BPI Environmental Risk Assessment
Having long recognized the importance of assessing the exposure of clients to environmental hazards, especially in view of the Philippines’ location in the Typhoon Belt and the Pacific Ring of Fire, BPI has introduced the use of DOSTPHIVOLCS’ HazardHunterPH system for Environmental Risk Assessment (ERA) to the Philippine banking industry in 2019.
Through ERA, BPI was able to assess the risk exposures of client addresses and collaterals, as well as employee residences, bank branches, ATMs, and CAMs vis-a-vis environmental hazards:
- Climate Hazards (such as flooding, typhoons/severe winds, storm surge, and rain-induced landslides)
- Non-Climate Hazards (such as earthquakes, liquefaction, and volcanic eruptions)
ERA allows BPI to identify, detail, measure, and mitigate physical climate and non-climate risks incurred by the Bank in its lending activities & 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, or by type of asset which helps prevent potential losses not just in terms of income, but more importantly in terms of human lives.
Risk Type | ERA-related Mitigating Solutions |
|---|---|
Credit Risk | 1. Integration of risk data from mapping of clients’ assets, collaterals, and locations of key business operations vis-à-vis natural hazards to the credit evaluation process of all corporate and commercial loans 2. Risk-mitigating measures required prior to the approval of potential borrowers with high-risk scores
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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
4. Business Continuity Plans ensuring uninterrupted, resilient, and reliable operations amidst natural disasters a. Focus areas
b. Additional preventive measures
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DOST-PHIVOLCS HazardHunterPH
BPI’s Environmental Risk Assessment leverages HazardHunterPH, a system developed by DOST–PHIVOLCS. Freely accessible through online platforms, HazardHunterPH is the Philippine government’s primary risk assessment tool for assessing exposure to natural hazards.
To know more, visit Hazard Hunter's website.
First in the Philippine Banking Industry
BPI pioneered Environmental Risk Assessment in the Philippine banking industry, beginning as early as 2010.
Year | Milestone |
|---|---|
| 2010 to 2014 | BPI conducted a comprehensive assessment of climate-environmental, socio-economic, and adaptive capacity vulnerabilities across 16 selected cities. This initiative enabled targeted, community-level interventions through the “Business Risk Assessment and the Management of Climate Change Impacts” (BRAMCCI) 16-city study. The study supported selected Philippine cities in preparing for escalating climate change impacts and was undertaken by BPI Foundation, the Bank’s corporate social responsibility arm, in partnership with the World Wide Fund for Nature (WWF). |
| 2019 | Following a strategic re-engagement between BPI and WWF, the assessment coverage was expanded to include additional cities, focusing on the identification of:
BPI used HazardHunterPH in assessing environmental risk exposures of Sustainable Development Finance projects, as an initial foray into physical risk scoring. |
| 2020 | BPI was the first to adopt HazardHunterPH to assess Bank assets, collaterals, and operational locations for exposure to seismic, hydrometeorological, and volcanic hazards. |
| 2021 | HazardHunterPH was subsequently institutionalized and formally integrated into BPI’s loan evaluation and approval processes, strengthening the Bank’s environmental risk assessment capabilities. |
| 2023 | BPI further refined the bank’s risk scoring models exposures based on physical vulnerabilities, assessed using HazardHunterPH. |
