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Embarking on the TCFD journey A briefing guide
Introduction & contents
Embarking on the TCFD journey Contents
Luminous has developed this briefing What is TCFD reporting? 2
guide for UK-listed companies starting When does TCFD reporting become mandatory? 3
out on their TCFD reporting journey.
What level of detail is initially required to comply? 4
TCFD reporting refers to the set of What new information, if any, is likely to be required? 6
recommendations published by the
What information are other companies providing? 8
Task Force on Climate-related Financial
Disclosures in 2017. In November last year, What does good look like? 9
the Financial Conduct Authority (FCA) Summary recommendations 12 Harriet Rumball
announced that reporting against the Senior Investor
What are the next steps? 14 Engagement Consultant
recommendations will become mandatory Appendix15
in the UK from 2022, with disclosures to Luminous
be included in the Annual Report. Acknowledgements: Luminous is most grateful to Sarah Abbot
and Helen Wickham of Berkeley Group plc, Jon Harrington of
While some of the TCFD recommendations Britvic plc, Richard Eadie of Severn Trent plc, Hannah Armitage of
the Financial Reporting Council’s (FRC) Financial Reporting Lab
overlap with existing non-financial and Simon Weaver of KPMG for their valuable and generous input
reporting requirements, others do not on the research for this paper.
and are likely to require new disclosures.
This guide is designed to help companies
navigate the recommendations, identify
where existing activity and data is
relevant, and pinpoint where new
information is required.
We deliberately refer to this as a journey
because the TCFD recommendations
will apply on a ‘comply or explain’ basis
(at least initially) and they are sufficiently
flexible to allow companies add to and
enhance their disclosures over time.
We hope this guide will provide a helpful
and timely starting point for companies
embarking on this journey.
1
What is TCFD reporting?
TCFD stands for the Task Force The framework consists of 11
on Climate-related Financial recommendations on climate-related
Disclosures. It was established financial disclosures structured
in 2015 by the Financial Stability around four thematic areas:
Board under the leadership of
• Governance
Mark Carney, then Governor of the
• Strategy
Bank of England. In the context
• Risk Management
of corporate reporting, the term
• Metrics and Targets
refers to a framework published
by the Task Force in 2017 for The recommendations are designed to
use by companies to provide be adoptable by all organisations for
information about their climate- inclusion in companies’ annual financial
related financial risks to investors filings, i.e. the Annual Report for
and other stakeholders. UK-listed companies.
2
When does TCFD reporting
become mandatory?
UK premium listed companies Is TCFD reporting relevant to all An important part of the recovery from
with reporting periods beginning listed companies? Covid will be to stimulate and support
on or after 1 January 2021 are now investment… To support this, we need
The groundswell of support from
required by the FCA to adopt TCFD to see a strong focus on public metrics
governments and capital markets
reporting in their Annual Report. that set out the climate impacts of both
regulators for measures to address
The requirement will be rolled out investment and corporate activities.”
climate change is now evident globally.
more widely from the following
Without needing to expand on this Thus, even where climate-related
year onwards.
trend, the recent launch by the Bank reporting may not feel immediately
Immediately following the FCA’s of England of climate stress tests for relevant to all companies, it appears
announcement on mandatory TCFD commercial lenders from June 2021 is likely that the provision of capital may
reporting in November 2020, the relevant here. increasingly be linked to compliance
Financial Reporting Council (FRC) with frameworks such as TCFD.
In his speech at the Green Horizon
also announced its support for
Summit on 9 November 2020,
companies to report against the TCFD
Andrew Bailey, Bank of England
recommendations. For reference,
Governor, commented:
at the same time it announced its
encouragement for companies also “What we cannot measure we cannot
to report against the Sustainability manage, so it is important that financial
Accounting Standards Board (SASB) firms and their clients use the TCFD
metrics, these being metrics designed framework and the latest tools available
to help companies report financially to measure, model and disclose the
material sustainability information climate risks and opportunities they
to investors on a sector-specific basis. are exposed to today and in different
“We encourage companies to report on future climate scenarios…
these areas within their next reporting As we have set out in our supervisory
cycle,” the FRC commented. However, expectations, firms must assess how
reporting against SASB metrics is not climate risks could impact their
mandatory for the time being. business and review whether additional
capital needs to be held against this…
3
What level of detail is initially
required to comply?
The FCA has confirmed that reporting
against TCFD recommendations will
“The flexibility the TCFD framework offers
is valuable in allowing each company “ The flexibility the TCFD framework
initially be introduced on a ‘comply or
explain’ basis. This will be important
to set out its own metrics and targets
and showcase how it approaches risk offers is valuable in allowing each
in allowing companies to start on the
journey towards TCFD reporting, with
management. A company can also
showcase both risks and opportunities company to set out its own metrics
further detail provided over time.
To date, TCFD reporting has been
relating to climate change in an
appropriate context. TCFD allows and targets and showcase how it
presented in the form of an index
table or a narrative, or a combination
companies to set new targets as
the business develops or add new approaches risk management.”
targets as external situations develop.
of both. While it typically features
COVID-19 is a good example of when
cross-referencing to various sections Sarah Abbot
businesses may want to bring in
of the Annual Report, the inherent Financial Reporting Manager
additional targets or amend their
flexibility provided by the TCFD Berkeley Group plc
existing targets to take account of
framework means that additional
external factors.”
commentary, beyond an index of
disclosures, can – and probably
should – be provided.
The benefit of this flexibility was
clearly explained by Sarah Abbot,
Financial Reporting Manager of FTSE
100 Berkeley Group, which reported
against TCFD for the first time in its
2020 Annual Report:
4
What level of detail is initially required to comply?
continued
Alongside Berkeley Group, Luminous
spoke to two of its other clients which
Where Severn Trent has committed
to publishing science-based targets, “ We include in our Annual Report
have been early adopters of TCFD
reporting, each at sightly different
Britvic has already done so and
described the process as beneficial and Accounts which Directors
stages in their reporting journey
but sharing a clear commitment to
to the business:
“The climate crisis is the defining issue
possess sustainability – and,
climate-related reporting and the
TCFD framework:
of our time and the greatest challenge
to sustainable development, affecting
in particular, climate change –
Severn Trent commented: every country, business and person on
the planet.
experience and expertise.”
“Climate change is a key consideration
in our business planning and we have “At Britvic, our commitment to
a long history of reducing carbon achieving our science-based carbon Richard Eadie
emissions, having held the Carbon reduction targets has concentrated our Head of Corporate Strategy, Sustainability and Group Transformation
Trust accreditation for over a decade. focus and helped us embed climate- Severn Trent plc
We include in our Annual Report and related decision-making across our
Accounts which Directors possess business. Specifically, our approved
sustainability – and, in particular, science-based targets mean reducing
climate change – experience and our Scope 1 and 2 emissions by 50%
expertise and last year announced our and our Scope 3 emissions by 35% by
triple carbon pledge of net zero carbon
emissions, 100% electric vehicles,
2025. We have also pledged to be a
carbon-neutral business by 2050. “ Our commitment to achieving
and 100% of energy from renewable
sources, by 2030.
“Clearly, we are already committed
to working towards incorporating the
our science-based carbon
“Importantly, we also took the
decision to report against the TCFD
TCFD recommendations in full and we
also plan to integrate it in our internal
reduction targets has concentrated
recommendations for the first time.
We published our TCFD disclosures in
decision making processes.”
our focus and helped us embed
our Sustainability Report along with a
commitment to develop science-based
climate-related decision-making
targets and are looking forward to
building on our TCFD reporting going
right across our business.”
forward.”
Sarah Webster
Director of Sustainable Business
Britvic plc
5
What new information,
if any, is likely to be required?
Given existing non-financial
reporting requirements, some
Hannah Armitage, Project Manager
at The Financial Reporting Council’s “ There is a clear need for
of the TCFD recommendations
are already being met by listed
Financial Reporting Lab, acknowledged
this but highlighted that, as more standardisation in global
companies, for instance around
greenhouse gas (GHG) emissions
companies report on TCFD, the
volume of data available will increase frameworks but reporting against
under Metrics and Targets. Others
are likely to be underway, for
which should, in turn, open up this
area of data provision: frameworks like TCFD and SASB is
instance around Governance,
while others still are likely to
“There is a clear need for
standardisation in global frameworks
an important interim step.”
be achievable (at least in part) but reporting against frameworks like
within existing structures and TCFD and SASB is an important interim
processes, for instance around Hannah Armitage
step. Climate scenarios are complex Project Manager
Risk Management. but as more companies consider these, The FRC’s Financial Reporting Lab
That said, it is likely that new and as disclosures are increasingly
information will be required by standardised, more data will emerge
most companies around scenario which should help make benchmarking
planning in response to the TCFD and scenario planning more accessible.”
Strategy recommendations and, given The FRC’s statement on Non-Financial
its complex and technical nature, Reporting Frameworks can be found at
some investment in specialist data www.frc.org.uk/news/november-2020/
modelling is likely to be required. frc-nfr-statement. In addition, its support
for IFRS Foundation consultation paper
on international sustainability reporting
standards can be found at www.gov.
uk/government/publications/joint-
statement-of-support-for-ifrs-foundation-
consultation-on-sustainability-reporting/
initial-response-to-ifrs-foundation-
trustees-consultation
6What new information, if any, is likely to be required?
continued
Figure 1. Identifying likely new information requirements versus likely relevant existing corporate disclosures
Based on the TCFD graphic opposite we Governance Strategy Risk Management Metrics and Targets
have sought to identify where companies
Disclose the organisation’s Disclose the actual and potential impacts of Disclose how the organisation identifies, Disclose the metrics and targets used
reporting for the first time are likely to governance around climate– climate–related risks and opportunities on assesses and manages climate-related risks. to assess and manage relevant climate-
require new information in order to related risks and opportunities. the organisation’s businesses strategy, and related risks and opportunities where such
comply, as opposed to referencing financial planning where such information information is material.
is material.
relevant existing disclosures:
Recommended disclosures
a) D escribe the Board’s oversight of a) D
escribe the climate-related risks a) Describe the organisation’s processes a) Disclose the metrics used by the
climate-related risks and opportunities. and opportunities the organisation for identifying and assessing climate- organisation to assess climate-related
b) Describe management’s role in assessing has identified over the short, medium related risks. risks and opportunities in line with
and managing climate-related risks and and long term. b) Describe the organisation’s processes strategy and risk management processes.
opportunities. b) D
escribe the impact of climate- for managing climate-related risks. b) D isclose Scope 1, Scope 2 and, if
related risks and opportunities on c) Describe how processes for identifying, appropriate, Scope 3 GHG emissions,
the organisation’s businesses, strategy assessing, and managing climate-related and the related risks.
and financial planning. risks are integrated into the organisation’s c) Describe the targets used by the
c) D
escribe the resilience of the organisation’s overall risk management. organisation to manage climate-related
strategy, taking into consideration different risks and opportunities and performance
climate-related scenarios, including a 2°C against targets.
or lower scenario.
Luminous commentary on new and/or existing information required
a) and b) a) F
or many companies, shorter-term a), b) and c) a) If climate is already included as a principal
Mechanisms and processes at both Board key risks and opportunities related to It is likely that the mechanisms and risk or is included in a company’s emerging
and executive management levels are climate change will probably have been processes for risk identification, risk register (or equivalent), it is likely that
likely already to be in place for ESG/CSR/ identified, if material, but additional data management and mitigation will serve, appropriate metrics have already been
sustainability issues. With timely planning, to assess longer-term implications may at least initially, to address climate-related identified/are in use.
these could be extended, as required, be required. A holding statement on risk where it is material. b) Most companies will already make
to include climate-related issues. the company’s intentions/plans may Scope 1 and 2 disclosures (and Scope 3
therefore be required. The TCFD recommendations make a
distinction in their supporting commentary where appropriate) as part of their
b) A
s above, if material, it is probable that between physical risks (such as flooding) GHG emissions disclosures and, since
companies can explain how they have and transitional risks (such as regulatory April 2019, to meet the Streamlined
responded in terms of strategy and changes in response to climate change) and Energy and Carbon Reporting (SECR)
financial planning to shorter-term risks these should therefore be considered here. compliance requirements.
and opportunities. A description of how c) M
any companies will already have some
they intend to evolve these in the longer targets in place and may wish to commit
term may also be possible based on to identifying more in due course.
existing information.
Science–based targets, probably
c) H
owever, an explanation of how
requiring specialist third–party input,
companies would respond to specific
have tended to be considered for year
temperature/climate changes is likely
two of TCFD reporting or thereafter,
to require new information, probably
as a next step in enhancing reporting.
achieved with the help of a specialist third
party. As above, a holding statement
on the company’s intentions/plans
may therefore be required.
7What information are
other companies providing?
Set out in the Appendix are some
(but by no means all) of the key
Naturally, companies in sectors such
as financial services, oil and gas, and Establishing science-based targets is
disclosures made by a selection of
companies to illustrate – at a glance
fashion are likely to have been earlier
adopters of TCFD disclosures and to be likely to require specialist input.
– the type of content that could be providing a greater level of detail based on
considered for inclusion in year one. scenario analysis, financial metrics and,
in some instances, science-based targets.
The intention here is to give a flavour of
the kind of information companies are For reference, emissions reduction
providing, the level of their ambition in targets are defined as ‘science-based’
terms of disclosures and how they are if they are developed in line with the
explaining their position where more scale of reductions required to meet the
information will be provided over time. goals of the Paris Agreement or COP 21
(as it was adopted at the 21st Conference
of the Parties (COP 21) which took
place in Paris in 2015) of limiting global
warming to well-below 2°C above pre-
industrial levels, and pursuing efforts to
limit warming to 1.5°C.
Establishing science-based targets is likely
to require specialist input.
8What does good look like?
Figure 3. HSBC Annual Report 2019
More advanced TCFD reporting Strategic report
Annual Report | How
and Accounts 2021we do business How we do business AVEVA Group plc Annual Report and Accounts 2021
from early adopters provides a good Strategic Report
– Governance Report
– Financial Statements
b
reference point for best practice. Task Force on Climate-related Financial Disclosures (‘TCFD’) continued
TaskChief
Force on Climate-related Financial Disclosures (‘TCFD’)
Strategic report
Executive’s Review
An example here is Landsec, which Developing our approach to transition risk from over 750 customers within the six higher are designed to help us identify key areas of
We all have a role to play in limiting climate climate risk forum and an ESG Steering disclosure. We also partnered with climate
includes specific financial disclosures change and supporting the transition to a Committee also provides executive oversight change experts at MIT to produce exploratory We have started to develop and publish new risk transition sectors, which represented 34% vulnerability to climate change, the associated
Insight into the
of climate commitments. We have formally
Have you found reporting on
transition scenarios. These scenarios were
nonsecestrum
transition metrics to help us gain queaea inis earumque
deeper of our exposure. We are using this information impact on property portfolios and economic
low-carbon economy. We are a signatory
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activity. We also aim to review our policies
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Table 2: Customers’ questionnaire responses and pilot carbon intensityin such a
metrics
The Board strongly welcomed
Table 1: Wholesale loan exposure to transition risk sectors enimolu ptatiunt et essi nonemolor
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and economic environment?
the opportunity the section 172
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statement presents to provide
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investors and wider stakeholders
and advances to customers harita quis dem. Ipsunt.
Figure 2. Landsec Annual Report 2020 and banks in 2019 1,2,3 quo ea volorum que verest et dolorpo esequid ea qui aci nos dolecullest,
Proportion of questionnaire responses 84% 51% 85% 64% 94% 62% 72%
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with
% of total anloans
wholesale
and advances to customers
insight into≤ 3.9% the processes ≤ 3.8% ≤ 3.9% Which ≤ 3.4% tough decision
≤ 3.0% are you
most proud of making in the
≤ 2.8% ≤ 20.8% that reported Did
eitheryou
stakeholders
policy or a management
review
having a board the impact on
plan4 of key decisions modis autem as eostiistia duntum
and banksthein 2018
Board has in place to capture
1,2,3 last year and why? more closely this year than
Sector weight as proportion of high 18%
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veratec tatur, 19% 15% 15% 13% 100%
Metus, cus del il ma dit, suntbus transition risk ever?
sector 4
1 Amountssection 172
shown in the table matters,
include its objectives
green and other sustainable
quantifying our exposure to higher transition risk sectors and the transition risk metrics will evolve over
cum ditatis
finance loans, which support the transition
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to the es
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etThe methodology for
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Pilot as % of total sector
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41% Sum re ventur30% rest quis 52% 42% 46% 41%
in
our risk reviewing
management systems and that
processes. information and its
2 Counterparties are allocated to the higher transition risk sectors via a two-step approach. Firstly, where
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the main business
Proportion of earibusam co considerations
pilot that report carbon helped
49%
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53% 38%
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48% 38% 30% 44%
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a group
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connected counterparties
is in aidentification of the outcomes ofofthe
ipsantionse intensity metricshape a particular
through CDP 4 decision? dolorrum
higher transition risk sector, all lending to the group is included irrespective the sector of each individual obligor within the group. Secondly, where the si unti corum dolut quam quid que re que pelignat.
odiscias vellesequi imporuptio. Ore
main business of a group of connected counterparties is not in a higher transition risk sector, only lending to individual obligors in the higher transition risk sectors Weighted averagelabo. carbon emissions 688 408 517 301 7,235 787
key
is included.
decisions it makes.
3 Total wholesale loans and advances to customers and banks amount to $680bn (2018: $668bn).
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per million dollars of revenue (total
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client emissions/revenue weighted
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sequia nam nobitiur asi tempores by exposure) maio
4,5 offic tecum eium harita quis qui nihiciatest, quat. Im derem. Sit Read more, see our XXXX section
on pages XX-XX
rem. Ut verferunt que volluptatis mil dem. Ipsunt. volorios amenis con nobitate lat.
il ipsamus ni ducimol uptate molupta 4 All percentages are weighted by exposure.
5 Customer responses to CDP have been used to formulate the carbon intensity metrics in table 2. If a client does not complete the CDP questionnaire, information
is not included in the metrics. The CDP questionnaire is voluntarily completed by clients between April and July of a given year and may not all be from a single
point in time. Figures obtained from CDP have not been separately validated. The carbon intensity ratio is calculated by CDP using both reported figures and
estimated data. Carbon emissions are measured in tonnes of carbon dioxide equivalent (tCO2e) and revenue is measured in millions of US dollars.
22 HSBC Holdings plc Annual Report and Accounts 2019 HSBC Holdings plc Annual Report and Accounts 2019 23
9What does good look like?
continued
Figure 4. Berkeley Group Annual Report 2020
A more pragmatic approach forstrategic
Our group those planning team is responsible for using data from Metrics and targets Annual Report and Accounts 2021
making disclosures for the first time
the BP Energy Outlook and implementing the insights in our strategic
frameworks, including our net zero ambition and mid-term RIC targets.
Recommendation: Disclose the metrics and targets used to assess
and manage relevant climate-related risks and opportunities where
could be informed by companies such
We recognize that climate-related risks are an important consideration
in developing our strategy. Climate-related risks are incorporated into
such information is material. Task Force on Climate-related Financial Disclosures
We present the principal group-wide metrics and targets used to assess
as Berkeley Group, whichBP’s provides a see How we manage risk on page 69.
governance process,
and manage climate-related risks and opportunities on page 17. This
Chief Executive’s Review
concise one-page summary and
Risk management
signals
Recommendation: Disclose how the organization identifies,
includes the targets we set out in 2018 in our RIC framework.
Insight into the
In addition, in 2019 BP announced that sustainable GHG emissions Berkeley welcomes the recommendations of the Financial Stability Board’s (FSB) HaveTask Force
youon Climate-related
found reporting Financial
on
further disclosures to follow over time,
assesses and manages climate-related risks.
reductions would be included as a factor in the reward of around
Disclosures (TCFD). Berkeley reports on climate-related governance, strategy, risk management, and metrics and targets in
section 172 duties a useful
a stand-alone report as found on our website (www.berkeleygroup.co.uk/about-us/sustainability/reports-and-case-studies)
process in its own right this
Our processes for identifying and managing climate-related risks are 37,000 eligible employees across the group and around the world,
right (Figure 4.) and within our annual response to CDP’s Climate Change Programme. Both climate change mitigation and adaptation are
Boardroom.
integrated into BP’s risk management policy and the associated risk including executive directors. This target was 10% of the group’s annual year?
key areas of focus for Berkeley, featuring prominently within the Our Vision business strategy.
Faceptatur? Metus, cus del il ma dit,
management procedures. BP’s risk management system is designed cash bonus scorecard and we exceeded the target set of 1.0Mte suntthrough
que idem
Berkeley continues to take actions to further implement the TCFD recommendations theexerit fugit of
evolution rerferiatur
our
The index of disclosures provided to address all types of risks and as part of this system our operating (1.4Mte). In 2020 we plan to increase the percentage of remuneration assincilBerkeley
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An introduction
processes and reporting mechanisms. The table below summarises the key areas where has already made
businesses are responsible for identifying and managing their risks. which is linked to emissions reductions for our leadership and eligible progress and where we have reported on these. que volor aut qui nonsed utempor
by BP (Figure 5., below) is another Risks which may be identified include potential effects on operations employees. Our aim is to mobilize our workforce to become advocates
Governance
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eumrisks
The Board has ultimate responsibility for climate-related quisciis
and destiae molupti oribus
opportunities.
to our section 172
at asset level, performance at business level and developments at for our net zero ambition.
example of clear communication regional level from extreme weather or the transition to a lower
For information on our 2020 remuneration policy, see page 110.
Disclose the
organisation’s governance
A nominated Executive Director, Karl Whiteman, has direct
and wider sustainability topics.
et qui responsibility for climate
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carbon economy.
which supports more detailed around climate-related lanis rero es dolut erro odicitthere
volupta
statement
To ensure climate-related actions are incorporated into Berkeley’s daily activities,
risks and opportunities. is a Group Sustainability Team focused on identifyingilluptatem ra coreped
strategic risks ut fugitatis
and opportunities,
As part of our annual planning process we review the group’s principal
narrative disclosures againstrisks the four Climate change and the transition to a lower
and uncertainties.
carbon economy has been identified as a principal risk, see page 69.
place within Berkeley’s operating companies to support
mod que deliqui
performance monitoring and reporting. Dedicated sustainability invenienimin
practitioners
local management
rehendic
conse
are also
and project
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teams in meeting their responsibilities to implement Berkeley’s
eni untur. Our Vision strategy, identify
main areas of the recommendations.
This covers various aspects of how risks associated with the energy climate change risks and opportunities facing their business and to drive continual
improvement in performance. Assitatem faccus in pediam ut pa
transition could manifest. Similarly, physical climate-related risks such
For reference, this sits within a larger
as extreme weather are covered in our principal risks related to safety Read more on pages 76 to 77 and 90.
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dolupta dolores nonserum fugia
and operations.
narrative set of TCFD disclosures: Strategy
Disclose the actual
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Climate change mitigation and adaptation are key areas ium volor
of focus reperios featuring
for Berkeley, iuntur ad
prominently within the Our Vision business strategy. que dolum dolla neceria tusdaerissin
and potential impacts consenducia is ente parum is
A detailed climate change adaptation risk identification exercise was undertaken in 2014 to
of climate-related risks niscitatis nos rehenda non nihit
Figure 5. BP Annual Report 2019 and opportunities
inform strategic commitments as part of Our Vision, facilitated by specialist consultants and
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involving key representatives from across the business. The key risks identified for the homes
on the organisation’s occullorro
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During this year, which has
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TCFD recommended disclosure Where reported where such information
is material. In addition to recognising the importance of adaptingWas reporting
our homes on more
and places to be resilient
Governance
Disclose the organization’s
a. Describe the board’s oversight of climate-related
risks and opportunities.
Page 42.
disruption caused by COVID-19,
to future climate change risks, Berkeley is focused ondifficult
taking action
resulting from our direct activities and those resultingfrom
decisions
COVID-19
from the
to reducearising
use of the a homes
the emissions
challenge
and
governance around climate- b. Describe the management’s role in assessing and Page 42. consideration homes of the impact of
developments we create as evidenced by our carbon for
commitments.
the
positive Board?
and net zero carbon
Board decisions onwillstakeholders
related issues and opportunities. managing climate related risks and opportunities. Metus, cus del il ma dit, suntbus
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be undertaking more detailed climate-related es estiam
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and the long-term success of the
Strategy a. Describe the climate-related risks and opportunities Achieving the Paris goals, page 13 – for a discussion of the understanding of climate-related risks and opportunities. quidus, cus et ut aut fugia dolum
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impacts of climate-related risks
and opportunities on the
medium, and long term. RIC framework, page 41 – for an outline of opportunities.
Risk factors, pages 70-71 – description of principal risks.
company
Risk Management
has come under very
Climate change is considered a principal risk to Berkeley.
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Group Sustainability Team
organization’s business, strategy
and financial planning where
b. Describe the impact of climate-related risks and Risk factors, pages 70-71 – description of principal risks. close scrutiny.
Disclose how the
organisation identifies,
identifies strategic climate change risks and
regular review of issues and trends. Active collaboration
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such information is material. assesses and manages representation at conferences and events help to ensure up-to-date knowledge. Identified
strategy, and financial planning. risks and opportunities are shared with the Board andsimet
included within
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c. Describe the resilience of the organization’s strategy, Achieving the Paris goals, page 13. register reviewed by the Audit Committee. suntiberum delita sedipsant adi
taking into consideration different climate-related Our strategy, page 16. Read more on pages 66 to 79. ventemp oreperu ntionsequi aut re,
scenarios, including a 2°C or lower scenario.
statement
Metrics and Targets
presents
Berkeley
to
reports
provide
on greenhouse gas (GHG) emissions
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which we areraestrum
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on an
Risk management
Disclose how the organization
a. Describe the organization’s processes for identifying
and assessing climate-related risks.
Risk management, page 44.
Upstream, page 50. investors and wider
Disclose the metrics annual basis. stakeholders quo eachange,
To minimise Berkeley’s contribution to climate volorumwe que verest
have
carbon intensity reduction target under Our Vision that is reviewed every two years to
et dolorpo
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with an insightensure intocontinual
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processes
and targets used
identifies, assesses and Downstream, page 56. to assess and manage
Whichtotough
Berkeley has also committed procuringdecision are you
100% renewable
manages climate-related risks. Other businesses and corporate, page 63. most proud
electricity for its UK operations and offsetting our remaining emissions ofsince
making in the
2017/18.
the Board
risks and has in place to capture
relevant climate
related Berkeley has broader targets for the homes and places lastwe year and
develop, why? the provision
including
b. Describe the organization’s processes for managing Risk management, page 44.
of energy efficient lighting and appliances, as well as Metus,
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homes maoperate
dit, suntbus
at net zero
section 172 matters, its objectives
opportunities where
climate-related risks.
such information carbon by 2030. cum ditatis es estiam verovid et
c. Describe how processes for identifying, assessing, Risk management, page 44. We are currently working with an external consultant quid comnialonger-term
dus mos alicatium
in reviewing that information and its
is material. to develop science-based
and managing climate-related risks are integrated How we manage risk, pages 68-69. targets for our activities labo. Neque endae preic torporro
identification of the outcomes ofandthe
into the organization’s overall risk management. Risk factors, pages 70-71. ipsantionse vendis nis et aut latur,
Read more on pages 46 to 47 138 to 139.
odiscias vellesequi imporuptio. Ore
key decisions it makes.
Metrics and targets a. Disclose the metrics used by the organization to Relevant group-wide metrics and targets, page 17. si doluptas con reici con explicto
Disclose the metrics and targets assess climate-related risks and opportunities in line rem deni te porepudamus aliatur ma
Berkeley will continue to work with external experts to develop science-based targets, climate-related scenario analysis
used to assess and manage with its strategy and risk management process. sequia nam
and related disclosures in line with the recommendations of the TCFD. We have complied withnobitiur asi tempores
the Streamlined Energy
relevant climate-related risks b. Disclose Scope 1, Scope 2, and, if appropriate, GHG emissions data, page 40. rem.Report
and Carbon Reporting (SECR) framework in our emissions reporting in the Directors’ Ut verferunt que138
on pages volluptatis
to 139. mil
and opportunities where such Scope 3 GHG emissions, and the related risks. il ipsamus ni ducimol uptate molupta
information is material. 64 Berkeley Group 2020 Annual Report
c. Describe the targets used by the organization to RIC framework, page 41.
manage climate-related risks and opportunities and (Also note: Net zero ambition and aims, page 6).
performance against targets.
10 44 BP Annual Report and Form 20-F 2019climate-related issues is Simon Carter, for analysing: Sustainability Committee, which
Chief Financial Officer. Simon chairs consists of senior managers from
– Climate-related risks to the Risk
our Risk and Sustainability Committees, across the business including
Committee, which consists of the
ensuring continuity and accountability. strategy, asset management,
Executive Committee and leaders
As part of assuming these responsibilities, and leasing. The delivery of the
from business units, including
Simon took part in The Prince of Wales’s sustainability programme, including
procurement and property
What does good look like?
Business & Sustainability Programme our net zero targets, is overseen by
management. Each business unit
at the Cambridge Institute for this Committee, which reports to the
maintains a comprehensive risk
Sustainability Leadership. Board’s Corporate Social
register, which is reviewed quarterly
Responsibility Committee.
The Board is updated on climate-related by the Risk Committee. Climate risks
issues at least annually and has are identified through a process
continued
ultimate oversight of risk management. involving trend analysis and
Significant and emerging risks are stakeholder engagement. Identified
escalated to the Audit Committee and risks are incorporated into our risk
climate risk is tracked as part of our framework and managed by the
Catastrophic Business Event risk appropriate business areas.
category (see page 84). – The TCFD Steering Committee
Our Board CSR Committee meets reports to the Risk and Sustainability
three times a year and oversees the Committees, both of which meet
delivery of the sustainability strategy, quarterly. Ultimate oversight is at
including the delivery of the Pathway Board level, with our new Corporate
to net zero and the management Social Responsibility Committee
of climate-related risks. playing a role from May 2019. Any
resulting disclosure requires approval
Figure 7. British Land Annual Report 2020 by the Audit Committee.
When approaching cross-referencing • O
rganisational charts
Board of Directors
and an index of disclosures, two A simple but effective organisational
Board
practical points are worth considering: chart is provided by Barclays (Figure 6) Audit Committee
Corporate Social Responsibility (CSR)
Committee
and an alternative is from British Land
First, many larger listed companies will
(Figure 7). Risk Committee Sustainability Committee
already provide a response to the CDP’s
annual questionnaire on climate change, • O
pportunities as well as risks TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD)
Executive and Management
Climate-Related Financial
TCFD Steering Committee
forests and water security to provide an There is a tendency for companies to Members include representatives from across the business: Asset management,
Development, Finance, Investment, Procurement, Property management,
Risk management, Strategy and Sustainability
assessment of their environmental impact. focus primarily or exclusively on risk
This is likely to contain information that in their TCFD reporting. Care should Disclosures
is relevant to TCFD reporting. However, therefore be taken to ensure that both
Figure 8. British Land Annual Report 2020 British Land Annual Report and Accounts 2020 43
rather than simply referencing their risks and opportunities are considered.
CDP responses, companies should use The Board recognises the systemic threat posed by climate change and the need for urgent mitigating action. We have a track record
• A
clear roadmap to full disclosure of improving environmental performance, we were one of the first real estate companies to introduce stretching carbon reduction
them as a starting point for their own targets that go beyond the demands of the Science Based Targets initiative for Scope 1 and 2 emissions, and we are a founding
The example (Figure 8.) from British signatory of the Better Buildings Partnership’s Climate Change Commitment. Since 2009, we have reduced our operational carbon
intensity by 73%, and we are announcing an ambitious set of climate targets as part of our new pathway to net zero (see page 40).
TCFD disclosures.
Land is a helpful reference point for Our roadmap to full disclosure in 2021/22
Second, it is always helpful if the data those ready to commit to a fuller level 2019/20 Establish governance Scoped potential risks Potential risks identified
Roadmap agreed
referred to in the TCFD disclosure is of disclosures.
GOVERNANCE Board-level oversight Two climate workshops, including:
located in the same publication, typically 1. Established the CSR Committee – low carbon transition
Our governance framework
2. Net zero strategy reviewed at risk scenario
the Annual Report, or in full in one the Board away days
Operational Accountability
– physical risk scenario
location on the corporate website to 1. TCFD Steering Committee
established
avoid a time-consuming search for Progress
information and the risk of valuable Figure 6. Barclays Annual Report 2020 – Our newly-formed TCFD Steering Committee undertook two climate risk scenarios workshops, where facilitators from Forum for
the Future took the group through the latest climate science and ran breakout sessions on climate risk identification and
organisational responses.
data being overlooked. – As part of the new sustainability strategy, we worked with experts to develop our pathway to net zero, including aggressive
climate and energy targets. Our updated Sustainability Brief will enable asset-level delivery of this approach.
Barclays PLC Board – The Board’s strategy away days in 2019/20 included the review and discussion of our new sustainability strategy including the
Specific aspects of others’ reporting may pathway to net zero.
also be helpful to consider. These might
include the following: Group Executive Committee
2020/21 Establish exposure
Physical: Transitional:
– Audit asset resilience – Policy development
– Potential compound impact – Supplier resilience
– Identify opportunities – Identify opportunities
Environmental and Social Impact Group Risk
Committee Chair: Group CEO Committee
2021/22 Organisational response
Portfolio level: Adapting corporate strategy
Quantified exposure Mitigation targets
Sustainability
TCFD Forum to each risk event Adapting financial planning
Forums
Incorporate into enterprise Risk management metrics
risk management
For more information, see our 2020 Sustainability Accounts at www.britishland.com/data
Board deep dives in 2019 plausible climate stress. This analysis will
support the Group’s response to the
The Board’s agenda in 2019 has been 42 British Land Annual Report and Accounts 2020
forthcoming Bank of England industry-wide
significantly influenced by a comprehensive
stress test. This progress was welcomed
‘listening tour’, undertaken by our new
11 Chairman following his arrival at Barclays in
whilst acknowledging the need for risk
management practices generally to evolve
March, before he became Chairman in May.
further across the whole industry in respect of
Nigel Higgins held around 50 meetings with
climate change risk.
shareholders and other stakeholders as part ofYou can also read
