This diagram shows the effectiveness of measures taken depending on the achievement of climate targets.
Trajectory / Transition Risks
Achieved
- Orderly
Orderly - We are now starting to reduce emissions in a measured way to meet climate targets. - Disorderly
Disorderly / Accelerated
A sudden, unanticipated response is a source of disruption, but is sufficient to achieve climate goals.
Not achieved
- Orderly
Business As Usual / No transition
We continue to allow emissions to increase, taking little or no action to avoid physical risks. - Disorderly
Delayed
We are not doing enough to achieve our climate goals, the presence of physical risks is resulting in a disorderly transition.
2.3 - Climate-related risks within the risk appetite framework
Climate-related risks are directly integrated into the main cross-functional processes used to identify and monitor Groupe BPCE’s risks.
The ‘Climate Risk/Transition Risk’ and ‘Climate Risk/Physical Risk’ categories were added to BPCE’s risk framework document in 2019. At this stage, the materiality of these risk categories has been assessed by expert opinion and supported by the mapping work presented above. Transition risk has been deemed material, including in the short term in view of the potential impacts in terms of reputation, risks related to changes in the regulatory and legal framework, and the strategic risk related to market developments undertaken in response to the climate transition.
The Risk Appetite Framework (RAF) is applied to each Groupe BPCE establishment and subsidiary. The mapping methodology forms part of the Group’s permanent control system and includes the finance, risk, compliance, and information systems security functions. In this context, the appraisal of the materiality of these risks will be reviewed annually and may, if necessary, be refined using new measurement methodologies.
At the Groupe BPCE level, transition climate risk metrics are currently being integrated (metrics under observation before the calibration of a limit). Within the scope of activities of the Corporate & Investment Banking division, the share of assets classified as ‘dark brown’ according to the Green Weighting Factor method - which are the assets most exposed to transition risk - is monitored in the Natixis Risk Appetite Framework. Work is currently underway to enhance this framework, notably by defining a limit.
Climate-related risks are directly integrated into the main cross-functional processes used to identify and monitor Groupe BPCE’s risks.