Board oversight on climate-related risks and opportunities
Our CEO, Alan Dunsmore, is actively engaged and takes responsibility for the Group's strategic direction and progress on climate-related issues. He assumes overall board-level responsibility for climate-related matters and he also chairs Severfield's sustainable and risk committees, thereby ensuring continuity throughout the business, particularly from a governance perspective.
As summarised on the board skills matrix on Governance at a Glance, the board possess significant climate-related experience, and has a sound basis from which to consider the risks and opportunities facing the business as a result of climate change. We use our board skills matrix for succession planning purposes to ensure there are no skills gaps.
All board reporting at Severfield is underscored by a focus on climate change, sustainability and ESG. The board is consistently updated on climate-related matters on a monthly basis and is briefed on any other changes throughout the year. Where relevant, we also arrange in-depth briefings from industry subject experts so as to draw attention to material ESG matters throughout the year.
The work of the sustainability committee, which mainly consists of selected members of the executive committee, has responsibility to consider the impact of climate change on the business on behalf of the board. The committee (via the executive directors) regularly updates the board on the Group's sustainability strategy and progress against our targets. A monthly sustainability board report is prepared by the Group SHE director, which includes a dashboard on greenhouse gas emissions to ensure ongoing monitoring.
Below are some of the examples of strategic decisions, where we demonstrate how the board gives full and close consideration to ESG factors and sustainability when assessing the impact of the decisions it makes.
- The Group has taken steps to ensure we offer recycled steel as an option for our clients during the tender process, reinforcing the sustainability benefits of steel. This is also linked to the identified risk of steel having a high embedded carbon.
- The Group has further invested in carbon offsets to ensure we remain certified as carbon neutral. This linked to the identified risks of failing to meet emissions targets or failing to comply with legislation or expectations.
- The board has approved and confirmed the Group's Net Zero roadmap and revised the Group Sustainability Policy.
- Investing in climate-related research and development to identify new engineering techniques remains part of our strategy, reinforced by the launch of Project Horizon and our operational improvement programme.
- The Group has embedded sustainability considerations into its capital expenditure approval process.
- In 2023, we joined the SteelZero policy taskforce collaborating with the Climate Group and other members on the most effective approach to capturing and reporting data for the SteelZero framework. In 2024, we plan to start disclosing our progress against low carbon steel procurement to the Climate Group.
- Consideration of investments in UK-based carbon offsetting projects.
The Group board, through the executive committee and risk committee (both chaired by the CEO) has delegated oversight of the management of climate-related risks and opportunities to the sustainability committee and sustainability risk review committee. The board has overall responsibility for the Group's risk management and systems of internal control and for determining the nature and extent of the significant risks it is willing to take in achieving its strategic objectives, this includes specific consideration of climate-related risks.
The Group's sustainability committee members include the following: Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Group legal director and company secretary, Group SHE director, Group HR director, Group head of ESG and Group head of procurement. This ensures that key management is represented across all business disciplines and that, crucially, they share an aligned approach to climate-related matters. Effectively, this ensures that the Group's overall sustainability strategy is delivered successfully.
Our Group legal director and Company secretary, Mark Sanderson, is a member of the executive committee and also chairs the sustainability risk review meetings. He is responsible for helping to ensure that an appropriate strategy is in place to understand, identify, monitor and control risks from climate change in line with the Group's risk appetite parameters.
Beyond the committees themselves, business unit management teams are responsible for managing climate-related risks and opportunities on a day-to-day basis – they, too, are driven to deliver on the Group's Net Zero roadmap and sustainability strategy.
The sustainability committee meets every two months and engages with a wide range of senior managers and colleagues from across the Group to oversee the day-to-day implementation of our sustainability strategy and report on the progress of the Group to the executive committee, who ultimately report to the board.
The Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer are all members of the sustainability committee and therefore provide the board with regular written and verbal updates on climate-related matters.