Company: BCS
Filing Date: 2025-02-13
Form Type: 20-F
Source: 0000312069-25-000114
Chunk: 123

Company: BARCLAYS PLC
Filing Date: 2025-02-13
Form: 20-F
Chunk 123
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, Barclays have made several key enhancements across climate scenario development, climate risk modelling, and the ways in which we embed climate learnings into our risk management &#8226; Climate scenarios are designed and developed with our internal specialist scenario expansion team, leveraging the tools and approaches of the existing scenario expansion processes and supplementing these with specific climate analysis. This ensures consistency in climate scenario design alongside existing regulatory scenarios, as well as detailed and granular climate scenario expansion. &#8226; Our climate scenarios are gradually becoming more embedded within our existing stress testing procedures, producing climate aware stressed scenarios. Climate has been integrated into the Internal Stress Test; with a single scenario produced which accounted for climate risk drivers. &#8226; A suite of qualitative and quantitative models have been developed and enhanced to be able to analyse the risk due to physical and transition drivers specifically across large corporates, mortgages, agriculture and real estate. &#8226; Further embedment of climate risk into capital risk appetite, via climate informed stress loss limits and supporting climate stress loss riggers, to control the Bank's activity within its CET1 capital constraint. &#8226; The Corporate Model was redeveloped this year to become a production based model (more cognisant of company business activity), as well as linking to the Barclays&#8217; Client Transition Framework such that companies that have insufficient transition plans fare worse under the stress scenario. &#8226; The model also introduces asset-level modelling where carbon policies are applied taking into consideration the different jurisdictions that companies operate in. This takes into consideration both a differential carbon tax policy as well as the risk a company is prone to from acute and chronic physical risk. &#8226; We have continued to enhance our modelling capabilities in the UK Residential Mortgages space by considering additional transmission channels as well as streamlining the execution process through technological platforming, to allow results to flow more seamlessly for downstream consumption. The model now captures properties which do not have an EPC certificate using an EPC fall-back. &#8226; For Real Estate portfolios, while the model remains qualitative this year, in addition to loan to value impacts, rental impacts were also assessed as the 2024 Internal Stress Test scenario called for upgrading properties to Minimum Energy Efficiency Standards. The approach was also adapted to allow for better downstream integration for this portfolio. &#8226; For our Agriculture portfolio, impacts of methane tax were a key consideration. The scenario narrative this year had a consistent view of carbon and methane tax. It included for the first time calibration for methane tax as a tax