorindirectly,bytheGroup’sactivities.

Besidescaringforourownenvironmentalimpact,ournewESGlendingguidelinesandSustainableProcurementPolicyalsohelpuspromotebetterenvironmental,socialandgovernancepracticesamongstourcustomersandsuppliers.

Environmental PolicyTheGroupiscommittedtoenvironmentalsustainability.Weminimiseourenvironmentalimpactbyreducingourcarbonfootprint,usingresourcesmoreefficientlyandeffectivelyandpromotingenvironmentallyresponsiblebusinesspractices,servicesandproducts.

OurpolicywasformulatedwithreferencetotheUNEPStatementbyFinancialInstitutionsontheEnvironmentandSustainableDevelopmentandotherfinancialsectorinitiatives.TheseincludetheUnitedNationsPrinciplesforResponsibleInvestment(“UNPRI”)andtheUnitedNationsGlobalCompact(“UNGC”).

Our Environmental ResponsibilityWerecognisethatourbusinesshasdirectandindirectimpactsontheenvironment.Ourobjectiveistomanagetheseimpactssothatwecanminimiseriskstoourbusinessandportfoliosandenhancelong-termstakeholdervalue.

Wesupporttheprecautionaryapproachtoenvironmentalmanagement,whichstrivestoanticipateandpreventpotentialenvironmentaldegradation.

Our pledge Wewillworktowardsintegratingenvironmental

considerationsintoourbusinessoperations,servicesandproducts.

Wewillimplementrigorousenvironmentalprogrammesbasedonenvironmentalmanagementsystemsandaregularprogrammeofreviewingandreportingonrelevantkeyperformanceindicators.

Wewillensurethatthespaceweoccupyisoperatedwiththeobjectiveofbestpracticeenvironmentalperformance.

Wearecommittedtocomplyingwithlocal,nationalandinternationalenvironmentalregulations.

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ESG Lending Criteria

In2010,wereviewedandenhancedourcreditriskpolicyandproceduresincorporatingelementspromotingenvironmentalprotection,energyandemissionsreductionandpublichealthandsafety.Inlinewiththeseprinciples,weconductcreditassessmentstoconsidertheinfluencesofcreditcustomersorcreditprojectstowardssocialand/orecologicalenvironment,andtheirpositiveandnegativeimpactsonsocietyandenvironment.Environmentalandsocialperformanceofourcustomersorcreditprojectsisoneofthefactorsformakingthecreditdecisions.Therelatedcreditriskpolicyandproceduresarereviewedannually.

Energy and Carbon Audit

In2011,theGroupcompletedtheenergyandcarbonauditforourmainbuildings,providingforacomprehensivereviewofthecurrentlevelofcarbonemissionsandenergyconsumption.Thisprovidesafoundationtoestablishindicatorsforfurtherreductionofcarbonemissionsandconservationofenergy.

Inordertobettermeasureourcarbonfootprint,wehavesetupsystemstomeasureenergyconsumption,waterusageandwastegenerationacrossourofficebuildingswhichareourmainsourcesofcarbonemissions.


Green Equipment Financing

Weoffera“GreenEquipmentFinancingScheme”throughcollaborationwiththeHKPC.Theschemeencouragescorporatecustomerstopurchaseenvironmentalfriendlyequipmenttoincreasetheirproductivityandoperatingefficiencywhilereducingenvironmentalpollution.BOCHKdonatesHK$1foreveryHK$2,000ofloanstodesignatedgreengroupsviatheHKPCtosupportenvironmentalprotectioninitiatives.

Wealsojointlylaunchedthe“EnergyEfficiencyLoanScheme”withthetwoelectricitycompaniesinHongKongtoprovideloanstocommercialandindustrialcustomersfortheimplementationofenergy-savinginitiativesandencouragethemtoswitchtoenergy-efficientelectricalappliancesandequipment.

9.1EnvironmentalHighlightsin2011

Reductioninelectricity

1.7millionkWh

Recycledmaterialscollected

76,041kg

NumberofsheetsofA4papersaved

4.2million

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Company encourages its shareholders and investors to access corporate communications of the Company through its website. The Company believes that this is also the most efficient and convenient means of communication with shareholders and investors.

Paper use

We procure paper with proven environmental impact reduction or FSC-certified paper approved by procurement committee. Working towards a paperless office, we have reduced our paper use by 4% in 2011, as compared to 2010. In an effort to reduce paper use, we submitted our annual Employer’s Tax Returns in the form of CD-ROMs, resulting in us being awarded Green Employer status by the Inland Revenue Department of the HKSAR Government.

Recycling

Due to the nature of our business, our paper and electronic records may contain sensitive financial and personal information. Therefore, we must take special care with our recycling efforts. Our material recycling is handled through a company certified by the National Association for Information Destruction for Plan-based Operation. This ensures appropriate and proper destruction of sensitive printed documents and computer hard drives.

18,800 m³, of which BOC Tower and BOC Centre accounted for around 17,685 m³ and 1,126 m³ respectively.

9.4 Other Environmental Initiatives and Voluntary Codes

E-statements and Electronic Platforms

The Group launched an e-statement promotion campaign to encourage its customers to register for e-statement services in order to reduce the paper used for printing hard-copy statements. We provide 24-hour e-statement registration service to achieve convenient and paperless operations. To further reduce the environmental impact of our operations, we encourage our customers to manage their finances via Internet Banking and Mobile Banking and switch to e-card services. By the end of 2011, customers using our Internet Banking Service increased by 13% over 2010 and those choosing to receive consolidated statements and investment statements in electronic forms were up 78% and 54% respectively.

The Company’s website provides shareholders with access to important and relevant corporate information on an effective and timely basis. To support the environmental protection, the

9.2 Energy Saving in Key BuildingsEnergy saving initiatives implemented across our office buildings throughout the past year, led to total energy savings of around 1,721,914 kWh, of which BOC Tower, Bank of China Building and BOC Centre accounted for around 668,000 kWh, 59,388 kWh and 230,470 kWh respectively. Energy saving was achieved by the following initiatives:

Improving the air conditioning system of some floors

Better control of air conditioning chillers

Using more efficient lighting tubes and LED lighting

Managing the passenger lifts with zone controls

Maintaining room temperature at 22 ºC - 24 ºC

9.3 Water Saving in Key BuildingsIn addition to the carbon and energy audit, BOCHK conducted an assessment of its water usage in key buildings together with proposed recommendations for reduction. Water saving initiatives, such as washroom equipment improvement implemented across our office buildings throughout 2011 led to total water savings of

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(1.5mgperlitre)fromourofficefurniturematerialisanotherkeyspecificationforsupplierstocomplywith.

Banqueting Guidelines

IncompliancewiththeadvicesetoutbyWWFHongKong,theGroupformulatedtheBanquetingGuidelinesin2008tostopservingsharkfins,endangeredreefspeciesandblackmossatcorporatebanquets.

9.5Environmental Standardsand SchemesAdopted in2011ManagementSystemCertificateforISO14001(certifiedbyUKAS)

IndoorAirQualityCertificate–ExcellentClass(EPDofHKSARGovernment)

QualityWaterRecognitionSchemeforBuildingsCertificate(WaterSuppliesDepartmentofHKSARGovernment)

HygieneControlManagementSystemsCertificate(SGSHongKong)

Educational DVD

In2011,weproducedaneducationalDVDforinternaltrainingbasedonproprietaryresearchonenvironmental,sustainabledevelopment,low-carboneconomyandbankingissues.Thesevideos,availableonourinternalwebportal,havealsobeenbroadcastacrosstheGroup.TheaimoftheDVDistoraiseawarenessandknowledgeofourstaff,particularlyfrontlinestaffwhomayfacequestionsregardingourenvironmentalpolicies.

Lighting

TheGroupsignedthe“Dimit”CharterorganisedbyFriendsoftheEarthinHongKongtocommittoenergysavingandreductionofcarbondioxideemissions,lightpollutionandlightnuisancebydimmingthelightbulb/fluorescenttubesoftheGroup’spremisesperiodically.Wehavealsoparticipatedintheglobalinitiative“EarthHour”organisedbyWWFtoraisethepublicawarenessoftheglobalclimatechange.

Toxin Reduction

Duetothehealth,climateandairpollutionrisksposedbyvolatileorganiccompounds,weuselowVOCpaintinourbuildingswhenrepairingandrenovating.Wealsoensurelead-freepaintisused,giventheproventoxiceffectsoflead.Lowformaldehydeemission

Weundertakeanumberofrecyclingprogrammes:

1 SourceSeparationofCommercialandIndustrialWasteProgramme,runbytheEnvironmentalProtectionDepartment(“EPD”):mechanismsaresetuptofacilitatewasteseparationatsourceandrecycling,includingpaper,metal,plasticandproperhandlingoftheconstructionwastefromrenovationprojects

2 WastePaperRecyclingProgramme:wastepaperiscollectedbydesignatedbinsandrecycled

3 RechargeableBatteryRecyclingProgramme,runbytheEPD:properdisposalandrecyclingofrechargeablebatteriesareensured

4 ComputerRefurbishmentProject:conservationandenvironmentalprotectionarepromotedamongsttenants

5 TonerCartridgeCollectionProgramme:collectedcartridgesaresentforproperdisposal

6 FluorescentLampRecyclingProgramme:thisschemeorganisesthecollectionofmercury-containinglamps,includingcompactfluorescentlamps(“CFLs”),fluorescenttubesandhighintensitydischargelamps.Collectedlampsaresentfortreatmenttoreducetheenvironmentalriskfromimproperdisposalandtorecoverresources


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10.SupplyChainandProcurement

WeareoneofthefewbankswithaprocurementpolicyandCodeofConductforsuppliers.TheGroupformulateditsSustainableProcurementPolicyandaSupplyChainCodeofConductin2011andhasalreadybegunimplementation.

ThefollowingprincipleswillguidetheGroup’sbesteffortstomeetitsobjectives:

Weendeavourtosourceandusemoresustainableandresourceefficientproductsandservices.Forexample,weuseFSC-certifiedpaper,officeequipment/homeapplianceswithbetterenergyefficiency,andcarsincompliancewithlatestEuropeanstandard.

Weadoptanethicalandresponsiblebehaviourindealingwithsuppliers,basedontrustandcooperationtoensurelong-termpartnerships.Forexamplea“GiftandEntertainmentPolicy”isinplaceforallourstafftoabideby.

Weworkwithpeersandpolicymakerstoshareexperiencesandadoptbestpractices.

TheCodeoutlinestheminimumsetofrequirementsforsocial,ethical,corporategovernance,environmentalstandardsandfairlabourconditionsthattheGroupexpectsitssupplierstocomplywith.IthasbeendevelopedtakingintoaccountinternationallabourstandardsandtheprinciplesofdecentworkbasedontheInternationalLabourOrganization(“ILO”)CoreConventions.

TheCodeaddresseslabourandworkingstandardsrequirementsaroundforcedandchildlabour,freedomofassociation,discriminationandharassment,healthandsafety,wages,benefitsandtermsofemployment,workinghoursandenvironment.ItclearlyindicatestherequirementstothesuppliersoftheGroup.

SupplyChainin2011Ourimmediatefocusisonkeysupplierswhichhavethelargestenvironmentalorsocialfootprint.WeaimtoextendthescopeoftheProcurementPolicyforSustainableDevelopmenttoourentiresupplychainovertime.

ToassesstheperformanceofsuppliersbasedonournewCodeofConduct,weconductbothsupplierself-auditandphysicalon-siteaudits.Aself-assessmentquestionnairehasbeendeveloped,whichcoversallrelevantESGissues:

1 Labourmanagementsystems

2 Forced,bonded,indenturedandprisonlabour

3 Childlabour

4 Freedomofassociationandtherighttocollectivebargaining

5 Discrimination,harassmentandabuse

6 Healthandsafety

7 Wages,benefitsandtermsofemployment

8 Workinghours

9 Ethicalstandards:briberyandcorruption

10 Governanceandriskmanagement

11 Environment

12 Compliancemechanism

In2011,theSelf-AssessmentQuestionnairewassentto42companiessupplyingaspecifiedlevelofgoodsandservicestotheGroupinthefinancialyearof2011.TheassessedsupplierswereincompliancewiththeCodeofConduct.

TofacilitatetheimplementationoftheCodeforsuppliers,inthefirstquarterof2011weformulatedacommunicationstrategy,wherewetrainedprocurementstafftocommunicateourstandardandrequirementstooursuppliers.Anynon-compliancewiththeCodemayleadtocontractterminationifaremedialactionplantocomeintocomplianceisnotputintoplacebythesupplier.

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11.1Customer-centricOneoftheWorld’s10StrongestBankandtheTopamongBanksinHongKong(BloombergMarkets)

“OneoftheTop10BanksinHongKongandTop20BankswiththeHighestNetProfits”oftheTop300BanksinAsiain2011(YazhouZhoukan)

ChinaBondHouseoftheYear2011(InternationalFinancingReviewAsia)

InthecapacityofaJointGlobalCoordinatorofICBCAsia’sBaselIIIcompliantRMBsubordinatedbond:BestOffshoreRenminbiOfferingAward2011(FinanceAsia),Investment-gradeBondoftheYear2011(InternationalFinancingReviewAsia)

TopbankintheHongKong-Macausyndicatedloanmarketforsevenconsecutiveyears(BasisPoint)

11.SelectedAwardsandRecognition

ExcellentBrandofRMBBankingServiceoftheHongKongLeaders’ChoiceBrandAwards2012(MetroFinance)

BestSME’sPartnerAwardforfourconsecutiveyears(TheHongKongGeneralChamberofSmallandMediumBusiness)

ThePerson-to-PersonTelemarketingCodeofPracticeCertification,HKCCAGrandAwardoftheYear2011andsevenotherGoldawards(HKCCA)

CustomerServiceExcellenceAward2011–IndividualAward(CounterService)(HongKongAssociationforCustomerServiceExcellence)

TheHKIBOutstandingFinancialManagementPlannerAwards-OutstandingFinancialPlannerGoldAward,OutstandingFinancialPlannerCertificateofMerit(TheHongKongInstituteofBankers)

ISO9001:2008QualityManagementSystemCertificationpresentedtotheTradeServiceCentre(SGSHongKong)

BestRetailBankofthePrimeAwardsforBanking&FinanceCorporations2011(MetroBOX)

CapitalWeeklyServiceAwardsforMobileBanking,andInternetBankingforthreeconsecutiveyears(CapitalWeekly)

BOC Credit Card (International) Limited:

ComplaintsHandlingSystemCertificateofISO10002(HongKongQualityAssuranceAgency)

BOC Group Life Assurance Company Limited:

OneoftheTop3ofthe15thAsiaInsuranceIndustryAward–2011LifeInsuranceCompanyoftheYear(AsiaInsuranceReview,SingaporeandTheReviewWorldwideReinsuranceMagazine,UK)

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BestPracticeAwards–BestPracticesinCustomerEngagement(BestPracticeManagementGroup)

AwardforExcellenceinTrainingandDevelopment:AwardforExcellenceinTrainingandDevelopment–Gold,MostInnovativeAward(HongKongManagementAssociation)

11.2Corporate Governanceand InvestorRelations

HongKongCorporateGovernanceExcellenceAward2011–MainBoardCompanies:HangSengIndexConstituentCompanies(TheChamberofHongKongListedCompaniesandtheHongKongBaptistUniversity)

2011BestInvestorRelations–SecondPlaceinthebankingsector,nominatedbytheBuySide(InstitutionalInvestorMagazine)

Top3BestReportingbyaHongKongCompanyAward2011(InvestorRelationsMagazine)

11.3Social Responsibility

AconstituentofHangSengCorporateSustainabilityIndexandHangSeng(MainlandandHK)CorporateSustainabilityIndexrespectivelyfortwoconsecutiveyears,andincludedasaconstituentoftheHangSengCorporateSustainabilityBenchmarkIndex

PartnerinGivingandSharingAward,President’sAward,SilverAwardoftheCorporateandEmployeeContributionProgrammeandtheSecondHighestDonationAwardoftheGreenDayin2011(TheHongKongCommunityChest)

CaringCompanyfornineconsecutiveyears(TheHongKongCouncilofSocialService)


GoldAwardofEnterpriseswithIntegrityandCredibilityandAwardofJusticeintheFinancialandInsuranceCategory(HangSengManagementCollege)

BOC Credit Card (International) Limited and BOC Group Life Assurance Company Limited:

CaringCompany(TheHongKongCouncilofSocialService)

11.4Environmental Protection

GreenEmployerAward(InlandRevenueDepartmentoftheHKSARGovernment)

BOC Tower, BOC Building, BOC Centre and Bank of China Wanchai Commercial Centre:

ISO14001Certification(UKAS)

CertificateofQualityWaterRecognitionSchemeforBuilding(WaterSuppliesDepartmentoftheHKSARGovernment)

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BOC Tower and BOC Centre:

IndoorAirQualityCertificate–ExcellentClass(EnvironmentalProtectionDepartmentoftheHKSARGovernment)

HygieneControlManagementSystemsCertificate(SGSHongKong)

BOC Building:

HKQAACarbonReductionLabel(HongKongQualityAssuranceAgency)

BOC Centre:

CarbonLess4%Certificate(HongKongAwardsfortheEnvironmentalExcellence)

ISO50001:2011EnergyManagementSystemCertification(SGSHongKong)

BOC Group Life Assurance Tower:

IndoorAirQualityCertificate–GoodClass(EnvironmentalProtectionDepartmentoftheHKSARGovernment)

CertificateofQualityWaterRecognitionSchemeforBuilding(WaterSuppliesDepartmentoftheHKSARGovernment)

BOC Credit Card (International) Limited:

CertificateofMeritoftheHongKongAwardsforEnvironmentalExcellenceinthesectorofFinancial,InsuranceandAccountingInstitutions(EnvironmentalCampaignCommittee)

11.5 Innovation andCreativity

OutstandingCorporateImageAward2011(TVBWeekly)

AstridAwards:BOCHK’sCaringHongKong–AHeartWarmingCampaign:SilverAwardfor“Campaigns:CorporateSocialResponsibility”

MercuryAwards:PowerPlant:BronzeAwardfor“SpecialEvents:ExhibitionPromotingEnvironmentalProtection”;HongKongGlobalGeoparkofChina–PrehistoricStoryRoom:SilverAwardfor“SpecialEvents:Exhibition(GeologyFormation)”andHonoursfor“Promotion/Marketing:EarthScience”


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