Manage our impact responsibly
Table of Contents
Maintain a foundation of trust
Obsessed with your success
Supplemental reporting
Appendices and Glossary
Overview
Next steps
Given the qualitative nature of this work and the small sample size used these heatmaps are not yet a measure of climate risks to our portfolio, but have highlighted some key insights and areas for future analysis, including:
• An assessment of physical climate risks using a small sample size highlights the importance of asset level assessment for physical risk management where possible, rather than using industry-level assessments. The industry-level assessments will be useful to prioritize our efforts to examine climate risk in more detail. • Continued enhancements in the estimation of our financed emissions (see page 70 ) will help improve granularity of transition climate risk assessment, as transition risk appears to be higher in industries that are emissions intensive. This also indicates potential opportunities to support clients in reducing their climate risk by providing financing for activities aligned with the transition to a low-carbon future. • The vulnerability scores for both physical and transition risks were assigned qualitatively with input from subject matter experts. We found that the industry level approach made it difficult to reflect the nuances of climate vulnerability and would not be sufficient to reflect, for example, investments a client had made to reduce their vulnerability to a climate risk. As we move towards more detailed climate scenario analysis, we will investigate opportunities for a more customizable approach to assessing vulnerability. Climate scenario analysis Building on the experience developing the climate risk heatmap, we will further develop our capabilities to perform climate scenario analysis that incorporates short-, medium- and long-term impacts and plausible scenarios to support the development of resilient strategies aligned with Canada’s transition to net-zero emissions. We expect our approach to climate scenario analysis will evolve over time as methodologies are further developed and more robust climate data becomes available. Our participation in industry working groups provides opportunities to share insights and formulate best practice approaches to climate-related risk management.
65 2023 SUSTAINABILITY REPORT AND PUBLIC ACCOUNTABILITY STATEMENT
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