Company: BCS
Filing Date: 2025-02-13
Form Type: 20-F
Source: 0000312069-25-000114
Chunk: 57

Company: BARCLAYS PLC
Filing Date: 2025-02-13
Form: 20-F
Chunk 57
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 short, medium and long-term horizons. Significant uncertainty remains around the timing of major climate-related impacts, although some effects have already surfaced, So far, these impacts, have been largely contained within specific geographies and sectors, but they carry the potential to escalate and trigger broader impact on financial systems. In the short term, physical risks arising from extreme weather events and climate-related disasters pose a direct threat to Barclays' physical assets and infrastructure. This can potentially result in immediate losses, increased costs for repair and higher insurance premiums. Similarly, acute events may also potentially damage the physical facilities of Barclays' clients or cause business disruptions, which may adversely impact the value of clients' assets, reduce their profitability and subsequently lead to potential increase in credit risk for Barclays. Additionally, business facilities and operations in regions prone to high physical risks may also experience higher insurance premiums or limited insurance coverage. Transition risks could occur in all timeframes. Short to medium-term developments may be largely driven by new regulations and technological breakthroughs aimed at replacing carbon- intensive methods. There remains significant uncertainty around the speed and scale of transition. The cost of transitioning to cleaner technologies and sustainable business practices may strain the financial resources of businesses, affecting their profitability and long-term viability. There may be challenges related to employment opportunities as businesses transition away from carbon-intensive practices. This in turn may impact the creditworthiness of Barclays' clients and their ability to repay loans. Financial institutions like Barclays could also face significant increases in costs and resources allocated to adhere to new policies, laws and regulations aimed at transitioning to a low-carbon economy. This in turn may lead to higher conduct and operational risks to Barclays. Transition risks aimed at mitigating climate change can also impact the profitability and value of assets in Barclays' portfolio, particularly those linked to carbon-intensive industries. Companies perceived as slow to adapt or unresponsive to environmental concerns may face reputational damage or legal actions leading to decreased customer trust and investor support. With escalating concerns and heightened global awareness of climate risks, it is likely that litigation linked to these risks will increase. Additionally, Barclays may face greater scrutiny of the type of business it conducts &#8211; including in the form of adverse media coverage and an increase in climate-related litigation cases. This in turn may adversely impact customer demand for Barclays' products, returns on business activities, value of assets and trading positions, resulting in higher impairment charges. Looking to the longer term, the cumulative effects of global temperature rise are likely to become increasingly pronounced &#8211; influencing ecosystems, sea levels and societal structures. Climate