Strategic report Governance Financial statements Other information RESPONSIBLE BUSINESS TOWARDS HIGHER STANDARDS CONTINUED •The chance to enhance brand value through We felt the 2°C and under 2050 scenario posed In addition, increased protests and climate to meet long-term pledges. These will be robust reporting. Authentic targets will attract a medium risk. Limiting temperature increases outrage activism could be targeted at reviewed by our Board and our ESG Committee. and retain colleagues, clients and shareholders. over the next few decades will involve costs for FTSE 100 companies. We also need to consider demand for our And we know that transparency drives businesses. These might act as a drag on share An overarching risk across all scenarios is services if we don’t evolve to embrace ESG investor confidence. prices and could also impact economic growth the reputational damage. This could result from investing. Likewise, consideration must be given The Department for Business, Energy and compared to the business as usual scenario. poor climate risk management, misalignment to the Group’s growth rate and falling average • Industrial Strategy (BEIS) stated the UK low1 In the 4°C and above 2050 scenario, a with reporting and ‘greenwashing’. We recognise age of HL’s clients. The environment is the top carbon economy could grow four times faster significant increase in energy demand is expected the impact this could have on relations with all of concern of millennials and Gen Z’s. As the2 than the rest of the economy between 2015 as a result of rising water scarcity. We felt this was our stakeholders. Group’s youthful client base grows, we appreciate and 2030. We can allow our clients to invest a medium risk. Due to the misalignment with the Hitting our climate-related targets is the key the importance of championing responsible in this area, through creating a Responsible Paris Agreement, reactive policies and taxes to mitigating this risk. Our approach is to set climate action for all current and future Investing hub. could be implemented. short-term targets to make sure we are on track stakeholders. Risk Management Climate-related risks are raised by the ESG Committee. Each team throughout the business CORE ELEMENTS OF RECOMMENDED is responsible for identifying risks and putting controls in place. The Management Committee CLIMATE-RELATED FINANCIAL DISCLOSURE GOVERNANCE and Product Governance Committee assess thisframework, and we also use peer reviews to make sure we’re considering external trends. Governance We’re focused on strengthening our operational The Group’s governance around climate-related risks resilience, by integrating climate-related risks into and opportunities. STRATEGY our overall strategy. The bi-annual ESG board Strategy paper is one example of bringing these factors The actual and potential impacts of climate-related to the attention of the Board of Directors, risks and opportunities on the Group’s business, incorporating the risks and opportunities with strategy and financial planning. RISK the Group’s strategy. Risk management MANAGEMENT The processes used by the Group to identify, assess and manage climate-related risks. Metrics and targets METRICS The metrics and targets used to assess and manage AND relevant climate-related risks and opportunities. TARGETS 1 PRI IPR and IEA HM Government 2017, ”The CleanGrowth Strategy”. 2 Deloitte 2020, “The Deloitte Global Millennial Survey 2020” 46 Hargreaves Lansdown Report and Financial Statements 2021