FirstRand : TCFD report 2022

2022

CLIMATE-RELATED FINANCIAL DISCLOSURES

	Introduction: FirstRand and climate change	Governance	Strategy	Risk management	Metrics and targets	Appendix

This report represents disclosures made in line with the recommendations and requirements of the Task Force on Climate-related Financial Disclosures (TCFD).

This report covers the activities of FirstRand Limited (FirstRand or the group).

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Introduction: FirstRand and climate change

Summarises the group's climate change approach, and provides updated ambitions and commitments, and progress highlights.

2	3
Governance	Strategy
Explains how the	Explains how the
group governs	group's businesses
climate-related risks	are addressing
and opportunities.	climate change
	through strategy,
	product development
	and balance sheet
	deployment.

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4	5	6
Risk	Metrics and	Appendix
management	targets	Provides insights into
Explains how the group	Provides the metrics	FirstRand's industry
identifies, assesses and	and targets used	forum participation
manages climate-related	to assess and	and a consolidated
risks.	manage relevant	picture of progress
	climate-related risks	against the group's
	and opportunities.	climate roadmap.

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See FirstRand's commitments.

CLIMATE - RELATED FINANCIAL DISCLOSURES 2022 REPORT

	Introduction: FirstRand and climate change	Governance	Strategy	Risk management	Metrics and targets	Appendix

Contents

1. Introduction: FirstRand and climate change

Message from the chairman	2
Message from the group chief executive officer	3
Message from the group chief risk officer	4
FirstRand group profile	5
FirstRand's climate change philosophy	7
FirstRand's climate roadmap	8
FirstRand's climate ambitions and commitments	11
Progress highlights	12
Alignment to TCFD recommendations	14

2. Governance
Governance structure	16
Incorporation of climate considerations into remuneration
practices	23
Materiality of climate risks and opportunities	25

3. Strategy

Incorporating climate factors into financial resource
management	28
FirstRand climate balance sheet	29
Reduction pathway for financed emissions	32
Client solutions	33
Operating business strategy update	35

4. Risk management

Climate risk appetite	47
Processes for identifying and assessing
climate-related risks	48
Management of climate-related risks	50
Climate-sensitive sectors	52
Portfolio-levelclimate-related risk assessment	53
Transactional-levelclimate-related risk assessment	59

5. Metrics and targets

Balance sheet exposure to climate-related risks	64
Financed emissions	67
FirstRand's operations and own emissions	73

6. Appendix

Industry forums and pilots	79
Consolidated picture of progress against climate roadmap	82

CLIMATE - RELATED FINANCIAL DISCLOSURES 2022 REPORT

	Introduction: FirstRand and climate change	Governance	Strategy	Risk management	Metrics and targets	Appendix

1

Introduction:

FirstRand and climate change

This section summarises the group's climate change approach, and provides updated ambitions and commitments, and progress highlights.

Message from the chairman	2
Message from the group chief executive officer	3
Message from the group chief risk officer	4
FirstRand group profile	5
FirstRand's climate change philosophy	7
FirstRand's climate roadmap	8
FirstRand's climate ambitions and commitments	11
Progress highlights	12
Alignment to TCFD recommendations	14

CLIMATE - RELATED FINANCIAL DISCLOSURES 2022 REPORT

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	Introduction: FirstRand and climate change	Governance	Strategy	Risk management	Metrics and targets	Appendix

Message from the chairman

Climate change is one of the defining issues of this century. It is a global crisis that has the potential to alter geopolitics and interstate relations, disrupt business models and markets and to impact the livelihoods and well-being of millions of individuals worldwide. Given this context, FirstRand must develop strategies and solutions that support climate resilience and a just transition to a low-carbon world.

FirstRand supports the Paris Agreement and commits to assisting the countries where the group operates to realise their Nationally Determined Contributions (NDCs).

It is the long-term ambition of FirstRand to be net zero by 2050 for scope 1, 2 and 3 emissions. This commitment includes financed emissions and operational emissions, and the group is working towards this ambition through:

• continuing detailed science- and data-driven research, in collaboration with industry bodies, specialists and governments on optimal decarbonisation transition paths, enabling FirstRand to align its financing flows to the most appropriate scenarios;
• facilitating the necessary transition in the real economy through active client engagement and offering products and services to support clients' transition to a low-carbon world;
• understanding the social impacts of the transition to ensure

that its financing activities support a just energy transition;

• proactively engaging on corporate and industry (financial and real economy) action, as well as public policies, to support the transition of sectors in a way that considers both climate science and the associated social impacts; and

• supporting innovation, the near-term deployment of existing viable technologies, and scaling up the financing of credible, safe and high-quality climate solutions.

The group is comfortable with its ambitions and the progress made, but it can never be enough, and the group must always strive to exceed expectations. The most effective response to this issue is best tackled through partnership and collaboration and will require innovation to fast-track solutions. This is a key underpin to FirstRand's overall approach, which is rapidly taking shape as outlined in this report.

ROGER JARDINE

Chairman

CLIMATE - RELATED FINANCIAL DISCLOSURES 2022 REPORT

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