TCFD

We believe the implications of climate change are far-reaching and the energy sector is at the forefront of the need to respond.

As a leading energy and services business, we aim to play a meaningful role in tackling climate change.

Identifying, assessing and managing the risks and seizing the opportunities associated with climate change is at the heart of our business strategy and enhances our resilience and our ability to achieve our goals.

We support the work of the Task Force on Climate-Related Financial Disclosures (TCFD) in promoting effective disclosure of companies’ response to climate change. We are committed to transparent reporting and continuous improvement of our disclosures, including further alignment with the recommendations of the TCFD.

  • Governance

    Our governance structure gives the Board a group-wide oversight of climate related issues.

    The ‘Safety, Health, Environment, Security and Ethics Committee’ (SHESEC) reviews performance on climate-related matters at least once a year. The ‘Health, Safety, Environment and Security’ (HSES) sub-committee, chaired by our CEO, meets quarterly to review environmental performance and is responsible for setting objectives, targets and policies on climate change issues.

  • Strategy

    Centrica’s strategy is based on the global trend towards a lower carbon future. We have assessed various scenarios and we believe that our strategy positions us well to succeed in this energy transition.

    Our major strategic review in 2015 included market trend analysis out to 2035. We concluded that, although fossil fuels will continue to have a role in the near term, climate policies and advances in technology will be effective in decoupling energy growth from carbon emissions.

    We believe the decarbonisation of the energy system will increasingly be driven by decentralisation, digitisation and increased customer control of energy generation, management and consumption. As a result, we have fundamentally transformed Centrica, changing the company from a centralised, asset-based model to a customer-focused energy and services business. We are investing £1.2 billion to establish new, market-leading businesses, such as Distributed Energy & Power and Connected Home, which we believe will play a significant role in decarbonising the energy sector.

  • Risk Management

    Climate Change is a categorised risk area, managed through our Enterprise Risk Management process.

    Our risk profile is produced and reviewed quarterly at business unit and Executive Committee level (Group Ethics Risk Assurance Control and Compliance Committee). The HSES function provides horizon scanning, testing, calibration and assurance as part of this process. Further details can be found in Our Principle Risks and Uncertainties section of the Annual Report and Accounts 2018.

    Longer term risks are assessed once a year at our Board Planning Conference. This takes into account how the market environment, competition, technology and policy are influenced by climate change.

    We have identified and assessed near and long term climate related risks and opportunities for our business. These include trends in policy, technology and markets such as the decarbonisation of heat, the electrification of transport and changing consumer behaviour. We have also assessed direct, physical aspects of climate change such as the impact of extreme weather events on our people and operations and the potential impact of increased average temperatures on demand for our products and services.

  • Metrics and Targets

    Centrica adopts best practice in the measurement of greenhouse gas emissions and performance reporting. We monitor and report our global scope 1, 2 and 3 emissions in line with the Greenhouse Gas (GHG) Protocol and were early adopters of GHG efficiency ratios such as CO2/kWh (Carbon Dioxide per Kilowatt Hour) or CO2/Revenue.

    Our Data Centre is publicly available and discloses environmental data from recent years, allowing trend analysis and benchmarking.

    We use key performance indicators (KPI’s) to manage climate related risks and opportunities and measure our performance. We have a strong track record of setting and achieving carbon reduction targets, previously exceeding our ‘internal carbon footprint’ and ‘carbon intensity of power’ targets. Many of these KPIs and targets are subject to third party assurance with published methodologies.

    Our performance has been recognised by CDP’s global disclosure system continuously for the last decade and, in 2019, we maintained our A-ranking for action and disclosure on climate change.

    We have developed challenging new climate change goals out to 2030 as part of our Responsible Business Ambitions. These focus on three key areas where we are helping to shape a low carbon future:

    • Helping our customers reduce their emissions in line with the Paris Agreement goals
    • Enabling a decarbonised energy system
    • Reducing our own emissions in line with the Paris Agreement goals