Company: BCS
Filing Date: 2025-02-13
Form Type: 20-F
Source: 0000312069-25-000114
Chunk: 117

Company: BARCLAYS PLC
Filing Date: 2025-02-13
Form: 20-F
Chunk 117
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 and vulnerability of Barclays Europe to environmental-related shocks. Strategy Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC 2024 Annual Report on Form 20-F 56 Resilience of our strategy TCFD Strategy Recommendation (c) 20242018 2019 2020 2021 2022 2023

Barclays' resilience to climate scenarios Two stress tests which incorporate climate risk have been conducted during 2024, each with their own scenario which are aligned to a less than 2&deg;C pathway, to assess the Bank's financial resiliency to transition and physical risks. Firstly, a single scenario which contained climate risk drivers over a five-year time period was designed for the 2024 Internal Stress Test and was executed utilising the bank&#8217;s stress testing framework. This year, the approach was enhanced to that taken in 2023 as climate risk was incorporated into our main internal stress test, rather than being an add-on to the macroeconomic internal stress test last year. Secondly, a reverse stress test was run to assess climate risks over a longer-term time horizon (2040), to understand the impact from extreme tail events and plausible triggers that could lead to these events unfolding sooner. Furthermore, to assess climate-related and environmental risks that the institution is exposed to, in 2024 the Bank has designed a Nature Exploratory Stress Test to assess the resilience and vulnerabilities of Barclays Europe to environmental shocks. The overall impact of the exercise is manageable within the Bank&#8217;s existing risk profile. Based on the results of the scenario analysis performed to date, our understanding is that Barclays' strategy remains resilient to climate scenarios. Given the evolving climate landscape, we seek to further enhance our capabilities and modelling to refine our understanding of the Bank's resilience to various climate scenarios, particularly given high uncertainty in this area. Internal Stress Test The 2024 Internal Stress Test was designed as a Bank-wide exercise, conducted over a five-year time period and the climate aspect of the scenario was designed to assess an accelerated transition and specific climate vulnerabilities to the Bank's business plan. The exercise includes an assessment of the financial impact to our clients of a structural decline in fossil fuel demand and consumption and shift towards low- carbon products and services. For 2024, the assessment of climate risks has been extended to be aligned with Barclays' existing stress testing approach. Scenario The 2024 Internal Stress Test scenario has been internally designed with consideration of Barclays' specific portfolio vulnerabilities. External scenarios such