Managing Reputational Risk Managing Reputational Risk

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In addition to managing issues and projects relevant to CR, Commerzbank's corporate responsibility includes early identification and appropriate handling of environmental, social or ethical risks. The evaluation of these risks is integrated in the group’s overall risk strategy and management as part of the management of reputational risk.

Reputational risk is the risk of its stakeholders losing confidence in Commerzbank or its image being harmed as a result of negative events in the course of its business. Stakeholders comprise members of the general public, the media, employees and customers, rating agencies, shareholders, and business partners.

The Reputational Risk Management department uses a qualitative approach to reputational risk management, and to this end cooperates closely with other relevant units. Transactions and business relationships in which aspects of sustainability play a material role are extensively researched, analysed and subjected to wide-ranging evaluation. In extreme this may lead to a rejection of a transaction or termination of a business relationship.

Sensitive areas that are subjected to regular and thorough analysis by Reputational Risk Management include armaments deals and transactions involving energy production or mining of commodities. Commerzbank's positions and directives are binding for all staff. Regular presentations and workshops in Germany and abroad and the reputational risk newsletter, raise staff awareness of current issues, such as the environmental impact of rising demand for palm oil.

This and other issues are firmly embedded in the bank’s processes. Commerzbank’s Reputational Risk Management department is regularly looking out for and analysing newly emerging environmental, ethical and social issues and making the relevant areas of the bank aware of them.

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