DWS : Investments UK Limited TCFD Entity Report 2023

2023

TCFD Entity Report

DWS Investments UK Limited

TCFD Entity Report 2023 | DWS Investments UK Limited

Introduction

DWS Investments UK Limited (the Firm) is authorised and regulated by the FCA to conduct portfolio management and investment advisory services, as well as distribution services for the entire set of products in Passive Xtrackers, Active and Alternatives.

Graph 1: DWS Investments UK Limited relationship with DWS Group

The Firm is the delegated portfolio manager for the Luxembourg and Irish Exchange Traded Fund (ETF) platforms, certain segregated mandates and CROCI fund range. Graph 1 depicts this delegation structure.

The Firm is a subsidiary of DWS Group GmbH & Co. KGaA (the Group) and as such is subject to the general processes, frameworks and policies of the Group relating to climate risk and other sustainability matters as reflected in the Group's Climate Report. This includes Group climate- related targets.

Delegation of portfolio management of physical ETFs and CROCI funds

Sub-delegation of portfolio management of physical ETFs and CROCI funds

DWS Group GmbH & Co. KGaA

DWS Investments S.A

UCITS ManCo

DWS Investments GmbH

DWS Investments UK Limited

Delegation of portfolio management of synthetic ETFs

In addition, due to the Firm's AuM being predominantly passive related, there is limited scope to apply discretionary investment decisions (including those relating to climate risks and opportunities) at the level of ongoing portfolio management.

Based on the FCA TCFD rules the TCFD products in scope relate to Xtrackers1 ETFs, Passive Mandates and CROCI funds. The total AuM for these in scope products was £147 bn as at 31 December 2023. Table 1 provides a breakdown of AuM by product.

Throughout the report, metrics and other data points are stated for the full year 2023 and / or as at 31 December 2023. The descriptions of governance, strategy and risk management where applicable will reflect changes during 2024 to provide the most up to date view of the Firm's activities.

1 Exchange Traded Funds offered within the Passive business of DWS

Table 1: TCFD in-scope business breakdown by product AuM

	AuM 31 December 2023
Product	EUR bn	GBP bn
Xtrackers ETFs	162	140
Passive Mandates	6	5
CROCI Funds	2	2
DWS Investments UK Limited	170	147

Note: £7 bn Exchange Traded Commodities excluded from this report because they are not considered an in-scope TCFD product under FCA rules.

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TCFD Entity Report 2023 | DWS Investments UK Limited

Compliance statement

On behalf of DWS Investments UK Limited I confirm that the disclosures in this report comply with the requirements set out in section 2.2 of the DISCLOSURE OF

CLIMATE-RELATED FINANCIAL INFORMATION (ASSET MANAGER AND ASSET OWNER) INSTRUMENT 2021 https://www.fca.org.uk/publication/policy/ps21-

24.pdf

Andrew Levy, CFO, Director DWS Investments UK Limited

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Governance

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TCFD Entity Report 2023 | DWS Investments UK Limited

Governance

TCFD	A. Describe the board's oversight of climate-related risks and opportunities

DWS Group Annual Report 2023 cross reference

Group content and page reference		Rationale for cross reference		Material deviations Group | UK
Climate Report - Governance - Introduction (p.216)		The Executive Board and Group Sustainability		None
- Description of Executive Board oversight of climate-related risks and		Committee oversee climate-related opportunities
opportunities within DWS Group.		and risks and cover the Firm as part of group wide
- Description of Group Sustainability Committee who are mandated by		sustainability governance.
Executive Board to implement sustainability strategy

Governance A. UK supplementary disclosures

Board oversight

In response to the FCA TCFD rules the DWS Investments UK Limited Board (the Board) enhanced its governance processes in relation to sustainability and climate matters.

Climate topics are embedded into the remit of the Board, as documented in its Terms of Reference. The Board has delegated specific responsibilities to the Board Risk Committee (BRC) to support its management of climate-related risks and opportunities as described on the next page.

Since February 2023, the risk management function reports sustainability risk metrics to the BRC and Board on a quarterly basis to enable monitoring.

Relationship with DWS Group

DWS Group has assigned climate responsibilities to each division and mandated legal entities with specific responsibilities. The Management Company in Luxembourg is responsible for setting the investment guidelines of the portfolio management activities that the Board oversees on a delegated basis (or sub-delegated basis via DWS Investment GmbH). The climate mandate of the Board is limited to monitoring and reviewing Group targets, and due to its primary role as delegated portfolio manager it does not have direct powers to influence the Group targets, nor can it set UK targets.

To ensure the Board is informed of Group climate-related topics the Group Sustainability Committee (GSC) provide meeting papers and minutes to the UK COO to share with the Board and BRC. This periodically includes details of Group targets and progress towards achieving them.

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TCFD Entity Report 2023 | DWS Investments UK Limited

Governance

The Firm relies upon the strategy and decision making of the Executive Board, GSC and business divisions. The GSC acts as the senior decision-making body for sustainability-related matters at Group level, unless decision making falls within the area of competence of the Executive Board or the Firm.

DWS Investments UK Limited

-The Board has collective responsibility for the management and performance of the entity

-The Chair is responsible for setting the board agenda which focuses on strategy, performance, culture & conduct, accountability and risk management

-The Chair has been tasked with ensuring sustainability matters, including climate, will have adequate time in the regular agenda

-The COO receives materials from the GSC and will ensure that group climate-related issues are shared with the Board

-The Chief Risk Officer (CRO) attends the Board meetings and provides updates on relevant sustainability risk metrics

Board Risk Committee

The Board has delegated specific responsibilities as described in its Terms of reference including:

Developing proposed risk appetite levels and metrics to monitor Escalating key issues and risks to the Board

Meeting monthly and providing quarterly updates to the Board

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TCFD Entity Report 2023 | DWS Investments UK Limited

Governance

TCFD	B. Describe management's role in assessing and managing climate-related risks and opportunities.

DWS Group Annual Report 2023 cross reference

Group content and page reference

Climate Report - Governance - Divisional sustainability governance (p. 217-218) Climate Report - Governance - Climate Competence (p. 218)

Supervisory and Executive Boards self-assessments

Climate Report - Governance - Compensation (p. 218)

Annual variable compensation linkage with achievement of sustainability including climate- related indicators

Annual Report - Compensation Report - Executive Board Compensation (p. 144-165)

Rationale for cross reference		Material deviations Group | UK
The Executive Board and Group		None
Sustainability Committee oversee climate-
related opportunities and risks and cover the
Firm as part of group wide sustainability
governance.

Governance B. UK supplementary disclosures

UK Divisional Management Responsibilities

Where the Firm has specific incremental responsibilities not covered in the Group report these are explained below.

UK COO established the oversight responsibilities of the UK Board and its sub-committees and forums.

UK CFO is responsible for signing the Compliance Statement within this report. In addition, the Head of Finance Sustainability is based in the UK and oversees UK TCFD reporting.

UK CRO is responsible for incorporating the DWS strategic risk objectives from DWS Group Risk Appetite Statement into the Firm's risk appetite statement, including those related to sustainability risk. The CRO is also responsible for incorporating sustainability risk metrics if and when feasible and relevant to the Firm and report them to the BRC and Board. The UK CRO is a member of the BRC.

Climate competence

In line with Group Suitability guidelines the Board and BRC annually self-assess ongoing suitability individually and collectively including their knowledge of climate, environmental, social and governance risks and knowledge of regulation, principles and frameworks for Environmental, Social and Corporate Governance.

The Board receive updates on TCFD, DWS Group Climate Report and the FCA TCFD rules.

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Strategy

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TCFD Entity Report 2023 | DWS Investments UK Limited

Strategy

TCFD	A. Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long-term.

DWS Group Annual Report 2023 cross reference

Group content and page reference

Annual Report - Risk Report - Sustainability Risk and Adverse Impacts to the Environment and

Society (p. 49)

Climate Report - Strategy - How We Identify Climate Risks and Selected climate-related risks table (p. 221)

Rationale for cross reference		Material deviations Group | UK
Identification of risks is performed on a global basis. All risks		None
identified are to some extent relevant to the Firm. There are no
other material climate-related risks specific to the Firm.

Strategy A. UK supplementary disclosures

In the context of portfolio management of Passive products, the most relevant risk at the portfolio level is market risk. For example, for European Xtrackers products, the market price of underlying investments may be negatively impacted as a result of physical damage caused by climate change or measures to transition to a low-carbon economy. Another example of the market price of underlying investments being negatively impacted would be aspects linked to their own adverse impact to the environment, which could trigger regulatory fines or litigation related to violation of norm standards or other related factors.

Further details on how climate-related risks and opportunities are incorporated into the Xtrackers ETF business can be found under Strategy recommendation B.

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TCFD Entity Report 2023 | DWS Investments UK Limited

Strategy

TCFD

TCFD

1. Describe the impact of climate-related risks and opportunities on the organisation's businesses, strategy and financial planning.
   AM 1: Asset managers should describe how climate-related risks and opportunities are factored into relevant products or investment strategies

AM 2: Asset managers should also describe how each product or investment strategy might be affected by the transition to a lower carbon economy

DWS Group Annual Report 2023 cross reference

Group content and page reference

B. Annual Report - Our Strategy and Our Market - Sustainability (p. 9)

Climate Report - Strategy - Introduction (p. 220)

Climate Report - Strategy - Our Approach to Measuring Climate- Related Risks (p. 222)

AM 1. Climate Report - Strategy - How we incorporate climate change within our investment process - Passive (p. 226)

Climate Report - Strategy - How we incorporate climate change within our products - Passive (p.227-228)

AM2. Climate Report - Strategy - Our Progress towards Portfolio Net Zero (p.231)

Rationale for cross reference

DWS's overarching sustainability strategy includes three strategic priorities. These priorities are global and therefore are included in the Firm's activities.

The incorporation of climate risks and opportunities into the investment process and within products is aligned to the global businesses. The predominant business type of the Firm is passive. An example of climate change considerations within this business is provided on the next page.

DWS' NZAM commitment is overseen and executed at Group level. No targets or specific requirements have been assigned to DWS's legal entity boards including the Firm.

Material deviations Group | UK

None

None

None

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