Risk management continued Describe the organisation’s processes for managing climate-related risks
Our risk matrix and risk radar are reviewed and updated regularly by the Executive Committee to ensure that we remain attentive to the changing nature of these risks and to reflect evolving stakeholder requirements and the wider macroeconomic and geopolitical landscape. The risk matrix identifies individual climate-related risks with a residual risk ranking (low, medium and high) and mitigating controls and individual responsibility are determined to ensure risks are managed appropriately. Based on ranking, risks are communicated across relevant levels of our business. As we now have a comprehensive understanding of our material climate-related risks to our portfolio, this year we began undertaking asset resilience inspections to measure each asset’s resilience to its material climate-related risks. Next year, we will continue inspections across our portfolio, helping us to understand our portfolio’s baseline resilience to climate risk impacts and informing our asset resilience planning and capital expenditure requirements. This ensures that our most at-risk assets are prioritised, building our climate resilience where it matters most first. We have created a TCFD and net zero carbon action tracker that is utilised across the business to record the actions being taken to manage physical and transition climate-related risks at the portfolio level and asset level. This document is monitored centrally and reviewed by the Executive Committee to guarantee our climate resilience strategy is progressing as intended. To enhance our management of climate-related risks in occupier-controlled spaces, we have introduced green lease clauses and are proactively engaging with occupiers at an early stage around their operational behaviour, energy efficiency and data sharing. Conducting ESG audits has enabled us to identify opportunities to reduce energy consumption and improve efficiencies, supporting our ability to make informed decisions during our investment and capital allocation activities, as well as acquisition and divestment decisions to maximise the overall performance and resilience of our portfolio. We remain committed to achieving our 2040 net zero carbon target, which will be key to support our resilience against transition climate risk impacts, including increased carbon costs and shifting market demand towards low carbon buildings. Demonstrating our support for BBP, we have publicly published our net zero carbon pathway, which sets out our priority actions towards decarbonising the portfolio. In the coming year, we plan to transform how we collect and manage our climate-related data by moving from a third-party managed system to an internal system. This will enhance our ability to access data and real-time updates across the portfolio, assisting our management of climate- related issues. Our Risk Management Policy has enabled us to integrate the climate-related risks we have identified and assessed (see the Strategy section) into our overall risk management processes effectively such that sustainability and climate-related issues are considered across all our activities. We are committed to conducting business responsibly and in a way that creates a positive impact on society. Therefore, we will continue to ensure climate-related risks are identified, assessed and managed appropriately to fulfil our role in tackling climate change.
Describe how the processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s overall risk management
Picton Property Income Limited Annual Report 2023
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