Strategic Report
Financial Statements
Additional Information
Governance
TCFD Statement
This year, in order to fully comply with the requirements of the Task Force on Climate-related Financial Disclosures (TCFD), we have carried out a review of climate risk governance and a detailed assessment of the climate-related risks relevant to the business under two distinct climate change scenarios. The risks identified may be physical risks, caused by acute weather events or shifts in climate patterns, or transition risks, resulting from the change to a lower carbon economy.
Recommendation Governance The Board’s oversight of climate-related risks and opportunities
Commentary
Responsibility for climate-related risk management ultimately lies with the Board. This encompasses consideration of climate-related risks and extends to setting the Group’s risk appetite which defines the limits of the Group’s activities. Climate risk and wider sustainability matters are overseen by the Audit and Risk Committee which, in adopting the Risk Management Policy, is responsible for identifying and managing climate-related risks to the Group. The Audit and Risk Committee ensures that the Risk Management Policy is reviewed at least annually and revised as necessary to support our agile risk management approach. The Audit and Risk Committee meets at least twice a year and the Chair is responsible for reporting the Committee’s findings and recommendations to the Board after each meeting, including updates on the Group’s overall risk appetite, risk profile and risks strategy, accounting for the current and prospective macroeconomic and financial environment. This process led the Board to approve the implementation of our net zero carbon target this year, in response to our growing recognition of potential transition risks, including our exposure to higher energy prices and increasingly stringent building standards. This year we updated our Audit and Risk Committee’s terms of reference to include climate-related responsibilities, such as using qualitative and quantitative metrics as appropriate to identify, manage, monitor and oversee climate-related risks. The Responsibility Committee meets regularly to consider all aspects of sustainability and is responsible for identifying and reporting any emerging climate-related risks and opportunities. This year we updated the Committee’s Terms of Reference to reflect this. The Committee ensures compliance with all relevant ESG standards and legislation, and provides regular updates to the Executive Committee. The Executive Committee is responsible for identifying and evaluating risks, including climate-related risks, arising from the implementation of the day-to-day operational activities of the Group. The Committee ensures that physical and transition climate risks are evaluated and recorded in the Risk Matrix and Emerging Risks Dashboard on a regular basis, and as appropriate, risks are escalated to the Board and Audit and Risk Committee. Within the Risk Matrix, responsibility for oversight is assigned to an appropriate Committee or individual. The Executive Committee maintains management and oversight of all risks identified and their mitigating activities, and reports recommendations to the Board or the Audit and Risk Committee. The Terms of Reference have been updated accordingly to reflect the Executive Committee’s enhanced responsibility for oversight of climate-related risks. As part of our climate risks assessment outlined below in Risk Management, we conducted a detailed climate risk governance gap analysis, aligned with the TCFD recommendations, to understand the governance structures we should install to govern, oversee and manage climate-related risks across all levels of the business.
Management’s role in assessing and managing climate-related risks and opportunities
A detailed overview of our Governance structure can be found on page 80
Picton Property Income Limited Annual Report 2022
53
Powered by FlippingBook