Savills plc

05/12/2022 | Press release | Distributed by Public on 05/12/2022 07:49

Task Force on Climate-Related Financial Disclosures

As part of a wider ambition to deliver a more sustainable future, in 2021 Savills conducted a climate-risk assessment to inform its approach to managing climate-related risks and opportunities.

Under guidance from the Task Force on Climate-Related Financial Disclosures ("TCFD") climate-related financial disclosure within a company's Report and Accounts is required to enable stakeholders to understand both risks and opportunities relating to climate risks and the transition to a low carbon economy.

Process

The disclosure recommendations are structured around four thematic areas: governance, strategy, risk management, and metrics for targets. Savills process for identifying and assessing climate risk combines a grass roots approach via engagement with each of its Regional businesses and Savills Investment Management and a top-down approach of strategic review of the risks and opportunities.

First, climate scenarios and time horizons for assessment were selected, based on a review of publicly available data, to identify those most appropriate for the risk assessment. Second, the Savills TCFD Working Group reviewed industry publications, emerging regulatory requirements and engaged with representative working groups across our businesses, including those responsible for strategy, risk management, finance and client energy and sustainability services (Savills Earth) to identify the potential business risks and opportunities under each scenario.

Outcome

The assessment found Savills Group strategy as being resilient to the impacts of the transition to a low carbon economy, with highlights including a commitment to the Science Based Targets Initiative (SBTi) to position to the Group to achieve net carbon zero for scope 1 and 2 emissions by 2030 and for scope 3 by 2040, coupled with actions to further reduce risk and realise business opportunities. When considering a '4 Degrees' scenario, whilst extreme weather events are forecast to increase, the physical risk impact to Savills is expected to be relatively low, due to the nature of Savills business, with workspaces leased rather than owned, whilst the Savills Investment Management business has been developing strategies to mitigate the impact of risks in relation to assets in funds under its management. When looking at the transition to the green economy, there is a significant business opportunity, as Savills continues to develop employee skill sets and knowledge to further support clients as they plan their transition to net zero.

Some key initiatives within the business strategy will continue to be driven via the TCFD action plans, such as continued investment in technology solutions and strategic partnerships with, or acquisitions of, firms offering climate-change related services and solutions both to better serve its clients changing demands. In addition, Savills will continue to invest further in the development of its existing sustainability offering across its Regional Businesses, complemented by appropriate learning and development programmes to ensure that knowledge of climate-related risks are embedded in all teams to allow our people to best meet client requirements.

Pathway

Savills regional targets, set to align with Sustainable Development Goals and the Science Based Targets Initiative (SBTi), will also assist with some actions relating to TCFD assessment findings, such as staff Environmental, Social and Governance (ESG) training programmes and climate adapted office fit out programmes.

Mark Ridley Group CEO, says: "Decarbonising the real estate sector is an urgent and pressing need, a challenge that COP26 highlighted. Consequently, ESG considerations are increasingly defining both investor and occupier decisions."

Lizzie Jones, Group Sustainability Director, comments: "TCFD has been a beneficial process for the group helping us to identify both our risks and opportunities relating to climate change and ensuring our business plans incorporate both mitigation and action plans sufficiently."