9a. BNG Annual Report BNG 2024.pdf

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The AC follows the work of the IAD during each meeting. The most important findings of

the IAD and their follow-up are also discussed. With regard to the IAD Audit Plan 2024, the Committee issued a positive recommendation to Supervisory Board.

The AC discussed the financial statements and the 2024 Annual Report and gave the

AC positive advice on the approval of the financial statements and the management statement included in the Annual Report. The committee also provided a positive

consultancy on the proposal to make a dividend of 50% of the net profit for 2024 available for distribution.

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Key points for attention •

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plan and the progress of the funding programme, as well as about the management measures at Treasury.

BNG must report in accordance with the CSRD for the first time for the year 2025. The AC discussed the action plan for the implementation of the CSRD and the progress of the

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also discussed its board report on the financial statements with the external auditor. The most important subjects were the audit scope, materiality and key audit issues:

provisions for loans and debtors, the valuation of financial instruments and design and the existence and operation of IT general controls (ITGCs).

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were approved.

Specifically, the committee advised Supervisory Board on the material topics in the DMA. Prior to discussing the financial statements in the full Supervisory Board, the AC

The determination of the provisions for loans and debtors is a key audit matter, because

The ILAAP and ICAAP were discussed in a joint meeting with the Risk Committee,

after which the Capital Adequacy Statement and the Liquidty Adequacy Statement

project, including the implementation of the DMA.

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The AC was informed on two occasions in detail about the content of the funding

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The process to select and appoint a new auditor was started and completed in 2024.

Two accountant organisations were invited and selection interviews took place with both

of them. The AC has positively advised the Supervisory Board to select EY. The Supervisory Board adopted this decision and the appointment of EY as a new auditor was approved in an EGM in October 2024.

BNG’s loan portfolio contains not only guaranteed, but also unguaranteed loans. The calculation of the provisions is complex and also requires judgement. The AC was

informed of the calculation methods used and the results and the manner in which

the external auditor formed an opinion on them. Based on the discussion and taking into account an acceptable range in the uncertainties, the AC agreed with the Management Board that the provisions reported give a true and fair view of the credit risks in the loan portfolio. •

The valuation of financial instruments is a key audit matter, because market information is not available on all instruments or because the models used are complex. Regarding the first category, the AC discussed with the external auditor how it challenged and assessed the assumptions and method used. Regarding the second category, the

external auditor explained to the AC the independent valuation of a number of positions that it had performed. The AC has been informed that the system used has not

changed and has been assessed as adequate. The AC discussed the adjustment of the presentation of the result in relation to derivatives, with the aim of providing a better insight. •

The IT general controls are also a key audit matter. With a view to auditing the financial statements, the Committee also directs its attention to the reliability and continuity

of automated data processing. In the year under review, the AC focused specifically

on logical access security, change management and the KPIs for the multi-year Data

Insight programme, focusing on data warehousing, data governance and data quality. •

After discussion with the external auditor – the AC took note with approval of the audit

plan for 2024 and the audit engagement as laid down in the engagement letter for 2024. 93

8.5 Risk Committee Composition and engagement

Recurring topics

The Risk Committee is composed of Constant Korthout (chair), Marlies van Elst, Karin

In preparation for the discussion by the full Supervisory Board, the Committee dealt with the

the supervisory authority in supervising the activities of the ExCo with regard to risk

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Bergstein and Femke de Vries. The Risk Committee supports the Supervisory Board and

following recurring topics.

management and the management of the various risks and corresponding risk areas.

The Risk Committee periodically discusses the effectiveness of the design and operation

and/or Integrated) Risk Management and Compliance.

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of the internal risk management systems, which are aimed at managing financial and

to the ExCo. In the Integrated Risk Report, Risk Management reports on the risk profile of the bank in relation to the Risk Appetite approved by the Supervisory Board. This

discusses the development of the credit, market and liquidity-based risks, as well as the

Working method

bank’s operational and strategic risks. In addition, managing Climate & Environmental Risks is an increasingly important point of attention. Compliance reports on integrity

In addition to the members of the Risk Committee, the CRO, CEO, CFO and COO, the head

risks, on compliance with existing laws and regulations and on the preparation and

of IAS, the head of Financial Risk Management, the head of Non-Financial Risk Management,

implementation of new legislation and regulations. The third pillar of the Integrated Risk

the head of Integrated Risk Management and the head of Compliance participate in the

Report is the reporting from the Security department. •

board also participates in the meeting.

the basis for the Risk Report. The committee discussed incidental losses In connection

with this. The committee prepared and positively recommended the annual adoption of

to the head of Risk Management (Financial, Non-Financial and/or Integrated), or to

the RAS 2025 by the Supervisory Board.

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Committee and the CRO and the head of Compliance, prior to the meetings of the Risk

The Compliance and Risk Section in the 2023 Annual Report were discussed

by the Committee and submitted to the Supervisory Board for approval with

Committee. The Risk Committee met six times in the year under review and also in a joint

session with the Audit Committee. Furthermore, the committee members have agreed that

The Risk Committee has been informed extensively about the cascading of the Risk

Appetite Statement (RAS), the system of limits, targets and information figures that forms

At least once per year, the chair of the Risk Committee speaks additionally and separately the head of Compliance. In addition, meetings are held between the chair of the Risk

Each quarter, the Risk Committee discussed the Integrated Risk Report, a joint report by Risk Management, Compliance and Security, followed by advice from the second line

non-financial risks.

meetings of the Risk Committee. Depending on the subject, the chair of the Supervisory

The committee discussed the 2024 and 2025 annual plans of (Financial, Non-Financial

positive consultancy. •

a ‘private session’ of the committee members will take place prior to each meeting as

The Risk Committee discussed the outcome of the Systematic Integrity Risk Analysis

(SIRA) 2023 and found that the SIRA has become more embedded in the organisation.

from 2025.

Where possible, actions under the SIRA will be included in existing plans. It is important that all of the action points remain well in view and are carried out as planned. In particular, the SIRA was discussed at Financial & Economic Crime (FEC).

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The Committee prepared the discussion in the Supervisory Board of the final letter

from the supervisory authority about the Supervisory Review and Evaluation Process 94

(SREP) 2024. The observations and recommendations have been recognised and, where possible, placed with ongoing projects to be addressed further.

Key points for attention •

When discussing the operational risk profile, the committee paid specific attention to the operational risks arising from the outsourcing.

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The Committee sought extensive information on the management of Climate and

Environmental Risk (C&E Risk), the C&E Risk programme and the relationship with other programmes within the bank, such as for the CSRD and ESG. A deep dive shared with the committee what the bank is doing currently and what is being done to become compliant. •

The committee noted the progress made in the ongoing programmes to become CSRD and DORA compliant. The committee was also informed of developments regarding payment transactions.

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In a general sense, the Risk Committee discussed the compliance risk arising from the Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft). In particular, in an in-

depth session, the committee discussed transaction monitoring and the material risks, in particular, as well as related aspects of FEC. The committee also discussed an internally conducted Risk Culture study that focused on aspects such as ownership and tone at the top.

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The committee gave extensive consideration to the preliminary results of the On-Site

Inspection by the supervisor of Market Risk. In this context, the committee discussed subaspects of the investigation in more detail and gave an initial reflection on the findings.

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8.6 HR Committee Composition and engagement

Recurring topics

The HR Committee consists of Huub Arendse (chair), Marja Elsinga, Femke de Vries and

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Leonard Geluk. The HR Committee's responsibilities include the recruitment and selection

reports quarterly in the HR Dashboard. As a result, the development of the workforce was

of members of the Supervisory Board and statutory members of the ExCo, the periodic

discussed, as well as the positive fact that the number of regretted losses is decreasing

evaluation of the performance of the Supervisory Board and the ExCo as a whole and

and the lead time for filling vacancies is decreasing. The committee also discussed

the assessment of the performance of individual statutory members of the Supervisory

Board and the ExCo. The HR Committee also supervises BNG's broader HR policy. The HR

strategic personnel planning as well as leadership and development programmes. •

Committee prepares the Supervisory Board's decision-making and supports the Supervisory

In addition to the members of the HR Committee, the CEO and the head of HR participate in the meetings of the HR Committee. The HR Committee met three times in 2024.

The HR Committee spoke extensively about the results of the periodic employee survey, in particular about the focus points that emerged from this, such as the importance of

Board in its role as employer.

Working method

A recurring topic in the meetings was the progress of the HR strategy, on which BNG

collaborating in efficient work processes and clear roles and responsibilities. •

In the year under review, the committee prepared the appointment of Philippine Risch and the new CRO, as well as the reappointment of CFO Olivier Labe. Finally, the committee prepared the annual self-assessment of the Supervisory Board.

Special topics The Diversity & Inclusion policy SB/ExCo was discussed and the HR Committee issued positive consultancy to the Supervisory Board.

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8.7 Remuneration Committee Composition and engagement

Special topics

The Remuneration Committee is composed of Femke de Vries (Chair), Huub Arendse, Marja

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Elsinga and Leonard Geluk. The Remuneration Committee is responsible for preparing the

decision-making in the Supervisory Board concerning the remuneration of the Supervisory Board, the ExCo and senior management, including decisions about remuneration that have consequences for risk management within the company. As is the case for the

activities of the HR Committee, this primarily centres around the employer role of the Supervisory Board.

The Remuneration Committee gave the Committee a positive opinion on the

explanation of the remuneration policy for the ExCo, which was included in the notice convening the General Meeting on 25 April.

The committee paid attention to market value supplements as an instrument and its application.

Working method In addition to the members of the Remuneration Committee, the CEO and the head of HR

participate in the meetings of the Remuneration Committee. The Remuneration Committee met once in 2024.

Recurring topics •

The committee discussed the implementation of the remuneration policy for the

ExCo and the employees for 2023 and advised the Supervisory Board positively on its approval.

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The committee also took note of the outcome of the annual risk analysis of the

controlled remuneration policy. This did not reveal any points for attention on which

decision-making by Supervisory Board was necessary or desirable; the remuneration policy contributes to effective risk management and does not invite taking more risk than is acceptable. •

The committee advised the Supervisory Board on the Remuneration Report (published on the website). In it, the SB reports on the remuneration policy of the ExCo and the employees and on the implementation of the remuneration scheme for the SB.

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9. Supplementary Information

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9.1 Reporting principles In its 2024 Annual Report, BNG accounts for its activities during the 2024 financial year. The Annual Report represents a balanced and complete analysis of the situation on the balance sheet date and the development and the results during the financial year and it contains financial and nonfinancial performance indicators.

responsible business conduct regarding human rights (2016). As of 2020, and pursuant to the latter agreement, BNG has applied the Equator Principles, a Risk Management

Framework for determining, assessing and managing environmental and social risk in projects. Along with other financial institutions, BNG has committed to the Climate

Agreement in 2019. BNG endorses the future-oriented banking package of the Dutch

Banking Association (NVB), which brings together the Social Charter, the Dutch Banking

Guidelines and definition of the reporting used Legislation and reporting guidelines

BNG prepares the Annual Report in accordance with Section 2:391 Dutch Civil Code and the EU directives “Annual financial statements, consolidated financial statements and related reports of certain types of companies” (2013/34/EU) and is in accordance with the GRI

Standards (Sustainability Reporting Guidelines of the Global Reporting Initiative). The report provides an overview of the principal developments and the performance of BNG in 2024

and shows how the bank deals with opportunities, risks and uncertainties. The Annual Report is based on the topics designated as material by the ExCo and stakeholders.

Defining the scope of the Annual Report

Non-financial information for the 2024 calendar year is included in the 2024 Annual Report. This is done to inform stakeholders about the public role of BNG in relation to its mission,

strategy and objectives. The information in this report relates to BNG Bank N.V., including its subsidiaries. There were no (potential) acquisitions in 2024. The performances of suppliers, sources of funding, clients and other parties in the chain are not included in the figures.

Codes and guidelines observed

Code and a set of rules of conduct associated with the banker’s oath. Through this,

the banking sector explicitly states how it strives for service-orientated and sustainable banking. BNG adheres to the recommendations under the UN Global Compact, the UN

Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises and has implemented these recommendations in its relevant procedures. BNG complies with the provisions of the Dutch Corporate Governance Code (2022 revised

version) including by ensuring that its working methods align as closely as possible with

the Code. An overview of compliance with the principles and best practice provisions of the Dutch Corporate Governance Code can be found on BNG’s website.

Data collection

The quantitative and qualitative information in this Annual Report was collected on the basis of desk research and through interviews. Sources include staff records, financial reports, incident registration, and the registration of reports from internal confidential

counsellors and the Compliance Officer. Information was provided by the Compliance, Finance & Control, HR, Risk Management, Security and Treasury & Capital Markets

departments. Interviews were also conducted with employees of the Business Strategy & Control, Relationship Banking and Lending departments. BNG follows the GRI Standards for the quality of the data included in this Annual Report. The non-financial data in this report relates to 2024. Where possible, data and results have also been reported for previous years.

BNG endorses a number of codes of conduct and international conventions and guidelines. BNG undertakes to comply with the Dutch Banking Sector Agreement on international

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Management cycle

The ExCo is responsible for strategy, company objectives, content and the implementation

of policy. Senior management, which reports directly to the Exco, is responsible for achieving

purposes of determining the Green Asset Ratio (GAR). The GAR for BNG for the 2025 financial year is, therefore, expected to be very low.

the objectives in accordance with the policy frameworks and for measuring performance.

To be able to report on its implementation of the EU Taxonomy on a voluntary basis, BNG

of monthly or quarterly reports. This takes place on the basis of reports prepared by

clients (sectors) will only be able to do so in 2025 to a very limited extent or not at all yet.

The ExCo monitors policy implementation and the achievement of objectives on the basis senior management, heads of department and control functions. Any adjustments are

made on the basis of progress against the objectives. Performance against the objectives set is reported externally each year in the Annual Report. In turn, the ExCo and senior

management evaluate policy and the designated objectives, in preparation for the annual management cycle. The lessons drawn from the evaluation are incorporated into the

subsequent management cycle and reported to the Supervisory Board. New policy and

procedures are assessed in terms of coherence with existing policy and procedures, and implemented by means of work meetings and publication on the intranet. The policies,

procedures and support systems of BNG and its subsidiaries are subject to internal audits.

Reporting on sustainability

An important objective of the European Commission resulting from the European Green Deal is to promote the financing of sustainable activities. To achieve this, legislation

and regulations have been published, with which (financial) institutions are increasingly required to comply. BNG started implementing CSRD regulations in 2024. As part of this

implementation, the double materiality analysis will be introduced and processes and IT

relies on the willingness and capacity of borrowers to provide information voluntarily. Many BNG is discussing with the various sectors how and to what extent this can be implemented in the future.

Principles and methods used in determining the CO2e emissions of the loan portfolio Methodology

The PCAF methodology was used to calculate the greenhouse gas emissions caused by our loan portfolio. This is what BNG has been doing since the Annual Report of 2019, in

which calculations were made about the financed emissions from our lending in 2018. The

methodology uses estimates and assumptions that are subject to uncertainties regarding external data.

Based on the general principles of PCAF, BNG applies the following principles in its approach: •

systems will be created to support the collection and processing of data underlying the

calculation and converted to CO2-equivalent;

sustainability information to be published.

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Absolute emissions are expressed in metric tons of CO2-equivalent (tCO2e);

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Relative emissions are expressed in metric tons of CO2-equivalent per million Euro

The EU Taxonomy was drawn to define sustainable activities in a uniform way. BNG endorses the objective of the EU Taxonomy. Because of the public nature of the bank, we are playing an important role in the transition to a more sustainable society. At the same time, the

(tCO2e/EUR mln);

EU Taxonomy does not seem to be properly applicable to BNG’s business model as a

public bank. BNG’s clients are mainly government institutions or institutions affiliated to the

government (including housing associations), to which balance sheet financing is provided. The vast majority of these clients do not fall within the scope of the EU Taxonomy and,

therefore, fall outside the scope of the activities that can be classified as green for the

Where possible, the seven greenhouse gases from the Kyoto Protocol are included in the

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The attribution method is applied. This means that we only report our share of the

customer's emissions. This share is determined by comparing the financing provided

by BNG to the customer's total balance sheet or project. This share is also known as the attribution factor. The emissions attributable to BNG from the customer are calculated

by multiplying the attribution factor of that customer (or project) by the total emissions 100