Strategic Report
Governance
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Risk management Describe the organisation’s processes for identifying and assessing climate- related risks
In recognition of the threat climate change poses to our business, sector and global economy, in early 2022 we conducted a rigorous climate risk assessment. At both the business and portfolio level, we identified our material climate-related risks and assessed their potential likelihood and significance, quantitatively and qualitatively, relative to each other. These results have been integrated into our risk matrix, containing all of our material corporate risks, and given probability, impact and residual impact ratings ranging from low to high to demonstrate the relative significance of climate-related risks to other risks. Furthermore, this year, we updated our emerging risk dashboard into a risk radar that identifies the principal and emerging risks to the business. Our risk radar recognises ‘climate change’ as a top principal risk to the business, and therefore embeds climate-related considerations into all our risk management and decision-making processes. Climate-related risks are reviewed on an ongoing basis by the Executive Committee and presented to the Board as part of the annual Risk Management Policy review, or as necessary. Results from the climate risk assessments highlighted that flooding is a key physical risk facing our existing portfolio. Therefore, this year we completed asset-level desktop assessments for our entire portfolio to understand our exposure to this climate risk at a more granular level, addressing flooding from rivers, surface water, reservoirs and sea. This helped us to assign a risk ranking to each asset, ranging from very low to high, whereby mitigation action is required at assets with a medium or high rank where flooding exposure is material. This exercise has and will continue to inform our investment into flood resilience measures, enabling us to prioritise our most at-risk assets. The initial assessments identified a number of properties where further investigation is required. This will take place during 2023/24.
Picton Property Income Limited Annual Report 2023
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