Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 281 report information sustainability report Governance review review statements Annual Report 2022 Material existing and emerging risks (continued) relation to any number of the material against the Group for financing or existing and emerging risks identified contributing to climate change and above. environmental degradation. A breach of applicable legislation and/or The outcome of legal, competition and regulatory matters, both those to which regulations by the Group or its employees the Group is currently exposed and any could result in criminal prosecution, others which may arise in the future, is regulatory censure, potentially significant difficult to predict (and any provision made fines and other sanctions in the in the Group’s financial statements relating jurisdictions in which the Group operates. to those matters may not be sufficient to Where clients, customers or other third cover actual losses). In connection with parties are harmed by the Group’s such matters, the Group may incur conduct, this may also give rise to civil legal significant expense, regardless of the proceedings, including class actions. Other ultimate outcome, and any such matters legal disputes may also arise between the could expose the Group to any of the Group and third parties relating to matters following outcomes: substantial monetary such as breaches or enforcement of legal damages, settlements and/or fines; rights or obligations arising under remediation of affected customers and contracts, statutes or common law. clients; other penalties and injunctive relief; additional litigation; criminal prosecution; Adverse findings in any such matters may the loss of any existing agreed protection result in the Group being liable to third from prosecution; regulatory restrictions parties or may result in the Group’s rights on the Group’s business operations not being enforced or not being enforced including the withdrawal of authorisations; in the manner intended or desired by the increased regulatory compliance Group. requirements or changes to laws or Details of legal, competition and regulatory regulations; suspension of operations; matters to which the Group is currently public reprimands or censure; loss of exposed are set out in Note 26. In addition significant assets or business; a negative effect on the Group’s reputation; loss of to matters specifically described in Note confidence by investors, counterparties, 26, the Group is engaged in various other clients and/or customers; risk of credit legal proceedings which arise in the rating agency downgrades; potential ordinary course of business. The Group is negative impact on the availability and/or also subject to requests for information, cost of funding and liquidity; and/or investigations and other reviews by dismissal or resignation of key individuals. regulators, governmental and other public In light of the uncertainties involved in bodies in connection with business legal, competition and regulatory matters, activities in which the Group is, or has there can be no assurance that the been, engaged and may (from time to outcome of a particular matter or matters time) be subject to legal proceedings and (including formerly active matters or those other investigations relating to financial arising after the date of this Annual Report) and non-financial disclosures made by will not have a material adverse effect on members of the Group (including, but not the Group’s business, results of operations, financial condition and limited to, in relation to ESG disclosures). prospects. Additionally, due to the increasing number of new climate and sustainability-related laws and regulations (or laws and regulatory processes and policies (including approach to fiduciary duties) seeking to protect the energy and other high carbon sectors from any risks of divestment or challenges in accessing finance), growing demand from investors and customers for environmentally sustainable products and services, and regulatory scrutiny, financial institutions, including the Group, may through their business activities face increasing litigation, conduct, enforcement and contract liability risks related to climate change, environmental degradation and other social, governance and sustainability-related issues. Furthermore, there is a risk that shareholders, campaign groups, customers and other interest groups could seek to take legal action