NORD/LB CBB wants to play an active role in ensuring that the goals of the Paris climate agreement to limit global warming to a maximum of 2°C are met. In order to achieve this, it is the task of the financial sector to reduce CO2 emissions, promote climate-friendly developments and projects, and redirect capital flows to a more sustainable economy. NORD/LB CBB is committed to this task. To ensure that it succeeds, the bank follows the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) as a framework for developing effective climate-related financial disclosures through appropriate reporting processes. The TCFD recommendations relate to the following four sub-areas:
ESG is currently already fully integrated into NORD/LB CBB's bank governance. This applies to governance as well as to the document and committee landscape. The established ESG management fully supports the Board of Management in its responsibility for anchoring ESG in the bank and serves as an external and internal contact for all ESG-related topics.
ESG is a fixed and integral part of NORD/LB CBB's business strategy. NORD/LB CBB's risk strategy, as part of the NORD/LB Group's risk strategy, is developed consistently with the business strategy and describes, among other things, how ESG risks are incorporated as risk drivers into the bank's risk management process via the risk types classified as relevant.
ESG risks are generally defined as climate/environmental, social, or governance events or conditions, the occurrence of which may have an actual or potential material adverse effect on the bank's net assets, financial position, results of operations, and reputation. Climate and environmental risks comprise the two main risk drivers of physical and transitory risk.
The bank's risk management approach takes a comprehensive look at these two risk drivers. In this context, ESG risks do not represent a independent risk type, but are considered as risk drivers of the relevant risk types.
In accordance with the TCFD Guidance on Metrics, Targets and Transition Plans of October 2021, the climate-related metrics provide information for the three other functions of governance, strategy and risk management as control variables for the achievement of climate-relevant targets and receive necessary impulses for their own further development from these in a kind of feedback loop.
On this basis, NORD/LB CBB has developed an expressive set of Key Performance Indicators (KPI) / Key Risk Indicators (KRI) that measure the bank's physical and transition risks as well as its overall CO2 emissions. These indicators are regularly reported in the bank's risk report and are thus used by those responsible in the bank to manage ESG risks. In addition, NORD/LB CBB has another effective tool at its disposal in the form of the BEM limit model (branches exposure management) to effectively limit transitory risks.
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