Summary disclosure against TCFD recommendations continued
Climate-related risks and opportunities Time horizon key: Short term = 0–5 years, Medium term = 5–15 years, Long term = 15+ years
We consider the potential implications for all TCFD risks and opportunity categories. For these risks and opportunities, we distinguish between potential impacts on our investments (considering the impact on portfolio companies and the value of client assets), our investment propositions (considering their delivery, suitability for and perception by clients) and our direct business operations. We outline the estimated time horizons over which they could take effect. These have been revised since the last reporting period to reflect evolving trends and to better align with the investment horizons of our business. Table of risks
Potential impacts for the Group
Estimated time horizon
Transition risks
Policy and legal Investments: Portfolio company failure to fully respond to climate regulations, which could lead to increased costs (e.g. high carbon offset costs) and decreased asset valuations, impacting the performance of client portfolios. Some industries are likely to be more negatively affected than others. Short Medium Long Investment propositions and operations: Increased climate-related regulatory and reporting requirements may lead to increased operational costs for the Group and risk of non-compliance. Short Medium Market Investments: Assets with exposure to climate-related market risks may suffer poor performance during a transition to a lower carbon economy, affecting our portfolio returns and client outcomes. Short Medium Long Investment propositions: Climate change, net zero and associated regulatory developments drive client appetite for investment propositions that we do not provide, leading to lower revenue and poor client outcomes. Short Medium Technology Investments: As technology develops, asset-intensive firms such as those in automotive, manufacturing and utilities sectors may have large capital expenditures to upgrade equipment to align with efficiency requirements or to retain consumers increasingly interested in lower-carbon options. This could lead to increased costs, decreased revenues and decreased asset valuations. Short Medium Long Investment propositions and operations: As new technology and data is required to evolve and implement our investment practices, this may lead to increased resource and expertise constraints and costs, as well as operational challenges. Reliance on third-party data may increase our risk of exposure to incorrect or missing data, leading to challenges in assessing climate-related risks and opportunities. Short Medium Reputational Investments: Portfolio companies whose response to the climate challenge is perceived as inadequate could suffer decreased revenues and asset valuations. This, in turn, could negatively impact on the Group’s FUM and revenue. Short Medium Long Investment propositions: Clients feel misled by our responsible investment propositions, leading to lower confidence and demand for our products and services, resulting in reduced revenues. Short Medium Investment propositions and operations: Clients may perceive our response to climate-related challenges as inadequate, leading to a loss in market share. Short Medium
48 Brooks Macdonald Group plc Annual Report and Accounts 2025 Brooks Macdonald Group plc 48
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