A clearer decision starts here.

Guidance 4a: Rapid climate risk screening matrix (first-pass) Examples of how responses translate Primary funnel for climate risk Example (sub)questions in this Type of response expected into Red/Amber/Green flags screening category (automated if possible) 1. What is the company’s core business ▪ If the primary location is in a known hazard Core business context activity? risk zone → Red (depending on sector i. Dropdown – sector classification Understanding what the client does and where 2. What is the primary location of the sensitivity to hazard) ii. Dropdown – city, county, province, state it operates company’s main operations (ideally at ▪ If business activity is in known high-emitting asset-level)? sector → Red (depends on severity level) * FIs can use public resources such as ThinkHazard LEGEND and PACTA sectors to shortlist critical hazards and transition-relevant sectors for rapid screening. Green • No foreseeable risk or good level of awareness/mitigation already in place • The transaction can proceed with standard processing Red • Potential material risk present 1. If client scores Green, proceed with normal • Requires clarification via selective due diligence credit cycle activities. • 2LoD to be alerted 2. If client scores Red in any field, proceed to Unknown questions in Tool 6b. • Responses should default to Red to avoid false negatives

Guidance 4b: Rapid climate risk screening matrix (second -pass) Categorical data gathering for Examples of how responses translate into Example (sub)questions in this category Type of response expected prospective clients flagged Red Red/Green flags (automated if possible) 1. Has the company’s location experienced any i. MCQ – yes / no / unknown ▪ If ‘yes’ to recent disruptions from extreme disruptions from extreme weather in the past ii. MCQ – yes / no / unknown weather → Red five years? iii. MCQ – yes / no / unknown ▪ If ‘unknown’ but the asset is in a known high-risk Physical risk awareness 2. Are any core assets located near rivers, coasts, area → Red Establish whether the client has already experienced wildland or steep terrain? physical risk impacts 3. Does the company have basic insurance for weather-related damages? 1. Does the company operate in a sector that i. MCQ – yes / no / unknown (with sector-level ▪ If sector is on ‘transition risk watchlist’ → Red might be impacted by climate policies? guidance provided for front-line lending officer) ▪ If ‘unknown’ on policy awareness for a known 2. Is the company’s main product/service highly ii. MCQ – yes / no / unknown high-risk sector → Red Transition readiness energy/emission-intensive? iii. MCQ – yes / no / unknown Establish sector and business model-specific 3. Is the company aware of any planned local or transition risk exposure international regulations that might impact their business model? 1. Does the company consider climate change a i. MCQ – yes / no / unknown ▪ If ‘no’ to all questions but positive for business risk? ii. MCQ – yes / no / unknown physical/transition risks → Red 2. Is someone at the company responsible for iii. MCQ – yes / no / unknown ▪ If ‘yes’ for basic adaptation efforts → Green Governance & strategy overseeing climate/environmental issues? Establish client level of awareness and willingness to 3. Has the company taken any steps to adapt to adapt or reduce its climate impacts? 1. Does the company track losses or disruptions i. MCQ – yes / no / unknown ▪ If ‘no’ or ‘unknown’ but working in a known high- caused by extreme weather events? ii. MCQ – yes / no / unknown risk sector → Red 2. Are climate risks discussed in regular business ▪ If ‘yes’ with supporting documentation → Green Risk management planning or risk management meetings? Establish level of operationalisation of climate risk