Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 117 report information sustainability report Governance review review statements Annual Report 2022 Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) We have also worked on embedding ESG All key businesses and functions are involved and Over the past year we have grown our existing Embedding ESG into our business considerations into the culture of the delivery is managed through a central talent with several strategic hires, including organisation through training and knowledge programme, supported by extensive change Heads of Sustainable Finance for CIB and BUK. We are embedding Sustainability and ESG building. To embed ESG in culture, we cannot management expertise. We are further Each hire will allow us to further support our throughout the Barclays business, taking only train colleagues whose role includes ESG developing processes and levers that have climate strategy; increase co-ordination and into account the impact of climate-related aspects, but all colleagues across the bank so in already started to impact the business we accountability and aid engagement with risks and opportunities on our businesses, 2022, we have implemented a number of training engage in. colleagues across our businesses as part of our strategy and financial planning. initiatives and developed resources available to financial planning process; and help our For example: all colleagues. customers and clients with their individual • we strive to continue to decarbonise our own Our climate strategy is underpinned by the way transitions to a low-carbon economy. Impact of climate-related risks operations, reducing our Scope 1 and Scope we assess and manage our exposure to climate- The 2022 financial planning process used a five and opportunities on our business, 2 and our upstream and selective downstream related risk. year baseline scenario that assumed climate Scope 3 emissions strategy and financial planning The risks associated with climate change are factors were already included in the wider • we are tracking progress towards portfolio subject to rapidly increasing societal, regulatory Barclays’ 2022 financial planning process macroeconomic variables, and therefore no alignment (i.e. of our financed emissions) with and policy focus, both in the UK and included a review of our strategy and its further climate-related adjustments were the goals and timelines of the Paris Agreement internationally. We are embedding climate risk implementation, as well as an initial view of necessary. We assessed the financial impact of through BlueTrack™, which includes a number into Barclays' risk framework taking into account climate-related risks and opportunities, which embedding the individual parts of our climate of portfolio alignment metrics. The metrics are regulatory expectations and requirements, and aligns with how we manage other risks. The strategy, new initiatives and targets across our subject to regular management review adapting Barclays' operations and business implementation of our strategy is not only businesses, including the wholesale credit book, including second line review by the Climate strategy to address the financial risks resulting impacting our products and services, but also our sustainable financing and sustainable lending in Risk team to assess the strategy against the from both the physical risk of climate change and operations. We continue to develop new the Corporate and Investment Bank and initiatives targets the transition to a low-carbon economy. processes and capabilities and are embedding across our retail businesses, such as green them into our operations to address increasing • we continue to develop our green, sustainable In January 2022, climate risk became one of the mortgages and sustainable investing. complexity, including building technology and transition finance banking product sets, Principal Risks in our Enterprise Risk A strategic review of sustainable financing was solutions where required to support oversight, including for retail customers, such as green Management Framework. We also identify and also completed during the year. The review management and reporting processes. mortgages, bonds, loans and investment funds consider the impact of climate risk on other identified commercial opportunities and noted Principal Risks facing the bank. Within Barclays' group change programme for • we continue to explore climate scenario certain risks which could arise. The majority of climate, there is a workstream specifically related analysis and stress testing as a tool to assess Further details on climate risk identification, assessment opportunities continue to reside within Equity + and management can navigated via the Risk Review to finance and regulations. Within this, we have and quantify the potential impacts on our Capital Markets, Debt Capital Markets and lending. contents section on page 264. strategic deliverables (along with a set of actions business from climate change The output of the strategic review was considered we track) to seek to embed our climate strategy In 2022, we included our climate strategy and in the planning process, including incremental • we conduct portfolio reviews to monitor that into the financial planning process, and prioritise climate-related risks and opportunities in our revenue, cost and capital. Additionally, the business activities conducted are within it as appropriate in line with our overall strategy. financial planning. We continue to work to embed planning process included an assessment of our Barclays’ mandate (i.e. aligned with Barclays' latest financial plan, developed during these considerations into our products and financed emissions reduction targets for some of expectations), and are of an appropriate scale 2022, leverages the three pillars of our climate services and operations. our highest emitting sectors: Energy, Power, (relative to the risk and reward of the underlying strategy to estimate the future impact of climate Cement and Steel. Barclays has set absolute activities). Mandate & Scale Exposure Controls on our financial performance. The financial plan emissions or emissions intensity targets for these form part of our overall risk appetite control also includes a section dedicated to climate. sectors. Barclays continues to engage with our framework and climate risks have been Further details on how this was included in our clients to support the transition to a low-carbon integrated into annual credit portfolio reviews five-year financial planning process are set out economy and our current targets do not for elevated risk sectors since 2020. below, including our approach to sustainable materially impact financial performance over the financing, targets and capital investments. next five years.