(C-FS2.2e) Indicate the climate-related information your organization considers about clients/investees as part of your due diligence and/or risk assessment process, and how this influences decision-making.
Question dependencies
This question appears if “Yes” is selected in any row in C-FS2.2d. A row will appear if “Yes” is selected in the corresponding row in C-FS2.2d.
Change from last year
No change
Rationale
Considering climate-related information about clients/investees in the initial phases of risk assessment and/or as part of your due diligence process helps investors and organizations in the financial sector better understand their value chain’s exposure to climate-related risks and opportunities. Data users are interested in what information financial institutions consider, about which clients/investees, and whether that is enough for them to make informed lending, investment and/or insurance underwriting decisions and thus mitigate climate-related risks within their portfolio.
Connection to other frameworks
TCFD
Risk management recommended disclosure a) Describe your organization’s processes for identifying and assessing climate-related risks.
Risk management recommended disclosure b) Describe the organization’s processes for managing climate-related risks.
NZAM (FS Only)
Commitment 7
Response options
Please complete the following table. You are able to add rows by using the “Add another” button at the bottom of the table.
(*column/row appearance is dependent on selections in this or other questions)
Portfolio* | Type of climate-related information considered | Process through which information is obtained | Industry sector(s) covered by due diligence and/or risk assessment process | State how this climate-related information influences your decision-making |
---|---|---|---|---|
Select from:
| Select all that apply:
| Select all that apply:
| Select all that apply:
| Text field [maximum 2,500 characters] |
[Add row]
Requested content
General
- For each of your financial portfolios, disclose whether you consider climate-related information about your clients/investee companies as part of your screening, risk assessment and/or due diligence process. For example:
- Banks:
- Considering clients’ climate-related information in borrower and deal-level credit risk and other pre-lending assessments such as due diligence and “know your client” processes.
- For the purpose of this question, focus on your commercial/corporate clients.
- Asset managers:
- Considering investees' climate-related information in fund allocation and investment risk assessment processes.
- Insurance companies:
- Considering policyholders’ climate-related information in insurance underwriting due diligence processes.
Portfolio (column 1)
- A row will appear if “Yes” is selected in the corresponding row in C-FS2.2d.
Type of climate-related information considered (Column 2)
- Select which type of climate-related information you consider as part of your screening, risk assessment and/or due diligence process.
Process through which information is obtained (Column 3)
- Select how you obtain climate-related information about clients/investee companies. This information could either be requested from the client/investee directly or gathered from other data sources.
Industry sector(s) covered by due diligence and/or risk assessment process (Column 4)
- Select which industry sectors you cover in your due diligence and/or risk assessment process
State how this climate-related information influences your decision-making (column 5)
- If you conduct enhanced due diligence or risk assessments involving climate-related information for certain clients only, describe what kinds of clients are considered relevant, and why.
- Comment on the proportion of clients for which this information is considered.
- Describe how you use the information you consider and if it has any bearing on the outcomes of due diligence or risk assessment processes.
Explanation of terms
- Due diligence: Research or investigation performed by the financial services company before transacting with another party.
C-FS2.2e - Scoring criteria
Disclosure scoring criteria
Points will be awarded per completed row in proportion to the number of rows disclosed
A maximum of 5 points is available for this question
Awareness scoring criteria
Table completed - 1 point
Management scoring criteria
Full Awareness points must be awarded to be eligible for Management points
Text answer in column 'State how this climate-related information influences your decision-making' provides at least one example of a climate-related decision made by the individual/committee within the last two years - 1 point
One row scored
Leadership scoring criteria
Full Management points must be awarded to be eligible for Leadership points
'Climate transition plans' selected in column 'Type of climate-related information considered' in at least one row - 1 point
Point Allocation
Disclosure numerator |
Disclosure denominator |
Awareness numerator |
Awareness denominator |
Management numerator | Management denominator | Leadership numerator | Leadership denominator |
---|---|---|---|---|---|---|---|
5 | 5 | 1 | 1 | 1 | 1 | 1 | 1 |