27 July 2022
The impact of global temperature rises was demonstrated all too clearly last week, with the UK experiencing temperatures of more than 40C for the first time in its recorded history.
Met Office officials have confirmed that reaching these temperatures in Britain would have been ‘virtually impossible,’ if we had an undisrupted climate.
The subsequent disruption, including fires, melting airport runways, and overheating train tracks, as well as a surge in A&E visits, has brought the importance of the UK’s climate adaptation efforts into even sharper focus.
Larger businesses are already having to address the risks and opportunities arising from climate change within the Taskforce for Climate Related Financial Disclosure (TCFD) non-financial information statement as part of their annual report. But the events of the last week show that assessing the risk and making appropriate plans should no longer be seen as a piece of troublesome compliance but as an inherent part of good governance and effective strategic planning.
Consumers, partners, stakeholders, and investors are all increasingly making decisions based on the sustainability performance of a business. But the last week shows that climate change can also already have a material impact on the operational resilience of your organisation.
The sustainability performance of larger businesses is increasingly in the public domain not only because of TCFD but also through highlighting overall carbon emissions and energy consumption as part of Streamlined Energy & Carbon Reporting (SECR). But leading organisations are increasingly aware that taking an initiative-taking stance and planning well and sharing those plans can be a source of competitive advantage. We are increasingly finding that some of our clients are choosing to voluntarily embrace these frameworks as a matter of good business sense even if they are smaller than the size dictated for mandatory compliance.
As a quick reminder, TCFD is mandatory for all AIM listed companies and others with more than five hundred staff and a turnover exceeding £500 million. The framework covers five key pillars:
Governance: This requires the disclosure of an organisation’s governance concerning climate-related risks and opportunities, including a description of the board’s oversight, as well as how management plays a role in assessing and managing these risks and opportunities.
Strategy: The disclosure of the actual and potential impacts of climate-related risks and opportunities on an organisation’s business activity, strategy, and financial planning, identified across the short, medium, and long term.
Risk Management: This is a disclosure of how an organisation identifies, assesses, and manages climate-related risks, including the process for identifying and analysing risks, the process for managing those risks and how climate impact is integrated into an organisation’s overall risk management plan.
Metrics and Targets: The metrics and targets are used to assess and manage climate-related risks and opportunities, which include disclosure of Scope 1 and Scope 2 emissions, Scope 3 emissions, if possible, and the targets laid out by an organisation to manage and improve their performance.
Scenario Analysis: This helps an organisation to look at a range of potential outcomes and how the future might look for them and of course then plan accordingly.
By completing these disclosures, businesses provide their key audiences with a way to clearly monitor their climate performance over time, together with a method by which they can be compared to other businesses. But more importantly, it provides the basis to run a better business in a greener world.
Inenco has a strong record for supporting organisations through mandatory compliance schemes and already supports a number of large UK businesses with their TCFD reporting.
A strong and deep understanding of the energy and sustainability sector ensures that we deliver accurate reporting that meets the expectations of your varying stakeholders.
For more information, give us a call on 08451 46 36 26 and speak to one of our experts.