2022 ESG supplement

Appendix D
ESG supplement

We have an ongoing interaction with ESG rating agencies, also supporting the increasing requests by
investors for greater transparency, more stakeholder engagement and stronger sustainability management. Topic ESG Metric Page # Response
The primary goal of the 2022 ESG Supplement is to provide additional supporting information about stc’s
ESG approach and performance on specific ESG material topics.
Corporate Governance Disclosure of actions taken to include low-in- 73, 74 stc has renovated and provided connectivity to low income households in
come households in access to communication 22 provinces.
programs such as free WiFi access in public Detailed disclosure can be found in our Sustainability pages:
places https://sustainability.stc.com.sa/#/

Disclosure of targets to implement access to 76 stc is committed to providing a modern, sophisticated network with
Corporate Governance communication and digital divide in emerging maximum accessibility and digital inclusion for urban and remote areas
markets beyond current operations. across the entire Kingdom by utilizing wireless broadband to serve rural
and desert areas and a fixed/ wireless combination to cover urban areas.
Topic ESG Metric Page # Response
Detailed disclosure can be found in our Sustainability pages:
https://sustainability.stc.com.sa/#/
Data Privacy and Security Disclosure of a policy that governs all relevant - https://www.stc.com.sa/content/dam/groupsites/common/generic/pdfs/
-
business lines/subsidiaries in data privacy and Data%20Privacy%20and%20Security%20Position%20Statement.pdf Corporate Governance Disclosure of the voting results including - Disclosure of the voting results including the percentage of approvals,
security the percentage of approvals, rejections and rejections and abstentions (AR) can be found here:
abstentions https://www.stc.com.sa/content/dam/groupsites/common/generic/inves-
tors/investor-pdf/general-assembly-meeting-2022.pdf

Data Privacy and Security Disclosure of a statement that covers the - https://www.stc.com.sa/content/dam/groupsites/common/generic/pdfs/
rights provided to individuals regarding the Data%20Privacy%20and%20Security%20Position%20Statement.pdf Corporate Governance Disclosure of proxy access that gives share- 117 For this indicator we use the boundary as relevant for the jurisdiction in
control of their data, such as the right of holders the power to nominate a number of which stc is active. stc is fully compliant with regulations issued by the
access, rectification and deletion of data director candidates for inclusion in stc’s proxy capital market authority (Article 13 in the implementing regulation of the
materials companies law).

Data Privacy and Security Disclosure of external independent audits on 59 stc is regularly audited by external party on data privacy and security. Moreover, we are capturing the shareholders voting by the Local Market
data privacy and security The audits take place annually and are conducted by CST. platform (Edaa) for this matter, and this platform is owned by Saudi Tad-
The latest audit was completed in May 2022. CST commission was awul Group, and mandatory to be used by all listed companies.
established to regulate, monitor and empower the communications &
IT sector as it is one of the most prominent sectors that support the
development and prosperity of the Kingdom of Saudi Arabia. Corporate Governance Disclosure of audit committee members who 161-164 Detailed disclosure can be found in our Sustainability report and our
meet MSCI’s standards for industrial expertise Sustainability pages: https://sustainability.stc.com.sa/#/

stc has established a privacy framework containing policies and pro-

Data Privacy and Security Introduction of an executive or board-level 57 cedures relating to the privacy of personal information address data Corporate Governance Disclosure of board members who meet MSCI 161-164 Detailed disclosure can be found in our Sustainability report and our
committee for data privacy and security classification, record management, retention, and destruction as well standards for risk management expertise Sustainability pages: https://sustainability.stc.com.sa/#/
as implemented technical solutions to set different permission levels
for employees based on what PII they need to access, such as Public,
Private, and Restricted Access.
Data Privacy Council reports at board level via BAC. Reporting is con- Corporate Governance Pay committee independent of management - For this indicator, we use the boundary relevant to jurisdiction in which
ducted quarterly to all board members. stc is active. We are complying with corporate governance regulations is-
Detailed disclosure can be found in our Sustainability pages: sued by capital market authority (article 48-B) with 3 out of 4 independent
https://sustainability.stc.com.sa/#/ members and will consider it in the next board cycle.

Data Privacy and Security Disclosure of training scope on data privacy 58 Cyber Security training and Data Protection & Privacy training are man-
and security provided to all stc employees datory courses for all new employees and are taken during onboarding Corporate Governance Disclosure of how sustainability performance 108 stc LTIP Policy states that sustainability performance is incorporated in its
including contractors sessions. These courses are also mandatory courses for all existing is incorporated in incentive payment structure current incentive pay policies.
employees to take on an annual basis.
Detailed disclosure can be found in our Sustainability pages:
https://sustainability.stc.com.sa/#/

Corporate Governance Disclosure of overall links between executive 108 Detailed disclosure can be found in our Sustainability report and our
Corporate Governance Disclosure of actions taken to include elderly 70, 61 In 2022, we evolved our community investment methodologies and pay data links and economic/financial per- Sustainability pages: https://sustainability.stc.com.sa/#/
people in accessibility programs such as policies to maximize our positive impact on the societies in which we formance
special applications to enhance their access are operate. In doing so, we aim to leverage our key strengths including
to communication services technologies, broad reach, the incredible talent of our people and
financial resources. The best way to complement our strengths in
achieving a positive impact is to join hands and leverage our dedicated,
specialized resources and partners in key priority areas including ed-
ucation, health, accessibility, climate change, and empowering youth,
women, early stage entrepreneurs, and people at risk such as elderly
157 stc.com.sa people and low income households. In 2021 stc reached 1 million elderly 158 stc.com.sa
people.
Detailed disclosure can be found in our Sustainability pages: https://
sustainability.stc.com.sa/#/
Topic ESG Metric Page # Response Topic ESG Metric Page # Response

Corporate Governance Disclosure on the number of years the exter- 160 Detailed disclosure can be found in our Sustainability report and our Corporate Governance Training programs on ethical standards that 122, 123 Every employee at stc, at every level of the company (including
nal audit firm has served the company Sustainability pages: https://sustainability.stc.com.sa/#/ covers all employees including part-time and suppliers), is bound by the code of ethics. All new employees who join
contractors stc are required to complete a Basic Online Integrity Training course,
and 100% of employees and contractors have signed a Code of Ethics
with acknowledgement, stating that they have read, understood, and
will abide by the code.
In late 2021, all stc contractors were provided with access to the
Corporate Governance Disclosure of audit and non-audit fees 160 Detailed disclosure can be found in our Sustainability report and our company’s online learning management system and are required to
Sustainability pages: https://sustainability.stc.com.sa/#/ complete the basic online integrity training by mid-2022.
Detailed disclosure can be found in our Sustainability report and our
Sustainability pages: https://sustainability.stc.com.sa/#/
Human Resources Disclosure of future-expected collective 98, 99 For this indicator, we use the boundary relevant to the jurisdiction in
bargaining negotiations which stc is active. At stc, we have labor committee that reports direct-
ly to GCEO. Their role is to be the advocate of employees’ issues and
they have direct access to the GCEO. The communication between the Corporate Governance Say on Pay & Remuneration of the Executive - https://www.stc.com.sa/content/dam/groupsites/en/pdf/nomina-
committee and the company is monitored by the HRSD. Management Policy tion-and-remuneration-policy-new-10-en.pdf

Human Resources Disclosure of major layoffs events 95 For this indicator, we use the boundary relevant to the jurisdiction in
which stc is active. As per HRSD decree No.50945, the company must Corporate Governance Minutes of the General Assembly - https://www.stc.com.sa/content/stcgroupwebsite/sa/en/investors/
send a notice including (study, justification...etc) of such action 60 days general-assembly.html
before the major layoff to HRSD and seek their input within 45 days of
the notice.

Corporate Governance Disclosure on non-executive shareholding - https://www.saudiexchange.sa/wps/portal/saudiexchange/hidden/

Human Resources Disclosure of statement that covers stc’s 98, 99 For this indicator, we use the boundary relevant to the jurisdiction in data company-profile-main/!ut/p/z1/04_Sj9CPykssy0xPLMnMz0vMAfI-
position on collective agreements which stc is active. At stc, we have labor committee that reports direct- jo8ziTR3NDIw8LAz83d2MXA0C3SydAl1c3Q0NvE30I4EKzBEKDM-
ly to GCEO. Their role is to be the advocate of employees’ issues and KcTQzMDPxN3H19LAzdTU31w8syU8v1wwkpK8hOMgUA-oskdg!!/?-
they have direct access to the GCEO. The communication between the companySymbol=7010
committee and the company is monitored by the HRSD.

External Auditor (incl. audit and non-audit fees)

Human Resources Disclosure of the percentage of variable 108 Variable pay is linked to EBITDA and Revenue and any other business Ernst & Young (EY) is a network of firms with more than 300,000 people providing the context and meaning for the work they do every day. They help digital pioneers fight
incentive pay that covers stc employees metrics - subject to management approval. data piracy, guide governments through cash-flow crises, unlock new medical treatments with data analytics, and pursue high quality audits to build trust in financial
markets and business. In other words, working with entrepreneurs, companies, and entire countries to solve their most pressing challenges. Through their four integrated
service lines:

Human Resources Disclosure of employee productivity (Profit/ 108, 109 Gross profit 37.39SAR billion / Total workforce 22,759 Assurance, Consulting, Strategy and Transactions, and Tax. With their deep sector knowledge, they help their clients capitalize on new opportunities, asses, and manage
Employee) risks to deliver responsible growth. Their high-performing and multidisciplinary teams help them fulfill regulatory requirements, keep investors informed and meet
stakeholder needs.

Following is a statement of the audit fees and expenses related to services provided by the company’s external auditor, in addition to any other services provided by audit
Human Resources External recognition as employer of choice 96 https://stevieawards.com/mena/solutions-stc-most-exemplary-em-
firms other than the Company’s external auditor during the year 2022.
(last three years) ployer
https://greatplacetowork.me/certified-organization/solutions-by-stc/
Name of Audit Firm and Partner Auditor: Ernst and Young, Saad M. AlKhathlan
https://www.tahawultech.com/enterprise/stc-bahrain-wins-big-at-gcc-
Number of Years Spent as the Auditor of the company: 8 years
best-employer-brand-awards/
Total Audit Fees for the Year 2022 (SAR): 12,185,000
https://www.arabnews.com/node/2199096/corporate-news

Environment Disclose science-based quantitative targets 38 Detailed disclosure can be found in our Sustainability report and our
Fees and costs of services provided to the company by its external auditors, EY, other than for the audit of the financial statements of the company for the year 2022:
in its sustainability report Sustainability pages: https://sustainability.stc.com.sa/#/
Audit firm Service Type Fees and Expenses (SAR)

Environment Disclosure of actions taken to mitigate 38-45 In 2021, stc initiated a new pilot project that aims to install an intercon-
greenhouse gases nected solar photonic network with the existing infrastructure of the EY Net telecommunication revenue base report 339,000
Kingdom.
Detailed disclosure can be found in our Sustainability report and our EY Local content report 840,000
Sustainability pages: https://sustainability.stc.com.sa/#/
EY Zakat and tax services 260,000

Environment Disclosure of actions taken to use clean 40-45 We have two solar energy sites at stc HQ. In 2021 we generated 303.17 EY Compliance with Article 71 from companies Law 132,000
sources of energy such as solar energy MWh of energy saved 302 tCO2.
Detailed disclosure can be found in our Sustainability report and our EY Solvency report 60,000
Sustainability pages: https://sustainability.stc.com.sa/#/
EY Capital increase 40,000

EY AUP Report on bad debt write off 21,000

Environment Disclosure of actions taken towards energy 41-34 In 2021, we achieved a 27% reduction in our total electricity consump-
consumption management and operational tion in all stc buildings, largely due to the energy efficiency initiatives
efficiency enhancement such as efficient implemented throughout the previous year. We also achieved a 22%
cooling systems decrease in total energy consumption. TOTAL 1,697,500
Detailed disclosure can be found in our Sustainability report and our
Sustainability pages: https://sustainability.stc.com.sa/#/

Corporate Governance Conduction of audits of all operations on 120, 123 Detailed disclosure can be found in our Sustainability report and our
ethical standards and anti-corruption at least Sustainability pages: https://sustainability.stc.com.sa/#/
once every three years

Corporate Governance Evidence of a board-level committee or 119, 120, 123 In order to provide senior level leaders direct visibility about compli-
C-suite or executive committee to oversee ance investigations, training, communication and other compliance
ethics issues program elements in their sector, compliance councils were set up
within 4 sectors in Q4 last year. In 2022, the intention is to do this for
all C-level executives. These councils consist of each organization’s
Chief, their direct reports, representatives of other departments like
Human Resources and members of the Corporate Ethics and Compli-
ance team. The councils meet on a frequent basis and help leaders
drive engagement around Ethics and Compliance and thereby impact
the integrity culture.
Detailed disclosure can be found in our Sustainability report and our
Sustainability pages: https://sustainability.stc.com.sa/#/

Corporate Governance Provision of evidence of having a formal anon- 119, 124, 125 Employees and stakeholders are encouraged to report all integrity
ymous whistleblower system that includes concerns through the designated speak up channel.
legal protection Detailed disclosure can be found in our Sustainability report and our
Sustainability pages: https://sustainability.stc.com.sa/#/

159 stc.com.sa 160 stc.com.sa

 Board and Committees members
and their membership classification

No Academic Vocational Current Previous No Academic Vocational Current Previous

Name Membership Membership Name Membership Membership
Qualifications Experience Occupation Occupation Qualifications Experience Occupation Occupation

1 HRH Prince Chairs the Board MBA Banking and Chairman, Al Vice President, Al Independent 9 Mr. Jameel A. Member of the Bachelor in science Administrative Managing Director Board Member, Independent
Muhammad bin of Directors, administrative Faisaliah Holding Faisaliah Holding AlMulhem Board of Directors marketing experience. of Takween Group Shaker Group
Khaled Al-Abdullah the Executive experience. Group Group and Chairs the
Al-Faisal Al Saud Committee, and Nomination and
the Investment Remuneration
Committee. Committee

2 H.E. Dr. Khaled H. Member of the PhD. Electrical Associate Assistant Secretary stc CEO Non- executive 10 Mr. Walid Ibrahim Member of the Bachelor of Administrative Member of several Principal Partner Independent
Biyari Board of Directors Engineering Professor, King of Defense for Shukri Board of Directors Accounting experience. Boards and Com- in Price
and the Executive Fahd University Executive Affairs - and the Risk mittees Waterhouse, Saudi
Committee of Petroleum and Ministry of Defense Committee and Arabia
Minerals for 13 Chairs the Audit
years. Committee
Experience in / non- independent
business.

3 H.E. Mohammed Member of the Bachelor of Banking, business Governor of the Governor of the Non- executive 11 Mr. Ahmed Member of the Master of Administrative and GOSI GM, IT Non- executive
Talal Al-Nahhas Board of Directors Accounting development, and General Organi- Public Pension Mohammed Al- Board of Directors Computer Science information Governor Assistant Infrastructure, GOSI
and the Executive administration zation for Social Agency Omran and the Risk technology for IT Affairs
Committee experience. Insurance Committee experience.

/ non- independent / non- independent

4 Mr. Yazeed A. Al Vice Chairman of MBA Experience in PIF, Deputy Chief of Staff and Non- executive
Humied the Board of Direc- finance and admin- Governor, Head of Advisor to PIF
tors and a Member istration. MENA Governor
of the Executive Investments
Committee

/ non- independent

5 Ms. Rania Member of the Master of Science Experience in PIF, Head of Advisor to PIF Non- executive
M. Nashar Board of Directors in Information banking and admin- Compliance and Governor
and Chairs the Risk Technology istration. Governance
Committee Division

/ non- independent

6 Mr. Arndt Member of the MBA Administrative Founder and Managing Partner, Non- executive
Rautenberg Board of Directors experience. Managing partner OC&C Strategy
and of several Consultants.
the Investment companies
Committee

/ non- independent

7 Mr. Sanjay Kapoor Member of the MBA Administrative Consultant Executive President Non- executive
Board of Directors experience. of Micromax
and the Executive
Committee

8 Ms. Sarah J. AL- Member of the Bachelor of Finance and Chairperson of CEO NCB Independent
Suhaimi Board of Directors Accounting Investment Tadawul Capital
and the Investment experience.
Committee

161 stc.com.sa 162 stc.com.sa

 External Members of the Board Committees Audit Committee Skills and Competences Matrix

No Academic Vocational Current Previous Khaled Bin Abdullah

Name Membership Membership Skills / Characteristics Waleed bin Ibrahim Shukri Ammr Bin Khaled Kurdi Medhat Bin Fared Tawfeq
Qualifications Experience Occupation Occupation AlAngery

Business leadership
1 Mr. Khalid bin Audit Committee Bachelor of Technical and General Manager, Head of Private External Member
Abdullah Al Ankari Accounting managerial Babel Al Khair Banking and
experience in Trading & Real Lending Products,
auditing Estate Est Samba Financial Commercial
Group

Financial markets

Finance, Audit & Risk

2 Mr. Medhat F. Tawfik Audit Committee Master Program Professional and Founder of IRSAA, Account Manager, External Member
Citibank Asia managerial expe- Business Solutions Samba Financial
Pacific rience in auditing, an outsourcing Group
risk management company of Financial experts
Responsible for risk
management and
internal audit International experience

(Full time) Executive position

3 Dr. Ammr Audit Committee PhD. in Accounting Accounting CFO, Tawuniya Executive Vice External Member at other company
K. Kurdi experience President of
Business for
DUSSUR Mainly non-executive role

Male

Female
4 Eng. Tarek Risk Committee Master of Science Experience in Independent CEO, Saudi Kuwaiti External Member
Abdulaziz financial, banking Financial Advisor, Finance House
Alrikhaimi services, risks Investment and
management, Risk Management
operations, strategic Advisor
planning
and projects
management.

5 Mr. Rashid Investment MBA Experience in CEO, SNB Head of the General External Member
I. Sharif Committee finance and Capital and an Administration,
a member in several Executive Saudi Investments
listed companies Member of the Public Investment
Board Fund

6 Mr. Johan Brand Nomination and Master of Business Experience in Independent Key Partner, Egon External Member
Remuneration Economics Master leadership advisory consultant in a Zehnder
Committee of Business Law leadership advisory
Master of Private company
Law

7 Ms. Hoda Nomination and MBA Experience in Human Executive Director General manager of External Member
M. Al- Ghoson Remuneration Resources of Human Staff Training and
Committee Resources and Development,
Training, Aramco Aramco

163 stc.com.sa 164 stc.com.sa

 Inquiries and feedback

Inquiries, feedback or suggestions

are welcome at:
[email protected]
https://twitter.com/stc
https://www.linkedin.com/company/stc
https://www.facebook.com/stc/

167 stc.com.sa 168 stc.com.sa