Climate Change Data

Environmental Metrics

ESG Focus Areas

• Enabling colleagues to thrive
• Enhancing financial wellbeing
• Supporting the green transition

Environmental Achievements

• 84% reduction in carbon emissions intensity within our own operations on 2011 baseline
• €3.8bn Green mortgages drawn down since 2019
• First Irish bank to set scientifically-validated greenhouse gas emission reduction targets (validated by SBTi)

Social Achievements

• 68% employee engagement score (up 5 points since 2021)
• 60:40 male/female appointments to management and leadership positions
• Over 6,300 vulnerable customers supported by Vulnerable Customer Unit

Governance Achievements

• Establishment of a Board-level Group Sustainability Committee
• Appointment of a Chief Sustainability Officer
• Publication of inaugural annual Sustainability Report

Climate Goals & Targets

Environmental Challenges

• Extreme weather events due to climate change
• Social inequality and lack of financial wellbeing and inclusion
• Elevated inflation and cost of living crisis

Mitigation Strategies

• Science-based targets for emission reductions (consistent with Paris Agreement goals)
• Increased sustainable lending
• Financial wellbeing initiatives (e.g., Mi365, cost of living hub)

Supply Chain Management

Responsible Procurement

• Code of Supplier Responsibility

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of extreme weather events
• Changes in rain patterns
• Rising mean temperatures
• Rising sea levels

Transition Risks

• Increased pricing of carbon emissions
• Enhanced emissions-reporting obligations
• Regulation of existing products and services
• Exposure to climate-related litigation
• Substitution of existing products and services with lower emissions options
• Costs to transition to lower emissions technology
• Changing customer behaviour

Opportunities

• Growth in green mortgages and home improvement loans
• Increased demand for green business loans
• Opportunities in renewable energy financing
• ESG advisory services

Reporting Standards

Frameworks Used: GRI, TCFD, EU Taxonomy, EBA Sustainable Finance Pillar 3 ESG Disclosures, SFDR, UNEP FI Principles for Responsible Banking, UN Principles for Responsible Investment, UN Principles for Responsible Banking ‘Commitment to Financial Health and Inclusion’, CDP, UN Sustainable Development Goals (SDGs), SBTi, PCAF

Certifications: ISO 14001, ISO 50001, ISO 45001

Third-party Assurance: KPMG (limited assurance on selected KPIs)

Sustainable Products & Innovation

• Green mortgages
• Green home improvement loan
• Green motor loan
• Green business loans
• Sustainability-linked loans
• Woodland Nature Credit
• Green bonds

Awards & Recognition

• Mortgage lenders excellence awards for best service and best products at The Brokers Ireland Awards 2022
• Best Use of Investment Strategy’ for the New Ireland Master Trust
• Marketing Campaign of the Year’ for Pensions Odyssey series of pension thought leadership webinars at the 2022 Irish Pension Awards
• Contact Centre of the Year 2022 award for the 4th year in a row at Customer Contact Management Association
• Five stars at the Financial Adviser Service Awards
• Best Loan Lender at the Mortgage Strategy Awards
• Intermediary Partner of the Year at the L&G Mortgage Club Awards
• Best Finance Product at Motor Finance Europe Awards
• Best Independent Lender (Bank Owned) and Car Finance Personality of the Year at the Annual Car Finance awards
• two Gold Ribbons for customer experience at the UK Fairer Finance Spring Awards
• Highly Commended in the Best Leasing Company (under 25,000 vehicles) category at the Business Car Awards
• Customer Service Team Award at the FN50 Customer Service Awards
• 9 awards in the Finance Dublin 2022 Deals of the Year
• CXI Impact in Financial Services Award at the Irish Customer Experience Impact Awards

Environmental Metrics

ESG Focus Areas

• Supporting the Green Transition
• Enhancing Financial Wellbeing
• Enabling Colleagues to Thrive

Environmental Achievements

• 42% Reduction in Scope 1 & 2 carbon emissions (Dec 2023 v 2020 baseline)
• >85% of our 2030 emissions reduction targets across our own operations have been achieved and c.90% of our 2025 reduction target achieved for long-term corporate lending
• €2.25bn issued in bonds through Green Bond Framework. Total issuance to date c. €4.75 bn
• 1.8 million new native trees planted in Ireland through Woodland Nature Credit

Social Achievements

• Remained #1 bank for Financial Wellbeing in Ireland
• 46% female appointments to management & leadership positions
• Over 17,700 adults supported through financial education initiatives throughout 2023
• Over 100,000 students took part in our Financial Literacy Programmes for the 2022/2023 school year
• 80% colleague score for culture embeddedness (+5 points vs global financial services benchmark)
• 73% colleague engagement index (+5 points since 2022)
• Awarded Gold in diversity EDI Mark
• €500,000 Community Fund was distributed to 20 organisations

Governance Achievements

• Board Sustainability Committee established
• Appointed Chief Sustainability and Investor Relations Officer
• +2 Improved ratings from two ESG rating agencies in 2023
• Green bond Framework 2024 version published
• ‘Sustainable Company’ Embedded as a core Group strategic pillar

Climate Goals & Targets

Environmental Challenges

• Increased cost associated with physical and transition risks may impact financial soundness of households and businesses
• Physical risks could impact continuity of the Group’s operations or operations of its material suppliers, resulting in supply chain and customer disruption
• Franchise impacts if strategic commitments are not achieved by the Group and the Group’s product offering does not adapt to changing market dynamics
• Potential impact on the Group if failures in product design, market practice or customer engagement lead to greenwashing claims or poor customer outcomes
• Profitability could be impacted due to regulatory sanctions imposed because of a failure to implement changes in climate regulation in a timely manner or if potential physical risks impact our services to customers
• Risk of increased capital depletion from the impact of climate risks across the Group’s other principal risks

Mitigation Strategies

• Embedded Integration of climate considerations into key risk management practices
• ESG risks form part of credit assessment
• Limits on property energy ratings, requirements for flood insurance
• Quantitative risk metrics embedded in procedures for key portfolios in scope for SBTs
• Climate risk scenario analysis for credit risk integrated into the Group ICAAP
• Climate risk scenario analysis for operational risk is part of Group ICAAP
• Business continuity mission critical services scenario analysis: climate-related scenario testing carried out
• Third parties and outsourcing: ESG (including climate change) is part of supplier due diligence assessment
• Data risk: Standard group control framework applies to climate data.
• Model Risk: Climate risk factors to be considered in models
• ESG considerations incorporated in new product approvals and ongoing product lifecycle reviews to mitigate potential claims of “Greenwashing”
• All colleague training on climate concepts and processes, as well as role-specific training on sustainable finance and ESG risk management launched in 2023.

Supply Chain Management

Responsible Procurement

• Group code of supplier responsibility
• ESG profiling of suppliers during due diligence

Climate-Related Risks & Opportunities

Physical Risks

• Flood
• Heat stress
• Hurricanes
• Sea level risk
• Wildfire
• Water stress

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Growth in financing for EVs and renewable energy projects

Reporting Standards

Frameworks Used: TCFD, EU Taxonomy, UNPRB, UNPRI, SBTi, CSRD, NFRD, EU SFDR

Certifications: ISO 50001, ISO 14001

Third-party Assurance: KPMG

Sustainable Products & Innovation

• Green Mortgage
• EcoSaver Mortgage
• Green Home Improvement Loan
• Green Motor Loan
• Motor Financing for EVs
• Green Capex Loan
• Sustainability Linked Loans
• CRE Green Loan
• Project Finance
• Woodland Nature Credit
• Enviroflex – Sustainability-Linked Agri Lending
• Green Business Loan
• SBCI Energy Efficiency Scheme

Awards & Recognition

• Gold in diversity EDI Mark

Environmental Metrics

ESG Focus Areas

• Sustainable lending
• Green mortgages
• Agri-business green lending
• Fraud prevention
• Housing development funding (including social and affordable housing)

Environmental Achievements

• Increased sustainable lending by €0.7 billion (c.6%) to €11.8 billion, with a €0.4 billion increase in green mortgages and a €0.3 billion increase in other ESG lending.
• Launched a new innovative ‘EcoSaver Mortgage’ product supporting customers to improve the energy efficiency of their homes.
• Further expansion of the Enviroflex agri-business green loan, supporting sustainable farming.

Social Achievements

• Increased funding for housing development to €2.5 billion, more than doubling funding for social and affordable housing to €1 billion.
• Commitment of €50 million to fraud prevention and protection.
• Improved customer satisfaction.

Governance Achievements

• Enhanced ESG disclosures with the release of the 2023 Sustainability Report.

Climate Goals & Targets

Environmental Challenges

• Lower deposit volumes and modestly higher deposit funding costs.
• Reduction in UK personal lending (which the bank is exiting).

Mitigation Strategies

• Continued strong commercial pricing discipline.
• Tight control over cost base while absorbing inflation and investing in strategic growth and simplification opportunities.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• EcoSaver Mortgage