Management report, climate change, TCFD disclosures, CDP

National Grid plc – Annual report – 31 March 2022

Industry: utility

Strategic Report (extract)

Task Force on Climate-related Financial Disclosures

Climate change is the defining challenge of the 21st century and in our role as The Energy Transition Company we understand the critical role we need to play in navigating the change and uncertainty facing the economies we serve in reaching their carbon reduction targets.

That change and uncertainty presents significant risks and opportunities to our business model that we manage with the due focus and attention required to enable the positive, responsible change needed by all of our stakeholders.

We are committed to developing a business model that is consistent with the objectives of the Paris Agreement, and therefore set a commitment in November 2019 to reduce our Scope 1 and 2 emissions to net zero by 2050. The details of the interim targets that we have set to achieve this are included in our RBC that we published in October 2020. This includes approved science-based targets for Scope 1, 2 and 3 emissions across our Group. This year sees the second iteration of our RBR which details our progress against all commitments set out in our RBC, including our emissions reduction targets.

In this year’s disclosure we have fully complied with the FCA listing rule LR 9.8.6R(b). Our climate-related financial disclosures are considered to be consistent with the TCFD’s recommendations and recommended disclosures. Please see the index on page 71 for where we respond to each recommendation and recommended disclosure.

In reaching full compliance this year, we have refreshed our energy transition scenarios and completed the first stage of our comprehensive Group-wide assessment into the physical risks facing the Group under 2°C and 4°C scenarios, with the outcomes detailed in this disclosure. We have also published our first Climate Transition Plan, which provides greater detail and clarity on how we will achieve our emissions reduction targets.

Our climate-related financial disclosures cover all of the TCFD’s recommendations and recommended disclosures. The following index navigates between our disclosures and the TCFD’s recommendations and recommended disclosures:

Governance of climate-related risks and opportunities

The Board’s role

The Board of Directors is responsible for setting and leading the Company’s climate-related strategy and goals, and has oversight of climate-related risks and opportunities impacting the Group. The Board in turn delegates some elements of responsibility to various subcommittees as described below. Our Board members bring a variety of skills and experience to the Board, including expertise in ESG and climate change matters. See page 88 – 89 for an overview of the Board’s skills and experience.

In the year, the Board received regular updates from the Chair of the Safety & Sustainability Committee, providing an overview of matters discussed at the Committee meetings. This included updates on progress against goals and targets for addressing climate-related issues. The Board also receives a CEO report at each Board meeting which informs on how the Company is tracking against performance against metrics and targets and progress is reported through a regular dashboard. Additional updates received by the Board in the year are outlined here:

  • The Board was informed that the carbon emission reduction targets that had been set had been verified by the SBTi.
  • The Board was updated on current ESG positioning in the Company, including key strategy enhancements to keep pace with and to choose where to lead as a responsible business, and assurance around the right governance in place to provide a central organisational focus to drive strategy and performance. The Board was also updated on the impact of acquiring WPD on the Company’s ESG agenda and opportunities including climate-related matters.
  • The Board discussed various aspects of the US business with US management, which included an update on the significant acceleration of the energy transition following President Biden’s election and the Company’s key clean energy ambitions in the US strategy.
  • An enrichment session was hosted by the Chief Sustainability Officer and management to provide focus for the Board on the Company’s ESG and climate-related commitments, ahead of Board approval of year-end sustainability reporting. The session promoted the understanding of the architecture of the ESG commitments, the flow of approvals at various Committees, key stakeholders that are engaged in the process and to assure that ESG stewardship is well embedded at Board level.

The Board also reviewed its entire governance framework in the year to ensure the remit of the Committees remained appropriate and well placed to progress the Board’s agenda going forward, in particular around tackling climate change and monitoring progress against net zero aims. Three of the Board Committees refreshed their remit and focus, including the Safety, Environment & Health Committee, which became the Safety & Sustainability Committee. Within the business there has been a continuing move towards clearer ownership of climate issues; a Chief Sustainability Officer was appointed in September 2021, providing a single point of accountability across the Group for our overarching sustainability strategy to help deliver the energy transition and ensure we drive our own emissions down to net zero by 2050. The Chief Sustainability Officer attends all Safety & Sustainability Committee meetings and provides regular updates at Board and management level, including holding a Board ESG enrichment session, covering ESG commitments, reporting and developments. The remit of the Board and its Committees under our governance framework is set out on page 91. Terms of reference for the Board and its Committees are available at

The Safety & Sustainability Committee is responsible for assessing and monitoring the Group environmental sustainability strategy and performance, as well as how the Company adapts its business strategy considering potential climate change risks and opportunities. This includes reviewing whether appropriate progress is being made against our net zero aims. Progress around GHG emissions was considered and challenged in the year. The remit of the Committee was extended in the year to provide further oversight of climate-related matters including climate scenarios within TCFD and progress against the Company’s climate transition plan which they reviewed in the year. The Committee also noted the changes to the Group Climate Change Risk which moved from what was a single strategic risk, to two risks – one strategic and one operational.

The Remuneration Committee recommends to the Board the remuneration policy for Executive Directors and the leadership team including approving how ESG targets are incorporated into our incentive arrangements. The Committee also reviews workforce remuneration and monitors related policies, satisfying itself that incentives and rewards are aligned to National Grid’s strategy, culture and long-term sustainable success. During the year the Committee considered the remuneration policy to be presented to shareholders for approval at the 2022 AGM and increased the proportion of incentives linked to ESG and progress against climate-related targets.

The People & Governance Committee oversees a diverse succession pipeline, helping to ensure we have the right people to deliver our strategy and net zero ambition. During the year the Committee approved the appointment of several new Non-executive Directors, taking into consideration skills and experience including climate. Martha Wyrsch, appointed in 2021, brings sound knowledge and experience around climate-related issues through her experience as CEO of a major international gas transmission business, as well as leading the growth and development of Vestas’ renewables business in the US, where she spearheaded the expansion of its wind farm portfolio. Anne Robinson joined the Board in January 2022, bringing strong ESG experience and insight into investor perception around climate. Anne and Martha both joined the Safety & Sustainability Committee on appointment and along with the other members received an induction tailored to the Committee including around climate issues. See page 100 for more information around the skills and experience of our Board.

The Audit & Risk Committee has oversight over non-financial disclosures and assurance, including our RBR reporting, TCFD reporting and reporting in line with leading ESG frameworks such as the Sustainability Accounting Standards Board (SASB), the Global Reporting Index (GRI) and the EU Taxonomy. The Committee received papers in March and May 2022 on the financial reporting and disclosure considerations in relation to climate change.

The Finance Committee oversees our financing strategy, including the issuance of National Grid plc’s €850 million Green Bond in September 2021. The Finance Committee also considers the financial impact of environmental factors on our credit metrics and relevant considerations with regard to debt investors, pension and insurance strategy.

Management’s role

The Board delegates to management responsibility for asset investment and maintenance planning, implementation of the net zero strategy and overseeing the development of the RBC. Management is also responsible on a day-to-day basis for the climate-related risks and opportunities faced by the Group and for delivering the roadmaps to achieve the net zero strategy set by the Board. Throughout the year, the Group Executive Committee created a number of sub-committees with delegated responsibility over specialist areas that receive updates on climate-related matters ahead of presentation, where applicable, to the Board and Committees.

The Safety, Health and Sustainability Sub-Committee reviews and manages Group-wide safety, environment and health tracking/monitoring and related decisions. The Chief Sustainability Officer attends this Committee, providing a link between management and Board discussions around climate-related issues. In the year, the Committee spent time reviewing progress against the Company’s climate-related targets and shaped related strategy. In particular, the Committee reviewed potential impacts on our climate strategy and progress towards net zero from external events including the war in Ukraine and the energy crisis.

The Reputation & Stakeholder Management Executive Sub-Committee provides oversight of responsible business policy development and engagement including in relation to the RBR and climate-related disclosures.

The Ethics, Risk and Compliance Committee oversees the implementation of the Group’s risk management framework and assessment of principal risks including climate change.

The Policy and Regulation Sub-Committee agrees and provides strategic oversight of Group public policy priorities and positions.

The Investment Committee has delegated authority to approve investment decisions including those related to our Renewables business.

Other forums

A TCFD steering group comprising representatives from Group External Reporting, Sustainability, Corporate Strategy, Group Risk and Company Secretariat oversees progress against the TCFD recommendations and the publication of our annual disclosure.

A Responsible Business steering group, chaired by the Chief Sustainability Officer, provides oversight of the integration of responsible business into National Grid including the development of ESG targets and future ESG strategy.

Business Unit Green Financing Committees chaired by the Group Treasurer, provide governance over our Green Financing Programme and approve the publication of our Green Financing Report, which provides an analysis of how we utilised the proceeds from our portfolio of Green Bonds and their environmental impact.

Our businesses. Further delegation and responsibility is given to the core operational businesses including the Business Unit Presidents, who are responsible and held accountable for delivering the net zero roadmaps for their businesses.

Our functions. Corporate Affairs, Group Finance, Sustainability and Group HR are responsible for supporting the businesses in achieving their net zero pathways.

Our strategy and risk management for responding to climate change

National Grid has four strategic priorities, as set out on pages 20 – 21, the first of which is to enable the energy transition for all. We have committed to support the decarbonisation of the communities that we serve, migrating to cleaner energy solutions. We have also committed to enabling a fully decarbonised electricity grid, to lead the way on the decarbonisation of gas and to enable the decarbonisation of transport. To support these strategic ambitions, we have recently executed a strategic pivot, via three transactions which will enhance our role in the energy transition. These transactions were the acquisition of WPD, the UK’s largest electricity distribution network operator, in June 2021; and the proposed sales of our Rhode Island gas and electricity business in the US and of a majority stake in our UK Gas Transmission business expected to complete during 2022. Upon successful completion of all transactions, the contribution of electricity to National Grid’s portfolio will increase to around 70% of the Group.

Across all of our businesses, we aim to play a leading role in enabling and accelerating the transition to a clean energy system, balancing decarbonisation, affordability and reliability of supply. Working closely with governments, other stakeholders, subject matter experts, and partners around the world and through our work for COP26, we focus on the technical and commercial solutions that will help achieve net zero for the energy sector. The biggest impact we can have is in enabling the economy-wide clean energy transition, but we must also reduce our own impact on the environment and strengthen our resiliency to risks that we have less control over. To accomplish this, our RBC commitments to reduce Scope 1 (direct emissions from our operational activities), Scope 2 (indirect emissions from our purchase and use of electricity) and Scope 3 (other indirect emissions from our value chain activities) emissions align with the requirements of the Paris Agreement and SBTi. These commitments, along with our overall suite of environmental sustainability initiatives, are reviewed in accordance with our quarterly business reviews, incorporating the risk and opportunities management processes detailed below, and reported accordingly to the Group Executive Committee and Board.

Carbon pricing is one of the tools we use to support the delivery of our emissions reduction targets. We participate in traded carbon markets where our operations are covered by these frameworks, have regulatory incentives to reduce SF6 and methane emissions that are underpinned by a carbon price, and have applied an internal carbon price of $60/£45 per tonne (set in 2017) in investment decision making. Additionally our latest UK regulatory agreements apply a price of £241/tonne.

We’ve found that a carbon price alone is unlikely to drive the changes needed to meet our net zero goals. As important are policies and commitments, such as those we have to remove and reduce SF6 leakage on our networks, and replace our fleet with electric vehicles. We are currently reviewing our approach to investment decision making to ensure we have the right mix of approaches to meet our commitments.

Identifying and assessing the impact of climate-related risks and opportunities

The scale of ambition and speed of change required to meet net zero emission targets, along with the changes in weather patterns, present both risks and opportunities to our business. These risks and opportunities, which are informed by our physical and transition risk scenario analysis and our horizon scanning processes, are built into our business planning and investment decision processes where we assess the degree of exposure to climate-related financial risks and opportunities. For our regulated businesses, our plans to address these are formulated with and agreed to by our regulators. Our management is incentivised through our target setting and remuneration policy to deliver the actions necessary to achieve our net zero objectives. This year, we agreed new ESG-related targets for our long-term incentive programme as detailed on page 113. We also launched a suite of internal climate change e-learning modules to help all employees learn more about climate change and our role in the energy transition. To accompany this, we conducted extensive pre- and post-COP26 employee engagement campaigns.

See page 75 for detail on our scenario modelling and page 79 for further detail on the significant risks and opportunities we identified and our response.

Climate change and enterprise risk management

Climate change is considered as part of our ERM process and has been one of our GPRs since autumn 2019. The ERM process is the framework through which the Group identifies, assesses, prioritises, manages, monitors and reports risks. This process is described on page 28 and includes the identification of a series of Group-wide controls and actions to mitigate the climate change principal risk (this is further described on page 30).

Historically, the climate change risk at the GPR level was managed through one broad risk covering both physical and transitional impacts of climate change on our business. In December 2021, the Executive Ethics, Risk & Compliance Committee agreed to split the climate change GPR into two distinct elements: adaptation and mitigation child risks. This has enabled greater alignment to our strategic objectives. The adaptation activity, absorbed within the ‘significant disruption of energy’ risk’s control framework, will help ensure we continue to ‘deliver for our customers efficiently’, and the new standalone mitigation risk is aligned to our strategic objective, ‘enable the energy transition for all’. This has generated greater oversight, focus and adoption of two distinct and proportionate control frameworks in line with the new Group risk appetite – mitigating downside risk, and maximising opportunities, where applicable.

We have further developed our risk and opportunity horizon scanning to assess critical trends to the energy transition. With our senior stakeholders and supported by external risk experts, we identified key indicators and metrics which are measured on a monthly basis versus thresholds. These are analysed against our current strategy and business plans for their potential impact and plausibility. Emerging risks are managed under our risk management framework with results reviewed by senior leadership (detailed further on page 29).

Integration of climate change into our overall risk management

Consistent with the Group’s overall approach to risk management and internal control, climate change risk management activities take place through all levels of our organisation. Our risk governance model drives an effective ‘top-down, bottom-up’ approach which allows the Group Executive Committee to define and cascade the GPRs to each business area; and in parallel, all business areas identify and escalate the operational risks that could impact their business model and objectives. The disclosure on page 28 provides further detail.

The Group’s Risk Taxonomy supports all levels of the business to categorise any climate change risk into one of our four taxonomy groups: strategic, operational, financial and compliance; sub-categories beneath these four groups allow the business to select a more granular taxonomy grouping with an assigned risk appetite. The individual business unit or Group Function Risk Committees oversee, discuss and challenge new and existing climate change risks using the ERM framework and scoring methodology to ensure each risk has an appropriate inherent, current and target score for likelihood, financial and reputational impact. Where current risk levels are outside of agreed target scores and our risk appetite (based on the taxonomy), the business area implements actions and internal controls to close the gap.

To support accountability for both aspects of climate change risk, each business unit and applicable Group functions are currently in the process of considering, and where necessary, adopting an individual adaptation and mitigation child risk. As WPD is new to the Group, we are still in the process of integrating WPD into our ERM processes and will report back on our progress with respect to WPD’s climate change risk management next year.

Our climate-related scenario analysis

Scenario analysis to 2050 and beyond guides our strategic and financial planning with respect to climate change. Our scenarios consider the potential physical impacts to the Group of average global temperature increases of 2°C and 4°C. We also consider potential transitional impacts of scenarios of average global temperature increases of 1.5°C in accordance with the Paris climate agreement.

The scenarios executed in 2021/22 build on those of previous years and will evolve as we continually monitor emerging trends in technology and wider market developments. We developed the following stretching, plausible alternative futures for our society by using different assumptions across variables, including (but not limited to) technology, policy, consumer behaviour, competition and science. We tested the resilience of our business strategy against these different transition scenarios, whilst focusing our physical risk scenarios on the climate change hazards which present the greatest physical risk to the Group’s operations.

Physical modelling

The climate hazards that we tested in our 2 degree and 4 degree scenario analysis are summarised below. The climate hazard data is sourced from the national climate assessments (NCA4 in the US, and UKCP18 in the UK). These assessments include data from the Federal Emergency Management Agency, NOAA Physical Sciences Laboratory, Environmental Protection Agency, Met Office, Environment Agency and academic literature. The scenario data is modelled using IPCC’s Representative Concentration Pathway (RCP) scenarios of RCP8.5 (4°C) and RCP4.5 (2°C).

* The UKCP18 national climate assessment does not include data for the 2°C (RCP4.5) scenario. Therefore, the above highlights the potential changes under a 4 degree scenario for both the UK and the US. The changes outlined will still occur under the 2 degree scenario but there will be more intense and higher frequency of occurrence under 4°C.

Physical insights

In assessing the physical impacts of our scenarios, we grouped our portfolio of assets into 12 asset types to assess vulnerability to these hazards. For our 2 degree scenario, the climate data was not yet available in the UK national climate assessment chosen for this analysis, but based on the US findings under this scenario, we can assume similar impacts in the UK, as outlined below. Note, vulnerability to hazards does not mean that risks will be realised. Whether vulnerability translates into risk depends on the exposure (location) of individual assets relative to projected changes in climate hazards, as well as any site-specific resilience measures in place. Although to a lesser degree, our analysis has identified consistent risks that exist today, e.g. flooding, consistent with our wider risk management we are implementing necessary responses to those risks, e.g. flood defences, to ensure reliable operation of our assets and sufficient resilience today as well as into the future.

Most hazards are projected to increase in frequency in the future, with high temperatures and coastal flooding of particular concern. In most cases the level of risk is greater in a 4°C scenario than a 2°C scenario.

The insights from our physical risk scenario modelling show that all scenarios will result in physical impacts to the Group’s assets across consistent areas of our operations; however, the impacts are most material in a 4°C scenario.

We are continuing to progress our physical risk analysis to inform our strategic planning and investment choices. Over the next year, we aim to implement a higher resolution assessment of key risks identified, particularly where risk is extremely localised, e.g. flood-related risk and coastal areas which are exposed to multiple hazards. We will consider the interdependencies between hazards to better understand the resiliency of asset criticality and prioritisation of actions to reduce risks. We also aim to add socio-economic data into the model, to understand where communities at greater socioeconomic risk, like environmental justice communities, and at-risk assets are coupled. The next version of our risk assessment will also incorporate National Grid Renewables and WPD. For further detail on our assessment of the physical impacts of our scenario modelling, please refer to the Climate Change Risk Tool case study below.

Transition scenarios modelling

Our transition scenarios are developed using driving forces which we monitor regularly as part of our risk management process and annually in our strategic horizon scan. In our analysis, we do not make a judgement on the likelihood of any one scenario relative to others; and by design, the analysed scenarios do not encompass all possible future pathways and their associated risks. There are limitations within the scope of our modelling, e.g. available data across other sectors, but to minimise this impact we have utilised a wide range of resources and compared our results with external scenarios.

Transition insights

Whilst current global climate policies and actions suggest a lower than 4°C scenario, a 4°C scenario was still modelled in line with our approach to scenario modelling outlined above. The transition impact to the Group is most significant in scenarios resulting in a lower degree of warming given the increased action required. The following five transition insights are therefore most relevant to a 2°C (or lower) scenario. However each still applies, albeit to a lesser extent, to a 4°C scenario as well.

None of the transition scenarios tested threaten the viability of the Group and we are in a strong position to adapt our portfolio to maximise the opportunities of the energy transition. Further detail on the transition risks and opportunities identified in our scenario analysis, including estimated qualitative and quantitative impacts where applicable, can be found on pages 79 – 82.

How we manage our climate-related risks

As part of our ERM process, risk owners and other key stakeholders establish internal controls to manage the risk within appetite. Regular risk reviews consider the effectiveness of individual controls as well as the collective strength of the internal control framework which determines the financial and reputational impact, and likelihood of the risk to materialise. Where current risk levels are outside of agreed target scores and our risk appetite, remedial or continuous improvement plans will be agreed to mitigate the current risk score.

The controls for our new climate change principal risk (mitigation) have evolved in line with our strategy and regulatory frameworks. They include controls on strategic oversight and governance (for example, Board and Group Executive Committee sign-off on strategy and oversight of delivery against net zero action plans), business unit roadmap and operational plans to deliver net zero targets (that are aligned to Group’s strategy) and investment plans (providing leadership to structural changes, e.g. bringing to scale new technologies). Controls related to the climate change risk are also reflected throughout other relevant risks, for example regulatory outcomes; political and societal expectations; and significant disruption of energy.

The significant disruption of energy risk and controls demonstrates how we are adapting as an organisation to manage the impact of climate change to our assets. Our key climate adaptation controls include the following:

  • Fit for Future of Electricity Strategy: a corporate strategy that considers the future electricity business, including our network resilience and changing environment, and the steps to ensure our business remains resilient in the future, such as enhanced design standards, and investments on asset hardening and flood protection.
  • Engineers Governance forums: Chief Engineers and Engineering Duty Holders meet to provide guidance and data-sharing on key topics such as resilience.
  • Resilience and Asset Management Business Management Standards (BMS): sets out minimum requirements and framework for resilience capability and managing asset risk to ensure each business unit is prepared for the next disruptive event, including the changing environment.
  • Organisational Resilience Competency Framework: to guide, measure and where applicable, heighten our resilience response across the Group under different climate change scenarios.
  • Business Continuity and Crisis Management: ongoing development of a new business continuity software application to ensure a consistent view across the Group, and internal crisis management tool to respond more effectively to incidents, drive consistency, and identify and track actions.

The quality of assurance over key controls has been enhanced following roll-out of a new control testing methodology, that integrates the first line and second lines of defence.

Key controls related to Group and business areas GPRs are self-assessed by first line teams (control owners and/or performers), and tested by second line teams, who review the design and operating effectiveness; all captured in our GRC system. Any ineffective controls are identified and remediated. Risk owners across the Group have the ability to view assurance of their controls in real time, using newly developed PowerBI dashboards.

As outlined above, with regard to our greenhouse gas emissions, where specific actions are identified to achieve our strategy, drive desired behaviours and manage our risks, we set SMART targets for those accountable. Performance against those targets is published transparently, principally through the RBR and the results contribute to the assessment of remuneration for those accountable. For the most material performance measures, an external assurance opinion is received over the accuracy of preparation; a copy of this opinion can be found on our website.

Our significant climate-related risks and opportunities and our strategic response

Guided by our scenario modelling, strategic planning and risk management approaches articulated above, the climate-related risks and opportunities that pose a potentially significant financial or reputational impact are detailed below, along with our basis of measuring the risk/opportunity and our strategic response to each risk/opportunity that underpins our resilience assessments. To assess the relative materiality, we established scope of impact, timeframe and likelihood for each risk and opportunity using internal analysis, market data and input from subject matter experts across our

business. Refer to the subsequent section for further information on measurement indicators, including our performance against them. We assessed which businesses would be impacted against whether there was a risk that could materially affect our ability to meet business objectives and/or, is of material importance to stakeholders. The timeframes we have used to assess the climate-related risks and opportunities are short: up to 2025, medium: from 2025 to 2030 and long-term: from 2030 to 2050. Our ‘likelihood’ assessment is an indicative estimate of the probability for material financial impacts with reference to the following categorisation:

  • Low: Very unlikely to unlikely
  • Moderate: About as likely as not to occur
  • High: Likely to very likely to occur

Climate change metrics and targets

We have metrics and targets that allow us to measure our impact on the environment, demonstrate our commitment and monitor our performance. These were published in October 2020 within our RBC and, on an annual basis, we report our progress against those targets in our RBR and our key metrics in respect of our GHG emissions can be found on page 26. We have a commitment to reduce our impact by achieving net zero for our Scope 1 and 2 emissions by 2050, with interim targets of an 80% reduction by 2030 and a 90% reduction by 2040, from a 1990 baseline. Alongside this, we have a Scope 3 emissions reduction target of a 37.5% reduction by FY 2034 from an FY 2019 baseline year. This target includes all of our Scope 3 emissions. Our GHG emissions reduction targets are science-based and approved by the SBTi.

Numerous underlying metrics support and complement this goal as part of our broader sustainability ambition, including reducing our energy consumption, enhancing the natural value of our landholdings, recycling and/or reusing our recovered assets and reducing our office waste. These are discussed in more detail on page 67 and in our RBR. The metrics comprise several business unit level metrics that are then tracked and monitored by business unit, and presented to senior management on a quarterly basis, with accountability at the local level.

With reference to the principles of the EU Taxonomy, we have disclosed the proportion of our IFRS revenue, operating expenditures and capital expenditures that align with the climate change mitigation and adaptation objectives of the EU’s taxonomy. Given the climate change mitigation objective’s alignment to the principles of the Paris Agreement, the disclosures provide a transparent view of the Group’s compatibility with the net zero goals of the economies we serve during the year ended 31 March 2022. Our assessment is presented within our RBR; please see page 53 of our RBR for the complete disclosure.

We continually review our metrics and targets to ensure that the data we are measuring is meaningful, aligns with our strategy, and is providing the information the business and our stakeholders need to effectively monitor our performance and demonstrate our progress. In June 2022, we published our Climate Transition Plan alongside our RBR. Note, whilst we do not consider water use as a significant climate-related financial risk for the Group, performance metrics are contained in the RBR.

Further, we are closely monitoring developments regarding the UK’s greening finance initiative, the formation of the ISSB and the proposals to deliver a comprehensive global baseline of sustainability-related disclosure standards. Whilst we currently leverage the GRI, SASB, EU Taxonomy, EEI and TCFD frameworks in our RBR to maximise the usefulness of our reporting, we are encouraged to see advancement to further align sustainability reporting disclosures. Please also refer to the RBR for the limited scope assurance opinion received over our most material sustainability metrics. A complete index of the quantitative measurement indicators used to manage each climate-related financial risk and opportunity is below:

Internal control and risk management (extract page 30)

Strategic risks (extract)

The environment (page 67)