Charter of the Environmental committee

Bank

Asia Iraq Islamic Bank for Investment and Finance

Chairman

Chairman of the Board of Asia Iraq Islamic Bank

Board

Board of Directors of Asia Iraq Islamic Bank

Corporate Governance

A comprehensive system that defines the relationship between the Board of Directors, executive management, shareholders, and other stakeholders. It covers: Defining the Bank’s strategy, including the ESG strategy Managing Bank risks, including ESG-related risks Overseeing Bank operations Balancing shareholders’ rights with the interests of depositors and other stakeholders Ensuring compliance with laws, regulations, and policies Practicing transparent reporting of all material financial and non-financial matters

ESG Committee Governance

Refers to the tools that support the assessment or self-assessment of ESG management practices within the Bank, compared to good market practices in environmental and social aspects.

ESG Risk Management Operations

A system consisting of policies, procedures, and tools to identify, assess, monitor, manage, or mitigate exposure to environmental and social risks. It should be an integral part of the Bank’s overall risk management framework.

Objectives of the ESG Committee

Monitor and oversee the application of environmental, social, and governance (ESG) standards, including climate-related matters.

Environmental Standards

Refers to the Bank’s impact on the natural environment, climate, carbon emissions, supply chain activities, energy consumption, waste and pollution management, plastic usage, recycling, land use (e.g., deforestation), biodiversity, nature loss, target setting, disclosure, and transition planning.

Social Standards

Refers to the Bank’s interaction with stakeholders, employee physical and mental safety, whistleblowing, fair pay, gender pay gap disclosures, racial diversity, customer fairness, supplier conduct, modern slavery risks, human rights, social violations, and partnerships.

Executive Management

Includes the CEO, Deputy CEO, and Directors of Credit, Finance, Operations, International Banking, Local Banking, Internal Audit, Anti-Money Laundering, Human Resources, Administration, Risk Management, Treasury, and Compliance — or any employee with equivalent executive authority reporting directly to the CEO or Regional Manager, and anyone required by the Central Bank of Iraq to comply with the CBI Law No. (56) of 2004 and the Banking Law No. (94) of 2004.

ESG Committee

A committee responsible for preparing ESG and sustainability reports to be included in the annual report and making recommendations to the Board for approval. It coordinates with the Audit Committee during the reporting process.

Stakeholders

All parties who may be affected by or have an interest in the Bank’s operations, products, services, or profitability. This includes shareholders, investors, employees, regulators, customers, depositors, borrowers, suppliers, communities, and others.

Formation

The ESG Committee is established by the Board and is composed of independent non-executive members. The Chairman of the Board also serves as the Committee Chair.

Membership

– Chairman of the Board (Chair)

 – Board Member (Member)

 – Board Member (Member)

Qualifications

Members must possess qualifications in accounting, auditing, financial management, or related banking disciplines. They must also have a sound understanding of ESG principles and sustainable finance practices.

Term

Membership in the committee is valid for the duration of the member’s Board term.

Powers of the Committee

Powers of the Committee:

Monitoring and Supervision: Monitor and supervise the adherence to environmental, social, and corporate governance (ESG) standards, including climate-related matters.

Delegating a Subcommittee: The committee may delegate a subcommittee to monitor and oversee climate-related matters within the bank.

Ensuring the Application and Regular Updates: Ensure the application of the Environmental, Social, and Corporate Governance (ESG) standards and relevant climate-related documents, and update them regularly.

Preparing the Report: Prepare the ESG and sustainability report to be included in the annual report and recommend it for approval by the Board of Directors.

ü  Coordination with the Audit Committee: The committee will coordinate with the Audit Committee regarding the report preparation process.

Periodic Review: Regularly review the effectiveness of the ESG governance structures, including establishing additional committees for the Board and dissolving them, and propose any changes for approval by the Board.

Ensuring the Application of Policies and Procedures: Ensure that the bank, Board members, and executive management apply the ESG standards, policies, and procedures as per the bank’s guidelines.

ü  Independence of Board Members and Disclosure of Interests: Ensure compliance with the requirements for the independence of Board members and the disclosure of interests.

Review and Enhance Code of Conduct: Review and regularly enhance the requirements of the bank’s Code of Conduct and policy on managing conflicts of interest.

Ensuring Report Compliance: Ensure that the bank’s reports comply with the ESG performance card requirements issued by the Central Bank of Iraq, including the documentation and documents that ensure compliance.

Ensuring Compliance with Laws and Regulations: Ensure the bank’s compliance with the applicable laws, instructions, and regulations in the field of ESG.

Reviewing Training and Development Plans: Review the annual training and development plans for the executive management and staff at the bank concerning ESG standards, sustainability, and climate-related matters, and provide recommendations to executive management and human resources regarding the training plans.

Meeting Venue

The committee meetings shall be held at the bank’s headquarters or any other location determined by the Chairperson if the headquarters is unavailable.

Meeting Frequency

• The ESG Committee must meet at least four (4) times annually. • Additional meetings may be held as necessary or upon request by the Board of Directors, unless otherwise directed by the Board.

Invitations and Agenda

The Committee may, when necessary, invite members of executive management, bank staff, or others to attend meetings to provide information or respond to relevant inquiries.

Quorum

A quorum is constituted with the attendance of at least two Committee members, provided they are independent non-executive Board members, or a majority of members including at least two independent non-executive Board members.

Decision-Making

Decisions are made by a majority vote of the members present. In case of a tie, the Chairperson’s vote shall be the deciding vote.

Meeting Minutes

– After each meeting, the Committee shall submit a report (meeting minutes) to the Board of Directors, detailing the agenda, discussions, outcomes, and recommendations for approval. – A semi-annual report shall be prepared summarizing the meetings, key topics, and recommendations, to be presented to the Board and archived by the Committee Secretary.

ü  Develop a strategy or framework for the bank’s Environmental, Social, and Governance (ESG) standards

ü  Provide guidance and recommendations on appropriate strategic objectives and metrics for the bank’s ESG standards.

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