Outcomes The result of this assessment is a series of heatmaps showing the relative potential impact of climate risks by industry and geography. The exercise was a foundational step for CWB towards identifying and assessing climate-related risks that our customers may be exposed to and does not represent climate-related risks directly to the bank. Despite looking at broader scope of risks than presented below in the heatmap, we have chosen to focus the results to illustrate potential future impacts from climate change by averaging the scores of the key metrics listed below:
Physical risk: The hazards chosen for the heatmap align with key hazards identified by regulators for future standardized scenario analysis: • Acute: Flood and Wildfire • Chronic: Mean Temperature Rise (increasing heatwaves are correlated to this metric).
Transition risk: Reputational risk was assessed from a CWB perspective related to products and financing, whereas other transition risk hazard focused from a sectoral perspective;
• Regulatory, Market, Technology
Included below are the high-level summary tables for long-term physical risk in the high-emissions scenario, and for transition risk in the long-term Net-Zero by 2050 scenario.
% Portfolio as in Annual report (2)
Climate Related risks
Sector (1)
2022
2023
Physical Risks
Transition Risks
Real Estate
21%
20%
Construction
19%
19%
Personal Mortgages
18%
17%
Finance & Insurance
9%
9%
Transportation
7%
7%
Oil & Gas
3%
4%
Agriculture
2%
3%
LOW
MODERATE LOW MODERATE
MODERATE HIGH
HIGH
(1) Based in North American Industry Classification System (NAICS) codes. Excludes sectors that comprise less than 5% of our outstanding loans, excepting Oil & Gas and Agriculture, which were included based on higher climate risk exposures.
(2) Percentage of outstanding loans as at October 31.
64 2023 SUSTAINABILITY REPORT AND PUBLIC ACCOUNTABILITY STATEMENT
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