TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES 34 Integration of Processes to Identify, Assess RCSA provides a systematic means of identifying and Metrics/Targets and Manage Climate-related Risks assessing operational risks and the effectiveness of controls. The core characteristics of the RCSA consist of: Assessment of Metrics of Climate-related Our ERM function, in partnership with our business • The identification of risks that could threaten the and support lines, is responsible for executing on plans achievement of objectives, and the activities and Risks and Opportunities throughout the year to address or mitigate our key, processes affected by the different risks identified; identified risks across our risk categories. As noted We embrace our responsibility to be a good steward of previously, we currently view climate as a transversal • Identifying the controls in place intended to our natural resources. In terms of operational metrics, risk impacting these seven risk categories. As we build manage the risks or prevent the risks from we have established a system for analyzing energy capabilities to model and measure the potential impact materializing; usage in our real estate portfolio and have established a of climate risk on our business, our intention is that we • Determining where responsibility for performing centralized energy management system for our offices. develop quantitative approaches in the future to evaluate those controls lies; and We also track paper usage and recycling efforts, and and assess the potential ranges of risk severity posed by • An assessment of the effectiveness of the controls are mindful of considering the environmental impact of climate-related risk. and the level of residual risk. building and construction as well as furniture, fixtures and equipment decisions. Details regarding these The Company utilizes a Risk and Control Self-Assessment Assess and Quantify initiatives and metrics related thereto can be found (RCSA) process, which is facilitated by Operational Risk under the Environmental Responsibility section of this Management and conducted by the Operating Unit Key Risks ESG Report. management team. The RCSA process enables the Company to: The RCSA assesses operational risk exposure. The As for broader climate-related risk exposures and • Identify those operational risks that may impede expected outcome is that residual risk will be lower opportunities stemming from our business operations, the Operating Unit’s ability to achieve strategic than inherent risk, depending upon the extent and we are currently evaluating what metrics can help us objectives and initiatives effectiveness of the controls in place. The Company’s assess those risks and opportunities, particularly within approach is to use the RCSA to assess the level of its our lending and investment portfolios. • Determine existence of horizontal and vertical current residual operational risk exposure as it stands interdependencies given the controls in place. This approach recognizes that • Facilitate development of effective risk an understanding of the inherent risk profile is essential management practices in order to identify improvements required for existing • Enhance opportunities for improved risk mitigation controls to manage the risk exposure to the desired level. activities (i.e., proactively identifying potential audit, compliance, and regulatory findings) • Improve identification of potential operational loss events Company goals are aspirational and not guarantees or promises that all goals will be met. Statistics and metrics included in this document are estimates and may • Maximize risk/reward decision-making processes be based on assumptions or developing standards. Content available at websites and in documents referenced in this document are not incorporated herein and are not part of this document. Hancock Whitney Bank, Member FDIC and Equal Housing Lender. All loans and accounts subject to credit approval. Terms and conditions apply. © 2023 Hancock Whitney Bank.