Climate Risk

Climate-Related Risk

We consider climate risk an amplifier of existing risk types, and consider its impact within our overarching risk management framework.

Climate-related risks are treated as risk drivers that are embedded in PNC’s Risk  Taxonomy and aligned with traditional categories such as credit, market, liquidity and reputational risk. We consider the potential physical and transition risk impacts on PNC, including collateral value loss, geographic credit concentrations in areas  exposed to natural disasters, customer preference shift, technology improvements and regulatory change, and the potential for increased operational losses from acute and chronic weather events.

We consider climate risk an amplifier of existing risk types, not as a new risk type. As such, we consider the impact of climate-related risks within our overarching strategic vision to set concrete, incremental and achievable goals. This is done while remaining responsive to forward-looking external factors such as future regulatory guidance; competing demands from governments, investors and public policy organizations; evolving best practices for incorporating climate into our ERM Framework; and assessing the carbon intensity of our portfolio in ways that support sound decision-making.  

The Climate Risk Working Group includes members across lines of business,  and provides input into the tactical integration of climate-related risks into our Enterprise Risk Management (ERM) Framework. The Climate Risk Working Group provides a forum for the discussion of enterprise-wide activities to identify, monitor, manage and report on climate-related risks and concerns.

The Enterprise Risk Management Committee (ERMC) oversees the first and second lines of defense risk committees, including climate related risks owned by the business lines. The Independent Risk Management (IRM) Climate Risk Working Group supports the management-level committees. Members are accountable for driving the incorporation of climate risk within their individual risk areas. It includes senior risk leaders across IRM with the purpose to support the Climate Risk Working Group objectives.