TCFD disclosures, principal risks, Streamlined Energy and Carbon Reporting disclosures, green bond report, judgements and estimates

Burberry Group plc – Annual report – 2 April 2022

Industry: retail


Burberry has a longstanding commitment to addressing the impacts of climate change and has taken luxury industry-leading steps to advance our decarbonisation agenda. Since 2016, we have cut our market-based scope 1 and 2 emissions by 93%. In FY 2021/22 we have achieved our goals to be carbon neutral across our own operational use globally and to use 100% renewable electricity.

Take urgent action to combat climate change and its impacts

Building on these achievements, in June 2021 we became the first luxury brand to pledge to being Climate Positive by 2040. To achieve this, we have committed to accelerate emissions reductions across our extended supply chain on our journey to net zero by 2040, 10 years ahead of the 1.5°C pathway set out in the Paris Agreement. We are also committed to investing in nature-based projects with carbon benefits that restore and protect natural ecosystems and enhance the livelihoods of global communities. See page 93 for further details.

In November 2021, we announced our biodiversity strategy to support global conservation efforts. We will take action to protect, restore and regenerate nature by applying a nature-based approach to our own value chain and in areas of greatest need beyond our operations. We are committed to restoring ecosystems within Burberry’s own value chain, working with key partners such as the Savory Institute on their Land to Market programme, as well as continuing to evolve our understanding of our nature impacts in partnership with The Biodiversity Consultancy. We are also working with organisations like the Science Based Targets Network to support the development of a robust framework to monitor and drive progress.

We have adopted the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and reported on its four thematic areas: Governance, Strategy, Risk management, and Metrics and Targets, since FY 2019/20. This section builds on our previous reporting, and describes our approach to scenario analysis, the results of the scenario analysis, and the actions taken in response to these results. Climate change and the transition to a low carbon economy also presents opportunities for efficiency, innovation and growth, all of which are built into our Climate Positive ambition.

As scientific understanding of climate change and the global transition towards a lower-carbon economy evolves, we will continue to develop our assessment of climate-related risks and mitigation strategies and our TCFD disclosures to reflect such changes, ensuring they follow latest guidance and leading practice.

The Burberry TCFD Basis of Reporting outlines how we have prepared the Financial Statements and disclosures, considering relevant TCFD guidance publications and the principles for effective disclosure. We have engaged Ernst & Young LLP, our independent auditor to provide a limited assurance statement in accordance with ISAE 3000 on our FY 2021/22 TCFD disclosures. The TCFD Basis of Reporting and assurance statement is available on

Listing Rule 9.8.6R(8)

The Company has included in its Annual Report climate-related financial disclosures consistent with the TCFD Recommendations and Recommended Disclosures.


The Board is responsible for ensuring its approach to sustainability is integrated into and implemented across the business. The governance framework of committees and advisory forums provide updates and key information to the Board to ensure that it is able to make informed decisions. Our governance framework is outlined in the corporate governance statement on page 167 and more detail on the roles of the Board and its Committees is set out in the matters reserved for the Board and its Committees’ terms of reference, which are available in the corporate governance section of The Board is also responsible for overseeing and monitoring the management of risks and opportunities, including with respect to climate-related risks and opportunities. Further information on the risk management process is included in the Risk and Viability report on page 107.

The Group’s strategy on environmental and social issues is governed by the Sustainability Committee, which convenes four times per year and is co-chaired by the CEO and CO&FO. The Chief Supply Chain Officer, the Chief People Officer, the Head of Ready-to-Wear, General Counsel, Senior Vice President Strategy, Vice President Corporate Responsibility and Senior Vice President Corporate Relations and Engagement are also members of the Sustainability Committee. The Company Secretary or their designate is secretary to the committee. Each committee member is responsible for the execution of sustainability strategy within their business area.

The Board received regular updates on progress across our Responsibility agenda during FY 2021/22, including in relation to our ambition to become Climate Positive by 2040. We also evolved the governance of sustainability and climate-related matters during the year reflecting the increasing importance of these topics to the Group and society. Following this review and to enhance the Board’s monitoring of progress against goals and targets for addressing climate-related issues, the Sustainability Committee will report to the Board at least twice a year.

The cross-functional TCFD working group, which includes members from the Risk Management, Finance and Responsibility teams, defined the approach for identifying and assessing climate-related risks. The TCFD working group reports to the Risk Committee, which is chaired by the CO&FO. In addition, our Enterprise Risk Management process enables us to identify, assess and manage all risks, both existing and emerging, that may impact our strategic objectives. The University of Cambridge’s Centre for Risk Studies supports our scenario analysis. When sustainability and climate-related risks are assessed, existing mitigating activities and controls are highlighted and, where relevant and appropriate, additional activities and controls are implemented. Progress against these mitigating activities and controls was subject to independent and objective review by Group Internal Audit in FY 2020/21 and will also be reviewed in FY 2022/23. The Audit Committee review the work performed by the TCFD working group, including progress against the four TCFD pillars, outcomes of the scenario analysis and proposed disclosure. The Board reviews our climate-related reporting as part of their overall assessment that the Annual Report is fair, balanced and understandable.

Burberry ensures it has a suitable pool of internal sustainability experts, with relevant knowledge and skills to support decision making. Members of the TCFD working group participate in external training courses, including the Accounting for Sustainability Academy, to ensure they keep up to date with relevant climate-related topics. The chart on page 167 illustrates the sustainability expertise on the Board and relevant skills and experience are also included within Directors’ biographies on pages 154 to 159. We educate employees on the topic of climate change through frequent engagement, focused events, strategic communications and volunteering opportunities. In addition, the Executive Committee received an update on the impact of climate change from the Cambridge Institute for Sustainability Leadership in March 2022 and a similar session was held for the Board in May 2022.

The remuneration of the Executive Directors is partly linked to our progress in building a more sustainable future, including progress towards the Group’s climate goals. More details of this are set out in the Directors’ Remuneration Report on pages 186 to 213.


This section describes our key climate-related risks and opportunities, their potential impact on our business and the resilience of our strategy to such impacts, which has been assessed using scenario analysis as further described below. Our strategy to address climate-related risks is integrated into our business strategy and decision making across the business in areas such as capital allocation, investment appraisal, supply chain planning and raw material sourcing. Our Climate Positive by 2040 ambition is underpinned by a roadmap which sets out Burberry’s strategic direction and plan to reduce GHG emissions across our operations and supply chain. Building on this, our biodiversity strategy will support us in building a nature-based approach in our value chain and beyond.

Background to scenario analysis

Scenario analysis is a process for identifying and assessing the potential implications of a range of plausible future states, under conditions of uncertainty. Scenarios are hypothetical constructs and not designed to deliver precise outcomes or forecasts. Instead, scenarios provide a way for the Group to consider how the future might look if certain trends continue, or certain conditions are met, and to assess the Group’s strategic resilience.

As the scientific understanding of climate change and availability of data evolves, we expect greater rigour and sophistication in the approaches to scenario analysis. We will continue to develop and update our scenario analysis to support our assessment of the resilience of our business strategy to climate-related risks and ensuring relevant mitigating strategies are in place.

Building on the assessment of climate-related risks disclosed in FY 2020/21, the cross-functional TCFD working group, in partnership with the University of Cambridge’s Centre for Risk Studies, developed and expanded its scenario analysis in FY 2021/22 to include a wider range of potential physical and transition risk impacts. The scope of our scenario analysis was also expanded to include three emissions pathways, including a low emissions scenario aligned to the Paris Agreement aspiration to limit global warming to 1.5°C.

Our approach to scenario analysis

Our scenario analysis incorporates the Group’s financial forecasts, operational footprint, supply chain information and environmental data, to create a digital twin representation of the business. The product portfolio and value chain were modelled using historical data. This information is combined with industry reference scenarios on climate emission pathways, including assessments by the Intergovernmental Panel on Climate Change and International Energy Agency, to consider the potential impact of physical and transition risks on the Group.


Our scenario analysis considers the implications of a range of emissions trajectories and global average temperature increases, as detailed below:

In addition, we have considered the risks that a market shock caused by transition to a low carbon economy will impact the Group’s cost of debt, and that low carbon innovations will devalue the Group’s technology. We have concluded that these risks are not significant at this time due to the Group’s strong net cash position, focus on renewable energy consumption and absence of carbon intensive machinery. We will continue to monitor and report on these risks.

The table below describes the global impact of physical and transition climate-related risks over time under the three emissions trajectories considered as part of our scenario analysis:

We have defined our time horizons as short term (five years), medium term (five-20 years) and long term (> 20 years). The time horizon used for our detailed scenario analysis is a short-term outlook of five years, during which we can influence decisions through strategy, capital allocation, costs and revenues. Typically, three years is used for our financial and operational planning, as this is sufficient to cover almost all approved capital expenditure projects, and most current business development projects will be completed in the three-year period. We have extended the period to five years using a growth assumption, which more closely aligns with our expected asset lifetimes, and strategic plans. Beyond five years, there is significant uncertainty around the impact of climate-related risks as this is dependent on the pace and effectiveness of the global transition to a lower carbon economy. Whilst our detailed analysis covers a five-year time horizon, we have performed a high-level review of how Burberry may be impacted by climate change in the medium and long term.

Each physical and transition risk was modelled independently due to the complexity and uncertainty associated with measuring the interconnectivity of risks and how they influence each other. Planned future mitigating actions, including those to deliver our Climate Positive by 2040 ambition, have not been taken into consideration in the scenario analysis.

Scenario analysis results

The table on page 136 shows the results from our scenario analysis, and our strategic response. The financial impact represents the estimated loss of value to the Group’s discounted cash flows over the next five years assuming no mitigating actions are taken. This impact has been rated as “High”, “Medium” or “Low”, reflecting materiality to the Group’s financial statements. At Burberry, we believe our long-term success depends on actively addressing the potential impact of climate-related risks and adapting to the potential opportunities. As such, we have adopted strategies and actions to mitigate against these risks and ensure our strategy adapts to the potential opportunities. The financial investments associated with these actions are embedded within our financial plans, and we have considered the impact of climate change in the preparation of our Financial Statements which can be seen on page 222.

Beyond a five-year time horizon, the level of uncertainty increases. Transition risks are expected to be the most impactful in the short to medium term, continuing the trends which our five-year scenario analysis has identified. Physical risks are expected to become most impactful in the long term, with the size of the impact dependent on the success of global initiatives to limit the impact of climate change. These long-term physical risks may disrupt our supply chain and create operational challenges. Our commitment to more sustainable, low impact materials, and our partnerships focussed on regenerative agriculture are key to limiting this impact. We will remain agile, and continue to monitor this risk, informed by the latest scientific understanding of climate change.

Overall, the results of our scenario analysis indicate that the physical and transition risks associated with climate change could impact the Group in the short, medium and long term. The size of the impact will depend on the nature and speed of the global transition towards a lower carbon economy. The 1.5 degrees scenario would have most impact on Burberry in the short to medium term before considering any mitigating actions.

We recognise the potential impact of climate change, which remains a principal risk for the Group. Our strategy continues to evolve to address the foreseeable impacts of and improve resilience to climate-related risks. We expect that consumer demand will continue to shift towards more sustainable materials, and we have a series of ambitious targets on traceability and raw materials certification, as described within the ‘Metrics and Targets’ section, to ensure we are well placed to capture this momentum.

Risk management

Climate change has been identified as a principal risk to Burberry (see page 127), which has the potential to impact our business in the short, medium and long term as detailed above.

The overarching approach to identify climate-related risks is the same for all principal risks and is described on pages 107 to 145. Additionally, for climate-related risks, we have undertaken qualitative scenario analysis since FY2018/19 and a quantitative scenario analysis since FY2019/20 to support our identification and understanding of such risks.

For each principal risk we have a risk management framework detailing the controls in place and those responsible for managing both the overall risk and the relevant mitigating controls. We monitor risks throughout the year to identify changes in principal risk profiles. Management of climate-related risks is distributed throughout the organisation depending on where the risk resides. For example, climate-related risks in relation to raw materials in the supply chain are managed by our sourcing team responsible for buying commodities.

The cross-functional TCFD working group has defined the risk management methodology and approach for identifying and assessing climate-related risks and mitigating controls. Using scenario analysis, we have quantified climate-related risks to Burberry and evaluated their size and scope. This has supported the working group in prioritising such risks and assessing the resilience of our business strategy to potential climate change impacts.

When sustainability and climate-related risks are assessed, existing mitigating activities and controls are highlighted, and, where relevant and appropriate, additional activities and controls are implemented, if risks fall outside of appetite. Progress against these mitigating activities is assessed by the Risk Committee and is subject to independent review by Group Internal Audit as part of the annual audit plan. During the year, the Audit Committee reviewed the work performed by the TCFD working group, including progress against the four TCFD pillars and proposed disclosure.

Climate-related risks and opportunities are continually monitored as part of our Enterprise Risk Management framework. This allows us to evaluate the relative significance of our risks based on their likelihood and impact and to prioritise accordingly. A ‘Value Creation Framework’ is being developed, linking risks and controls to ESG targets. We also monitor the environment for new and emerging risks, and to keep abreast of evolving regulatory requirements. We will continue to develop our scenario analysis to improve our understanding of these risks and opportunities and align our strategy and actions accordingly.

Metrics and targets


We have a number of metrics and targets in place to monitor and manage the most significant risks and opportunities arising from climate change. These are outlined in the table below and are explicitly linked to the risks and opportunities modelled as part of the scenario analysis.

Setting targets and monitoring progress are key in driving progress towards our ambition to be Climate Positive by 2040 as well as our ongoing risk mitigation approach.

Our climate targets cover absolute energy use, GHG emissions reductions and renewable energy procurement across scopes 1, 2 and 3. PwC provide independent limited assurance over selected KPIs as part of our Responsibility Strategy, as well as key metrics reported in our GHG table. KPIs assured by PwC are denoted with a ^ throughout this Annual Report.

Two of our GHG emissions reduction targets are recognised as science-based:

  • To reduce absolute scope 1 and 2 GHG emissions by 95% by end of calendar year 2022 from a FY 2016/17 base year and maintain 95% emissions reduction

We reduced our scope 1 and 2 emissions by 93% from a FY 2016/17 base year and in addition, we have achieved 100% renewable electricity use across our own operations. The 95% reduction target was not met within the financial year (FY 2021/22). However, we plan to meet this target within the calendar year 2022.

  • To reduce absolute scope 3 GHG emissions by 46% by 2030 from a FY2018/19 base year

Independent limited assurance will be sought by Burberry over our FY 2021/22 scope 3 emissions and our percentage movement of scope 3 emissions compared to FY 2018/19 baseline. The assurance report will be made available later in 2022 on

In addition, we have a number of internal targets to achieve our Climate Positive and Net Zero Roadmap with accountability sitting with key Executive Committee members. Looking ahead, we are committed to reviewing and refining these internal targets as required. We will also further develop our climate-related metrics and monitoring to ensure improved risk management and accountability.

During the year, we strengthened our climate commitments, becoming the first luxury brand to pledge to being Climate Positive by 2040. This means that all our Science Based Targets are aligned to the 1.5°C pathway set out in the Paris Agreement. To complement this, we have set an ambitious biodiversity strategy and traceability and raw material targets to 2025.


We align our reporting on climate-related metrics to recognised standards, including the GHG Protocol, The UK’s Streamlined Energy and Carbon Reporting and the Task Force on Climate-related Financial Disclosures.

In line with the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008 as amended by the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, our GHG emissions are set out on page 66.

During the year, in recognition of the importance of the TCFD and Sustainability Accounting Standards Board (SASB) being key ESG reporting frameworks for our stakeholders, we produced a standalone SASB-aligned disclosures report which is available on

In recognition of the importance of CDP as a gold standard for environmental reporting with the richest and most comprehensive dataset on corporate action on climate, we have been reporting to CDP since 2010. In 2021 Burberry was ranked by CDP in the Leadership band for its climate change submission.

We recognise that meeting our climate-related targets is dependent on collective action. Foremost are countries implementing their Paris Agreement-aligned commitments and increasing them to more ambitious levels. Improving the market conditions for clean energy supply, such as the rate of installation of renewable electricity in many countries, reducing costs and the availability of purchase power agreements will help shift the rate of decarbonisation at scale. We believe we have a role in helping to shape the policy and regulation required and are working collaboratively with partners, suppliers and other organisations to achieve our ambition, including the United Nations Global Compact, the Fashion Pact, the Lowering Emissions by Accelerating Forest finance (LEAF), The UN Fashion Charter, RE100, Race to Zero and the Prince’s Trust Accounting for Sustainability initiative.

Scope 1 and 2 target focuses on GHG emissions from our direct operations, including electricity and gas consumption at our stores, offices, internal manufacturing and distribution sites.

Scope 3 target relates to indirect GHG emissions in our extended supply chain, such as from the sourcing of raw materials and manufacturing of finished goods.

100% renewable electricity target: This covers all electricity reported as part of the Mandatory Greenhouse Gas Reporting Requirements.

Page 93 extracts

As a brand built on the desire to explore nature and the great outdoors, our new strategy, Burberry Beyond, is our commitment to be a force for good through how we design, source, create and advocate. We are determined to be a better company, to create a more sustainable future for luxury, and to have a positive impact on climate, nature and people. This compels us to draw on our creative spirit, to evolve, innovate and, at times, defy convention. It also requires us to enhance our metrics to track, guide and report on progress.


We are going beyond net zero, reducing emissions across our extended supply chain and investing in initiatives and projects that support wider climate change efforts beyond our business. These include programmes that remove carbon from the atmosphere, designed to accelerate climate action and build resilience for climate-vulnerable communities.


We will take action to protect, restore and regenerate nature by applying a nature-based approach to our own value chain and in areas of greatest need beyond our operations. We are committed to restoring ecosystems within Burberry’s own value chain, working with key partners such as the Savory Institute’s Land to Market programme, as well as continuing to evolve our understanding of our nature impacts in partnership with The Biodiversity Consultancy. We are also working with organisations like the Science Based Targets Network and the Taskforce on Nature-related Financial Disclosures to support the development of a robust framework to monitor and drive progress.


We are committed to having a positive impact on our people and communities. We are collating information about the work we do across our business and in our supply chain, from protecting and nurturing luxury craftmanship skills, to driving progress towards our diversity, equity and inclusion ambitions, in order to establish and evaluate the full picture of our impact on people within and beyond our Company.


Strategic Report (extract page 66)

Global GHG emissions

Burberry applies an operational control approach to defining its organisational boundaries. Data is reported for sites where it is considered that Burberry has the ability to influence energy management. Data is not reported for sites where Burberry has a physical presence but does not influence the energy management for those sites, such as a concession within a department store. Overall, the emissions inventory reported equates to 92% of our net selling space square footage.

Burberry uses the Greenhouse Gas Protocol (using a location and market-based approach to reporting scope 2 emissions) to estimate emissions and applies conversion factors from Defra, IEA and RE-DISS. All material sources of emissions are reported. Refrigerant gases were deemed not material and are not reported. Market-based emissions globally and for the UK relating to electricity purchased and used for operations (scope 2) is stated as 0 due to 100% of electricity being procured from renewable sources. Combustion of fuel use from owned or leased transport is reported from FY 2018/19 onwards. Burberry has updated GHG data for FY 2020/21 and FY 2019/20 to account for updated emission factors and improvements in data availability and estimation methods. GHG emissions data reported is based on the period from 1 April 2021 to 31 March 2022. For the avoidance of doubt, the Company’s financial accounting period is from 28 March 2021 to 2 April 2022. However, references to FY 2021/22 for the selected KPIs included in the Responsibility section of Burberry’s Annual Report 2021/22 refer to the period 1 April 2021 to 31 March 2022.

^ Information subject to assurance is denoted with a ^. PwC’s assurance report and Burberry’s basis of reporting for assured data are available on

Strategic Report (page 96 extract)



Burberry is committed to using its position and influence to drive social and environmental improvements and foster sustainability innovation in the value chain, from the sourcing of raw materials to the manufacturing of finished products and distribution through our stores and wholesalers. We are also committed to enlisting the support of investors in delivering these ambitions by linking Burberry’s sustainability strategy to its funding requirements.

Burberry issued a debut five-year Sustainability Bond on 21 September 2020 for £300 million at a coupon of 1.125% (the Sustainability Bond). As part of the Sustainability Bond Framework1, (the ‘Framework’) a commitment was made to publish a use of proceeds report within one year of the issuance of the bond and annually thereafter.

This report constitutes Burberry’s second use of proceeds report to investors and covers the allocation of proceeds from the Sustainability Bond by category per the Eligibility Criteria as defined in the Framework.

Eligibility criteria and oversight

The categories of our Eligibility Criteria are as follows:

  • Green buildings
  • Environmentally sustainable management of living natural resources and land use
  • Pollution prevention and control (including waste prevention, waste reduction, waste recycling)

Burberry’s Responsibility targets are owned by senior leadership across all regions and key functions and progress is reviewed by the Sustainability Committee.

The Sustainability Committee was established in 2019 to review and oversee the Group’s strategy on environmental, social and governance issues related to our sustainability agenda. The Sustainability Committee convenes at least four times a year and is co-chaired by the CEO and CO&FO, who is accountable for ensuring oversight of climate-related risks and opportunities of the Group. In addition to the Sustainability Committee, sustainability matters are regularly discussed at the Ethics and Risk Committees and updates are shared with the Board.

The Sustainability Committee has considered the Eligibility Criteria in the Framework and reviewed the spend on projects eligible for financing under the Sustainability Bond and allocated the proceeds accordingly.

Allocation of proceeds

The proceeds of the Sustainability Bond have been allocated across the three categories outlined in the Framework. In accordance with the Framework, these eligible projects and spend were completed within the three-year period preceding and the financial years since the issuance of the Sustainability Bond in September 2020.

The allocation across categories is summarised below.

1. The framework can be found at:

Unallocated proceeds

The unallocated proceeds under the bond are £133.9 million. The cash is kept on deposit in accordance with Burberry’s Treasury Policy.

Project examples

Green buildings:

Projects include the financing or refinancing the spend on properties which have one of the following certifications. For existing buildings, certification has been received within the last three years.

Certifications include:

a. LEED: Platinum or Gold level

b. BREEAM: Excellent or Outstanding level

Environmentally sustainable management of living natural resources and land use:

As part of Burberry’s Responsibility strategy, where cotton is the product’s main material, Burberry set a goal to procure 100% of its cotton more sustainably by 2022 by using a portfolio approach.

Burberry continues to promote more sustainable farming practices among its suppliers and also remains committed to driving demand for organic cotton.

In addition, we support Cotton 2040, a cross-industry partnership convened by Forum for the Future to address long-term resilience in cotton supply chains.

Pollution prevention and control

Burberry is committed to driving positive change and building a more sustainable future. We aim to minimise the amount of packaging used and, where packaging is unavoidable, to maximise use of recycled, reusable and recyclable materials in line with circular economy principles.

All Burberry retail bags and gift boxes are reusable, fully recyclable and made from a minimum of 40% recycled content and FSC TM certified paper. Our signature oak garment covers are made from 100% recycled polyester. Our products are transported on recyclable hangers made from a minimum of 60% recycled plastic.

We have allocated proceeds against packaging procurement where recycled content is more than 20%.

External assurance of corporate responsibility disclosures

Burberry has appointed PricewaterhouseCoopers LLP (PwC) to provide limited assurance over the allocation of use of proceeds. Information forming part of the assurance scope is denoted with a ^. The  assurance statement is available at

Page 241 (extract)

1. Basis of preparation (extract)

Consideration of climate-related matters

The Group has performed a climate-related scenario analysis as required by the Task Force for Climate Related Financial Disclosures. This scenario analysis takes into consideration different climate-related scenarios, including a 2°C or lower scenario. Based on this scenario analysis, consideration has been given to the impact of climate-related risks on management’s judgements and estimates, including inventory provisions and the impairment of property, plant and equipment and right-of-use assets.

The impact of climate-related risks on the consolidated financial statements for the 53 weeks to 2 April 2022 is not material.

The incurred costs and investments associated with our sustainability strategy are reflected in the Group’s financial statements, including within inventories, property, plant and equipment, and operating profit.

The committed future financial investments associated with our sustainability strategy are included within our budget and three year forward looking financial plans. These financial plans have been used to support our impairment reviews and going concern and viability assessment. Future plans may incur additional investment on research and development and higher expenditure on raw materials.