Company: BCS
Filing Date: 2025-02-13
Form Type: 20-F
Source: 0000312069-25-000114
Chunk: 403

Company: BARCLAYS PLC
Filing Date: 2025-02-13
Form: 20-F
Chunk 403
---
 reducing financed emissions in line with 2030 financed emissions targets. Barclays has established a risk appetite for climate risk at the Group level.The climate risk considerations have been included in the qualitative statements and quantitative constraints. This is reviewed and revised (where applicable) annually and formally approved by the Board. Climate risk appetite is managed through risk limits, triggers and indicators set across different Principal Risks (including, Credit Risk, Market Risk and Treasury & Capital Risk), portfolios, sectors, assets classes and products. Barclays has progressively enhanced its approach for the quantification of climate risk appetite by implementing additional risk limits and triggers. Regular monitoring, reporting and governance provide oversight so that exposures remain within the appetite and corrective actions are taken to address any breaches or excesses . The Group continues to regularly review its risk appetite and makes enhancements to maintain alignment with the Group's strategic objectives as part of its business planning process. Risk identification Physical and transition risk drivers can lead to adverse financial impacts through various transmission channels. Transmission channels are causal chains that explain how climate risk drivers impact firms such as Barclays either directly through their own operations and infrastructure or indirectly through their financing and investment activities, as described earlier in the "Climate-related Risks" section on page 24 . Through these transmission channels, risks for Barclays may materialise in its traditional risk categories, such as credit risk, market risk, treasury and capital risk, and operational risk. The impact of climate risk drivers may be significant and widespread, affecting companies, households and the general economy leading to potential financial system contagion . Barclays' work on assessing climate- related risks has focused on the short (0-1 year) and medium term (1-5 years) horizons, in line with our financial planning cycle. However, the longer-term climate (> 5years) risks have been considered using both quantitative approaches, such as reverse stress testing, and qualitative analysis. The effects of climate risk drivers through macro and micro transmissions channels are observed in Barclays' portfolio through traditional risk categories, such as credit risk, market risk, treasury and capital risk, and operational risk (including legal risk) . The below table provides examples of how Barclays' Climate Risk framework considers potential key effects of climate risk drivers on Barclays' Principal Risk types.

| Principal risk          | Example effects of climate risk drivers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Credit risk             | A changing climate (i.e. more frequent and more intense physical hazards) and society’s response (i.e. increasedtransition factors such as new policies or technologies to reduce carbon emissions)