Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 350

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 350
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 The 2024 climate scenarios range from a combination of highest physical risk to highest transition risk as follows:

| 254 | HSBC Holdings plcAnnual Report on Form 20-F |

Risk review

– Downside Physical Risk scenario : with significant global warming and physical risk events, assumes climate action is limited to currently implemented governmental policies, new decarbonisation policies fail to get introduced and global warming continues. – Severe Climate Stress scenario : a near term disorderly climate action, triggered by unprecedented global weather events that lead to a short, sharp economic recession. In this scenario, extreme physical events pivot the public view on climate and the transition to net zero accelerates. This extreme stress scenario is used to test HSBC’s capital resilience to extreme and very unlikely events, combining downside climate and macroeconomic risks with a horizon ending in 2030. – Current Commitments scenario : assumes a slower-than-required transition to a net zero economy, reflective of the current pace of transition, which assumes that climate action is limited to current governmental committed policies, including already implemented actions. This scenario helps us determine the actions we need to take to reach our net zero ambition while operating in a world that is not on a net zero by 2050 pathway. – Below 2 Degrees scenario : a Paris Agreement-aligned scenario where net zero is achieved, but beyond the 2050 scenario horizon, as it assumes an orderly and gradual rise in the stringency of climate policies over time. – Delayed Transition Risk scenario : in which action is delayed until 2030 but is then stringent and rapid enough to meet net zero by 2050, accentuating disorderly transition risks. We have chosen these scenarios to provide a holistic view that supplements the Group’s current and future strategic thinking. The 2024 climate scenarios are underpinned by well-established industry bodies such as the Network for Greening Finance Phase IV, the Intergovernmental Panel on Climate Change (‘IPCC’) and International Energy Agency (‘IEA’), which are further enriched for additional granularity, ensuring consistency with industry-recognised work and reflecting the latest climate policy and economic outlook. +Physical Risk Transition Risk+ Characteristics of our scenarios

|                                              |                                                              |             |                Scenarios |      |        |                      |                              |    |        |                  |                               |      |          |                 |                                        |      |       |                      |                              |      |       |
|                                              |                                                              |             |    DownsidePhysical Risk |      |        |                      |         Severe ClimateSt