By Nicholas K. Akins | Lead Independent Director
Submitted by Fifth Third Bancorp
On behalf of the Board of Directors, I’m pleased to share that 2021 marked another year of significant ESG progress at Fifth Third. The Board and its committees oversaw various facets of Fifth Third’s ESG program and are pleased with the Bank’s achievements across the ESG spectrum.
While ultimate oversight of ESG rests with the full Board of Directors, each of the Board’s six committees oversee important features of the Bank’s ESG program. The Nominating and Corporate Governance (NCG) Committee is the Board’s front line on ESG matters and strategy. In 2021, management provided an ESG update at each of its meetings. The committee heard from the chief inclusion and diversity officer on progress made against the Bank’s six bold inclusion and diversity goals, discussed new operational sustainability targets, reviewed trends and emerging topics such as financial institutions’ plans to measure and disclose clients’ carbon emissions, and engaged in discussions on specific items like a focused session on the Code of Business Conduct and Ethics. The consistent time allocated to ESG provided the directors a forum to give regular guidance, counsel and challenge to management on matters relevant to ESG. The NCG Committee also continues to oversee Fifth Third’s governance practices, focusing on maintaining robust and modern governance structures and sustaining a diverse demographic of directors with expertise aligned to our business strategy.
As the committee charged with overseeing risks related to Fifth Third’s environmental and social risk management activities, the Risk and Compliance Committee (RCC) likewise played a prominent role in the Bank’s ESG program. The RCC had multiple discussions regarding climate change, including the maturation of the Bank’s climate risk program with Fifth Third’s climate risk officer. The committee also had substantive discussions on fair lending, the Community Reinvestment Act and anti-money laundering. In fact, the Committee discussed risks associated with climate change at multiple meetings during the year, including during a joint meeting with the Finance Committee.
In 2021, the Human Capital and Compensation Committee (HCCC) worked with management and the committee’s independent compensation consultant to analyze and evaluate the proper approach and timing for including ESG into Fifth Third’s annual variable compensation program. The committee focused on structuring an ESG compensation component to ensure the Bank’s employees understood and could impact the goals, thereby providing the appropriate incentive for employees to take action to achieve Fifth Third’s top ESG priorities. The HCCC ultimately approved the inclusion of an ESG modifier in the annual variable compensation program for 2022.
The Audit Committee served the important ESG-related function of exercising oversight of the Bank’s policies, procedures and controls to ensure accountability and transparency. The Committee oversaw the review of the Fifth Third’s financial statements and the exercise of the Company’s audit functions. In addition, the committee received regular reports from the chief ethics officer on its Ethics program, including updates about calls received on Fifth Third’s EthicsLine.
The Technology Committee oversees Fifth Third’s information security and privacy programs. In 2021, the committee held sessions with the chief technology officer and chief information security officer to ensure the Bank’s approach to safeguarding customer data and other sensitive information was adequate, appropriate and reflects best practices in order to stay ahead of emerging cyber threats. Fifth Third conducted a detailed, full-day cyber war game simulation involving dozens of members of management last year. Multiple members of the Technology committee, including its chair, participated directly as players in the simulation, ensuring preparation and alignment from the Board and throughout the Company.
The full Board of Directors provides oversight of all Fifth Third’s ESG activities and approves the Bank’s annual ESG priorities. At meetings of the Board, the NCG committee chair provided a detailed report on ESG matters. In June 2021, the Board received a deep dive presentation on Fifth Third’s ESG program that included progress made against the Bank’s top ESG priorities, feedback from investors on ESG matters, proposed expanded disclosure in the ESG Report, and ESG trends among peer banks and the industry. The Board also reviewed reports on progress of Fifth Third’s Executive Diversity Leadership Council; cybersecurity and organizational defense; key compliance, legal and ethics matters and trends; and the strategic priorities of Fifth Third’s $2.8 billion Accelerating Racial Equality, Equity and Inclusion program, including its $180 million Fifth Third Empowering Black Futures Neighborhood Investment Program. At our February 2022 meeting, the Board focused on the Bank’s climate risk program and key initiatives, which included a presentation from the Ceres Company Network on physical and transition climate risks.
As a Board, we are very proud of the ESG progress that the Bank has made and all of us are committed to helping Fifth Third maintain its leadership in ESG amongst its peers. We look forward to overseeing and helping to facilitate the further significant progress on the Bank’s ESG journey for the benefit of all of our stakeholders.
Read the full report at 53.com and ir.53.com/esg.
Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio and the indirect parent company of Fifth Third Bank, National Association, a federally chartered institution. As of Dec. 31, 2021, Fifth Third had $211 billion in assets and operated 1,117 full-service banking centers and 2,322 ATMs with Fifth Third branding in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia and North Carolina. In total, Fifth Third provides its customers with access to approximately 54,000 fee-free ATMs across the United States. Fifth Third operates four main businesses: Commercial Banking, Branch Banking, Consumer Lending and Wealth & Asset Management. Investor information and press releases can be viewed at www.53.com. Fifth Third’s common stock is traded on the Nasdaq® Global Select Market under the symbol “FITB.” Fifth Third Bank was established in 1858. Deposit and Credit products are offered by Fifth Third Bank, National Association. Member FDIC.
Fifth Third’s Purpose is to improve lives and the well-being of its communities by being the One Bank people most value and trust. The Company believes in doing well by doing good and delivering long-term sustainable value to all its stakeholders. Fifth Third is focused on five environmental, social and governance priorities: keeping the customer at the center, demonstrating its commitment to employees, strengthening its communities, promoting inclusion and diversity, and addressing climate change.
More from Fifth Third Bancorp