Change location

You are about to change the origin location from where you are visiting Credit-suisse.com.

*The location of origin is defined in your browser settings and may not be identical with your citizenship and/or your domicile.

Risk management. Sustainable and responsible.

To achieve long-term success, it is essential that we pursue a responsible approach to business. That is why sustainability issues are an integral part of our risk review process.

 

We con­sider it vital to op­er­ate re­spons­ibly and demon­strate a high de­gree of risk aware­ness in all our busi­ness activ­it­ies. The ap­pro­pri­ate con­sid­er­a­tion of en­vir­on­mental and so­cial as­pects is there­fore an in­teg­ral part of our in­ternal risk as­sess­ment processes.

How risks are assessed

Prudent risk-taking in line with our strategic priorities is fundamental to our business. Credit Suisse uses a wide range of risk management practices to
address the variety of risks that could arise from our business activities. Reputational risk is among the key risk types considered in that process. Potential reputational risks may arise from various sources, including, but not limited to, the nature or purpose of a proposed transaction or service, the identity or activities of a potential client, the regulatory or political context in which the business will be transacted, and any potentially controversial environmental or social impacts of a transaction. Reputational risk potentially arising from proposed business transactions and client activity is assessed in the Reputational Risk Review Process.

In line with the expectations expressed in the OECD Guidelines for Multinational Enterprises, environmental and social risks are some of the aspects considered in that process. For example, companies operating in sensitive industries frequently play a key economic role in the global supply of energy and commodities. They may also be a major employer in economically weak regions. At the same time, we recognize that the activities of these companies can, in some cases, have a significant impact on the climate, biodiversity, water resources or local communities. To assess environmental and social risks, our internal specialist unit, Sustainability Affairs, evaluates whether the client's activities are consistent with the relevant industry standards and whether the transaction is compatible with Credit Suisse's policies and guidelines for sensitive sectors.

Based on the outcome of this analysis, Sustainability Affairs submits its findings to a Reputational Risk Approver who is a senior manager independent from the area of business in question, or to the respective Reputational Risk Committees. They have the authority to approve, reject or impose conditions on our participation in a transaction or the establishment of a client relationship. In cases of particularly complex or cross-divisional transactions, the decision may be referred to the Position & Client Risk (PCR) cycle of the Capital Allocation & Risk Management Committee (CARMC). The PCR cycle of CARMC, chaired by the Group's Chief Risk Officer, is the most senior governing body responsible for the oversight and active discussion of reputational risks and sustainability issues (including climate change).

 

Sector policies and guidelines

Certain industries are particularly sensitive from a social or environmental perspective. They include oil and gas, mining, power generation, and forestry and agribusiness, which covers pulp and paper as well as palm oil production. To assess potential transactions with clients in these industries, we have defined specific global policies and guidelines, taking account of standards developed by international organizations such as the UN and the World Bank.

These sector policies and guidelines cover topics including:

  • Compliance with industry-specific, internationally recognized standards on the environment and human rights
  • Measures to assess and reduce the environmental impact of operations
  • The protection of the health and safety of company employees and surrounding communities
  • Respect for the human rights of the local population

Our policies also set out activities and business practices that Credit Suisse will not finance. For example, we announced in 2019 that we would no longer provide any form of financing specifically related to the development of new coal-fired power plants. This restriction was introduced in addition to the bank’s existing policy of not providing any form of financing that is specifically related to the development of new greenfield thermal coal mines. Our policies also include restrictions of financing activities related to High Conservation Value Forests as well as provisions for the particular scrutiny of peatland operations and the prohibition of financial services for operations in protected areas such as UNESCO World Heritage sites. Finally, our policies also state that Credit Suisse will not finance or advise companies against which there is credible evidence of involvement in grave human rights abuses.

Our sector policies and guidelines are regularly reviewed and updated to reflect the latest developments and challenges. A summary of our sector policies and guidelines is available here.

Further documents guiding our approach to environmental and social issues are our Statement on Climate Change our Statement on Human Rights and our Supplier Code of Conduct. In addition, in 2019, we introduced a Group-wide Climate Risk Strategy program, integrating our existing efforts (including also our TCFD recommendations adoption program) as well as defining new measures.

 

Equator Principles

Credit Suisse has also adopted the Equator Principles – a voluntary risk management framework applied by around 100 financial institutions for determining, assessing and managing environmental and social risk for specific types of finance for industrial and infrastructure projects. The principles set out specific due diligence requirements for certain areas of business, based on environmental and social standards defined by the International Finance Corporation (IFC).

More information on our Equator Principles membership is available on our Sustainability networks and initiatives website. Comprehensive disclosure in accordance with the EP3 standard for the financial year 2019 can be found here.