BPI Environmental Risk Assessment

Environmental Risk Assessment (ERA) is a pioneer mitigation tool to assess physical climate and environmental risk exposures, introduced by BPI to the Philippine banking industry, amidst the Philippines' location in the Typhoon Belt and the Pacific Ring of Fire. Through DOST-PHIVOLCS' HazardHunterPH system, the Bank was able to assess risk exposure of client addresses and collaterals, as well as employee residences, Bank branches, ATMs, and CAMs vis-a-vis environmental hazards:

Climate Risks (such as flooding, typhoons/severe winds, storm surge, and rain-induced landslides)
Other Environmental Risks (such as earthquakes and volcanic eruptions)

ERA aims to further detail, measure, and mitigate physical risks incurred by the Bank in its lending activities & risks incurred in the conduct of its daily operations. ERA’s integration into BPI’s processes allows the Bank to assess its specific or aggregate environmental risk exposures by industry, by city/barangay, or by type of asset which helps prevent potential losses not just in terms of income, but more importantly in terms of human lives.

Mitigated Risk

Solutions

Credit Risk

1. Integration of environmental risk scores derived from mapping of client assets, collaterals, and locations vis-à-vis natural hazards, into the credit review process of loans

2.Advisory on risk-mitigating measures

Project relocation
Engineering interventions aimed at damage prevention, resilience, and compliance
Insurance coverage

3. Macro-level loan portfolio management using data on aggregate asset risk exposures by type, risk-level, peso value, and location by city or barangay

Operational Risk

1. Awareness of employees on the risk exposures of their residences vis-à-vis natural hazards

2. Integration of risk data in the mapping of BPI’s corporate offices, branches, and machines (eg. ATMs, CAMs) vis-à-vis natural hazard exposures of the Bank’s processes for real estate acquisition and leasing

3. Application of risk-mitigating measures

Relocation
Engineering interventions aimed at damage prevention, resilience, and compliance
Insurance coverage

4. Business Continuity Plans ensuring uninterrupted, resilient, and reliable operations amidst natural disasters

a. Focus areas

Employee health and safety
Asset protection
Timely restoration of building, equipment, and technology

b. Additional preventive measures

Regular evacuation drills
Hazard protection guidelines
Hazard awareness seminars

Reliable and Innovative Tool

BPI’s Environmental Risk Assessment utilizes the Hazard Hunter PH system of DOST-PHIVOLCS. Accessible for free via online platforms, Hazard Hunter PH is the Philippine government’s primary risk assessment tool for natural hazards.

Visit Access Hazard Hunter's website here.

First in the Philippine Banking Industry

Environmental Risk Assessment is a first in the Philippine banking industry, with a history dating back as early as 2010.

Year	Landmark
2010 to 2014	Assessment of climate-environmental, socio-economic, and adaptive capacity vulnerabilities of 16 select cities, which enabled community-level interventions through the “Business Risk Assessment and the Management of Climate Change Impacts” 16-city study, which prepared select Philippine cities for escalating climate change effects (conducted by BPI Foundation, the Bank’s corporate social responsibility arm, in partnership with the World Wide Fund for Nature or WWF)
2019	Expansion of assessed list of cities for the identification of the following, as triggered by a regrouping between BPI and WWF Site-specific environmental and climate risk exposures Sustainable development financing opportunities
2020	Hazard Hunter first adopted by BPI to assess Bank assets, collaterals, and locations for seismic, hydro-meteorologic, and volcanic hazards
2021	Hazard Hunter officially integrated to BPI’s official loan evaluation and approval processes