Governance
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“Describe the board’s oversight of climate-related risks and opportunities”
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- The process, frequency and depth of climate-change reporting
- How climate-related matters inform strategy, risk management, objectives and reward
- How the board oversees and challenges progress towards climate-related targets
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“Describe management’s role in assessing and managing climate-related risks and opportunities”
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- Which management positions and committees are responsible
- How does the organisational structure enable / facilitate effective management and discussion of climate-related risks and opportunities
- How climate-related issues are monitored (at individual and committee level)
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Strategy
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“Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term”
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- How the organisation defines time horizons
- The climate-related risks / issues across each time horizon
- Which risks and opportunities have a material impact
- How they may vary across business lines and geographies
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“Describe the impact of climate-related risks and opportunities on the organisation’s business lines, strategy, and financial planning”
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- Strategic impacts across products and services, supply chain and operations
- Financial planning impacts across operating costs, revenues, capital expenditure, acquisitions / divestments, access to capital
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“Describe the resilience of the organisation’s strategy, taking into consideration a 2°C or lower scenario”
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- How resilient the strategy is to climate-related risks
- How the strategy may change to address potential risks and opportunities over time
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Risk Management
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“Describe the organisation’s processes for identifying and assessing climate-related risks”
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- How risk management processes operate in practice for climate-related risks
- How the relative significance of climate-related risks versus other risks is determined
- How current and emerging requirements relating to climate change have been considered
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“Describe the organisation’s processes for managing climate-related risks”
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- How climate-related risks are analysed and prioritised in practice
- How decisions are made with respect to the mitigation, transfer, acceptance or control of climate-related risks
- How each of the risks relevant to businesses articulated in the TCFD report are addressed (e.g. policy and legal risks, technology risk, reputational risks, physical risks)
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“Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s overall risk management”
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- How embedded climate risk management processes are across the overall risk management cycle
- What key actions are required to fully embed processes for managing climate-related risks
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Metrics and targets |
“Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process”
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- Determining metrics across water, energy, land use and waste
- Metrics that measure revenue from products / services designed for a lower-carbon economy
- How metrics can be incorporated into existing business and performance measures
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“Disclose scope 1 (all direct emissions), scope 2 (indirect emissions from electricity purchased and used) and (if appropriate) scope 3 (all other indirect emissions) greenhouse gas (GHG) emissions and related risks”
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- Determining emissions by scope category relevant to the business
- Ensuring GHG emissions are calculated in line with the GHG protocol methodology
- Providing emissions and associated metrics for historical periods to enable trend analysis
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“Describe the targets used by the organisation to manage climate-related risks and opportunities”
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- Describing targets relating to GHG emissions, water, energy and land use, waste management
- Describing financial targets for products / services designed for a lower-carbon economy
- Timeframes for achieving targets, base year from which progress is measured and KPIs used
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