Climate Change Policy
Climate change risk management – Brightstone Trust Company
This disclosure is published in accordance with the Climate Risk Management Guideline, as updated by the Autorité des marchés financiers (“AMF”) on December 4, 2025.
1. Introduction
Brightstone Trust Company Inc. (the “Company”) is a trust company whose main business is the administration and custody of property administered for others, primarily trusts. It has a small workforce.
The role of a trustee is, by nature, forward-looking. Traditionally focused on financial prudence, compliance with trust deeds and tax compliance, the Company’s mission has for some time incorporated an additional variable: climate risk. Ignoring the impact of climate on assets would today constitute a breach of 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 overseen through 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 significant climate risks is conducted at least annually with the Company’s management.
Management is responsible for integrating climate factors into the administration of property for 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 its minutes.
3. Strategy
The Company recognizes that climate change is a source of financial risk that may affect the value, liquidity and return 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 administered for others could have a material impact on the Company’s revenues.
In this context, the Company integrates climate considerations into its overall risk management strategy, with the aim of:
- protecting the capital administered;
- maintaining risk-adjusted returns;
- meeting its fiduciary and regulatory obligations.
The Company identifies two main 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 can affect 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 – Extreme weather events (acute), such as floods, wildfires and storms, and gradual deterioration such as rising sea levels (chronic). These risks threaten the integrity of tangible assets (real estate, agriculture) and can affect the performance of financial assets.
However, climate change can also create opportunities, such as increased investment in sectors that are resilient or that benefit from the transition (for example, renewable energy and sustainable infrastructure).
Given its small size and the limited nature of its activities, the Company takes an evolving and proportionate approach, focusing its efforts on material risks affecting its business model and the assets it administers.
4. Climate risk management
The Company integrates climate-related risks into its overall risk management framework, consistent with its other risk categories (strategic, reputational, operational, etc.).
The main assets administered or held in custody by the Company include financial portfolios (physical, transition and market risks) and real estate assets (physical risks).
In its role as trustee and custodian, the Company regularly delegates the management of financial portfolios to external portfolio managers. In this context, management periodically asks the main portfolio managers it uses to include the portfolios’ exposure to climate change risks, including transition and physical risks, in their portfolio reviews, so that the Company can assess the level of risk taken with respect to financial assets.
The Company recognizes that climate change is a global systemic risk. It is not possible to fully eliminate this risk through diversification. Portfolio performance may be affected if financial markets themselves are affected by climate events. Taking climate risks into account is intended to improve financial risk management and is not 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 with respect to climate change, to preserve its long-term value. If a significant climate risk is identified for an existing property and no insurance coverage is available, the Company assesses the possibility of disposing of the property, where the trust mandate allows.
Before accepting or acquiring a new real estate property in trust, the Company:
- checks whether the property is located in a risk area (e.g., flood zone, coastal erosion);
- confirms that adequate insurance will be available to cover the main physical risks;
- if insurance is insufficient or too uncertain, avoids acquiring the property where the trust mandate allows, or recommends alternatives.
5. Metrics and indicators
Given its role as trustee and its reliance on external managers, the Company takes 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 areas;
- level of insurance coverage;
- condition and resilience of buildings.
These indicators are used mainly to:
- monitor exposure to climate risks;
- inform discussions with external managers;
- support decision-making.
6. Targets and objectives
The Company does not necessarily set strict quantitative targets at this stage. It favours qualitative objectives, such as:
- improving manager transparency;
- gradually integrating climate factors into its processes;
- reducing exposures deemed excessive, where appropriate.
7. Capital and financial resilience
The Company takes climate risks into account in its overall analysis of financial resilience, including:
- the sensitivity of its revenues to a significant change in assets under administration;
- its ability to maintain operations in the event of financial market disruptions, which may include climate-related disruptions.
Given the Company’s operational profile, no specific adjustment to regulatory capital is deemed necessary at this stage.
8. Indicators and greenhouse gas emissions
Due to the small size of its workforce and the nature of its operations, the Company’s direct emissions (Scope 1 and 2) are considered not significant.
9. Objectives and continuous improvement
The Company is committed to:
- maintaining a formal periodic review of climate risks;
- integrating these risks into its overall risk management framework;
- ensuring transparent and consistent communication;
- adapting its practices as regulations evolve.
It pursues a continuous improvement approach adapted to the size and complexity of its activities.
The Company also periodically monitors the climate change communications and practices issued or adopted by other financial institutions and various organizations, to stay informed of trends in this area and their potential impact on its activities, and to adjust its practices as needed.
10. Communication and frequency of disclosure
This disclosure is published on the Company’s website. It is updated within 180 days of the end of the financial year, or sooner if a significant change occurs.
11. Conclusion
The Company is committed to evolving its disclosure practices regarding climate metrics and indicators, based on improvements in available data, regulatory expectations and market best practices.