Skip to content Skip to footer

Loading Results

Climate change risks and opportunities

The Task Force on Climate-related Financial Disclosures (TCFD) was launched in December 2015 by Mark Carney, at that time Chair of the Financial Stability Board (FSB) and Governor of the Bank of England, with the support of the G20. Its recommendations were published in 2017 and provide a framework for companies to disclose the impacts of climate change on their financial performance in a more consistent and comparable way. The intention is to assist investors, lenders and insurers to appropriately assess and price climate-related risks to their portfolios. 
This is our third annual report for the UK firm following the publication of the TCFD recommendations and focuses on our 2020 financial year.


The climate agenda has become increasingly urgent over the last year, driven by extreme weather events in both the UK and globally, and increased social concern and political activity. More than 1,340 companies with a combined market capitalisation of $12.6 trillion and financial institutions responsible for assets of $150 trillion now support the TCFD recommendations. In parallel there has been an unprecedented level of investor concern and regulatory focus on the risks that climate change poses to business, and on TCFD adoption. Notably in the UK:  

  • the Financial Conduct Authority (FCA) has announced that it will require premium listed companies on the London Stock Exchange to disclose in line with the TCFD recommendations from January 2021 on a ‘comply or explain’ basis; 

  • the Government has stated that TCFD reporting will become mandatory for large companies and institutional investors by 2025; and 

  • the Financial Reporting Council (FRC) reported that auditors need to improve their consideration of climate risk in relation to audits and quality monitoring, while urging public interest entities to report using the TCFD recommendations. 

These and other developments will have implications both for our firm and for many of our clients.

As a professional services firm, PwC is not in one of the priority sectors specified by the TCFD, but we do provide services to clients in each of them, and we are regulated by the FRC. As one of the members of the Task Force, we played an active role in the development of the TCFD framework and recommendations, our Managing Partner and Chief Operating Officer, Warwick Hunt, is a signatory to the TCFD Statement of Support and PwC is a signatory to the recommendations at a Global level.  

We play an active role in contributing to the low carbon transition and targets agreed in the Paris Agreement of 2015, and have already reduced our total carbon emissions (scope 1, 2 & 3) by 60% in the UK since 2007, while our revenues have grown by 67%. In September 2020 our global PwC network committed to a science-based target to reach net zero carbon emissions by 2030 for our operations while scaling our Environmental, Social and Governance (ESG) capabilities to support our clients’ net zero transformation.

Governance and Risk Management

Our Management Board oversees our Purpose, which is to build trust in society and solve important problems. Being purpose-led sits at the heart of our strategy and one key way in which we deliver on this is through our support for the transition to a low carbon economy.  All climate-related metrics that the firm publishes in the Annual Review are independently assured each year, and reviewed by both the Executive Board, on behalf of the Management Board, and the Audit Committee of the Supervisory Board. Our Head of Purpose, Emma Cox, presents a report which is sponsored by our Managing Partner and Chief Operating Officer, Warwick Hunt to the Executive Board twice a year. 

Risks to our business relating to climate change, whether strategic or operational, are managed in the same way as other business risks, as part of our overall risk management systems. The Management Board is responsible for establishing systems of internal control and for reviewing and evaluating their effectiveness.  These systems are overseen by our Executive Risk Committee (ERC), which is a subcommittee of the Management Board that oversees the business risks and risk management strategy for the firm. 

There are systems of risk control at every level of the firm.  These include our lines of service, which report on risks relating to their business areas, supported by our risk management teams who work across our business on our professional services risk management systems. Additionally, we have firm-wide processes for reviewing new business, and a team which leads the firm’s efforts to track changes in applicable regulatory regimes. We publish our approach to firmwide risk and principal business risks in our Transparency Report each year. 

This year the ERC considered the implications of climate-related risk to the firm and initiated a review to consider the medium term implications to our services.



As a professional services firm, PwC delivers tailored, industry-focused services and solutions for public and private sector clients, across our core lines of service - Audit, Risk Assurance, Consulting, Deals and Tax. We do not manufacture or assemble physical products, or have complex supply chains, and one of the strengths of our business is that we are diversified across a wide range of clients, sectors and geographies. 

However, we recognise that climate change has the potential to impact our business to varying degrees through our operations and the services that we provide to our clients across the sectors that we operate in. 

Scenario assessment

A key feature of climate risk is the level of uncertainty, so in 2020 we embarked upon an assessment of potential implications of climate change under two possible scenarios of global warming by 2100 from a preindustrial baseline1. We developed these contrasting scenarios to help us explore how potential risks may develop under different circumstances over the short, medium and long-term (2022, 2025 and 2030). 

The 4°C scenario implies greater ‘physical’ risks to asset values from events related to more extreme weather, while the 1.5°C scenario involves greater transition risks in the short to medium term, as markets and regulators adapt to the realities of a zero carbon economy.  Both scenarios could pose potential risks for our business operations and for the services that we provide to our clients and we will continue to consider and assess the potential impacts of such risks in the coming year. 

PwC Operations

As a large people-based services organisation we rely on relatively small quantities of energy, compared to many sectors, to run our offices. Most are run on renewable energy, and we do not produce significant volumes of greenhouse gases. Our highest carbon impact is from our business travel. Our offices are located across the UK which reduces the risk of widespread disruption from extreme weather events in any particular area, and we invest heavily in business continuity to mitigate the risk of disruption to our core operations and business travel. Our business continuity management system is certified to the ISO 22301:2012 standard. Additionally, we are engaging with our key suppliers to drive net zero action, including sharing our experiences through a net zero workshop

We also continue to improve our resilience to potential ‘physical’ risks through leveraging our ongoing investment in collaborative technology and enabling remote working. The COVID-19 pandemic in 2020 has been an effective test of our ability to rapidly shift to working from remote and distributed locations in response to an external shock, and to adapt our ways of working with minimal impact on our ability to support our clients. We will continue to consider our resilience to potential disruptions from extreme weather events on our people’s remote working locations.

Given these mitigating actions, the risks from the impact of climate change to our operations are not currently considered to be material to our strategy.

Client services

Over the last year there has been a step change in the focus given by investors and regulators to the impact that climate change can have on business - and its consequent impact on financial reporting. This has implications for our business, both in terms of new and emerging regulation that our clients will need to comply with, and which may also apply to how we conduct our work. One of the most immediate consequences is for our audit practice where our auditors need to be alert to the impact that climate risk could have on the judgements which underpin financial statements, as well as wider reporting requirements.

In 2020, to ensure that our people are cognisant of climate change when delivering audits, we issued briefings to all audit partners, and to the wider audit practice, about the relevance of climate change to our services. We also initiated the development of two new mandatory steps in our audit methodology for all audit engagements, together with a new climate-risk knowledge hub for our people to access, which further sets out the issues for the sectors in which we operate.

We also need to remain conscious of our clients’ exposure to both physical and transition risks from climate change when selling and delivering our other core services in order to maintain our service quality - particularly those services relating to strategy and governance, risk and reporting, deals related transactions, and business transformation work. Equally, if some clients are disproportionately affected by climate risk it may change the priority that they give to certain types of external advice and may alter the mix of services they seek. We are currently developing and extending further ESG upskilling and training.

Climate change also affords us an opportunity to play a valuable role in advising clients on the relevant implications for them, while mitigating our own risks from exposure to engagements in higher risk sectors. We increasingly combine our multidisciplinary skills across our core lines of service - often in conjunction with our specialist Sustainability & Climate Change (S&CC) team - to support a range of clients in different sectors in their strategic response to climate change, and help many to implement the TCFD recommendations themselves.

Helping to shape the agenda

Using our technical skills and subject matter expertise to continue to progress this agenda is an important element of our strategy. We closely monitor regulatory discussions and market developments, and engage in relevant business forums and working groups. As well as the TCFD we work with key opinion formers such as the World Economic Forum, the World Business Council for Sustainable Development, the Value Balancing Alliance, and the Capitals Coalition, among others. We continue to invest time in research and thought leadership to inform the wider debate. We contributed again to the TCFD Status Report, and supported the roll out of guidance on effective climate governance that we co-authored with the World Economic Forum (WEF). We continue to publish the Net Zero Economy Index, tracking the progress of G20 countries in decarbonising their economies, and published The State of Climate Tech 2020, pioneering analysis of the state of global climate tech investing.  Additionally, we produced the first company research contribution (commissioned by Microsoft), to the ‘Transform to Net Zero’ initiative, and also published a review of best practice climate reporting by leading UK companies as part of our assessments for our Building Public Trust Awards.

Metrics & targets

Being transparent about our progress is a key principle that underpins our Purpose. We keep track of this in several ways, and while we don’t currently set financial targets in relation to climate risk, internally we track the performance of our dedicated S&CC business practice. We also track the investments of time we make in our provision of technical support to external bodies, and in the development of new perspectives, methodologies and services related to climate change.  Additionally, we track the operational savings from the investments we’ve made to reduce our reliance on fossil fuels and to operate our offices more efficiently. 

In the financial year to 30 June 2020, greenhouse gas emissions for the UK firm totalled 46,273 (FY19: 74,755) tonnes of carbon dioxide equivalent (CO2e). This breaks down as follows:



(tonnes CO2e)


(tonnes CO2e)

2020 vs 2019

2020 vs 2007 baseline

Scope 1





Scope 22





Scope 3





It means that in 2020 our total carbon emissions fell to 60% below our 2007 baseline. We were on track to surpass our 2022 target of a 40% reduction two years early, even before the exceptional impact of the pandemic. We offset our residual carbon emissions as reported in each financial year using certified carbon credits. The key components of this performance are set out in our 2020 Annual Review.

We also report our progress against our targets in our Non-financial scorecard, which is externally assured to the ISAE 3000 and ISAE 3410 standards, and publish information about our programmes to manage our environmental performance on our website.

1 1.5°C scenario: In this scenario we would expect a significant increase in climate policies and regulation required to support the transition to a low carbon economy, with a particular focus on decarbonising the energy system, and corresponding implications for certain sectors whose business models rely on fossil fuels. This would be bolstered by a surge in market demand for lower carbon products. This scenario is based on the Intergovernmental Panel on Climate Change’s (IPCC) SSP 1 scenario and the International Energy Agency’s World Economic Output (IEA WEO) sustainable development scenario. 

4.0°C scenario: this scenario reflects the trajectory of warming by the end of the century with little new action to reduce the carbon intensity of business, beyond current policies and commitments. The resulting increase in average temperatures, would lead to significant shifts in the frequency and intensity of extreme weather-related events in the UK and globally, as well as long term shifts in weather patterns that could affect food production, infrastructure, supply chains and migration for many of our clients. This 4°C scenario is based on the IPCC SSP 5 scenario and the IEA WEO stated policies scenario.

2 Based on the GHG Protocol ‘market based’ approach. ‘Location-based’ approach for 2020: 5,799 tonnes CO2e

Contact us

Emma Cox

Emma Cox

Head of Purpose and UK Leader Sustainability & Climate Change, PwC United Kingdom

Tel: +44 (0)7973 317011

Follow us