materiality

Determining materiality

During the implementation of its previous Bank of the Future (BOTF) Strategy, alrajhi bank engaged a leading sustainability consultancy to undertake a peer benchmarking study, evaluating the bank’s performance against its domestic and global peers, in order to determine the key ESG risks and opportunities that affect the bank’s stakeholders and operations.

From this process, the following 13 refined ESG-related material topics were identified and served as the basis of the bank’s ESG Framework. These topics are reviewed for materiality every year to ensure that they capture new trends and expectations from the global market, and have remained relevant for the new ‘harmonize the group’ strategy cycle that was launched by alrajhi bank in 2024. The material issues that are relevant for external stakeholders have been tabulated below for reference:

The materiality process also revealed both short-term and long-term benefits for alrajhi bank and allowed the bank to implement the best practices from around the world and respond to new ESG challenges. The Materiality metrics for external stakeholders are comprehensively captured through the Value Creation Model outputs and outcomes as well as the UN SDG Mapping Table, which highlights the initiatives and performance under each materiality topic. These resources provide a detailed view of the bank's impact and accountability across all relevant areas.

This approach helped the bank to provide more value to its stakeholders, increase its sustainability, and make a positive impact on the Kingdom’s Vision 2030 goals. The material topics also form the basis of alrajhi bank’s ESG Disclosures in compliance with the Saudi Exchange ESG Disclosure Guidelines, and act as a guide to integrating sustainability into the bank’s governance, strategy, and management. This continuous approach makes alrajhi bank a leader in Islamic banking and creates a sustainable value and positive social change.

Management
approach

Material topics are relevant to management as they influence the bank’s business model, resource management and activities. These topics are allocated to relevant business or functional units during the strategic planning process, and resources are then assigned depending on the importance of the risk or opportunity. During the materiality determination process, the bank establishes and maintains policies, goals, targets and KPIs under each topic. These are updated when required and communicated internally to employees, ensuring the team is on par with the objectives concerning these important topics.