Task Force on Climate-related Financial Disclosures
We are working to implement the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The purpose of TCFD is to stimulate better climate-related disclosures that will enable investors, lenders and insurers to gain a clear view of which companies will endure or even flourish as the environment changes, regulations evolve, new technologies emerge and customer behaviour shifts. We support this aim.
During 2021, we will undertake a TCFD-aligned scenario analysis as part of our journey to better understand, and quantify, climate risks and opportunities for Rotork. Outcomes of the scenario analysis will be published in our 2021 Annual Report and Accounts.
Our TCFD work will generate better and more insightful information about climate opportunities and risks. This in turn will inform our business operations and investment plans, supporting continuous improvement in our performance and communications.
The Rotork plc Board has overall accountability for oversight of effective risk management. As part of this, the Board oversees the Group’s management of climate and environment-related risks and opportunities. Risk management is included as an agenda item at Board meetings several times a year.
The Board is supported by the ESG Committee, the Audit Committee and the Rotork Management Board. Our Group Risk function is responsible for the day-to-day delivery of effective risk management across the Group, including maintaining our risk register. ESG performance – including management of climate change issues – is linked to senior leaders’ remuneration.
Environmental considerations are a key part of our Growth Acceleration Programme. This focuses on simplifying our core business, delivering manufacturing improvements and developing our global supply chain. It also targets sustainable growth through innovation, by broadening the application of existing products and accelerating new product development to support the transition to a low carbon economy.
Our capital management processes also include climate-related considerations. For example, we consider energy and resource efficiency, and emissions reduction, as part of investments in our property estate.
We monitor climate risk closely given its significance internally and externally. Climate-related risks and opportunities are assessed and managed using the Company’s overarching risk management framework. The Group’s established risk management framework incorporates both a ‘top down’ and ‘bottom up’ risk identification process. We also input views and contributions from our key external stakeholders, including customers, suppliers and investors.
During the first half of 2021, we made a dedicated discussion of ESG risks and opportunities – including climate change – a standing agenda item for every functional and divisional risk session. The outputs of these sessions influenced our disclosures in the climate risk and opportunity table.
Metrics and targets
We are committed to reducing our emissions, our energy and water usage, and waste. We are working to develop a new set of aspirations and targets to further reduce our environmental impact. As part of this, we have committed to developing a net-zero roadmap.
Overall, we achieved a reduction of 8.4% in our total greenhouse gas emissions in 2020 compared with the prior year (scope 1, 2 and 3). Scope 1 and 2 emissions reduced by 18% in 2020, or 9.5% per £1m of revenue. Our target for 2021 is to reduce CO2 emissions by 2% per £1m of revenue.
- Our current view of key climate risks and opportunities is set out in our Sustainability Report on pages 27 & 28.