Risks flowing from sustainability are managed in the same way as other business risks. Our company wide risk management model provides a robust foundation for identifying risks and establishing a clear management response.
The potential risks flowing from sustainability are high on the corporate agenda. As the effects of climate change become more obvious and legislative and regulatory responses expand we are careful to monitor the potential impacts and opportunities for our portfolio.
Known Unknowns
At a corporate level, sustainability risks are monitored on a quarterly basis as part of the business wide risk management process. The Sustainability Risk Framework is routinely reviewed by the CR Board. This allows relevant business units to be alerted to any identified risk or potential risk via the CR Working Groups and a response to be put in place.
Key material environmental risks are identified as climate change, energy security and supply and carbon emissions both in terms of their potential directo consequences on the portfolios and any resulting legislation and regulation.
Unknown Unknowns
But of course there are always unforeseen risks which are increased where there is political uncertainty and a lively legislative landscape. We therefore apply precautionary principles of ensuring in key areas we go beyond compliance in our reporting and in the standards set for our asset management and developments.
In 2013 this led to our being able to go beyond compliance with our Mandatory Green House Gas emissions reporting, which was externally assured. We continue to provide comprehensive reporting on GHG emissions and performance including of Scope 3 business travel, waste and water.
This approach also ensured that we have not been unduly affected by the forthcoming Minimum Energy Efficiency Standards. We have been proactive in ensure EPCs are in place across the portfolio and are on track to have elimited EPC risk as far as possible from our UK assets ahead of the compliance date. Our development schemes were not affected by the revisions to Building Regulations as our existing design standards target a greater reduction in carbon emissions than the new standard set.
The EU referendum result has produced some uncertainty regarding environmental legislation and regulation originating from the EU. However, most is already transposed into UK law and we do not expect there to be significant change. We will of course be monitoring developments particularly in relation to the Business Energy Tax Review which led to the withdrawal of the CRC Energy Efficiency Scheme. Our assets in France and Ireland remain subject to any existing and future EU Directives and regulations.
Our response is to continue monitoring the legislative and regulatory landscape through industry groups and forums. Our Responses to Legislative Risk ensure the business has strategies in place to manage any risk associated withforthcoming and potential legislation.
