Customer Context
A large Swiss bank as part of the overall strategy to support Paris Agreement initiative of lowering their greenhouse gas (GHG) emissions, has undertaken policy initiative to curtail financing economic activities leading to these emissions .
A robust Client Energy Transition Framework has been articulated, along with sector specific policies and guidelines to measure its current financed emissions and its transition to timebound targeted reductions
Solution
Client Characterization workflow
- Client categorization of based on fossil fuel-related industry clients according to their energy transition readiness based on
- Sector specific guidelines, and
- Internal as well as external ESG scores
- Annual review of categorization of in-scope clients
Transaction Approval workflow
- All transactions of in-scope clients pass the approval criteria of the climate risk assessment process
Outcome
- Transparency on financing to carbon-related and climate-sensitive sectors in line with TCFD recommendations
- Adherence to BCBS principles of effective management and supervision of climate related financial risks
- Helps achieve the targets in line with internal Global Climate Change Policy and ESG initiatives and targets
- Encourages the clients to transition to low-carbon activities
