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GRI
3-1, 2
Determining Materiality
A subject topic is considered material to an organisation’s strategy and performance, if it is anticipated to have a substantial impact on its ability to create value in the short, medium and long-term. This could be value created for the Bank, its stakeholders, or both. DFCC Bank effectively showcases its integrated thinking, a key objective of integrated reporting, by illustrating the interconnectedness of significant issues with its strategy, governance, performance, and future outlook. In the course of its value creation process, stores of value are consumed, transformed, and created by assessing the risks and opportunities in the immediate operating environment, studying the changes to legal and regulatory frameworks, analysing global trends, scrutinising research reports and other published information as well as through insights gained from stakeholder interactions.
Material matters determining process can be explained as follows:
Identification of Material Matters
We identify the material drivers impacting our strategy, stakeholders and value creation. In doing so, we analyse both external and internal environmental factors, considering the combined outcome of the potential magnitude of impact, and the probability of their occurrence.
(Materiality = Relevance X Magnitude of Impact X Probability of Occurrence)
Analysis and Prioritisation
We assess material matters, categorise and prioritise them upon analysing the organisation’s objectives, risks and impact on stakeholders in a way that influences our ability to successfully execute our strategy and deliver long-term value to our stakeholders.
Validation and Integration
Integrate the topics that are material to the value creation to meet stakeholder expectations. Business and individual targets are set through key performance indicators which are linked to the strategic objectives.
The Bank has consistently engaged with stakeholders over the years to gain deeper insights into their concerns, and the significance of these issues in relation to their priorities. This ongoing dialogue encompasses economic, environmental, governance, and social considerations. Firmly believing in stakeholders’ entitlement to voice their opinions on the impact of diverse issues on them and vice versa, the Bank ensures that their perspectives are heard and considered.
As an integral aspect of its sustainability initiatives, DFCC Bank consistently involves stakeholders to identify and resolve the following:
- Substantial effects linked to business operations and strategy;
- Stakeholders experiencing significant impacts; and
- Stakeholders holding significant potential to influence the Bank, its operations, profitability, and reputation.
The external landscape encompasses current and emerging trends in the economic, environmental, governance, and social spheres. This could be both national and international. DFCC Bank diligently assesses these pertinent trends in the external landscape, regarding them as material to its continued success. Through materiality analysis, the Bank successfully identifies and evaluates aspects that are crucial to both its stakeholders and its operations. This scrutiny extends across economic, social, and environmental dimensions, aligning with the Bank’s commitment to creating sustainable value.
The Bank engages with various stakeholder groups to identify the issues needed to structure its portfolio of activities. This alignment of activities with the distinct needs of each stakeholder group enables the Bank to create and deliver optimum value to them while also deriving reciprocal value. Consequently, this approach maximises the benefits for all involved parties. This approach will achieve the Bank’s two-fold objectives, namely:
- Strategic goal:
- - Ensuring the credibility of the Bank’s sustainability plans and its operations.
- Relationship goal::
- - Fostering relationships and nurturing bonds with customers.
- - Empowering employees by offering rewarding career opportunities.
- - Generating consistent returns for investors.
- - Establishing mutually advantageous and profitable partnerships.
- - Demonstrating responsible actions towards both society and the environment.
Material Topics
In 2020, when the DFCC Sustainability Strategy was formulated, the Bank conducted a materiality assessment. In the 2020-2022 annual reports, the Bank depicted the key matters that were identified in that assignment. We identified that the same topics are to be continued. However, we segregated those into identified key material themes as follows while considering the financial materiality and impact materiality of the topics.
Accordingly, compared to previous years, a few material topics are collated and presented in the table below.
Abbreviations/icon guide for the “Material Topics” table
Financial Capital |
Institutional Capital |
Investor Capital |
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Customer Capital |
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Employee Capital |
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Business Partner Capital |
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Social Capital |
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Natural capital |
Resilient Business and Inclusive Economic Growth |
DFCC Bank believes that sustainable practices and inclusive economic growth are vital to ensuring stakeholder value creation. Economic resilience enables the Bank to survive in rapidly changing environments, continuing to deliver superior performance. Hence, we consider the following topics to be material to ensure resilient business and economic growth: |
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Relevance to the Capitals
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Inclusive Growth in Resilient Communities |
DFCC Bank believes growth is sustainable when it supports not only the businesses in an inclusive manner but also the communities in which the business operates. The Bank tries to improve the lifestyles and livelihoods of broader population segments to promote inclusivity. Hence, we identify that the following key topics are material: |
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Relevance to the Capitals
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Equal Opportunity Employment and Employee Wellbeing |
DFCC Bank always considers that all our employees have a right to equal opportunities, and we strive to protect their interests in all employment decisions. Hence, we consider the following are material to ensure equal opportunity employment and employee well-being: |
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Relevance to the Capitals
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Customer Centricity and Future-proofing Business |
DFCC Bank believes that customer-centricity is critical in driving a business in a dynamic environment. We differentiate ourselves by implementing a customer-centric approach leveraging the customer experience. The following topics are identified as material: |
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Relevance to the Capitals
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Sustainable Procurement and Resource Efficiency |
DFCC Bank follows a consistent, efficient, and best practice approach to procurement, to ensure that an organisation acquires goods and services in a transparent, timely, cost-effective, sustainable and ethical manner. We amended the procurement policy to add social, environmental and governance aspects for supplier assessment/sourcing to improve resource efficiency, ethical sourcing and sustainable procurement. Six Guiding Principles (i.e. value for money, ethical sourcing, support of enterprise and growth, transparency, no conflict of interest, no bribery and corruption) underpin the core values and premise of the Procurement Policy of the Bank, which applies to all procurement decisions of the Bank, including procurement in the context of implementation and execution of funding proposals approved by external funds. We identify the following key topics as material: |
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Relevance to the Capitals
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Transparent Reporting and Communication |
DFCC Bank believes that transparency, reliability and accountability for the information we communicate enhance value creation for our stakeholders. We pay attention to regulatory reporting requirements, good reporting practices, market changes, stakeholder concerns and accessibility to information in reporting; |
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Relevance to the Capitals
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Materiality Matrix
A materiality matrix is a visual representation used in integrated reporting to assess and communicate the significance of various factors to an organisation’s strategy, performance, and stakeholders. This tool aids in prioritising reporting and engagement strategies, emphasising what matters most to both the organisation and its stakeholders.
The Management Discussion and Analysis section in this Annual Report will include details and analyses of the initiatives undertaken by the Bank during the period under review in terms of various materiality topics discussed above.