Risk Management
How Commerzbank manages Environmental Risk
Managing risks holistically
The task of risk management is to protect the bank's equity and to keep liquidity risks manageable at all times. In this context, environmental risk is also an essential part of risk management.
The Bank considers Environmental Risk (Climate and Biodiversity Risks) to be a horizontal risk type. This means that they influence conventional risk types, such as credit risk.
Environmental risk is steered according to the “Three Lines of Defense” concept. For Environmental Risk ("E"), we have anchored the 2nd line of defence overview function in the risk control function. It is operationalised via the Environmental Risk Control line function. Operational risk control remains the responsibility of the risk type managers concerned.
Measuring climate and biodiversity risks
Within the risk inventory, we conduct a comprehensive and cross-risk-type materiality analysis for Environmental risks on a yearly basis.
This is in line with Commerzbank's consistent strategic orientation towards "Net Zero". And it is in line with the high supervisory focus on Environmental Risk.
For the risk types materially affected by environmental risks, we ensure ICAAP consideration within the overall risk strategy. These include credit risk, market risk, operational risk including compliance risk and cyber risk, as well as business risk and reputational risk. More detailed information on the methodology and results of the materiality analysis can be found in the non-financial report.
Individual risk analysis at customer level
, Climate taken into account when granting loansWe are consistently developing our processes and methods for managing the effects of climate risks in our lending business. The credit decision for companies and institutions also includes the impact of climate risks and resilience to them. This is done within the individual risk assessment, insofar as they are relevant for the decision.