Foresight : Climate Disclosure December 2022 (1)

TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) REPORT 2022 UPDATED: Dec '22

EFFECTIVE DATE: MARCH 2022

CONFIDENTIALITY CLASSIFICATION - PUBLIC

Contents
Task Force on Climate-related Financial Disclosure - TCFD	3
Compliance Statement	3
Background	3
Summary: FSB Task Force on Climate-related Financial Disclosure	4
Governance	5
Oversight	5
Management Role	5
Strategy	6
Identified Climate-related Risk and Opportunities	6
Analysis Horizons	6
Impact of Climate-related risks	11
Transition Risks	12
Technology	16
Policy and Legal	16
Market	17
Reputation	18
Physical Risks	19
Risk Management	20
Processes for Identification, Measurement, Management	20
Climate-Risk Management Processes	20
Integration into Group Risk Management Processes	21
Metrics and Targets	22
Metric Disclosure	22
Scope 1,2,3 emissions	23

Task Force on Climate-related Financial Disclosure - TCFD

Compliance Statement

The disclosures in our annual report are consistent with the recommendations setting out how the Group incorporates climate-related risks and opportunities into governance, strategy and risk management. The TCFD summary in the annual report should be read together with this stand-alone TCFD report.

This TCFD report contains additional information on our exposure to Transition Risk and Physical Risk. The Group continues to develop its metrics and performance targets to better manage climate related risks and opportunities, and achieve full alignment with the TCFD recommendations. We expect this capability to be in place in the coming financial year (FY2023).

This report has been updated in December 2022. Scenario analysis has been included within the 'Strategy' section and updated emissions data covering the period from April 2021 to March 2022 can be found in the 'Metrics and Targets' section. All other information remains the same.

Background

Foresight continues its journey to full alignment with the recommendations of the Task Force on Climate- Related Financial Disclosures ("TCFD").

Our stakeholders expect transparency on our climate related risks and opportunities, and our reporting assists understanding of climate change implications for the Group.

This is the second year Foresight have reported our progress toward the TCFD recommendations and we have structured this update to provide additional insight into governance, strategy, risk management, and metrics and targets related to climate change. We report on how we address climate change risks across our businesses and shared services as well as climate change risks in our investment portfolios.

TCFD disclosures for listed AIFs managed by Foresight Group LLP can be found on their respective websites or in their most recent annual reports.1

1https://jlen.com/wp-content/uploads/2022/06/01_JLEN_AR22_web.pdfpp. 49-67

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Summary: FSB Task Force on Climate-related Financial Disclosure

Climate change will continue to be a defining issue for the global economy, financial markets and society in the future. Investors will be unable to avoid the impact of climate change but can align their resources to support investment strategies intended to slow, halt and even reverse the rise of average global temperatures.

As an asset manager of funds invested in sustainable resources and technology, we are predominantly concerned with the indirect emissions from our investments and their potential impact on the environment.

We are committed to improving our analyses of climate-related risks and opportunities in order to mitigate the risks and safeguard our clients' investments.

We are a supporter of the Financial Stability Board's Task Force on Climate-related Financial Disclosures (TCFD). TCFD seeks to provide investors with a common reference framework to assess the comparative approaches of investment firms to climate-related initiatives and reporting.

TCFD will increase awareness of climate-related risks and opportunities for investors, and we support this objective across our operations.

Core Elements of Recommended Climate-Related Financial Disclosures

Source: Recommendations of the Task Force on Climate-related Financial Disclosures (June 2017)

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Governance

Oversight

The Board continues to assume overall responsibility and accountability for the management of Foresight Group's climate-related risks and opportunities by setting its strategies in that regard, reviewing reports from the business and authorising new initiatives including launching new products or initiating new risk control measures. The Board keeps these reporting obligations under review and receives a regular quarterly report on the company's Sustainability activities. Alison Hutchinson CBE is the board member accountable for the Group's sust ainability strategy and performance.

The Board has tasked the Executive Committee with executing and delivering that strategy. Ricardo Piñeiro is the nominated Executive Committee member responsible for Sustainability and ESG matters.

The Executive Committee regularly discusses the potential impact of climate change on our business model and our strategy. The Executive Committee considers climate-related issues when reviewing and guiding significant new business projects, business plans, annual budgets, performance objectives (and monitoring thereof) and when overseeing major capital expenditures, acquisitions and divestments. Our ability to deliver long- term outperformance depends on the climate-related risks and opportunities in our clients' investments.

Management Role

Alongside the work on investment risk considerations, the Risk function is also integrating climate models into the capital stress testing processes, to be reviewed by the Executive Committee as part of the regulatory capital assessment, and reported in the Internal Capital Adequacy and Risk Assessment review.

Lily Crompton, the Group Sustainability Lead, chairs the Sustainability Committee ('SC') which was established in 2018 as a sub-committee of the Executive Committee. Further details of our governance structure are available in our annual report.

The Group Sustainability Lead updates the Executive Committee on a monthly basis. The Executive Committee co-ordinates the implementation of the sustainability strategy through the Sustainability Committee and its supporting working groups. The Group Sustainability Lead is responsible for oversight of the Sustainability policy (which includes climate change).

The nominated Executive Committee member sits as a member of the SC. The Chief Risk Officer ('CRO') leads the Group's overall risk strategy and delegates operational and prudential climate-related risk to the Head of Risk. The Head of Risk attends the SC working groups, which are responsible for the implementation and support of the Group's governance framework and policies.

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