41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 75
STRATEGIC REPORT
Risk
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
Transition
Technology
Reputation
Policy and legal
Market risk, commodity and
resource efficiency
Scenario
methodology
We assess individual assets
against the CRREM 1.5°C
pathways for UK multifamily
residential energy consumption
and carbon emissions (on a
market-based Scope 2 basis),
and have reviewed all EPCs
against relevant EPC MEES
targets in England and Wales
and in Scotland. These have
been compared against current
asset performance, and
expected performance after
the implementation of planned
capital investment over the
next 7 years set out in our asset
transition plans.
Not assessed
Not assessed
Not assessed
Mitigation
and
adaptation
activities
Delivery of our 2030 net zero
target, in conjunction with
our asset transition plans
are expected to avoid asset
stranding. We will monitor
progress against these plans
and take corrective action where
required. We plan to invest
around £100 million in our
sustainability strategy by 2030.
We actively engage with
our customers, University
partners, suppliers and
investors to explain
and seek feedback
on our sustainability
performance and goals in
addition to understanding
their requirements and
expectations.
We engage with Government and
our advisory teams to understand
likely future legislation and the
impacts that it might have on
Unite. This gives us the greatest
amount of time possible to
adapt to new regulation ahead of
introduction.
We forward purchase our
utilities so that we have
price certainty when putting
rooms on sale, allowing us to
confidently set prices at an
appropriate level to reflect the
costs which we face.
Our planned investment in
sustainability initiatives will get all
of our buildings up to minimum
efficiency standards for letting.
Our sustainability and legal
teams, with support from
our expert advisors, routinely
monitor upcoming and proposed
regulation to ensure we remain
compliant.
The Group operates solely in the United Kingdom and
generates substantially all of its income through letting
purpose-built student accommodation. Sector and
geographic considerations are therefore not considered
material to climate risk at the Group level. For individual
properties, geographic considerations can be a material risk
as discussed in the Risk Management section.
The Group has potentially significant opportunity to benefit
from the actions it has taken to address climate change.
Improving resource efficiency, particularly where services
are included in the rent, could generate cost savings and
potentially increase asset values. If students recognise and
value our sustainability performance, we may benefit from
increased sales or a reduction in marketing costs. Our use
of low carbon energy sources will reduce the impact of any
future carbon pricing or taxation. Equity and debt capital
may be more readily available, or at lower cost, if we can
meet and exceed market sustainability requirements.
Around 20% of our electricity
is secured through a corporate
power purchase agreement,
giving us certainty of supply
over the medium term. We are
actively exploring opportunities
to add to this given the
compelling environmental and
financial impacts.
During 2022, climate risks and opportunities were tracked as
part of our financial planning relating to utility costs where
varying levels of usage could have an impact on our financial
performance as energy supply and commodity costs became
a major geo-political issue. Our 2023 budget and planning
include further assessments of our exposure to utility costs
and the potential to mitigate cost increases through capital
investments in energy initiatives.
Green debt issuance, either on public capital markets
or privately, continues to gain pace. The Group has a
Sustainable Finance framework, enabling it to access the
Green Bond market and has also embedded sustainability
performance into the Group’s main bank facility. Failure to
meet the targets set out in the Sustainability Framework may
reduce the Group’s ability to access debt capital markets,
potentially resulting in higher finance costs.
Climate risk, most commonly energy usage, flood and
transition risk are considered in capital allocation decisions.
All potential acquisitions and disposals are reviewed to
identify the costs of meeting our net zero commitments, EPC
requirements and ongoing utility costs and ensure that these
are properly reflected in financial modelling and form an
important part of our due diligence.
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