Environmental & Social Risk Management

PNC recognizes that environmental issues, including climate change, may impact our business, our clients and the communities in which we operate.

We have adopted a framework to assess, mitigate and manage related risks at both the portfolio and individual transaction levels. This framework includes robust and regular portfolio analyses, stress-testing, and the establishment of policies and procedures governing our underwriting and portfolio management practices.

Broadly, our environmental risk management (ESRM) framework reflects our risk appetite as well as our balanced approach to serving our customers, shareholders, employees and communities.

This framework is regularly reviewed by senior management and, consistent with our broader Corporate Social Responsibility governance process, overseen by the firm’s Board of Directors. In addition, we remain highly engaged with key external stakeholders to ensure that our practices align with our commitment to corporate sustainability. PNC’s Manager of Corporate Sustainability helps coordinate and oversee Corporate and Institutional Banking's environmental and social risk management efforts. This role facilitates regular communication between business partners as it pertains to materiality, renewable energy financing, environmental assessments and socially responsible investing.

To learn more about our ESRM framework, oversight and execution: Download Full Report

Portfolio Analysis

PNC regularly reviews its exposure to various industries across the wholesale credit portfolio. These reviews provide PNC with a better understanding of the current and emerging risks, and help inform the strategy for managing future transactions to maintain our risk appetite. Corporate Banking also incorporates an environmental assessment into its risk-based, customer-level portfolio reviews.

These quarterly reviews assess customer relationships across Corporate Banking and enhance our understanding of environmental risks across our existing portfolio.

Environmental Stress Test

As part of its portfolio management practice, PNC regularly conducts stress tests to better understand how certain environmental risks could impact its wholesale credit portfolio.

This process involves teams of business and risk employees who first research how the sector being reviewed could be impacted and then consider the risks, such as carbon emission regulations and knock-on impacts, directly and indirectly impacting that sector. By using our regulatory stress-testing framework and models, and applying various downgrade scenarios that “shock” the sector, we are able to estimate the impact on a specific customer portfolio, including the probability of default and loss. Furthermore, we run these shocked portfolios through our risk migration matrices to better understand the cumulative impact on our portfolio over a certain time period. PNC’s stress-test results are presented to PNC’s firm-wide Credit Portfolio Strategy Committee, which manages the overall risk-and-return balance of PNC’s loan portfolio.

While our 2015 environmental risk review focused on the U.S. EPA’s Clean Power Plan, our 2016 stress test focused on carbon transition risk in the transportation sector, specifically automobile manufacturers and airlines. While the stress test results did not indicate material near-term risks, they did drive discussion of the potential impacts of electric vehicles, as well as a lower demand for oil.

Transaction Review

Environmental due diligence is performed by and on behalf of PNC to determine whether issues exist that could impact a customer’s assets, operations or financial condition. Environmental issues may create risks for PNC by directly impacting collateral provided as security for an obligation or by reducing the cash flow needed to address this obligation.

Prescreen Process

Corporate Banking incorporates an early-stage environmental risk assessment into the due diligence it conducts across all industries. This environmental prescreening process for prospective clients occurs prior to PNC’s presentation of a term sheet. As part of our management procedures, we communicate any changes to our policies and procedures to Corporate Banking employees through our Commercial Credit Policy & Procedure Updates newsletter.


Corporate Banking continued its focus on environmental risk, including maintaining credit underwriting procedures to codify supplemental due diligence criteria requirements for companies in the following industries: Coal Mining, Electric Power Generation Utilities, and Oil and Gas. This enhanced due diligence, which must be completed as part of the underwriting process, focuses on the borrower's:

  • Past and present environmental compliance with laws and regulations
  • Financial resources, including liquidity and access to public debt and equity markets, needed to adhere to environmental mandates
  • Internal policies, procedures and resources related to environmental risk management

...and the transaction's compliance with PNC’s credit and underwriting policies related to environmental risk.

As part of our commitment to increasing transparency, we now report on the frequency with which we conduct this later-stage enhanced due diligence for potential new clients.

In 2016, PNC conducted enhanced due diligence on 11 new clients, who were subject to our supplemental due diligence criteria, and ultimately approved nine for financing. The limited size of this population reflects our risk appetite across these industries, which has reduced the number of potential clients we evaluate and ultimately underwrite.

In addition to reviewing new clients, we conduct annual reviews for existing clients in these industries that incorporate similar environmental assessments. These reviews facilitate greater client engagement and allow us to identify potential concerns and help clients better mitigate risks.

Coal Mining & Coal-Fired Power Plants

PNC's lending to coal mining companies has declined significantly over the past several years and we are committed to further reductions moving forward.

In addition, PNC maintains extensive due diligence policies related to energy companies and now prohibits new lending to coal producers with anything more than a de minimis exposure to mountaintop removal (MTR) mining. PNC also prohibits construction financing of all single-site coal-fired power plants.

Human Rights Due Diligence

At PNC, we aim to do business with clients that respect human rights.

In mid-2016, we introduced a human rights due diligence process focused on select industries with operations that can significantly impact local communities and their residents. The procedure requires that we complete this due diligence for each new borrower and annually for each existing borrower that qualifies. This new process, which helps us assess our clients’ commitment and capability to support human rights, further aligns PNC’s lending practices with the company’s commitment to corporate social responsibility.

Real Estate Secured Transactions

The owner of real estate may have direct liability for past and/or present environmental issues associated with the real estate. PNC, if we hold a security interest in the real estate, could be directly impacted by these issues. Environmental issues may erode collateral value, drain cash flow or alter construction plans and timeframes. As such, PNC reviews environmental due diligence reports required by bank procedures and supplies sound recommendations to secured lenders based upon specific business transaction needs.

Learn more about this program from our Head of Corporate & Institutional Banking, Mike Lyons »

Together, We Prosper
2016 Corporate Social Responsibility

Summary of Our Efforts »
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Recognized for our Efforts

Corporate Awards & Recognition

High-Performance Franchise

  • Most Admired Companies (superregional banks), Fortune (2017)
  • Fortune 200 company (2016)

Diversity & Inclusion

  • "Best-of-the-Best" Top 30 Corporations for Inclusion, National Gay & Lesbian Chamber of Commerce/National Business Inclusion Consortium (2016)
  • One of the Best Places to Work for LGBT Equality, Human Rights Campaign (2016)
  • Top 50 Companies for Executive Women, National Association for Female Executives (2016)
  • Diversity Leader Award, Profiles in Diversity Journal (2015)
  • Top 10 Regional Companies for Diversity, DiversityInc (2016)
  • Top 25 U.S. ERG & Diversity Councils, Association of Diversity Councils (2015)
  • Top 50 Employers, CAREERS & disABLED (2015)

Employer of Choice

  • Great Workplace Award for Employee Engagement, Gallup (2016)
  • 100 Best Companies for Working Mothers, Working Mother (2016)
  • 2020 Women on Boards Winning "W" Company, 2020 Women on Boards (2015)
  • Best Employers for Healthy Lifestyles®, National Business Group on Health® (2015)

Military & Veteran Support

  • Top 100 Military-Friendly Companies, G.I. Jobs (2016)
  • Top Veteran-Friendly Companies, U.S. Veterans (2016)
  • Top 25 Military-Friendly Supplier Diversity Programs, National Association for Veteran-Owned Businesses (2016)


  • Community Reinvestment Award, Excellence in Cross-Sector Community & Collaboration Development for PNC’s Grow Up Great Early Education Initiative (2014)
  • U.S. Chamber of Commerce Foundation Corporate Citizenship Awards, Best Commitment to Education (2014)
  • Outstanding CRA Rating


  • Net-Zero Energy Certification (PNC's net-zero energy branch in Fort Lauderdale, Fla.), International Living Future Institute (2016)
  • Game Changer Award for Project Finance Innovation, Canadian Solar Industries Association (2016)
  • Leader in Climate Disclosure, Carbon Disclosure Project (2015)