Sustainability Performance
Risk Management

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Our Sustainability Performance: 5 Strategic Pillars

Client ESG Risk Assessment

A key achievement in 2024 was the development of our bottom-up Client ESG Risk Assessment process, together with our Industry Environmental Risk Rating methodology. The former enables the incorporation of client ESG risk into our lending process and client engagement, while the latter assesses environmental risk at the sector and overall portfolio level. They also ensure we meet the increasing regulatory requirements to factor ESG risk into the Bank’s credit decision. 

Client ESG Risk Assessment Workflow
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Sector screening Sector screening Sector screening
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Client ESG Risk Assessment
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Enhanced due diligence if applicable
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Incorporated into credit approval process
The Client ESG Risk Assessment is being rolled out across our global network and we expect it to be fully implemented in 2025. This assessment tool, along with several other new processes, will capture valuable data and insights that will allow us to refine our approach.
Client ESG Risk Assessment: Approach & Benefits
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Incorporates client ESG risk into credit process

  • Proprietary bottom-up approach that generates an objective client ESG score and rating.
  • Evaluates how clients are managing their ESG risks.
  • Includes ESG Enhanced Due Diligence (EDD) for high-risk clients.
  • Ensures we meet our regulatory requirements.
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Identifies financing opportunities

  • Enhances client engagement.
  • Deepens our ability to support our clients’ transition strategies.
  • Applicable to clients that have yet to begin their sustainability journey or those well advanced.
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Captures valuable client information

  • Allows us to evaluate client ESG scores over time and between clients.

  • Captures client’s forward-looking plans to decarbonise.

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Strengthens capability of client-facing teams

  • Launched training and support programme for Wholesale and Credit. 
  • Minimal disruption to relationship manager’s workflow.

The Client ESG Risk Assessment is based on a structured ESG questionnaire and allows us to translate the more subjective elements of ESG risk into a client ESG score and overall ESG rating. At the outset, the assessment will only be applied to companies operating in environmentally risky industries as defined by our proprietary Industry Environmental Risk Rating.

The questions, weighted by importance, cover topics such as ESG-linked remuneration, interim emission reduction targets, a defined transition plan and strategy and physical risks assessment. Each client gets an overall ESG score out of 100. The overall score places significant weighting to the governance and environmental related questions due to governance being a lead indicator of how well a company manages its ESG risks and the importance of reducing a company’s environmental impact. Depending on the overall ESG score, clients are assigned an ESG risk rating of Low, Moderate, High or Very High.