Environmental risk (E)
Environmental
risk
is
the
risk
of
negative
financial
impact
resulting
from
current
or
future
environmental
factors
on
invested
assets,
customers,
counterparties
or
balance
sheet
items.
From
the
point
of
view
of
classification
and
the
practical
approach
to
managing
this
risk,
the
Bank
does
not
treat
it
as
a
separate
type,
but
as
a
so-called
horizontal
risk,
which
affects
the
risks
identified
and
managed
in
the
Bank
to
date
to
varying
degrees
and
through
varying
channels
of
transmission.
In
addition,
the
Bank
distinguishes
two
major subcategories of environmental risk:
□
transformation
risk
understood
as
the
risk
of
unforeseen
financial
costs
for
institutions
that
may
result,
directly
or
indirectly,
from
the
process
of
adapting
these
institutions
to
a
low-carbon
and
more environmentally sustainable economy;
□
physical
risk
understood
as
the
risk
of
negative
financial
effects
of
a
changing
climate,
including
more
frequent
extreme
weather
events
and
gradual
climate
change,
as
well
as
environmental
degradation such as air, water and soil pollution, water stress, biodiversity loss and deforestation.
The
Bank's
operations
do
not
have
a
significant
direct
impact
on
the
climate.
The
industry
in
which
the
Bank
operates
is
not
one
of
the
sectors
with
high
greenhouse
gas
emissions.
The
Bank
takes
care
to
ensure
that
its
activities
do
not
lead
to
the
destruction
of
natural
ecosystems
and
biodiversity.
According
to
the
Bank,
this
impact
manifests
itself
primarily
indirectly,
through
the
financing
provided
to
customers.
The
Bank
has
an
impact
on
the
climate
through
its
decisions
related
to
providing
financing
to
customers
in
specific
industries.
The
Bank
can
reduce
our
impact
mainly
by
limiting
financing
to
customers
in
carbon-
intensive
industries
through
credit
policies
that
is
taken
into
account
the
EU's
climate
policy.
The
Bank
has
completely
excluded
financing
for
entities
operating
in
the
mining,
coal-fired
power
and
fossil-fuel-based
heating sectors.
The
Bank’s
preferred
areas
of
financing
include
projects
supporting
biodiversity
and
water
management
in
energy-intensive
industries,
and
targeted
projects
involving
the
construction
of
electric
vehicle
charging
stations.
The
Bank
uses
tools
that
analyse
and
quantifies
environmental,
social
and
corporate
governance
risks
at
the
industry
level
based
on
a
standardized
set
of
criteria.
This
assessment
is
a
mandatory
part
of
the
lending
process,
allowing
the
conscious
building
of
exposure
and
monitoring
the
ESG
profile
of
the
corporate
portfolio and better determining directions in the clients' transformation.
Social risk (S)
Social
risk,
included
in
ESG
risk,
is
the
risk
of
negative,
including
financial,
consequences
caused
by
the
actions
of
the
Bank
or
its
employees
that
violate
the
norms
and
rules
of
social
relations
between
the
Bank's
employees,
the
Bank's
relations
with
its
counterparties,
legal
entities
with
which
the
Bank
cooperates
or
customers.
Within the framework of social risks, the following aspects can be distinguished:
□
cyber threats, hacking attacks on both the Bank's systems and its customers,
□
consequences
resulting
from
violations
of
human
rights
(including
violations
of
labor
rights,
rights
or freedoms of individuals in terms of personal data protection, bullying, discrimination),
□
disputes with the Bank's customers,
□
handling controversial areas and industries,
□
customer expectations that do not arise directly from contractual relationships or laws,
□
public expectations of the Bank as a public trust institution that the Bank cannot meet,
□
complicated
and
complex
offerings
of
the
Bank
that
may
create
misunderstanding
on
the
part
of
customers,
□
social impact of natural disasters and pandemics.
Governance risk (G)
Governance
risk
is
the
risk
of
negative
consequences
in
the
financial
and
non-financial
areas
caused
by
the
bank’s
violation
of
the
principles
of
corporate
governance,
broadly
defined,
arising
from
external
and
internal regulations.
Governance risk may include:
□
operational
risk
–
in
light
of
governance
risk
within
operational
risk,
legal
risk,
risk
of
money
laundering, terrorist financing and violation of sanctions are particularly relevant,
□
compliance
risk
–
resulting
in
the
bank’s
failure
to
timely
comply
with
new
corporate
governance
regulations,
□
reputational
risk
–
the
occurrence
of
this
type
of
risk
can
materialize
through
the
occurrence
of events that affect the Bank’s stakeholders’ perception of the Bank.
