Managing Reputational Risk
Integrating Reputational Risk Management in our operations
What does Reputational Risk Management include?
In addition to managing issues and projects relevant to sustainability, Commerzbank's corporate responsibility includes the early identification and appropriate handling of environmental and/or social risks. The evaluation of these risks is incorporated into the group’s overall risk strategy and management as part of the management of reputational risk.
Reputational risk is the danger of a loss of confidence or reputation for Commerzbank among its stakeholders or the harming of its image as a result of negative events in the course of its business activities. Stakeholders comprise members of the general public, the media, employees and customers, rating agencies, shareholders, and business partners.
The Reputational Risk Management department uses a qualitative approach when assessing and addressing reputational risks, and to this end cooperates closely with other relevant units. Transactions and business relationships in which aspects of sustainability play a material role are extensively researched, analysed and subjected to comprehensive evaluation. This assessment can lead to the rejection of a transaction or termination of a business relationship.
Emerging sensitive issues, particularly environmental and social topics and risks, are continuously reviewed and updated by the Reputational Risk Management department as required. Additionally, the department is responsible for raising awareness of reputational risks and supports the relevant units of the bank in the timely identification of fundamental risks.
Sensitive areas that are subjected to regular and thorough analysis by Reputational Risk Management, for example, include defence business or business involving energy production or the mining of commodities. Commerzbank's stance on these issues is reflected in positions and guidelines that are binding for all employees. Further information on all positions and guidelines and regarding the assessment process can be found within our ESG Framework in the chapter “General Finance”. Here, we also describe our exclusionary and evaluation criteria.