ESG Report 2022 single pages web - Flipbook - Page 76
Task Force on Climate-related Financial Disclosures (continued)
RISK MANAGEMENT
a. Our processes for identifying and
assessing climate-related risks
Our short- and long-term climate-related risks include:
•
Transitional risks which mainly relate to potential policy
and regulatory changes that are considered ‘high’ in
terms of significance and likelihood over the longer
term. For example, policy development could trigger
new green business taxes to fund the initiatives. There
is also the potential issue that if legislation is rolled
out in haste it could result in long-term unintended
consequences which will need to be redressed.
•
Physical risks are low in the short term and ‘lowto-medium’ in the longer term for significance and
likelihood. Changes in temperature, for instance, could
impact energy demand for heating and cooling, while
extreme weather conditions could cause flooding,
rising sea levels and fires. Both risks could adversely
affect revenue. With a global footprint of over 70 offices
in 33 countries there is a varying degree of risk in
different geographic locations which are monitored in
conjunction with our business continuity programmes.
The principal and emerging risks facing the business,
which have been assessed by the Audit Committee and
Board, are described on pages 44 to 47 of the 2022
RWS Annual Report. The Board and Executive Team has
considered the risk of climate change to the business.
As mentioned, the Executive Team is responsible for
identifying potential climate-related risks and, together
with the CFO and Head of Sustainability and ESG, assesses
them to determine their potential impact following
which they are prioritised and risk-mitigation strategies
developed.
The climate risk assessment also includes the assessment
of existing and emerging regulatory requirements related
to climate change. These include additional reporting.
As mentioned above under ‘Governance’ we use climate
risk strategy scenarios to help quantify and conceptualise
the impact that risks might have on business practices.
Inputs include probability of risk occurring, severity of the
risk, assessment of current methods in place to manage
the risk and cost of mitigation versus cost of inaction over
short, medium, and long term.
Thereafter these are tied back to our climate-related
risk register and where we rank the risks in terms of
significance, priority, probability and gross risk as well as
tracking the strength of the risk management and actions
required.
b. Our processes for managing climaterelated risks
As noted above, climate change risks are managed
primarily through our risk management process. Risks
are identified by the CFO and Head of Sustainability
and ESG, and through regular engagement with the
Executive Team. Once identified, they are assessed to
determine their potential impact (hazard vs probability of
occurrence). Risk profiles are produced at a business level
with Board-level oversight of climate-related risks being
maintained by the CFO. The Executive Team provides
additional horizon scanning and meetings take place
periodically to discuss key risks and mitigation strategies.
We also continue to enhance our understanding of longerterm risks relating to our scenario analysis and share it
with the Board for consideration and approval.
The RWS business continuity programme oversees
mitigations of the physical risks of climate change on
our operations through business continuity plans which
include remote working. Supplier management by the
procurement teams mitigate the potential impact of
climate-related risks on our supply chain.
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RWS — ESG Report 2022
FRAMEWORKS
RWS has identified significant opportunities in sectors
which are the most vulnerable as they often have the
biggest opportunity, such as the move to renewables in
oil and gas, the move to electric cars in the automotive
industry, new technology, life sciences contingency
planning, increased litigation in the legal market, and so on.
c. Describe how processes for identifying,
assessing, and managing climate-related
risks are integrated into the organisation’s
overall risk management
The CEO has overall responsibility for climate change
management. The CFO and Head of Sustainability and
ESG supports the CEO by managing the risk potential
impact register and by engaging the Executive Team
on climate change related issues. The Executive Team
meets periodically to discuss climate change issues
and determine appropriate mitigation strategies. Risks
for direct operations, upstream and downstream, are
determined through consultation with each of the
Divisional Presidents and the Chief Information Officer
(CIO), and the Head of Sustainability and ESG. Risks are
categorised according to the likelihood of occurrence
versus the severity of the potential impact on the group.
For example, the hazard risk of climate change and natural
disasters ranks ‘medium’ for both criteria, and so this is
considered to be a principal risk. The Board monitors
principal risks routinely.
