THE UNITE GROUP PLC Annual Report and Accounts 2024 70 STRATEGIC REPORT and updated scenarios using the latest data from the Met Office, ensuring the analysis reflects current scientific understanding. The process for assessing climate risks follows the same approach as for all principal risks, with the Board responsible. These are detailed in the Summary of principal risks and uncertainties tables on page 60. The Energy and Environment Team integrates sustainability into the business, tracking climate, legal, and policy developments to manage associated risks. This includes adhering to MEES regulations for EPC standards and developing transition plans for assets to meet future standards. We monitor regulatory requirements, including climate change, to ensure compliance with new regulations. Climate-related risks and opportunities are assessed through due diligence for investments and risk assessments for existing assets. These include energy efficiency ratings and physical climate risks, detailed in Asset Transition Plans: • Existing assets – Risks are identified by analysing property data, such as flood risk, transition risk using CRREM tool outputs, and energy performance, typically reviewed annually to inform asset management and disposal strategies. • Investment and divestment – The Investment Committee reviews sustainability risks, considering geographical location for physical risks like flooding and overheating. • Transition risks are assessed based on energy efficiency ratings, plant and machinery, construction type, and investment needed to meet net zero targets. When risks are identified, we develop mitigation strategies for new developments or adjust acquisition pricing if risk can be managed. METRICS AND TARGETS Our 2030 net zero carbon commitment, outlined in our 2021 Net Zero Pathway, aligns with the Paris Agreement and UK Government goals. This is supported by SBTi-approved science-based targets and our RE100 pledge to purchase 100% renewable electricity by 2030. Senior leadership’s long-term incentive plan is linked to energy intensity, and Executive bonuses are tied to GRESB, which includes net zero transition and sustainability performance. Focusing on net zero helps reduce physical risks from overheating and flooding, maintains reputational integrity, and ensures the use of best available technology to achieve credible and achievable transition plans. As we offer all-inclusive rent, including the cost of utilities, our customers’ energy use is included in our Scope 1 & 2 emissions, providing an opportunity to reduce both our and their environmental impact. This is unlike most real estate businesses where tenant energy use contributes to Scope 3 emissions. Our Net Zero Carbon Pathway includes ambitious climate-related targets: • Reduce absolute carbon emissions (Scope 1 and market-based Scope 2) by 56% by 2030 from a 2019 baseline (SBTi validated) • Achieve 625kgCO2e/m2 of embodied carbon or new developments by 2030, in line with the RIBA 2030 climate challenge • Reduce energy intensity by 28% by 2030 compared to 2019 • Source 100% of energy from renewable sources by 2030, in line with RE100. We are undertaking a number of actions in 2025 to ensure that we continue to progress towards our net zero goal and mitigate climate risks: • c.£12 million of capital investment in energy efficiency planned for 2025, including LED lighting, air source heat pumps and improved heating controls • Exploring options to expand our electricity Power Purchase Agreements to meaningfully decarbonise our energy supply • Climate-related metrics are included in Company bonus and incentive schemes as set out in the Governance section of this disclosure • We continue to explore internal carbon pricing options and expect them to form part of our updated Net Zero Carbon Pathway. Energy consumption and Scope 1 & 2 greenhouse gas emissions, calculated in line with the Greenhouse Gas Protocol, have been externally verified by SGS to a reasonable level of assurance in line with the requirements of ISO 14064-3:2019. Environmental performance data has undergone external assurance by SGS to a limited level of assurance in line with requirements of ISAE 3000 (Revised): Assurance Engagements Other than Audits or Reviews of Historical Financial Information. RISK MANAGEMENT continued