Annex 1 Template for Climate-Related Financial Disclosures

Annex 1: Template for climate-related financial disclosures

1. Governance
   1.1 Oversight by the Board of Directors
   Disclosure Requirement References
   Disclosure of how responsibilities relating to climate-related risks and opportunities1 are reflected in the terms of reference, objectives, role descriptions and other relevant policies in force within the Board. IFRS S2 6(a)(i) BCBS Framework 1(a) Disclosure of the extent to which the Board possesses or has developed the skills and competencies required for oversight. IFRS S2 6(a)(ii) CBJ 23/1/3551 (4)(a) Disclosure of how and how frequently the Board is informed of climate-related issues. IFRS S2 6(a)(iii) Disclosure of how the Board takes climate-related risks and opportunities into account when overseeing strategy, major transactions and risk management, and how it adopts policies and procedures within the bank's risk management strategy to identify, assess and manage climate-related financial risks, and how these policies are reviewed and updated annually or as necessary in response to emerging risks and regulatory requirements. IFRS S2 6(a)(iv) CBJ 23/1/3551 (4)(b) Disclosure of how the Board of Directors oversees the setting of targets and monitors progress, including how performance metrics are incorporated into the bank's compensation policies. IFRS S2 6(a)(v) Indicating whether a dedicated unit, department or working group has been established within the bank’s risk management function to manage climate risk (mandatory for banks classified as Domestic Systemically Important Banks (D-SIBs)) and describing its responsibilities and how it fits into the bank’s governance framework. CBJ 23/1/3551 (4)(c)

1 These include, but are not limited to: developing green products; improving efficiency to achieve cost savings; accessing new low-carbon markets (such as renewable energy sources); and enhancing brand reputation through sustainability initiatives.

1.2 Senior Executive Management
Disclosure Requirements References
Disclosure of the role of senior executive management in governance processes, and the controls and procedures used to monitor, manage and oversee climate-related risks and opportunities, including whether responsibility is assigned to a specific position or committee, and how oversight of this role is exercised. IFRS S2 6(b)(i) CBJ 23/1/3551 5(b) Disclosure of how the controls and procedures relating to the oversight of these risks and opportunities are integrated with the bank's other internal functions (e.g. risk, compliance and credit). IFRS S2 6(b)(ii) CBJ 23/1/3551 8(a)(b)
1.3 Capacity Building
Disclosure Requirements References
Describe how the bank builds capacity and provides appropriate training on climate-related issues to board members, senior executive management, the bank’s committees (particularly the Risk Management Committee) and staff at all levels, where necessary, through in-house workshops or external collaboration with specialist organizations. CBJ 23/1/3551 (6)(a)(b)
2. Strategies
2.1 The impact of climate-related risks and opportunities on the bank's business models,
supply chains, financial position, performance and cash flows Disclosure Requirements References The bank must disclose the following in relation to both climate-related risks and opportunities affecting the bank:
Disclosure of how these risks and opportunities reasonably affect the bank's future prospects. IFRS S2 10(a) Identify the “short, medium and long-term” time frames in which these risks and opportunities are expected to arise; and clarify the definitions of these time frames and how they relate to the planning horizons used by the bank for strategic decision-making. IFRS S2 10(c) (d)

Disclosure of the current and anticipated impacts of these risks and opportunities on the bank's business model, supply chain and risk profile. IFRS S2 13(a) 10(d) Disclosure where these risks and opportunities are concentrated within the bank’s business model and supply chain (for example: geographical regions, facilities and asset types). IFRS S2 13(b) BCBS Framework 2(b) Disclosure of the current and anticipated impacts on the bank's financial position, financial performance and cash flows for the reporting period, in the short, medium and long term, and how these factors are taken into account in the bank's financial planning. IFRS S2 15(a)(b) S2 16(a) Disclosure as to whether there is a significant risk that a fundamental adjustment will be made during the preparation of subsequent annual financial reports to the amounts of assets and liabilities stated in the relevant current financial statements. IFRS S2 16(b)
2.1.1 Material opportunities and risks
Risk/Opportunity 1
Risk/Opportunity 2
Risk/Opportunity x
2.1.2 Transformation opportunities and risks
Risk/Opportunity 1
Risk/Opportunity 2
Risk/Opportunity x
2.2 Strategies and decision-making
Disclosure Requirements References
Disclosure of how the bank responds to, or plans to respond to, climate-related risks and opportunities in its strategy and decision￾making, including how the bank plans to achieve any climate-related targets it has set and any targets it is required to meet by law or regulation. IFRS S2 14(a) Disclosure of changes to the bank’s business model and the allocation of resources to address climate-related risks and opportunities (for example: plans to manage or discontinue carbon or energy- or water￾intensive operations; resource allocations resulting from changes in demand or the supply chain; resource allocations arising from business IFRS S2 14(a)(i)

development through capital expenditure or additional expenditure on research and development; and acquisitions or divestments). Disclosure of current and expected direct and indirect mitigation and adaptation efforts. IFRS S2 14(a)(ii) & (iii) Disclosure of any climate transition plan held by the bank, including information on the key assumptions used in developing its transition plan, and the factors on which the bank’s transition plan will be based. IFRS S2 14(a)(iv) Disclosure of how the bank plans to achieve any climate-related targets, including any target relating to the reduction of greenhouse gas emissions. IFRS S2 14(a)(v) Disclosure of how the bank secures resources and its plans for securing resources for the activities described in this section (strategies and decision-making). IFRS S2 14(b) Disclosure of the progress made in implementing the strategy and plans disclosed in previous reporting periods. IFRS S2 14(c) Disclosure of the bank’s expectations regarding any changes to its financial position, performance and cash flows in the short, medium and long term, taking into account its climate strategy (e.g. increased revenue from low-carbon products/services, asset impairment costs from climate events, or adaptation/mitigation expenditure), and investment and divestment plans (e.g. capital expenditure plans, major acquisitions and divestments, joint ventures, business transformation, innovation, new business areas, and asset retirement), including plans to which the bank is not contractually committed, and the planned sources of funding to implement its strategy. IFRS S2 16(c) & (d)
2.3 Scenario analysis2
and resilience to climate risks

2 This includes sensitivity analysis and scenario analysis. Disclosure Requirements References The bank’s disclosure of the method and date on which its climate scenario analysis was carried out. IFRS S2 22(b) Disclosure of the key inputs used in the climate-related scenario analysis conducted by the bank and the sources of those scenarios; and whether the analysis includes a diverse range of climate-related scenarios; linked to transition risks or physical risks; whether the bank has used scenarios consistent with the latest international agreements on climate change; whether the bank’s choice of the scenarios is relevant to assessing its resilience to climate-related changes, developments or uncertainties; It also includes the time horizons and the scope of operations used by the bank in the analysis (for example, the business locations and business units included in the analysis). IFRS S2 22(b)(i)

3. Risk Management
   Disclosure Requirements References
   Disclosure of the relevant processes and policies the bank uses to identify, assess, prioritize and monitor climate-related risks. IFRS S2 25(a) CBJ 23/1/3551 9(a) Disclosure of the inputs and metrics used (e.g. data sources and scope of operations covered). IFRS S2 25(a)(i) Disclosure of whether the bank uses scenario analysis to identify climate-related risks and how it conducts such analysis. IFRS S2 25(a)(ii) Disclosure of how the bank assesses the nature, likelihood and magnitude of the impacts of those risks. IFRS S2 25(a)(iii) Disclosure of whether the bank prioritizes climate-related risks relative to other risks, and how it does so. IFRS S2 25(a)(iv) Disclosure how the bank monitors climate-related risks. IFRS S2 25(a)(v) Disclosure of how the bank incorporates climate related factors into its credit analysis, and the policies used to incorporate these factors. Industry-based Guidance Vol. 16 (1)(2))3( Disclosure of the key assumptions used in the analysis, including those related to the country’s climate policies, macroeconomic trends, and variables at the national or regional level (e.g. local weather patterns, demographics, land use, infrastructure and the availability of natural resources), energy use, and technological developments. IFRS S2 22(b)(ii) Industry-based Guidance on Implementing IFRS S2 Volume 16 (7) Disclosure of the reporting period during which the scenario analysis was carried out. IFRS S2 22(c) The bank’s disclosure of its resilience assessment against climate change as at the date of the report, based on an analysis of climate scenarios. IFRS S2 14(a) The bank’s disclosure of the implications of its assessment of its strategy and business model, including how it is responding to the impacts identified in its climate related scenario analysis. IFRS S2 22(a)(i) Disclosure of the significant uncertainties taken into account in the bank’s assessment of its resilience to climate-related challenges. IFRS S2 22(a)(ii) Disclosure of the bank’s ability to modify or adapt its strategy and business model in response to climate change in the short, medium and long term, including the extent to which the bank’s current financial resources are available and flexible enough to respond to the impacts identified in the climate related scenario analysis, and to address climate-related risks and capitalize on climate-related opportunities; the ability to reallocate, repurpose, upgrade or decommission existing assets; and the impact of the bank’s current and planned investments in climate change mitigation and adaptation. IFRS S2 22(a)(iii) CBJ 23/1/3551 7(a)

The bank must disclose the following in relation to concentration risk:
 Disclosure of significant concentrations of credit exposure to climate-related factors, which may include carbon-related assets and regions experiencing water scarcity.  Disclosure of the potential impacts of exposures to counterparties associated with transition risks or physical risks on the bank’s overall risk profile and financial performance.  Disclose the processes used to identify vulnerable concentrated exposures and assess the likelihood of these risks occurring and their associated impacts (such as qualitative factors, quantitative indicators and other criteria used).  Disclosure of the impact of material climate-related concentration risks on the bank’s strategy and decision-making, including how the bank responds to and mitigates climate￾related concentration risks. Industry-based Guidance Vol. 16 (9) BCBS Framework 3(a) Disclosure of how climate related factors are incorporated into the bank's assessment and how they influence the bank's views on traditional macroeconomic factors (such as economic conditions, central bank monetary policy, industry trends, and geopolitical risks affecting borrowers' creditworthiness), and regarding traditional microeconomic factors (such as supply and demand for products or services that affect borrowers’ financial conditions and operating results), which may affect borrowers’ creditworthiness, and the maturity or duration of the loan, and the expected loss, including the probability of default, exposure at default and loss given default, and the value of collateral provided. Industry-based Guidance on Implementing IFRS S2 Volume 16 (10) Disclosure of any additional quantitative metrics relating to the bank's methodology for integrating climate, environmental, social and corporate governance factors into credit analysis (such as the number of commercial, industrial and project finance assessed in accordance with the Equator Principles (EP III) (or equivalent principles)3 by EP category; and the number of loans for which an environmental or social risk review has been conducted, for example by the Environmental and Social Risk Management (ESRM) team. Industry-based Guidance on Implementing IFRS S2 Volume 16 (11) Disclosure of the processes the bank uses to identify, assess, prioritise and monitor climate-related opportunities, and the extent to which climate related scenario analysis is used to identify these opportunities and how to do so. IFRS S2 25(b) Disclosure of whether the bank has changed the processes it uses compared to the previous reporting period, and how to do so . IFRS S2 25(a)(vi) Disclosure of the extent to which, and the manner in which, the processes of identification, assessment, prioritization and monitoring of climate-related risks and opportunities are integrated into the bank's IFRS S2 25(c)

3 Examples of such principles include the IFC Performance Requirements or the EBRD Performance Requirements.

overall risk management process, and how such risks and opportunities affect that process.
4. Indicators and targets
4.1 Climate-related metrics
Disclosure Requirements References
Disclose of the bank’s total Greenhouse Gas (GHG) emissions during the reporting period, expressed in metric tons of carbon dioxide equivalent, categorized as Scope 1, 2 and 3 GHG emissions, in accordance with the Greenhouse Gas Protocol: Corporate Accounting and Reporting Standard (2004) or similar methodologies. IFRS S2 29(a)(i) Disclose the measurement methodology, inputs and assumptions used to calculate the bank’s greenhouse gas emissions, explain the reasons for its selection, and clarify any changes made during the reporting period, providing justifications for those changes. IFRS S2 29(a)(iii)(1) IFRS S2 29(a)(iii)(2) IFRS S2 29(a)(iii)(3) For Scope 2 emissions, the bank must disclose emissions on a location basis (i.e. reflecting the average emission intensity of the networks in which energy is consumed), and provide information on any contractual instruments (e.g. renewable energy certificates) necessary to enable users to understand the bank’s Scope 2 greenhouse gas emissions. IFRS S2 29(a)(v) Regarding Scope 3 emissions, the bank must describe the categories included in the bank's calculation in accordance with the Scope 3 categories described in the Greenhouse Gas Protocol Corporate Value Chain Accounting and Reporting Standard (Scope 3) (2011); IFRS S2 29(a)(vi)(1) Disclose any additional information regarding category15 greenhouse gas emissions4 attributed to the bank or those associated with its investments (financed emissions), if the bank’s activities include asset management, commercial banking or insurance. IFRS S2 29(a)(vi)(2) Disclose the bank’s total absolute emissions financed, categorized by GHG Scopes 1, 2 and 3 for each industry, using the Global Industry Classification Standard (GICS), by asset class, including loans, project finance, bonds and equity investments. IFRS S2 B62(a) Disclose the bank’s total exposure to each sector by asset class, expressed in the currency of exposure used in the bank’s financial statements, and the proportion of that exposure relative to the bank’s total exposures included in the financed emissions calculation. If the proportion of the bank’s total exposures included in the financed emissions calculation is less than 100%, the bank must provide IFRS S2 B62(b) (c)

4 This category includes Scope 3 emissions associated with the bank’s investments, which are not included in Scope 1 or Scope 2.

information explaining the exclusions, including the type of assets excluded. The bank’s disclosure of the methodology used to calculate financed emissions, including the allocation method used by the bank to determine its share of emissions relative to its total exposure. IFRS S2 B62(d) Regarding climate-related transition risks, the amount and proportion of assets exposed to climate-related transition risks must be disclosed. Banks are expected, as a minimum, to disclose their exposure to the 18 sectors identified by the Financial Stability Board’s (FSB) Task Force on Climate￾related Financial Disclosures (TCFD), the bank must also disclose more detailed information where necessary, following an assessment of its relative materiality. Sectors vulnerable to transformational risks amount of the bank’s assets5 exposed to climate risk (thousands JDs) Percentage of the bank’s total assets Oil and gas Coal Electrical utilities6 Air freight Passenger air transport Maritime transport Rail transport Truck transport services Vehicles and their components Minerals and Mining Chemicals Construction materials Capital goods (such as machinery, equipment and buildings) Property Management and Development Beverages Agriculture Canned foods and meat Paper and forestry products Total IFRS S2 29(b) BCBS Framework

Includes credit facilities granted to the sector, and investments in shares and bonds relating to companies operating in the sector. Includes electricity companies that generate and distribute electricity.

Regarding physical climate-related risks, the bank must disclose the amount and proportion of assets exposed to physical climate-related risks using the tables below. The bank must also disclose more detailed information where necessary, following an assessment of its relative materiality. Governorates Type of risk (including, but not limited to:
floods, droughts, earthquakes, etc.). amount of the 5 bank’s assets exposed to climate risk (in thousands of dinars) Percentag e of the bank’s total assets Amman Zarqa Irbid Balqa Mafraq Madaba Karak Tafileh Ma’an Aqaba Jerash Ajloun Total IFRS S2 29(c)

Water-dependent sectors exposed Bank’s assets5 to climate risk (in thousands JDs) Percentage of the bank’s total assets Citrus, fruit, cereal and vegetable cultivation Food and beverages industry Ready-to-wear clothing industry paper and paper products manufacturing The industrial chemicals sector Oil refining Plastics industry Cement and lime industry Basic metal products industry Manufacture of electrical machinery and equipment Mining Alternative Energy Industries Fabrics, clothing and footwear Trading Total

Regarding climate-related opportunities, the amount and proportion of assets aligned with these opportunities must be disclosed, in accordance with Jordan’s National Green Taxonomy. Activities consistent with the green Taxonomy Amount of the 5 bank’s assets exposed to climate risk (in thousands JDs) Percentage of the bank’s total assets Agriculture, Reforestation, and Sustainability Activity 1: Activities that reduce water consumption in agricultural activities Activity 2: Activities relating to coastal zone management in both Aqaba and the Dead Sea Activity 3: Afforestation, Reforestation and Sustainable Forestry Management Manufacturing Activity 1: Cement manufacturing … Total IFRS S2 29(d) Disclosure of the amount of capital expenditure, funding or investment allocated to climate-related risks and opportunities. IFRS S2 29(e) Disclosure whether the bank applies an internal carbon price in its decision-making and how it is applied (for example, investment decisions, transaction pricing and scenario analysis), and disclosing the price per metric ton of greenhouse gas emissions used by the bank to assess the costs of its greenhouse gas emissions. IFRS S2 29(f) IFRS S2 29(f) Disclosure of whether climate-related considerations are taken into account when determining executive management remuneration, and the proportion of remuneration recognized in the current period that is linked to climate-related considerations. IFRS S2 29(g)

4.2 Climate-related targets
Disclosure Requirements References
Disclosure of each quantitative and qualitative target used to monitor progress towards the bank's strategic objectives, and any targets required by law or regulation, including any greenhouse gas emissions targets, such as:
 The metric used to define the target.
 The purpose of the target (e.g. mitigation or adaptation).  The part of the bank to which the target applies (for instance, whether the target applies to the bank as a whole or only to a part of it, such as a specific business unit or a specific geographical area).  The period to which the target applies.  The baseline period from which progress is measured.  Any initial milstones and targets.  Whether it is an absolute target or an intensity-based target, if the target is quantitative.  How the most recent international agreement on climate change, including the legal obligations arising from that agreement, has affected the target. IFRS S2 33 Disclosure of the approach used to set and review each target, and how the bank monitors progress towards achieving each target ; this includes whether the target and the methodology used to set it have been validated by a third party, the bank’s processes for reviewing the target, and the metrics used to monitor progress towards achieving the target, and any adjustments to the target and an explanation of those adjustments. IFRS S2 34 Disclosure of the bank's performance against each climate-related target and an analysis of trends or changes in the bank's performance. IFRS S2 35 For each greenhouse gas emissions target, the following must be disclosed:
 Which greenhouse gases7 the target covers.
 Whether Scope 1, Scope 2 or Scope 3 greenhouse gas emissions are included in the target.  Whether the target is gross or net (if the target is net, the bank must disclose the associated gross target separately). IFRS S2 36

7 Greenhouse gases such as: carbon dioxide (CO₂), methane (CH₄) and nitrous oxide (N₂O).

 Specify whether the target has been set using a sectoral decarbonization approach.  The extent to which, and the manner in which, any greenhouse gas emissions target is achieved depends on the use of carbon credits.  Which third party will verify or validate the carbon credits.  The type of carbon credit, including whether the underlying offset will be nature-based or technology-based carbon removal, and whether the underlying offset is achieved through carbon reduction or removal.  Any other factors necessary for users of financial statements for general purposes to understand the reliability and integrity of the carbon credits the bank plans to use (for example, assumptions regarding the permanence of carbon offsets).