Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 357

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 357
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 focused on assessing the impact of a severe physical risk shock using the Severe Climate Stress scenario. For n on-financial risk we assessed the potential impacts of a misstatement in our ESG and climate-related reporting and disclosures. For regulatory compliance risk, we assessed the potential impacts of greenwashing in the manufacturing and marketing of ESG funds and in the marketing of sustainability-linked bonds. For resilience risk, we assessed the potential impacts on our critical real estate from climate change, including temperature extremes, drought, water stress, wildfire, tropical cyclones and flooding. Understanding the resilience of our properties Climate change poses a physical risk to the buildings that we occupy, potentially impacting our operational resilience. This includes our offices, retail branches and data centres, both in terms of loss and damage, and business interruption. We measure the impacts of climate and weather events on our buildings on an ongoing basis using historical, current and scenario- modelled forecast data. In 2024, there were 40 major storms that had a minor impact on three of our buildings. We use stress testing to evaluate the potential impact on our owned or leased premises. Our 2024 scenario stress test analysed how nine climate change-related hazards – comprising coastal flooding, fluvial flooding, pluvial flooding, soil movement due to drought, temperature extremes, water stress, wildfires, landslides and tropical cyclones – could impact 2,719 of our properties . The 2024 test modelled climate change with the Intergovernmental Panel on Climate Change (‘IPCC’) Taking the Highway scenario (SSP5-8.5), which projects that the rise in global temperatures will likely exceed 4°C by 2100. It also modelled a less severe IPCC Middle of the Road scenario (SSP2-4.5), which projects that global warming will likely be limited to 2°C.

| 258 | HSBC Holdings plcAnnual Report on Form 20-F |

Risk review

Key findings from the Taking the Highway scenario included that by 2050, 15 of our 2,719 properties will have a high potential for impact due to climate change, with insurance-related losses estimated to be in excess of 10% of the insured value of the buildings . A key finding from the Middle of the Road scenario showed that the total number of buildings at risk reduced from 15 to 9. The highlighted facilities are still at risk from the same perils of extreme temperature and water stress by 2050. This forward-looking data along with historical data