+e. Engagement strategy

e. Engagement strategy

i. Policies for engaging with counterparties, including information on the frequency, scope and objectives of engage-ment, types of potential actions and escalation processes or cri-teria.Engagement policies:Clear policies that the institu-tion will follow to engage identified counterparties to achieve its strategic and risk management objectives, tak-ing into account outcomes of the materiality assessment and risk measurement meth-ods, in line with paragraph 46a.# Purpose and overall ob-jective e.g. understanding of risk profile and/or checking consistency with risk appetite and targets # Available solutions to counterparty # Escalation and valida-tion process # Due diligence screening to identify high-risk coun-# The percentage of counterparties with which dialogue has been pursued or is Qualitative: planned to be pursued Table 1 # The percentage of (d) (o) counterparties for Table 2 ESRS which an assessment (c) of ESG risks has been Table 3 performed (b) (c) # Proportion of sectors, products and business lines captured # The percentage of counterparties under-going ESG risk due dili-gence # Changes in the credit2-SBM 2
ii. Processes, methodolo-gies and metrics used for collect-ing and assessing information re-lated to counterparties’ expo-sure to ESG risks and alignment towards the institution’s objec-tives and risk appetite.Process, methods and metrics for as-sessing ESG risks:This relates to the institution's application of exposure-based, sector-based, portfolio-based and portfolio alignment meth-ods in line with section 4.2.3. This relates to the outcomes ofterparties based on pre-defined criteria # ESG risks reflected in in-ternal or external scores and/or ratings # Methods for measuring alignment of select coun-terparties against climate pathways # Criteria used to identify counterparties with signif-icant ESG risks that may require immediate atten-tion # Adjustment of credit terms, such as interest rates or collateral require-ments, based on ESG riskratings of counterpar-Qualitative: ties given impact of ESRS-E1.IRO-1 Table 1 ESG risks (k) (l) # Concentration of ex- ESRS-E4-1.AR-Table 2 posures within specific 1a ( i) (k) sectors subject to ele-vated transition or physical risks # Involvement in ESG-related controversies or incidents # Positive (or any sub-classification within that category) or nega-tive (or any sub-classifi-cation within that cate- Qualitative55
iii. Outcomes of engage-ment practices, including an overview of counterparties’ adaptability and resilience to the transition towards a more sus-tainable economy.Outcomes:engagement, allowing for a meaningful interpretation of the risk profile of the counter-parties and actions taken by the institution, in line with paragraph 81e(ii).assessments # Enhanced due diligence, e.g. implementing more rigorous due diligence processes for high-risk counterparties # (More) targeted engage-ment, e.g. developing spe-cific engagement plans to address identified ESG risks, such as setting im-provement targets or of-fering new financial prod-ucts that cater to the needs of counterpartiesgory) assessments of Table 1 these counterparties’ (o) ESRS-E1 resilience and align- Table 2 ESRS ment against the insti- (m) 2_45a tution’s targets and Table 3 risk appetite (c) (d) # Number and types of follow-up actions taken by the institution2 -SBM-AR 16 56

1. Overview

,
Summary Regulation

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

Requirements
Source Requirement

3. Related Standards

Standards
Source Requirement
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