37 Pension Protection Fund Climate Change Report 2022/23 Appendices Appendix A Our commitment to the TCFD A summary of where each TCFD recommendation is covered within this climate disclosure The Task Force on Climate-Related Financial Disclosures TCFD Pillars TCFD recommended climate disclosure Climate disclosure references (TCFD) guidance was created by the Financial Stability Board to help companies and investors voluntarily disclose climate-related 昀椀nancial risks clearly, consistently and Governance a. Describe the board’s oversight of climate-related risks Pages 07–09 reliability to help lenders, insurers and investors make and opportunities. informed decisions. Disclose the organisation’s We’ve formally supported the TCFD framework since 2018 governance around climate-related b. Describe management’s role in assessing and managing Pages 07–09 and have continually implemented it across our investment issues and opportunities. climate-related risks and opportunities. process. We share our progress in our annual Responsible Investing (RI) reports, which also detail our stewardship activities and work as an active owner of securities and Strategy a. Describe the climate-related risks and opportunities the Pages 10, 13 real assets. organisation has identi昀椀ed over the short, medium and long-term. Considering the impacts of climate change on our Disclose the actual and potential impacts investments is one of the three priorities within our of climate-related risks and opportunities b. Describe the impact of climate-related risks and opportunities Pages 10–13 RI strategy. on the organisation’s business, strategy on the organisation’s businesses, strategy and 昀椀nancial planning. and 昀椀nancial planning where such We’re committed to: information is material. c. Describe the resilience of the organisation’s strategy, Pages 12–14, 26–32 • Implementing the TCFD taking into consideration di昀昀erent climate-related scenarios, We’re continuously applying and implementing TCFD including a 2 degree or lower scenario. recommendations – and are always looking for ways to improve transparency and management of climate risks in our portfolio. Risk Management a. Describe the organisation’s processes for identifying Pages 10–15 • Assessing transition risks and physical risks and assessing climate-related risks We take a phased approach to analysing how exposed Disclose how the organisation identi昀椀es, our portfolio is to risk in the global transition to a low- assesses and manages climate-related risks. b. Describe the organisation’s processes for managing Pages 16–18 carbon economy, optimising relevant data as and when climate-related risks. it becomes available. We are also starting to assess the physical risks that climate change presents to our c. Describe how processes for identifying, assessing, and Pages 07–12 portfolio, while recognising that data on this is at a very managing climate-related risks are integrated into the early stage. organisation’s overall risk management. • Engaging with our fund managers We work tirelessly with our fund managers across all strategies, asset classes and markets to ensure they Metrics and Targets a. Disclose the metrics used by the organisation to assess Pages 15, Appendix D consider, manage and report to us the climate-related climate-related risks and opportunities in line with its strategy risks and opportunities our investments might face. Disclose the metrics and targets and risk management process. • Collaborating with industry used to assess and manage relevant We are committed to engaging with our industry climate-related risks and opportunities b. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 Pages 21–24, 35 peers, policymakers, regulators and the wider investor where such information is material. GHG emissions, and the related risks. community to further best practice in climate-related risk disclosure – supporting not only the TCFD but also c. Describe the targets used by the organisation to manage Page 36 Climate Action 100+, the PAII, and CDP. climate-related risks and opportunities and performance against targets.