Climate risks are complex and transverse in nature, and may potentially translate into known financial risk types for banks including credit risk, market risk, liquidity risk and operational risk. We have assessed the various climate risk transmission channels using either a qualitative or quantitative approach, and consider potential credit risk impact to be the most material.

Climate risk is identified, assessed, managed and monitored through our Group Environmental Risk Management Framework, which is approved by the Board Risk Management Committee.

Further, UOB’s business continuity plans set out the recovery strategies, action plans and resources needed following a crisis to recover critical business services and processes within an expected timeframe to a minimum acceptable level and restore our operations to normalcy. This minimises significant impact to the Bank, our customers and the financial ecosystem. We have in place a Business Continuity Management and Crisis Management Framework, and recovery efforts are overseen by a Business Continuity Management Task Force that reports directly to the Group Recovery Plan’s Crisis Management Team, which is headed by our Group Chief Executive Officer.

Please refer to the IFRS SDS Index for our disclosures based on International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures.

UOB’s climate strategy is underpinned by our commitment to supporting a just transition in the region, adopting ambitious net zero targets yet balanced with a pragmatic market- and sector-specific approach.

In setting our targets and measuring our baseline financed emissions, we examined the most relevant internationally and regionally-recognised approaches, pathways, and guidance to ensure alignment with global best practices. Read more about our net zero commitment, targets and progress.

In addition to managing our financed emissions, which account for the majority of UOB’s GHG emissions, we are committed to maintaining carbon neutrality for our operations. In particular, we aim to achieve 25 per cent reduction in our Scope 1 and 2 emissions intensity by 2030, with 2018 as baseline. Read more about how we maintain operational carbon neutrality.

Please refer to the IFRS SDS Index for our disclosures based on International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures.

To better understand the nature risks material to our business, we conducted a double materiality assessment of our corporate loan portfolio, examining:

• the impacts of our economic activities, defined as the economic activities we finance, on natural capital; and
• the dependencies of those economic activities on natural capital.

We augmented our sector materiality assessment with both a geographical analysis and a value chain analysis, where relevant. The initial assessment of our corporate loan portfolio indicated low to medium impacts and dependencies for most of the sectors we finance.

Read more about our nature strategy.

While we have conducted a high-level materiality and qualitative risk assessment of our corporate loan portfolio to identify nature risks in critical sectors, additional data and methodological refinements are still needed to deepen our understanding. To this end, UOB is exploring collaborations with ecosystem partners to increase the data quality and availability for our customers, and supporting the development of robust nature scenarios to evaluate and support the resilience of portfolios and strategies.

Please refer to the TNFD Index for our disclosures based on Task Force on Nature-related Financial Disclosures (TNFD) recommendations.

Just as nature risk management is essential, we see significant business opportunities. We see two categories of opportunities for nature-related financing. First, we believe that our funding resources will be most effectively used by identifying existing nat ure-relate activities that are scalable and financing more of them. These will be the activities with the greatest commerciality, with the widest possible adoption and highest potential impact. The second category is new nature-focused opportunities, as we tap into the lessons learned from climate financing to support our customers in their nature-related journey.

As we continue to promote nature financing within our corporate loan portfolio, we plan to engage our customers in sectors with

significant impacts and dependencies on nature. Through suitable financing products and services, we will look to support industry leaders in their efforts to halt and reverse nature loss within their sectors, and facilitate the scaling of these solutions in their business ecosystem.

As part of our nature vision, we will progressively embed nature in our business strategy and processes. This will include:

• tracking our nature financing;
• supporting our customers in minimising their impacts on nature through relevant financing products;
• facilitating nature capacity-building within our organisation; and
• conducting nature scenario analysis and setting nature targets when appropriate industry guidelines and data for these are available.

Read more about our nature strategy.

Please refer to the TNFD Index for our disclosures based on Task Force on Nature-related Financial Disclosures (TNFD) recommendations.