Additionally, the presence of physical and transition climate risks can result in second order risks that impact the retail and wholesale portfolios of the Barclays Bank Group. Climate change may lead to increased losses for sectors that are sensitive to the effects of physical and transition risks. Any subsequent increase in defaults and rising unemployment could lead to recessionary pressures, which could result in wider deterioration in the creditworthiness of the creditworthiness of the Barclays Bank Group clients, higher ECLs, and increased charge-offs and defaults among retail customers.