Manage our impact responsibly
Table of Contents
Maintain a foundation of trust
Obsessed with your success
Supplemental reporting
Appendices and Glossary
Overview
Sectors in scope for this round of the heatmap were selected from our lending exposures at an industry level, with a focus on sectors that account for over 5% of our loan portfolio or for smaller portfolios that are generally expected to have higher exposure to climate risks. Personal loans and mortgages were not included in this round of analysis. Physical and transition risk categories for review were selected based on our geographic and industry exposures, with input from the external climate risk consultants (see box).
Climate related risk categories considered:
Physical Risks: Acute risks • Heat waves • Extreme cold • Hail • Extreme wind speeds • Fluvial flooding
Transition Risks: • Regulation • Technology • Market shifts • Reputation impacts
Chronic risks • Rising mean temperatures • Changes in precipitation patterns • Sea level rise
• Drought • Wildfires
Within each scenario and time frame assessed, industries were given a qualitative score by risk type reflecting both exposure and vulnerability.
Physical risk assessment
Transition risk assessment
Exposure: How likely is it for this type of risk to impact a client in this industry?
For a small representative sample of clients within each portfolio, risk indicators were collected from climate risk modelling software based on asset locations. Sector scores were a weighted average of the sample results.
Scored by external consultants based on qualitative and quantitative research into existing and expected impacts.
Vulnerability: If a client is impacted by this type of risk, how sensitive are they to it?
Adjusted above or below a neutral score through discussion with relevant stakeholders.
Scored based on qualitative research of existing impacts and adjusted based on interviews with business leaders in each sector.
63 2023 SUSTAINABILITY REPORT AND PUBLIC ACCOUNTABILITY STATEMENT
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