The activities required to achieve our strategy Managing climate-related risks and are guided by our values and involve elements of opportunities risk-taking. When making decisions about risk- As part of its ESG oversight responsibilities, taking and risk management, we place a priority the corporate governance and nominating on the following risk management objectives: committee oversees matters related to • to safeguard the commitments and expectations climate change, and receives regular established with our customers, creditors, reports on relevant climate topics, including shareholders and employees our progress against the commitments set • to support the successful design and delivery of out in Manulife’s Climate Action Plan (see customer solutions through the development of page 135). innovative product solutions, and through providing The Executive Risk Committee and the customer-centric digital experiences board’s risk committee consider climate- • to prudently and effectively deploy the capital related risks and opportunities through the invested in the company by shareholders with ongoing monitoring and reporting of appropriate risk/return profiles emerging risks. The identification and • to invest wealth and asset management’s customer assessment of climate-related risks is assets consistent with their objectives guided by our Environmental Risk Policy, • to achieve and maintain a high level of operational which sets out an enterprise-wide framework resilience for the management of environmental risks • to safeguard the well-being of our employees, and within our business activities. promote a diverse, equitable and inclusive business In 2022, we continued to monitor climate- environment related risk and opportunities within our • to protect and/or enhance our reputation and brand business strategy over short (1-5 year), • to maintain the company’s targeted financial medium (5-15 year), and long term (more strength rating. than 15 year) time horizons to better assess While we pursue risks that we believe we can the relative significance of potential impacts appropriately analyze and monitor, we also manage and how and when actions are required to risks that arise outside of our direct influence. We address them. Our 2022 management’s recognize that risk exposures change over time. If discussion and analysis includes disclosures exposures materially increase, we will activate related to our climate risk governance, risk management actions designed to bring exposures back management, strategy, and targets. Please to desired levels. As an integrated component of our also refer to the 2022 ESG Report business model, risk management assists the company (published in the second quarter of 2023), in achieving our objectives and in reaching higher levels for detailed disclosure of the Financial of operational excellence, while encouraging Stability Board’s Task Force on Climate- transparency and organizational learning. related Financial Disclosures (TCFD) recommendations and our performance. We categorize the risks we face into five principal areas, to identify, measure, assess and manage our risk profile: strategic, market, credit, product, and operational. The board looks to the audit committee, risk committee and management resources and compensation committee to assist in overseeing certain areas of risk: • audit committee – oversees compliance with legal and regulatory requirements – oversees policies and internal control systems for effectiveness to mitigate our exposure to financial reporting risk – reviews our quarterly and annual financial statements and related disclosure before recommending them to the board for their review and approval • risk committee – reviews and assesses our principal risks, including our overall risk profile and reviewing our risk appetite – reviews and assesses our evolving risks – reviews the risk impact of the business plan and new business initiatives – oversees the risk management function – oversees our compliance with risk management policies – evaluates the company’s risk culture • management resources and compensation committee and risk committee – reviews our executive compensation program to ensure alignment against our risk management principles and our risk appetite 120 Manulife Financial Corporation