All our risk categories can include a sustainability perspective. The Board of Directors has the ultimate responsibility for limiting and following up on the sustainability risks. The main principle of the risk management is based on the three lines of defence, the first being the business units, the second comprising Compliance, Information Security and Risk Management functions and the third comprising the Internal Audit. In addition to the risks being described in note 3 of the annual report, TF Bank has identified the following specific sustainability risks:
| Sustainability risk | Consequence | Management |
| Excessive indebtedness The risk that TF Bank contributes to excessive indebtedness in society |
The trust in TF Bank and the financial sector as a whole may decrease, customers may face financial difficulties | For every individual application, TF Bank ensures accurate credit assessment through our established credit granting process that is continuously being tested, developed and improved. |
| Compliance The risk that TF Bank fails to comply with current regulations in its markets |
The trust in TF Bank and the financial sector as a whole may decrease, TF Bank may impose sanction fees or, in a worst-case scenario, lose permissions | TF Bank’s compliance function continuously work to ensure that TF Bank fulfils all applicable regulations, often in close dialogue with local supervisory authorities. A whistle-blower function is available to all employees. |
| Corruption The risk that TF Bank’s employees act on their own interest and in violence with the company’s code of conduct |
The trust in TF Bank may decrease | All employees undergo training in the code of conduct, and special training regarding anti-corruption. The training provides guidance in how to act if being uncertain in a relation or business situation. |
| Money laundering and terror financing The risk that TF Bank’s services are used for money laundering and terror financing |
The trust in TF Bank and the financial sector as a whole may decrease, TF Bank may impose sanction fees or, in a worst-case scenario, lose permissions | Risk assessment and KYC process for every new customer in the bank. Continuous monitoring of transactions and activities. Suspicious activities are reported to relevant authorities. |
| Suppliers The risk that TF Bank’s suppliers act in a way that may harm the Bank’s operations or trust in the market |
TF Bank may suffer both from a trust and financial perspective | TF Bank evaluates suppliers based on various criteria. The Bank has a code of conduct for suppliers, and an annual follow-up is conducted. |
| IT and data security The risk that TF Bank becomes the target of an IT attack or data breach with the purpose of obtaining customer data or exposing customers to fraud |
TF Bank’s customers may suffer financially or integrity-wise, the trust for TF Bank in the market may decrease, which could lead to outflows | TF Bank works preventively with systematic information security. |
| Health and safety The risk that TF Bank’s employees suffer from illness or that the workplaces don’t fulfil work environment requirements |
TF Bank may lose staff, the employer brand may be harmed, and TF Bank could as a consequence face difficulties to recruit new employees | TF Bank works with preventive work environment activities in close cooperation between management, staff, the work safety organisation and occupational health. TF Bank continually evaluates the Company’s efforts regarding work environment in order to be able to continuously improve the work environment. |