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AdaptationBERT-Climate

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Used data collected from our Climate Risk Assessments to design an ‘adaptation readiness’ test at the client level.

Standard Chartered became one of the founding partners of the Bangladesh Climate and Development Partnership, which aims to use blended finance to help Bangladesh adapt to climate change.

We continue to engage with our clients to understand their climate adaptation, mitigation and transition plans.

Physical risk adaptation remains an area of concern and we have seen downward trends across our portfolio of clients due to an increase in the number of assessments.

The Group uses a set of physical and transition risk rankings to identify the markets most vulnerable and least ready to adapt and mitigate climate-related physical and transition risks.

From a physical risk standpoint, the rise of El Niño season (expected to peak at the beginning of 2024) is likely to exacerbate climate conditions throughout the Group’s footprint regions and we continue to monitor these as part of our annual reviews.

Weather conditions, including storms and drought conditions, and the ability to recover significant storm restoration costs.

Atmos Energy Kansas Securitization I, LLC (AEK), a special-purpose entity wholly owned by Atmos Energy, was formed for the purpose of issuing securitized bonds to recover extraordinary costs incurred during Winter Storm Uri.

Climate adaptation risk refers to risks to our facilities or operations that may result from changes in the physical climate, such as changes to temperatures, weather patterns and sea level rise.

Over time, we may need to make additional investments to protect our facilities from physical climate-related risks.

Over time, we may need to make additional investments to adapt to changes in operational requirements as a result of climate change.

The ERM process provides Bunge with greater oversight and management of climate-related risks and the potential financial implications, and will help ensure continued short-, medium- and long-term resilience.

Regulators in several jurisdictions are considering the so-called protection gap as it relates to climate – which is the view that populations are under-insured or that there is insufficient coverage to protect policyholders against the risks associated with climate change.

With multiple levels of risk management processes in place, we actively analyze the latest climate science and policies to anticipate potential changes to our risk profile, pricing models and strategic planning and will continue to adapt to and evolve with the developing risk exposures attributed to climate change.

We are promoting measures to prevent and mitigate losses that are increasing due to climate change and increased severe weather including making homes and communities more resilient, enforcement of stronger building codes, adoption of sensible land use policies, expanded disaster response capabilities and creation of public risk sharing mechanisms.

Additionally, we could incur significant costs to improve the climate-related resiliency of our infrastructure and supply chain and otherwise prepare for, respond to and mitigate the effects of climate change.

The Company could incur significant costs to improve the climate resiliency of its operations, infrastructure, and supply chain, and otherwise prepare for, respond to, and mitigate such physical effects of climate change.

In addition, certain of our operations and facilities around the world are in locations that may be impacted by the physical impacts of climate change and we could incur significant costs to improve the climate resiliency of our infrastructure and supply chain and otherwise prepare for, respond to, and mitigate the effects of climate change.

Across our sourcing regions, we work to develop higher-yielding, higher-quality brewing crop varieties that are also resource-efficient, disease-resistant and resilient to climate stressors such as drought.

Thereby, on a case -by-case basis, we approached the landlords requesting the necessary information on the one hand, and, on the other, used existing information on climate risks and corresponding adaptation solutions that is regularly gathered as part of our standard business processes (e.g., for insurance purposes).

Whenever a certain level of physical risk is identified, a climate change adaptation plan needs to be implemented.

Product design Risk-based rewards for preventive actions taken by policyholders (2.1) : The regulator expects an insurance product to include risk-based rewards for customers to take preventive actions in order to protect themselves or their insured assets against climate change risks.

The distribution strategy for such products covers measures to ensure that policyholders are informed on the relevance of preventive measures (2.2): The regulator sees adaptation to climate change risks as an overall societal objective to which insurers and their customers should contribute, since risk-prevention is a key lever for reducing the overall economic burden.

However, effective adaptation to climate change does not only require adequate pricing of risks, but also individual measures by customers.

Living up to our role as a climate risk manager, we are also integrating advisory services into our customer communication and provide relevant information to customers, for example, on how to build stronger resilience against climate-related events.

Moreover, we started increasing our claims payments to our customers to not only rebuild damaged assets such as buildings, but to use more sustainable or energy-efficient building materials or elements (build back better), as well as building more resilience against the adverse effects of climate change (build back stronger).

Alignment reporting is produced for the two published environmental objectives of climate change mitigation and climate change adaptation.

Alignment screening relates to the first two climate change objectives, climate change mitigation and climate change adaptation.

The most notable material issues in 2023 are the following: – Climate change: adequate management of measures aimed at adapting to the consequences of climate change through the establishment of policies, as well as the identification and management of climate risks and opportunities.

In turn, as a risk mitigation lever, BBVA acts as a facilitator of financing investments that are necessary for mitigation and adaptation to climate change with more sustainable ways of life and products.

Endowed with USD 20 million over five years, its ambition is to support African women in research, and create a community of African and European researchers working on climate change adaptation in the agricultural sector in Africa.

In the face of the growing risks of climate change, we remain convinced of the crucial role of our industry in helping our clients protect themselves, but also in supporting them in their own adaptation with a dedicated entity, AXA Climate.

Through the nature of its insurance activities, AXA Group contributes to strengthen resilience and adaptive capacities in the face of climate hazards and climate-related natural disasters (SDG 13.1).

As a risk expert, AXA Group is active in improving education, awareness, and individual and institutional capacities regarding climate change adaptation, mitigation, and early warning systems (SDG 13.3).

In 2022, AXA Group initiated the “AXA Forests for Good” project which aims at restoring damaged forests’ ecosystems to make them more resilient to climate change and a better host for biodiversity (please refer to Section 4.4 “Inclusive Insurer” for more details).

Operational resilience seeks to ensure the continuity of services to AXA Group’s customers, through the protection of its employees and operations in case of major events including climate hazards.

In 2023, the Group initiated a multi-year working group for Climate Resilience and Adaptation for Future Threats (CRAFT) to analyze the vulnerability of our own operations to climate related hazards and adapt our existing readiness frameworks and readiness levels.

The Group issued an internal Flood Readiness Guideline, published a public version (1) and launched the Paris Flood Task Force to ensure we raise further our level of resilience to this specific risk scenario.

During the 2023 annual CRAFT Seminar, that brought together various professional families with a role in helping ensure the resilience of AXA to Climate Change-related risks, the CRAFT roadmap for 2024 was announced with a commitment to develop Heatwave Readiness Guidelines, both internal and public.

In order to regularly measure and monitor the evolution of its business continuity capabilities, which is a fundamental operational resilience building block to ensure readiness to climate change risks, the Group measures the number of entities that have tested all business continuity plans for high and mission critical business processes.

ORRAA brings together the finance and insurance sectors along with governments, non-profits, and stakeholders to: drive investment in marine and coastal natural capital; reduce ocean and climate risks; and build resilience in coastal communities.

AXA Climate also works with governments in the agriculture sector to protect farmers against yield losses due to multiple climate risks.

They will work on improving assessment and designing new climate adaptation approaches to those risks.

Integrate environmental issues into the Group’s insurance business activities and provide climate-related risk transfer products and adaptation services to communities, including those most impacted by climate change.

Under the Climate Delegated Act Non-Life insurance activities through the underwriting of climate-related perils can indeed qualify as contributing substantially to climate change adaptation.

Non-Life insurance products covering climate related perils distributed by AXA entities generally contain features that help customers to better adapt to the consequences of climate change, including incentives to prevent its effects on property and people.

This network will facilitate the development and introduction of additional products and/or features which align to the EU Taxonomy insurance product criteria for climate change adaptation.

Our innovative products, solutions and technologies help to improve quality of life and protect the environment as well as the climate.

We are also addressing the question of how climate change affects our sites and implementing climate resilience measures (see page 113) .

In the wake of advancing climate change, the resulting water shortages and extreme weather events, climate resilience measures are becoming increasingly important.

We adapt our portfolio to the specific requirements of regional markets as customer requirements, crops, soils, climate conditions, plant diseases and farming practices vary around the world.

At sites with material climate risk, the existence of adaptation solutions was additionally analyzed and evaluated.

Alongside these commitments, our Crop Science Division is delivering innovations to strengthen climate resilience, with further significant contributions being made in the value chains of the agricultural industry.

The criteria for climate change adaptation are assessed at site level, while in some cases highly granular requirements for the other environmental objectives are examined at the individual asset level.

We are working to advance climate change adaptation while also aiming to counteract changing environmental conditions through innovation and new approaches in order to help streng then climate resilience.

Our business planning takes account of research and development expenses for product innovations that can help adapt our business model to the impact of climate change.

Climate change adaptation: A robust climate risk and vulnerability assessment is required for both economic activity CCM 3.3 and economic activity CCM 6.5 to determine that they do not cause significant harm to Environmental Objective II.

Implementing early-stage adjustments to the supply chain to address climate change enhances its long-term resilience, thereby ensuring business continuity.

•Water: We are advancing solutions to address global water challenges by enhancing flood resilience and improving water management.

CRH will continue to invest in solutions that strengthen circularity and resilience to climate change in the built environment.

The transition towards regenerative agricultural practices, efforts to maintain ingredients’ availability as well as the climate efficiency of operations are key to adapt Danone’s business model to this environmental change building resilience, efficiency and consumer preference.

Specific actions related to feed resilience in light of increasing drought and water scarcity will be tested and implemented by the farmers.

Wetland conservation (carbon sinks) RamsarDanone has been a partner of the Ramsar Convention on Wetlands since 1998, with the aim of protecting wetlands as an important carbon sink essential to climate mitigation and adaptation.

For example, the deployment of regenerative agriculture in the value chain aims not only to reduce carbon emissions, but also to support biodiversity, soil health, improve water management and animal welfare while accompanying farmers towards resilient agriculture in the face of climate change.

As we approach 2050, climate change adaptation will become increasingly critical and is already so in some of the most exposed regions.

The SFICS provides criteria to flag the Group's financing and investment activities as sustainable (that help mitigate or adapt to climate change).

• Evolution of the Klima management tool: In Q3’23 we have integrated a physical risk assessment module into our tool, which allows the identification of physical risks in collaterals and client portfolios, adjusting their vulnerability by economic activity.

Waste & Water Management Activities to adapt to, or mitigate, climate change; preserve Financing of water, waste and soil biodiversity; boost the circular treatment, greater energy efficiency, Circular economy economy and waste & water lower emissions and conservation.

Nonetheless, EssilorLuxottica pays high vigilance to climate events and prepares comprehensive adaptation measures to ensure business continuity.

EssilorLuxottica pays close attention to climate events and prepares comprehensive adaptation measures to ensure business continuity.

•Eyes on Carbon : EssilorLuxottica is committed to addressing climate change and preserving the environment by reducing energy consumption and water use within its operations , limiting its carbon footprint across the value chain and being resilient to climate-related risks.

The Company aims to maintain good knowledge of global climate projections and assess its vulnerability to climate change risks to improve its resilience and prepare the business for potential consequences.

This updated climate risk model helps the Group screen the physical climate risk exposure of a specific site based on its location, anticipate and prepare for potential climate hazards, raise awareness and protect employees in urgent situations and improve the resilience of its assets and supply chain.

Looking ahead to 2024 During 2024 we will continue to deepen the understanding of our impacts on climate change, strengthen our resilience to climate-related risks and seek to identify ways of capitalising on climate-related opportunities.

Hermès provides financial support to its historical supplier so that it can adapt to climate change, such as irrigation and mechanisation, as well as carry out tests of mulberry trees that are more resistant to climatic hazards, with a view to adaptation.

Hermès has based its approach to adapting to climate change on the identification of risks and the assessment of their relevance in order to define action plans within each métier, with the assistance of a consulting firm and the use of authoritative tools.

To strengthen the resilience of this sector, Hermès is already providing financial support to its partner in Brazil for its work in adapting to climate change.

An agroforestry project in Ghana covering 17 ,000 hectares aims to support the adaptation to climate change of small cocoa farmers and improve their living conditions.

The DNSH criteria, for each of the Taxonomy activities, were applied as follows: 7.2 Renovation of existing buildings DNSH adaptation – The Climate Delegated Act recommends compliance with three criteria: Hermès has carried out an analysis of the physical risks impacting its main sectors since 2019.

Depending on the ranking obtained and the results of the climate projections, Hermès undertakes the construction of adaptation plans consistent with the nature of the assets concerned, their geographical location and the priority physical climate risks.

In 2023, a study was also conducted on the supply chain to identify the physical and transition risks related to climate change, thus enabling the construction of resilience plans.

Companies must do their part to combat this risk through mitigation actions, reducing their emissions and decarbonising their business model, and also by acting against the impacts of climate change, by improving their adaptation and resilience capacities.

Physical risks The main management and mitigation mechanisms applied are as follows: – Consideration of climate change in new investment decisions, to make future assets more climate resilient.

Based on the impacts discussed (which take into account the current uncertainty associated with climate projections) and the mitigating elements in place, it is estimated that the physical risks of climate change may not have a material and permanent impact on the consolidated figures of the Group, which is believed to be globally resilient.

Generally speaking, their objectives fall into two categories: initiatives aimed at reducing greenhouse gas emissions or policies designed to promote climate change adaptation.

Each facility has recovery curves assigned to it, depending on the severity of the scenarios, their vulnerability and resilience to each climate phenomenon.

To achieve this, the fund invests in agricultural communities, project leaders and NGOs so as to implement regenerative approaches that not only preserve the viability of the land but also benefit farmers, enhance animal welfare and the health of ecosystems, and foster climate change mitigation and resilience.

Analysis of the alignment of activities by type of activity For each of the eligible activities previously described, an assessment was carried out of the technical criteria in the climate change mitigation and adaptation objectives, specifically for CapEx.

Compliance with the technical screening criteria of ‘Do No Significant Harm’ (DNSH) specific to the activity • Climate change adaptation: no material physical climate risks were identified that might affect the performance of the reported activity pursuant to the provisions of Annex A of the Climate Delegated Act.

Furthermore, the Group has defined adaptation measures aimed at reducing its exposure to risks, thereby adapting to the consequences of climate change.

And we continue to call for more concrete guidance from governments and regulators on climate risk and climate adaptation.

We’re working to become more resilient to climate risk, and have the ambition to become an expert in managing and mitigating these risks as we are in managing credit and other forms of financial risk.

By aggregating this information, we’ll improve our insights into our clients’ transition plans, and be better able to identify both risks and opportunities - enabling us to better support our clients in mitigating and adapting to the effects of climate change.

The strategy includes climate change mitigation and adaptation measures and aims to transform Kering's entire industry.

The Group plans to manage these climate-related risks and opportunities, anticipate their effects and ensure its resilience by adapting its business model, governance and decision-making processes, and its supply chain.

The Group has therefore made climate action a key part of its Sustainability Strategy by means of a dedicated Climate Strategy, which includes climate change mitigation and adaptation measures and aims to transform Kering’s and the industry.

Kering intends to manage climate-related risks and opportunities, anticipate their effects and ensure its resilience by adapting its business model, governance and decision-making processes, and its supply chain.

These regenerative agriculture projects support climate resilience.

These factors together help make the ecosystem more resilient to climate change impacts, such as extreme weather events and temperature fluctuations, thereby protecting the environment and ensuring sustainable production for future generations.

Furthermore, Kering did not directly implement any solutions responding to the objective of adaptation in 2023, as in the light of the Group’s activities and risk review, expenditures over the year are related mainly to climate change mitigation measures.