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Environmental, Social and Governance Risk

Description The risk that the Bank doesn’t meet its environmental, social or governance objectives,
which could cause an actual or a potential material negative impact on the Bank.

Governance Board
Executive Committee
ESG Committee
Risk Appetite Environmental: Social: Governance:
Statement The Bank has a low appetite The Bank has a low The Bank has a low appetite
for Environmental Risk appetite for Social Risk for Governance Risk overall
overall. The Bank aims to overall and aims to create and aims to deliver the
deliver the strategic plan a positive impact on the strategic plan set by the
set by the Board whilst local community and to Board whilst adhering to the
internally minimising the be an employer of choice guidelines established by
Bank’s environmental impact, for its colleagues. the Task Force on Climate‑
and externally supporting The Bank will demonstrate related Financial Disclosures.
its customers to ensure positive inclusive and The Bank will achieve this
they remain compliant with diverse behaviours to create within its stated Risk Appetite
the prevailing minimum and maintain a workplace and regulatory guidelines
energy efficiency standards that attracts, retains and and deliver positive ESG
set by the Government. rewards talented and behaviours whilst managing
The Bank will proactively committed people, who any potential conflicts
manage the Loan Book to feel a belonging to the firm. of interest, such as the
minimise the physical and The Bank also engages prevention of greenwashing.
transitional risks to the Bank in the local community
from climate change. through a mix of sponsorship
and volunteering.
Key Mitigants The commercial property finance annual review process includes consideration to revalue
property held as security every three years, and to ensure adequate insurance is in place
for commercial and residential premises, subject to qualifying criteria. Assets purchased
on hire purchase or finance lease are generally financed over a short term (3‑5 years)
& legislative changes can be promptly accommodated within Lending Protocols to
address transition risk. The Bank monitors its exposure to properties that may cease to
be compliant with minimum energy efficiency standards or are at a high risk of flood.
The Bank has created a DE&I strategy and action plan to ensure the continued focus of the
Board and Management on delivering a positive inclusive culture. We have also an employee‑
led Charities Group, which is responsible for engagement with the local community.
The Bank’s status as a certified B Corp provides a governance framework for the
Bank to manage ESG impact. We are further enhancing this with our own internal
ESG framework focussed on creating a series of metrics, targets and actions in
alignment with the various regulatory reporting initiatives, including TCFD.

Comments The Bank continues to enhance its ESG strategies and uses the support of external firms.