Climate Risk Management
This communication is published in accordance with the Guideline on Climate Risk Management, as updated by the Autorité des marchés financiers (“AMF”) on December 4, 2025.
1. Introduction
Blue Bridge Trust Company Inc. (the “Company”) is a trust company whose principal activity is the administration and safekeeping of property managed on behalf of others, primarily trusts. Its workforce is modest in size.
By its very nature, the role of a trustee is forward-looking. Traditionally centred on financial prudence, compliance with trust deeds and tax compliance, the Company’s mission has for some time also included an additional consideration: climate risk. Ignoring the impact of climate on assets would now amount to a failure to meet the duty of prudence. In a context of accelerating environmental and regulatory change, the Company reaffirms its commitment to its fiduciary duty of care. This document sets out our approach to protecting the assets entrusted to us against physical and transition climate risks.
2. Governance
The Company recognizes that climate-related risks must be subject to appropriate governance, adapted to the size and complexity of its activities. Climate-related risks are integrated into the Company’s overall risk management framework.
The Company’s Integrated Risk Management Committee (the “IRM Committee”), which reports to the Audit Committee, is responsible for including climate risks in its analyses. A formal review of exposure to material climate risks is conducted with the Company’s management at least annually.
Management is responsible for integrating climate factors into the administration of property on behalf of others, including their identification, assessment and monitoring. Management is also responsible for assessing the impact of climate factors on the Company’s financial resilience. Relevant discussions and conclusions are presented to the IRM Committee and recorded in the Committee’s minutes.
3. Strategy
The Company recognizes that climate change is a source of financial risk that may affect the value, liquidity and performance of the assets it administers on behalf of its clients. Since the Company’s revenues are largely correlated with the assets it administers, any significant impact of climate change on the value of assets managed on behalf of others could materially affect the Company’s revenues.
In this context, the Company incorporates climate considerations into its overall risk management strategy with a view to:
• protecting assets under administration;
• maintaining risk-adjusted returns;
• complying with its fiduciary and regulatory obligations.
The Company identifies two broad categories of climate risk:
a) Transition risks — Risks arising from the shift to a low-carbon economy (carbon taxes, new regulations, stranded assets). These factors may influence the value of financial assets and the trustee’s reputation (i.e., the trustee’s actual ability to integrate climate change into asset management in line with the expectations of regulators, beneficiaries and clients).
b) Physical risks — Acute extreme weather events, such as floods, wildfires and storms, as well as chronic changes such as sea level rise. These risks threaten the integrity of tangible assets (real estate, agriculture) and may also affect the performance of financial assets.
At the same time, climate change may also create opportunities, such as increased investment in resilient sectors or in sectors supported by the transition (for example, renewable energy and sustainable infrastructure).
Given its limited size and the relatively narrow scope of its activities, the Company adopts an evolving and proportionate approach, focusing its efforts on material risks affecting its business model and the assets under administration.
4. Climate Risk Management
The Company integrates climate-related risks into its overall risk management framework, in a manner consistent with its other categories of risk (strategic, reputational, operational, etc.).
The principal assets administered by the Company, or held in its custody, include financial portfolios (physical, transition and market risks) and real estate assets (physical risks).
In its fiduciary role, the Company regularly delegates the management of financial portfolios to external portfolio managers. In this context, management periodically asks the principal portfolio managers it retains to incorporate exposure to climate-related risks, including transition and physical risks, into their portfolio reviews so that the Company is in a position to assess risk-taking at the level of financial assets.
The Company recognizes that climate change constitutes a global systemic risk. It is not possible to eliminate this risk entirely through diversification. Portfolio performance may be affected if financial markets themselves are impacted by climate events. Taking climate risks into account is intended to improve the management of financial risks and does not constitute a non-financial objective that could compromise the fiduciary obligation to maximize risk-adjusted returns.
With respect to the real estate assets it administers, the Company assesses physical risks (e.g., floods, wildfires, coastal erosion) and ensures that each property has adequate insurance coverage, including coverage for climate-related risks, in order to preserve long-term value. Where a significant climate risk is identified in respect of an existing real estate asset and no insurance coverage is available, the Company assesses the possibility of disposing of the property, where permitted by the fiduciary mandate.
Before accepting or acquiring a new real estate asset in trust, the Company:
• verifies whether the property is located in a risk zone (e.g., flood zone, coastal erosion zone);
• confirms that adequate insurance coverage will be available for the main physical risks;
• where insurance is insufficient or too uncertain, avoids acquiring the property where permitted by the fiduciary mandate, or recommends alternatives.
5. Measures and Metrics
Given its role as trustee and its reliance on external managers, the Company adopts a pragmatic and evolving approach to metrics.
As indicators, the Company may consider, depending on data availability:
• the sector exposure of portfolios (e.g., carbon-intensive sectors);
• indicators provided by managers (e.g., carbon intensity, ESG ratings);
• the proportion of assets invested in sectors or strategies related to the energy transition;
• for real estate assets:
• location in risk zones;
• level of insurance coverage;
• condition and resilience of buildings.
These indicators are used primarily to:
• monitor exposure to climate risks;
• support dialogue with external managers;
• inform decision-making.
6. Targets and Objectives
The Company does not necessarily establish strict quantitative targets at this stage. Instead, it emphasizes qualitative objectives, such as:
• improving transparency from managers;
• progressively integrating climate factors into processes;
• reducing exposures considered excessive where appropriate.
7. Capital and Financial Resilience
The Company takes climate risks into account in its overall analysis of financial resilience, in particular:
• the sensitivity of its revenues to a significant variation in assets under administration;
• its ability to maintain operations in the event of disruption in financial markets, including disruptions related to climate.
Given the Company’s operating profile, no specific adjustment to regulatory capital is considered necessary at this stage.
8. Metrics and Greenhouse Gas Emissions
Due to the modest size of its workforce and the nature of its operations, the Company’s direct emissions (Scope 1 and 2) are considered not material.
9. Objectives and Continuous Improvement
The Company undertakes to:
• maintain a formal periodic review of climate risks;
• integrate these risks into its overall risk management framework;
• ensure transparent and consistent communication;
• adapt its practices in light of regulatory developments.
It pursues a continuous improvement approach proportionate to the size and complexity of its activities.
The Company also carries out periodic monitoring of climate-related communications and practices issued or adopted by other financial institutions and various organizations, in order to stay informed of developments in this area and of the potential impact on its activities, and to adjust its practices as needed.
10. Communication and Frequency of Disclosure
This communication is published on the Company’s website. It is updated within 180 days following the end of the financial year, or earlier if a significant change occurs.
11. Conclusion
The Company undertakes to continue developing its disclosure practices regarding climate-related measures and metrics, in light of improvements in available data, regulatory expectations and market best practices.