Company: BCS
Filing Date: 2025-02-13
Form Type: 20-F
Source: 0000312069-25-000114
Chunk: 120

Company: BARCLAYS PLC
Filing Date: 2025-02-13
Form: 20-F
Chunk 120
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 between commercial and residential real estate &#8211; and property level variables, including subsidence and flood. Calibration is guided by the narrative with consideration for compounding effects of existing economic downturn and climate stresses, informing the shape and magnitude of variable calibration over the scenario horizon. Material technological development has not been assumed within the economic projections, given the immediate and short time horizon of the scenario. Strategy Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC 2024 Annual Report on Form 20-F 58 Resilience of our strategy (continued) TCFD Strategy Recommendation C + - &#8212; Economic Only Stress Scenario &#8212; Economic and Climate Stress

Results and insights Over the five-year period, the results of the exercise indicate a 10% impact on cumulative attributable profit in line with prior exercises. Whilst these are significant, they remain manageable within the Bank's existing risk profile. In the Investment Bank and UK Corporate portfolio, losses were driven mostly by companies operating in heavily emission intensive industries due to rising carbon prices ($349/tCO2e) over the scenario, or those within sectors where demand for products and services is rapidly falling due to consumer behaviour shifts or wider decarbonisation of the economy. For the Oil and Gas sector, whilst many companies were able to withstand the five-year stress given strong balance sheets post high prices in 2022, over longer time frames, non-linear increases in defaults are likely to be observed as carbon costs severely cut into the industry&#8217;s profits, alongside increasingly uneconomical assets due to market shifts caused by transition risk and increased frequency of physical risk. In addition, market pressures and government policies on low energy- efficiency Commercial Real Estate leads to deterioration in these markets, both in the UK and US. The impact of increased frequency of acute events is most obvious to our BUK business, where real estate and agricultural assets are susceptible to physical risks such as drought and flood. Despite this, the portfolios remain resilient due to availability of household insurance and the strong loan-to-value profile of the lending. However, considering the increasing challenges and concern with ongoing availability of insurance, a sensitivity on zero household insurance availability was conducted to better understand portfolio resiliency. Results indicated that a small population would be subjected to disproportionate impacts, though on average, resultant impacts to customer affordability and property value across the portfolio was limited. For future exercises, we will continue to refine and adapt our insurance assumptions to reflect ongoing changes in market expectations. Transition policies on emissions reductions and energy efficiency improvements do