RWS Annual Report 2022 web - Flipbook - Page 51
STRATEGY
The Board and Executive Team are kept informed and
updated on climate-change issues by the Head of
Sustainability and ESG using a variety of forms including
reports, presentations and discussions, including
monitoring and verification of global carbon emissions,
Environmental Management Systems (EMS) compliance
initiatives, carbon reduction plans as well as the latest
changes in regulation and the International Sustainability
Standards Board (ISSB).
The Head of Sustainability and ESG is responsible for
setting the strategy and targets for measuring and
reducing the Group’s environmental impact. These
are then approved by the CEO and CFO. The Group’s
performance is measured throughout the year, tracking
emissions across all scopes.
RWS is reviewing its climate change impact and
developing a carbon emission reduction plan using a
science-based target aligned with the SBTi criteria. These
targets and subsequent reduction plan will be submitted
to the SBTi for official validation following Board approval.
Initially, RWS is aiming to reduce carbon emissions by 55%
by 2030, using FY22 as a baseline. RWS is in the process
of establishing a system to monitor implementation and
performance of climate-related objectives.
The early adoption and alignment to the TCFD
recommendations, demonstrated by RWS becoming
a signatory to the TCFD in 2021 ahead of it becoming
mandatory in 2022, demonstrated the proactive approach
RWS has taken to risk management.
a. Climate-related risks and opportunities
in the short, medium, and long term
Internally we use climate risk strategy scenarios to help
quantify and conceptualise the impact that risks, including
climate change, might have on our business practices.
Certain risks may need to be assessed and reviewed at a
business strategic level whilst others focus on divisional
or local practices. Dependent on the risk being assessed,
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.
These scenarios look at the impact from risks over short,
medium, and long term. Our short term is one to three
years; medium term is three to five years; and long term
is five to 10 years. We have defined our terms to coincide
with business strategies and the planned objectives for
climate-change risk mitigation.
Although we operate in a low carbon intensive market
sector, RWS has considered and developed three
qualitative climate change scenarios based on details
in the Intergovernmental Panel on Climate Change’s
(IPCC) fifth assessment report. These scenarios include
RCP1.9 which limits global warming to below 1.5°C, the
aspirational goal of the Paris Agreement; RCP2.6 which
represents a mitigation scenario aiming to limit the
increase of global mean temperature to around 2°C above
preindustrial levels for mid-range climate sensitivity; and
RCP8.5, a high-emissions scenario frequently referred
to as 'business as usual', suggesting that is a likely
outcome if society does not make concerted efforts to
cut greenhouse gas emissions. The above scenarios take
into consideration the strategic and financial risks and
opportunities that are posed to our business.
This analysis is an important element in making
disclosures consistent with the guidance from the TCFD.
Based on current weather fluctuations, we have made
a number of assumptions associated with those states
and what could be experienced, for example, with carbon
tax levels, extreme weather impacts on the business and
supply chains.
As a company, we define a risk having a material financial
or strategic impact on the company if it meets the
following criteria:
•
•
A financial impact of £500,000 or more
A probability of very likely (medium) or higher
STRATEGIC REPORT RWS — Annual Report 2022
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