41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 73
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
Strategy
Time periods:
Climate change is a principal risk to Unite which has the
potential to impact our business in the short, medium and
long term. We face potential acute and chronic physical risks
from the direct and indirect effects of climate change on our
business, including extreme weather and flooding. Potential
transition risks associated with the shift to a low-carbon
economy include changing consumer preferences, impacts
on investment property valuations according to their climate
resilience and energy performance, and future policy and
regulation. These also present opportunities where, for
example, our leadership in the sector may be valued by
our customers and ultimately lead to improved financial
performance. Further detail, including the process used to
determine materiality of risks is included within the Risk
Management section.
Risk
S Short term: 0–3 years – Our highest confidence
forecasts including the detailed year budget and
subsequent two years where we have significant
visibility in our Business Plan.
M Medium term: 3–10 years – Covers the period to our
2030 net zero carbon target, asset transition plans
and other regulatory deadlines such as EPC B in 2029
and the useful life of building fit out.
L Long term: 10–30 years – The period beyond
our forecasting and planning horizon and the
age where PBSA can begin to face obsolescence
without investment.
Acute physical
Heat Stress
Flooding
Description
Rising average and frequency of heatwaves could
make our buildings uncomfortably hot during the
summer months.
Increased rainfall increases the risk of both flash flooding and rivers
bursting banks.
Impacts
We may be required to relocate those customers
living in excessively hot rooms at our expense or
otherwise compensate for disruption.
The impact of a flood could be significant to a single property, either
from temporary disruption to our customers and operations teams,
or damage to the building itself and the plant and machinery within.
In the most extreme scenario, a flood may damage the plant room of
a building requiring temporary closure whilst repairs are completed.
Sustained increases in temperature may mean
we are unable to let buildings during the summer
without active cooling or investment in passive
cooling technologies.
Time period
M
Financial
risks and
opportunities
c.£15 million of summer short term lettings
income at risk of increased cooling costs.
L
Higher temperatures during winter may reduce
the heating requirement of our buildings.
Operations may also be impacted by flooding elsewhere that disrupts
supply chains or communications even if individual properties are not
directly affected.
S
M
L
The geographic diversity of the portfolio means that flood damage is
unlikely to be material in the context of the Group. Closure of a building
for a year due to flood damage could cost up to £12 million of lost
net income.
A risk assessment using Environment Agency and Scottish
Environmental Protection Agency flood risk data found that
approximately 10% of the total portfolio has a High (1 in 76–100 years)
or Very High (1 in
