47153 AG Barr Annual Report 2025 AW4 SQ WEB - Flipbook - Page 46
A.G. BARR p.l.c. Annual Report and Accounts 2025
RESPONSIBLE BUSINESS REPORT CONTINUED
Best-case climate scenario
IEA Net-Zero Emissions (NZE) by 2050
Scenario narrative & context
Under this scenario, the global energy sector reaches net-zero emissions of CO2 by 2050 by deploying a wide portfolio of clean energy technologies and
without offsets from land-use measures. It also depends on a high degree of fair and effective global co-operation and collaboration. All countries are
required to contribute to deliver the desired outcomes.
This scenario assumes that all regions introduce pricing of CO2 emissions alongside other policies designed to bring about clean energy transitions in the
NZE Scenario. For advanced economies the assumed carbon price by 2030 is $140 per tonne of CO2.
Intermediate climate scenario
IPCC RCP 4.5 pathway
Scenario narrative & context
Emissions start declining by approximately 2045 to reach roughly half of the levels of 2050 by 2100.
Global temperatures rise between 2°C and 3°C, by 2100, sea levels rise and many plant and animal species are unable to adapt.
Worst case climate scenario
IPCC RCP 8.5 / SSP5
Scenario narrative & context
Limited efforts are made by governments and businesses to reduce greenhouse gas emissions, leading to temperature rises of 4°C above pre-industrial
levels by 2100.
In this scenario, the emphasis turns to protecting the population and operational assets from the catastrophic impact of the changing climate as opposed
to reducing the emissions themselves.
We chose this scenario to assess the potential physical risks on our business and supply chain, as it is supported with long-term data ranges on temperature,
precipitation and rise in sea-levels. The data from the scenario extends to 2100 and allows us to take long-term views on risks, considering the impact of
market change in the locations of our own assets and at the origin of our key materials.
Assessing risks
Our Group corporate risk register guidelines
provide the framework for defining financial
and strategic impacts on our business. This
framework applies equally to climate-related
risks and categorises five levels of risk impact:
“insignificant”, “minor”, “moderate”, “major”
and “critical”.
The Group corporate risk register guidelines
also include definitions for the likelihood of
the risks, including: “rare”, “unlikely”, “possible”,
“likely” and “almost certain”.
Different parameters are taken into account
when assessing the potential impact of a risk,
including financial, environmental and other
aspects such as health and safety and
corporate reputation. Each risk is given a risk
rating before and after mitigating actions.
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Gross risk impacts that fall in the categories
of “moderate”, “major” or “critical” would be
deemed to be material.
From a financial perspective, a “moderate”
impact is defined as impacting financial turnover
or profit by between 3% and 10%, a “major”
impact is defined as impacting financial turnover
or profit by more than 10% and less than 25%.
A financial impact of 25% of more on turnover
or profit would be deemed “critical”.
Managing risks
Metrics & Targets
The resolution of moderate impacts requires the
input from our Executive teams. The resolution
of major and critical impacts requires the input
from the Board and/or its sub-committees.
The mitigating actions for our key climate-related
risks, identified through our ESG Committee and
our multi-functional and business-wide risk
management process, are being managed
primarily through our No Time To Waste
environmental sustainability programme.
This programme has identified a number of
long-term climate-related goals, with the key
deliverables being the achievement of our
science-based targets and the ultimate delivery
of our net-zero by 2050 commitment. Other
climate-related targets and KPIs, including
those related to packaging, waste and water,
are detailed within our long-term goals and
non-financial key performance indicators on
pages 21 and 27.
The Group Risk Committee reports back to the
Audit and Risk Committee, attended by Board
Directors. Similarly, the ESG Committee reports
to the Board on the material climate-related
risks identified.
Mitigating actions are developed for each risk
and their effectiveness is reviewed on an ongoing
basis. New actions are triggered in order to
further reduce the net score of each risk,
especially for any risks that sit outside of the
Board risk appetite. Functional risk registers are
reviewed in depth by the Group Risk Committee
according to an annual schedule to ensure that
risks are well represented and that actions are
taken to reduce the level of risk for the business.
Our metrics and targets focus primarily on the
reduction of Scope 1, 2 and 3 greenhouse gas
emissions, identified as a cross-industry,
climate-related metric category.
