###### Transition Governance model
OSB Group adopts a thorough approach to risk management ensuring the effective identification, assessment, monitoring and management of all risks as defined by the Group's Enterprise Risk Management Framework (ERMF).
Climate risk is classified as a cross cutting enterprise risk within the ERMF. The Climate Risk Management Framework is a sub-framework which supports the Group with embedding the principles and approach outlined within the ERMF.
**Remuneration and**
**People Committee**
- Incentives and
remuneration
|Col1|Col2|
|---|---|
|ation and Audit Chief Ex ommittee Committee Off Group Risk Committee Group E Com ESG Te Com Climate T||
- Assurance
- Verification
- Audit
###### Group's Board
**Group Risk**
**Committee**
- Risk appetite
- Risk monitoring
- Provisioning
- Capital and liquidity
management
**Chief Executive**
**Officer**
**Group Executive**
**Committee**
**ESG Technical**
**Committee**
**Climate Transition**
**Working Group**
- Transition plan
development
- Review and approval
- Monitoring
implementation
--NEW-PAGE--
###### Accountability and decision-making
###### Role of the Board
The Board review the climate strategy and
ensure that it is implemented robustly,
receiving regular updates. The Board agree
the Group's climate-related risk appetite
and obtain assurance (for example, from
the Internal Audit function) that the risks are
effectively managed and controlled.
###### Role of Group Risk Committee
The Committee's primary responsibilities in
respect to climate risk management are:
- Review climate risk progress reports
- Monitor performance against risk appetite
- Monitor management actions when
formally defined
- Assessment of the Group's climate risk
disclosures
The Board delegates responsibility to the
Group Risk Committee for oversight of
the Group's risk appetite, risk monitoring,
provisioning and capital and liquidity
management. The primary objectives of the
Group's Risk Committee are therefore to
provide oversight and advice to the Board
on current risk exposures and future risk
strategy and assist the Board in fostering
a culture within the Group that emphasises
and demonstrates the benefits of a riskbased approach to internal control and
management of the Group.
###### Role of the Group Executive Committee
The Group Executive Committee is the senior
management committee responsible for
climate risk.
The Group Executive Committee oversees
the strategic direction of the Group's
approach to climate risk and delegates the
responsibility of day-to-day management of
climate risk to the ESG Technical Committee.
###### Role of ESG Technical Committee
The ESG Technical Committee is the
management committee responsible for
climate risk, reporting to the Group Executive
Committee. The objectives of the committee
include:
- To act as the key cross functional forum
for driving climate risk governance and
climate risk management
- Monitor and report the performance of the
Group's exposures to both physical and
transitional climate risks
- Identify and act on opportunities for the
enhancement of the Group's regulatory
response to the effective management
and reporting of climate-related risks
###### Role of the Climate Transition Working Group
The Climate Transition Working Group
(CTWG) was established as a subcommittee of the ESG Technical Committee
focusing on climate transition planning
(the Group's strategy to pivot its existing
assets, operations and business model
towards a trajectory aligned with climate
science recommendations and a low carbon
economy), implementation and disclosure.
The objectives of the CTWG are:
- develop the Group's Climate Transition
Plan, its implementation and monitoring
and review processes
- oversee the coordination of the Group's
climate related disclosures including but
not limited to Task Force on Climaterelated Financial Disclosures (TCFD) and
Climate Transition Plan disclosures
- provide regular updates to the ESG
Technical Committee, the Group Executive
Committee and the Board on progress of
the above
- advise ESG Technical Committee on the
completeness and comparability of the
Group's climate transition plan in relation
to relevant frameworks, standards and
peer disclosures
###### Internal Audit
Climate risk and wider ESG and sustainability
matters are regularly considered by the
Group's Internal Audit function, whose role
is to independently assess the adequacy
and effectiveness of governance, risk
management and internal controls performed
by the first and second lines of defence
within the Group. Specific engagements are
identified in the annual Internal Audit Plan.
In 2023 relevant internal audits included
reviews of the Group's commitment to the
Net-Zero Banking Alliance and climate risk
management in accordance with SS3/19
and associated regulatory guidance.
###### Remuneration
The Group introduced ESG metrics to the
Group's business balanced scorecard in
2022 within a weighted ESG quadrant
that included a target for GHG emissions
(Scope 1 and 2 absolute reduction). Further
information can be found in the Director's
Remuneration Report within the 2023 Annual
Report and Accounts. From 2024 onwards, a
financed emissions reduction metric, aligned
to our interim target has been included in
Performance Share Plan criteria.