RWS Annual Report 2022 web - Flipbook - Page 56
Task Force on Climate-related Financial Disclosures (continued)
RISK MANAGEMENT
As noted earlier, we have seen an increased demand for
companies to show effective management of their climate
change impact, for example, requests from the market, and
existing and upcoming legislation. This supports our efforts
in demonstrating that we are an ethical, responsible, and
trustworthy company. As such we review our operations
regularly to ensure that we operate as efficiently as
possible. This risk is considered over short, medium, and
long terms (one to 10+ years).
Over this next 10 year period, significant investment will
continue to be made by the company in a number of areas
The Group has previously set out plans to reduce its global
office footprint which will significantly reduce of Scope
1, 2 and most importantly Scope 3 emissions that are
associated with operating and travel to/from an office. The
financial impact of this will see the Group achieve savings
on its leased offices, the majority of which are on tenures of
less than three years.
As well, savings from reduced leasing costs, the Group
shall also reduce energy and heating costs. However, with
energy cost and heating costs expected to increase (from
either increased demand for renewable energy sources
or from carbon taxes on traditional energy sources),
any saving here may well be offset. Similarly, the Group
insurance premiums may reduce as the number of offices in
the Group reduces, however insurance premiums may well
rise as a result of increasingly extreme weather events and
rising sea levels.
For those locations where an office is required to continue
effectively serving our clients, the Group will prioritise
offices that possess the highest environmental ratings
possible in that jurisdiction. Any savings made arising
from reducing the Group’s office footprint shall be used to
cover the cost of moving and setting up these new office
locations or indeed making further improvements to our
existing office locations that we are retaining.
At this stage, its is not possible to estimate the full financial
impact of the above, other than to confirm that the costs of
transitioning toward our 55% reduction in carbon by 2030
will be mitigated partly by other initiatives that the Group is
actively implementing.
a. Our processes for identifying and
assessing climate-related risks
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. 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 — Annual Report 2022
STRATEGIC REPORT
