TCFD Report 2025
01 Derwent London plc TCFD Report 2025
Task Force on Climate-related Financial Disclosures (TCFD)
We are proactive in finding solutions to further reduce emissions and develop renewable energy sources.
TCFD compliance statement
Our disclosures in this section are consistent with the TCFD's Recommendations and Recommended Disclosures. When assessing the consistency of our disclosures, we have had due regard for all relevant guidance including the TCFD's Guidance for All Sectors.
We have adapted our disclosure to reflect some of the key aspects within the sustainability disclosure standards IFRS S1 and S2 which were published by the International Sustainability Standards Board in 2023.
We separately publish a Responsibility Data Report alongside our annual Report & Accounts which provides more detailed climate-related data sets and performance metrics.
This can be found at https://www.derwentlondon.com/responsibility/publications. We structure our reporting in this way to satisfy the requirements of our various stakeholders.
TCFD directoryIn line with the UK's Financial Conduct Authority Listing Rules, we have identified in the table below where our responses to the TCFD's 11 recommendations are located. We retain sufficient evidence/records to support our compliance statement (on page 86 in the Report & Accounts 2025) and our data disclosures in our annual Report & Accounts and Responsibility Reports.
Governance | a) Describe the Board's oversight of climate-related risks and opportunities | See pages 09 to 10 |
b) Describe management's role in assessing and managing climate-related risks and opportunities | See pages 05 to 10 | |
Strategy | a) Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long-term | See pages 03 to 06 |
b) Describe the impact of climate-related risks and opportunities on the organisation's business strategy and financial planning | See pages 07 to 08 | |
c) Describe the resilience of the organisation's strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario | See pages 03 to 06 | |
Risk management | a) Describe the organisation's processes for identifying and assessing climate-related risks | See pages 02 to 08 |
b) Describe the organisation's processes for managing climate-related risks | See page 09 to 12 and 108 in the Report & Accounts 2025 | |
c) Describe how processes for identifying and managing climate-related risks are integrated into the organisation's overall risk management | See page 02 | |
Metrics and targets | a) Disclose the metrics used by the organisation to assess climate-related risks See page 12 and 74, 75 in and opportunities in line with its strategy and risk management process the Report & Accounts 2025 | |
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks | See pages 74 to 75 in the Report & Accounts 2025 | |
c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets | See page 12 and 69 in the Report & Accounts 2025 | |
Derwent London plc TCFD Report 2025 02
The built environment
Climate change is a major global challenge which will impact how business operates in the future. The built environment contributes approximately 40% (including the residential sector) to the UK's overall carbon footprint. Consequently, we take a proactive approach in finding solutions to further reduce emissions and develop renewable energy sources (see pages 69 to 73 in the Report & Accounts 2025).
Examples include:
As part of our commitment to being a net zero carbon
business by 2030, we are helping to lead the industry in supporting the Government's net zero carbon ambitions and improving the carbon footprint of the built environment. We are also helping to develop best practice guidance for our sector through engagement with industry partners and organisations such as the Better Building Partnership and the British Property Federation.
- Westminster City Council Sustainable City Charter: We were early signatories to the Westminster City Council (WCC) Sustainable City Charter, which provides a framework for reducing carbon emissions from non-domestic buildings across Westminster; and
- Sustainable Markets Initiative (SMI) Sustainable Buildings Taskforce: Our CEO, Paul Williams, sits on the Sustainable Markets Initiative (SMI) Sustainable Buildings Taskforce which is part of His Majesty King Charles III's Terra Carta. The aim of the initiative is to put nature, people and the planet at the heart of global value creation.
We seek to actively engage with our peers, occupiers and other stakeholders to reduce energy use and carbon emissions within the built environment. If you wish to discuss our Net Zero Carbon Pathway, please email sustainability@ derwentlondon.com
Our approach
Climate change is a material issue for our business. We deem an issue to be 'material' when it is assessed as being sufficiently important to both our business and our stakeholders. Our properties are subject to climate-related risks such as increasing temperatures which could lead to greater physical stresses. Our strategy involves the acquisition and repositioning of older properties and ongoing investment in more modern properties.
We ensure a high degree of resilience in our new developments and repositioning of older properties by setting high standards for sustainability. When managing our core income portfolio, we focus on energy and carbon reduction (as dictated by our energy intensity reduction targets), ensuring our buildings operate as efficiently as possible. Our strategy centres around the concept of continual improvement to ensure a high degree of both climate and financial resilience. Our environmental priorities are on pages 69 to 73 in the Report & Accounts 2025.
Climate risk assessmentWe identify and monitor climate change risks and opportunities as part of our wider risk management procedures which are overseen by the Board and its principal committees (see pages 09 to 10 and 144 in the Report & Accounts 2025).
We structure our risk management framework, which is disclosed on page 158 in the Report & Accounts 2025, into four stages. Our climate risk disclosures, shown on pages 01 to 14, are structured in accordance with this four-stage approach.
Owing to their complex nature, the identification and assessment of climate-related risks and opportunities are undertaken with the support of third party expertise. In 2024, Willis Towers Watson (WTW) performed an updated independent climate risk assessment and scenario analysis. The scope of the assessment included our entire London-based investment portfolio (including our head office) and our Scottish portfolio.
During our climate risk assessments, short, medium and longterm time horizons were considered (see page 09 to 10). We recognise that climate-related issues, in particular physical risks, are often (but not exclusively) linked to the medium to long-term and that the properties within our investment portfolio have a long lifespan of many decades.
The climate risk assessments sought to identify the transition and physical risks and opportunities applicable to the Group. As our business is based in and solely focused on the UK, the risks/ opportunities were not considered on an international and/or segmental basis.
Through this process we identified and reviewed nearly 35 transition and physical risks and opportunities. On page 03 we have disclosed the most material risks and opportunities in terms of impact, likelihood (transition risk) and exposure (physical risk).
Once the risks and opportunities had been identified, three
pre-defined climate scenarios were applied, where appropriate, to test the resilience of our business, strategy and financial planning.
Identification Assessment Monitoring Response
03 Derwent London plc TCFD Report 2025
Identification
Transition
Transition risks and opportunities are those which arise from the transition to a low carbon economy. These were identified and assessed, in terms of their impact and likelihood, via a facilitated workshop with cross-functional representation from across our business. As part of our risk assessment, we considered how these risks changed under a 1.5°C aligned scenario (the 'Low Carbon World'). Overall, our transition risk exposure under the 'Low Carbon World' scenario was assessed to be low to moderate in both the short-term (2030) and the medium-term (2040) (see table below).
The impact and likelihood of each identified risk were challenged in the context of the latest regulatory updates and WTW's/our experience with the real estate sector.
We also estimated the financial impact (whether to the balance sheet or income statement) and assigned high and low impact estimates to applicable cost components, depending on the effectiveness of our planned mitigating actions. Through the assessment process, we applied mitigation measures already captured within the scope of our Net Zero Carbon Pathway and those within our existing business processes, to define our residual risk profiles. Due to the strength of our mitigation strategies, the impact of these risks reduced significantly on a residual basis.
Based on our assessment, the table below shows the most material transition risks and opportunities applicable to our business.
Material transition risks and opportunities identified:
Risk rating on a residual basis
Enhanced emissions reporting requirements
'Low Carbon World' (~1.5°C)
Risks Opportunities
0-5 years 5-15 years 0-5 years 5-15 years
Low
Low
Change in customer demand Moderate Moderate
Emissions offsets | Low | Moderate |
Planning approval changes Moderate Moderate
Cost of raw materials | Low Low Low Low Low Low | |
Employee attitude to climate change and sustainability | ||
Cost of low carbon emission technologies |
Physical
Physical risks were identified and assessed through an asset-by-asset exposure/susceptibility analysis using a range of acute and chronic climate hazards (risks). The scenarios were tested as at the present day, as well as for future projections under three climate scenarios (see table below). This was supplemented by a climate risk modelling analysis, undertaken by WTW, for flood and windstorm, as well as more chronic risks like heat, drought and subsidence. Physical assets were considered exposed if they are located in an area where a climate hazard may occur. The degree of exposure was defined by the severity/intensity of that hazard, with each hazard having its own intensity scale. If an exposure was deemed to be moderate or above it could have a material impact.
It should be noted that the scores were based on a global scale. For the UK, a modest increase in a chronic hazard, such as heat-stress (heatwaves), from very low to low could have wider implications on properties and infrastructure.
Our exposure to physical risks increases into the medium and long-term and as global temperatures rise. Based on our assessment, we consider windstorm and flooding to be the most material physical risks to our business. While subsidence is a material physical risk, there is no clear financial quantification model available within the data sets used.
Material physical risks identified:
Short-term 0-5 years Medium-term 5-15 years Long-term 15+ years
Present day
'Low Carbon
World' (~1.5°C)
'Current Policies' (~2 to 3°C)
'Hot House
World' (>4°C)
'Current Policies' (~2 to 3°C)
'Hot House
World' (>4°C)
Heat stress | Very low | Very low | Very low | Low | Low | Low |
Flooding | Low | Low | Low Low Low | Moderate | Moderate | Moderate |
Drought | Very low Very low | Low Low | Low Low | Low Low | Moderate | |
Fire | Low | |||||
Windstorm (Severe weather event) | Moderate | Moderate | Moderate | Moderate | Moderate | Moderate |
Subsidence | High | High | High | High |
Derwent London plc TCFD Report 2025 04
Decarbonising our portfolio Phased decarbonisationWorking with our Asset and Property Management teams, as lease expiries/breaks have occurred, c.80% of 1-2 Stephen Street has now been converted to be all-electric, through the installation of Air Source Heat Pumps (ASHP) and removal of gas for domestic hot water. We are targeting full decarbonisation by 2029.
When floors become available, retention and reuse is a priority, with raised access floors being retained and MEP reused where suited to the new ASHP system. We have worked closely with the supply chain to develop a custom design-led low carbon ceiling which meets quality, aesthetic and carbon requirements. As floors return, we keep learning and improving on our existing benchmarks.
Risk: Timing and costOur portfolio comprises buildings of different ages. Some projects require a greater level of intervention (for example, where on floor MEP equipment cannot be reused).
Consequently, some buildings may take longer to decarbonise as we align our works with lease expiries and breaks to minimise disruption.
Opportunity: Innovation1-2 Stephen Street has helped us develop a phased decarbonisation blueprint which allows us to continue decarbonising our portfolio whilst limiting disruption to occupiers. This approach is being rolled out across other buildings within the portfolio, including 9-10 Rathbone Place W1 and 17 Gresse Street W1 (Charlotte Building), where projects were completed during 2025. This both aligns with our Net Zero Carbon Pathway and improves EPC ratings.
9-10 Rathbone Place W1
05 Derwent London plc TCFD Report 2025
Scenario 1 'Low Carbon World' ~1.5°C | |
Assumptions | |
A low temperature rise scenario as the world transitions to a low carbon economy
| |
Transition risks | Low to Moderate |
Our overall risk exposure under the 'Low Carbon World' (~1.5°C) scenario is low to moderate in both the short-term (2030) and the medium-term (2040). The most material transition risks identified were EPC rating requirements, planning approvals and rising emission offset prices. | |
Physical risk exposure | Very Low to Moderate |
Our physical risk exposure was low under this scenario. However, our Scottish land had greater exposure to windstorm and river floods in comparison to our London portfolio. | |
Potential financial impacts | Moderate |
In 2021, approximately £97m of capex was identified to achieve an EPC rating of B across our London commercial portfolio. This has since been revised to £73.7m to reflect the latest scope (change in building regulations), inflation, disposals, the acquisition of the remaining 50% interest in 50 Baker Street W1, and the work carried out to date. We have mitigated the impact of near- to medium-term cost increases in market pricing of carbon offsets by forward-purchasing high quality, nature-based removal credits for our regeneration pipeline to 2030. However, we remain vigilant to pricing shifts in the voluntary carbon market. | |
Potential impact on strategy | Low |
Our strategy and financial planning already reflect more stringent planning and design requirements, guided by the introduction of our Net Zero Carbon Pathway in July 2020 (updated in 2025). We estimate that the cost impact of achieving our pathway requirements is approximately 5% to 10% of our development costs which is factored into our appraisals. Over the long-term, we can reduce the cost impact of carbon offsets on our financial returns by extending our carbon removal projects (e.g. tree planting) on our Scottish land which will help to reduce our reliance on the voluntary carbon market. However, in this scenario we are unlikely to realise the full value for some time, given such projects take time to yield a significant number of credits. In 2020 and 2024, we forward-purchased c.195,600 carbon credits for a combined price of c.£4.9m. | |
Assessment
Of the risks identified, none were deemed likely to have an impact such that the viability of our business would be interrupted, although our cost profile could increase.
Testing our resilienceThe risks and opportunities we identified were applied against at least two climate scenarios for transition risk and three for physical risk to test the resilience of our business, strategy and financial planning.
Our approach to creating scenarios followed the updated guidelines produced by the TCFD within its Guidance on Scenario Analysis for Non-Financial Companies and aligns with IFRS S2. We set out on page 14 the assumptions and risk data sources that were used in our most recent climate scenarios.
When conducting the scenario analysis, we had due regard to the following:
- Forecasting: scenarios are a way to imagine plausible states of the world and plan for our resilience. They are not intended as forecasts of the future.
- Balance: they should have aspects of quantification, but not so much that it impairs strategic thinking.
- Challenge: they must ensure we challenge our own thinking about our organisation and business model.
- Certainty: some drivers within the scenarios may be relatively certain and predictable whilst others are highly uncertain as to their development and impacts over time.
- Breadth: the resilience of our strategy should be investigated under multiple scenarios, including a 2°C or lower scenario.
The tables on pages 07 and 08 illustrate how we have incorporated these risks and opportunities into our strategy and financial planning. Ultimately, we do not envisage having to make changes to our overall strategic approach when considering climate-related scenarios.
Risk rating / See page 102 in the Report & Accounts 2025
Derwent London plc TCFD Report 2025 06
Scenario 2 'Current Policies' ~2°C to 3°C | |
Assumptions | |
The world follows the emissions trajectory based on current policies/practices
| |
Transition risks | Low to Moderate |
Under this scenario, the risk impact and likelihood profiles for transition risks were unchanged in comparison to the 'Low Carbon World' scenario. This is because strategically we are expecting to decarbonise in a shorter time frame compared to the current policy approach. | |
Physical risk exposure | Low to Moderate |
Within this climate scenario there was no scientific evidence to suggest that intensity or frequency of windstorms would increase significantly, therefore the risk profile has been deemed to be broadly similar to that in the short-term. However, subsidence starts to represent a material risk in this scenario, albeit currently there is little or no data available on its impact, either financially or structurally at the asset level. All our London portfolio assets are either out of risk zones or are protected by the Thames Barrier. Four agricultural assets in our Scottish portfolio are currently exposed to very high flooding risk. Flooding consequently represents a moderate risk in this scenario. | |
Potential financial impacts | Low to Moderate |
Generally, the transition risk cost impact is lower than in the 'Low Carbon World' scenario where demand for instruments such as offsets is greater, leading to supply constraints. Physical risk cost impact is not discernible in this scenario. | |
Potential impact on strategy | Low |
Sustainability has always been part of our strategy. This puts us in a good position to take advantage of market and occupier demand for more sustainable spaces, and the associated higher rental premiums. There are also operational cost savings that can be achieved from reduced energy intensity of more efficient spaces. Under this scenario, we would continue to retrofit and improve our properties in line with our net zero strategy and overall business model. It is assumed the opportunities available in our Scottish portfolio remain the same. | |
Scenario 3 'Hot House World' >4°C | |
Assumptions | |
A high carbon scenario where the world fails to transition, and temperatures rise
| |
Transition risks n/a | |
Transition risks were not modelled under this scenario. These risks only arise if the world actively attempts to transition to a low carbon economy. | |
Physical risk exposure | Moderate to High |
Our London portfolio could see a moderate risk of drought, of between three to four months per year, a notable increase over today's climate. Under this scenario, there is increased susceptibility of subsidence, with all the London portfolio having 'probable' increases and instability issues in line with the wider London area. There was no scientific evidence to suggest that intensity or frequency of windstorms would increase significantly. Consequently, the risk profile has been deemed to be broadly similar to that in the 'Current Policies' scenario. | |
Potential financial impacts | Low |
Within the next 10 years, modelling showed that there was a 10% probability of windstorm damage to the portfolio costing approximately £1.8m to £4.0m in the most extreme years. Likewise, in the same extreme years flood damage could cost £0.3m to £3.6m, rising to approximately £2.1m to £6.1m by 2050, across both the London and Scottish portfolios. | |
Potential impact on strategy | Low |
Drought might create water stress issues and shortages in the water supply for London. Our water management strategy would need to be adapted for more optimal water usage (reuse, collections etc.) which could lead to higher maintenance and regeneration costs. Although overall flood risk is not significant, projected changes indicate that the frequency of flood events could increase in the UK (and more for Scotland) and create additional direct building and infrastructure damage and more frequent interruptions. Flood risk assessment forms part of our acquisition appraisal process. Subsidence presents a risk to our London portfolio, although the lack of data makes it difficult to ascertain the impact, if any, on our business strategy. | |
07 Derwent London plc TCFD Report 2025
Assessment continued Impact on our strategy and financial planningThe outputs from the risk and scenario assessments (see pages 03 to 06) have been embedded into our business to ensure all of our core activities accurately reflect the required actions and investments. Our strategy remains unchanged as we continue to develop design-led, amenity-rich, low carbon office space in line with market and customer demand.
strong and flexible financing
5 To maintain
operate our buildings responsibly
4 To design, deliver and
develop talented employees
3 To attract, retain and
2 To grow recurring earnings and cash flow
create value from a balanced portfolio
1 To optimise returns and
Strategic objectivesExposure
Material risk | 0-5 years | 5-10 15+ Impact on strategy years years | Impact on financial planning |
Transition risks | |||
Planning requirements It is likely that the UK will need to incrementally increase the stringency of building planning and design requirements as part of its efforts to meet its net zero targets. This would affect our development pipeline, including increasing development costs to ensure all new buildings are net zero carbon ready. | ⚫ |
to ensure that our properties are more climate resilient, built for a longer life, flexible to occupy and operate, less reliant on mechanical cooling and free from fossil fuel use i.e., all electric heating and cooling. Strategic objectives: 1 2 4 Business model: Refurbishment & Development | The requirement to be net zero aligned is already factored into our development appraisal process and ensures we have a robust level of cost certainty and financial forecasting ability. Access to good quality, affordable finance is also important to enable us to deliver our development pipeline effectively. Further information on our green finance initiatives is on pages 60 to 61 in the Report & Accounts 2025. |
Emissions offsets As more companies commit to net zero, the demand for high quality carbon removal offsets is increasing, resulting in higher prices. There is also increasing reputational risk associated with the use of emission offsets if carbon offsetting is chosen as the only net zero measure, instead of focusing on reducing energy consumption and emissions first. |
our managed portfolio which look to reduce intensity by c.4% year-on-year between our 2019 baseline and 2030. These are designed to ensure (alongside our renewable energy procurement) that we drive down operational carbon as much as possible. Our strategy has been to utilise our Scottish land to generate our own offsets, initially via tree planting schemes. Strategic objectives: 4 Business model: All of our core activities | To offset our development-based residual embodied carbon we use carbon removal offsets purchased from the voluntary carbon market. Our development appraisals include a cost of carbon for these offsets, currently set at £34 per tonne, the price at which we forward-purchased c.114,000 carbon credits in 2024 which covers our forecast embodied carbon. This is complemented by our stretching embodied carbon targets, which aim to drive down the amount of embodied carbon on scheme completion and subsequently the need for and cost of offsetting. | |
Derwent London plc TCFD Report 2025 08
Exposure
Material risk | 0-5 years | 5-10 years | 15+ Impact on strategy years | Impact on financial planning |
Physical risks | ||||
Windstorm The risk arising from windstorms is damage to our buildings (which could include façade and roof damage and power outages), primarily caused by flying debris. |
at highest risk. Overall, the impact of windstorms on our portfolio does not impact on our business strategy. We have adequate building maintenance and management measures in place. Strategic objectives: 1 2 3 4 5 Business model: All of our core activities | As modelling showed a minor potential financial loss of approximately £2-4m in an extreme year, we currently do not believe that it will impact our financial planning. Recommendations from the climate assessments will be factored into our property management strategy and planned preventive maintenance schedules. | ||
Flooding All of our London assets are out of flood risk zones or protected by the Thames Barrier. In Scotland (c.2% of our total portfolio), we have locations, mainly used for agricultural purposes, which are currently exposed to very high flooding risk. |
are likely to undertake a greater level of due diligence during the acquisition process given future purchase targets could potentially be in flood zones. Strategic objectives: 2 4 Business model: All of our core activities | To ensure we understand the flood risk of potential new acquisitions, our due diligence procedures will need to be enhanced to account for a greater level of flood mapping to avoid introducing higher levels of risk and loss exposure into the portfolio. | ||
Further information on how we have addressed these risks can be found on the following pages:
Our Net Zero Carbon Pathway / See pages 69 to 73 in the Report & Accounts 2025
Occupier engagement on climate change / See page 69 in the Report & Accounts 2025
The Featherstone Building EC1
09 Derwent London plc TCFD Report 2025
Monitoring
Role of the BoardThe Board has overall accountability for climate-related risks and opportunities. It is responsible for ensuring that climate change is adequately reflected in the Group's strategy to ensure our future resilience. Due to its importance, climate-related matters are regularly discussed during the Board's strategy reviews and factored into the Board's viability assessment, with support from third party experts as required (see page 65 in the Report & Accounts 2025). The Group's non-financial assurance tender (see page 145 in the Report & Accounts 2025) was overseen by the Audit Committee and approved by the Board. The Responsible Business Committee approved publication of the updated Net Zero Carbon Pathway.
Climate resilience has been classified as a principal risk for the Group and is contained on our Schedule of Principal Risks (see page 104 in the Report & Accounts 2025). The Board reviews and approves the Group's risk registers on at least an annual basis and they are subject to review by the Risk Committee regularly.
Climate-related topics are included on the agendas of several Board committees, including: Responsible Business, Sustainability, Risk and Audit. The climate risk governance framework is on page 09.
To embed a further level of oversight, we have linked climate-related performance measures into our Remuneration Policy for the Executive Directors (see pages 178 to 187 in the Report & Accounts 2025). These targets are directly linked to our Net Zero Carbon Pathway.
Further information on the role of the Board and its committees in respect of climate change is available on the following pages:
Role of managementAs Chief Executive, Paul Williams has overall accountability for climate-related issues. However, oversight of climate-related issues (which includes identification) is delegated to the Sustainability Committee. The Investment, Asset Management, Property Management, Development and Company Secretarial teams are responsible for day-to-day implementation as appropriate.
Throughout the year, the Executive Committee reviews the Group's risk registers, which include sustainability/climate change-related risks. These reviews consider the risk severity, likelihood and the internal controls and/or mitigation actions required to reduce our risk exposure, so that it is aligned with or below our risk tolerance. This approach allows the effects of any mitigating procedures to be considered properly, recognising that risk cannot be eliminated in every circumstance.
The Sustainability Committee comprises key department leaders, many of whom have a responsibility for implementing climate-related issues within their department. At each meeting, a 'performance and data' dashboard is produced for discussion and analysis.
Members from key departments were involved in the most recent climate risk assessment and climate scenarios conducted with WTW, the outputs of which underpin our disclosure.
Audit Committee report / See page 142 in the Report & Accounts 2025
Remuneration Committee report / See page 172 in the Report & Accounts 2025The Schedule of Matters Reserved for the Board outlines that climate change and other environmental factors which could impact the design or management of our portfolio is reserved for the Board and two of its principal committees; the Responsible Business and Audit Committees. This responsibility of oversight is also formalised in the terms of reference of the respective committees.
The Board's assessment of its skills, experience and knowledge is on page 135 in the Report & Accounts 2025 and incorporates reference to environmental matters, including climate change.
Derwent London plc TCFD Report 2025 10
Climate risk governance frameworkAs climate risks and opportunities are likely to have an impact on various aspects of our business, all the Board's committees are involved in the oversight of climate-related matters. As illustrated below, the business has a 'top-down, bottom-up' approach to the oversight of climate-related aspects, from individual departments to the Board.
Risk Committee | Remuneration Committee |
Ensures climate-related risks are appropriately identified, monitored and managed. The Committee typically meets three times per year. | Ensures climate-related aspects are appropriately included in executive remuneration. The Committee typically meets at least twice per year. |
Property Management
Responsible for ensuring our properties are operated efficiently e.g. building energy consumption is reducing in line with our energy targets.
Asset Management
Responsible for ensuring EPCs are tracked and monitored across the investment portfolio.
Company Secretarial
Responsible for ensuring climate-related issues are adequately reflected within executive remuneration.
Sustainability strategy is set by the Executive Directors, in liaison with the Responsible Business Committee.
Responsibility for day-to-day implementation is integrated across the business.
Management
Development
Responsible for ensuring our development schemes embed the required
climate-related and net zero carbon aspects within their design and delivery programmes.
Nominations Audit Committee CommitteeEnsures climate and Ensures climate-related risks
environmental skills, and capital expenditure are knowledge and experience appropriately reflected in are a consideration when our financial statements assessing the Board's and portfolio valuations. composition and identifying The Committee typically any skills gaps. The meets three times per year.
Committee meets as required.
Board
Overall accountability for climate-related risks and opportunities
Oversight
Monitoring
Responsible Business Committee
Monitors the management of our climate-related risks and opportunities and meets at least twice per year to ensure that the Board adequately reflects climate-related issues in its decision making.
Executive Committee
Meets regularly and has overall responsibility for oversight of climate-related risks and opportunities.
Sustainability Committee
Typically meets quarterly and comprises key department leaders; it is chaired by the CEO. The Committee is responsible for monitoring our day-to-day climate-related progress and performance.
11 Derwent London plc TCFD Report 2025
Response
Capturing opportunitiesAs a responsible business, we understand, balance and manage our environmental opportunities proactively; it is visible in our culture and approach, and the design and management of our buildings. Our management structure and style ensure that we can respond to changes in regulation and occupier demand.
Likewise, this enables us to plan more effectively for the longterm and ensure we are putting the right systems and processes in place to maintain our position as London's leading office-focused REIT and capture the opportunities which arise.
Through our climate risk assessment, we identified the opportunities that we could embrace. Of those identified, changing occupier requirements and cost of debt through green initiatives were considered most material. We detail below some of the ways in which we are capturing climate-related opportunities.
Oliver's Yard EC1
Derwent London plc TCFD Report 2025 12
Green finance | Our Green Finance Framework was specifically developed to link an element of our debt funding to our net zero carbon ambitions and in particular our development and refurbishment activities. Our £350m green bond, issued in 2021, is linked to our framework and provides an attractive source of finance to part-fund our eligible projects. Further information on our Green Finance Framework is on pages 60 to 61 in the Report & Accounts 2025. |
Building upgrades | Refurbishing space to optimise rents as vacancies occur is an integral part of our business model. In addition to physical upgrades, we also seek to improve a building's environmental credentials. Where appropriate, we are removing gas from properties and where this is not possible, we are retrofitting specialist equipment to enhance performance - see page 69 in the Report & Accounts 2025 for further details. These works, which also form part of our strategy to ensure compliance with evolving EPC legislation, are factored into all refurbishment projects. Since the independent third party assessment in 2021, we have invested £24m of capital expenditure on EPC upgrade works. |
Operationalising data | The volume and quality of environmental data we collect from our buildings continue to rise. As well as retrofitting sensors as part of our refurbishment activity, we have developed a bespoke in-house environmental database which operates alongside our Intelligent Building programme. Our building managers now have better access to near-real time data, facilitating lower energy consumption and delivering savings in cost and operational carbon to our occupiers. |
Self-generation | The provenance of energy is under increasing scrutiny as businesses seek to optimise GHG emissions. Aligned with this, we aim to procure 100% of the energy consumed across our portfolio on renewable contracts. Our land in Scotland presents several opportunities for us to reduce our carbon impact, including self-generation. Construction of our 100-acre, 18.4 MW solar park is nearing completion (total development cost c.£16m). Energisation is due in 2026 and we expect it to generate in excess of 40% of the electricity needs of our London managed portfolio. |
The Group reports annually on its progress towards net zero by 2030. A brief outline of our progress in 2025 is set out on pages 69 to 73 in the Report & Accounts 2025. To help our stakeholders understand our performance, our annual Responsibility Data Report, which sits alongside our annual Responsibility Report sets out a broad range of climate and energy performance data and metrics. This includes extensive carbon reporting and historical performance data to allow for trend analysis. Our Data Report and Responsibility Report are available on our website.
We align our Responsibility Report disclosures to externally recognised frameworks including the EPRA Sustainability Best Practices Recommendations (sBPR) and the International Sustainability Standards Board (ISSB). We participate in internationally recognised indices, namely CDP and GRESB, and our performance against these can be found on the inside back cover.
Since 2023, embodied carbon reduction and energy intensity reduction performance metrics have been included within the Executive Director and Executive Committee incentive plan (the PSP). This is currently being reviewed by the Remuneration Committee as part of the 2026 Remuneration Policy consultation. Further information is on pages 178 to 187 in the Report & Accounts 2025.
In 2025 we updated our Net Zero Carbon Pathway. This is aligned to the Better Buildings Partnership (BBP) Climate Change Commitment, and includes a series of ambitious climate-related targets, which we show on the right.
Reducing operational energy and carbon emissions
An annual reduction in energy intensity of our managed portfolio to achieve 123 kWh/sqm by 2030.
Near-term: we commit to reduce absolute Scope 1 and 2 GHG emissions by 42% by 2030 from a 2022 baseline (5,450 tCO2e) and to measure Scope 3 emissions.
Long-term: reduce absolute Scope 1, 2 and 3 GHG emissions by 90% by 2040 from a 2022 baseline (44,183 tCO2e).
Reducing embodied carbon of development projects
New build commercial office schemes completing from 2025 to achieve: ≤600 kgCO2e/sqm (upfront carbon,
A1-A5, RICS v1).
New build commercial office schemes completing from 2030 to achieve: ≤500 kgCO2e/sqm (upfront carbon,
A1-A5, RICS v1).
Major refurbishments: ≤350 kgCO2e/sqm.
We publish a full breakdown of our corporate carbon footprint (inclusive of Scopes 1, 2 and 3) and energy usage in our Streamlined Energy and Carbon Reporting (SECR) disclosure on pages 74 to 75 in the Report & Accounts 2025. Our Scope 1, 2 and 3 totals in 2025 have been subject to independent limited assurance by PwC LLP in accordance with ISAE 3000 (Revised) and ISAE 3410 Standards.
SECR disclosures / See page 74 to 75 in the Report & Accounts 2025
13 Derwent London plc TCFD Report 2025
EPC ratingsEPC ratings indicate the energy efficiency of a building. We are following a phased programme of works to upgrade the EPC ratings of our portfolio. We target a minimum EPC of A for major new build schemes and 'B' for major refurbishments.
71.7%
of our portfolio (by ERV) has an
EPC rating of A or B (including projects)
16.2%
of our portfolio (by ERV) has an EPC rating of C
Percentage of portfolio (by ERV) | 2025 | 2024 | 2023 |
Rated A | 23% | 10% | 10% |
Rated B | 40% | 48% | 47% |
Rated C | 16% | 18% | 19% |
Rated D | 8% | 8% | 8% |
Rated E | 4% | 5% | 5% |
Rated F | 0% | 0% | 0% |
Rated G | 0% | 0% | 0% |
Properties in development | 9% | 11% | 11% |
Exempt/under review/outstanding | 0% | 0% | 0% |
The Group is committed to ensuring that all the energy we procure, electricity and gas, is from renewable sources.
100%
of our electricity is from renewable sources
100%
of our gas is from renewable sources
CertificationBREEAM and LEED certifications recognise the sustainability of our buildings, their construction and operation. We target minimum BREEAM ratings of 'Excellent' for major developments and 'Very Good' for major refurbishments (see page 33 in the Report & Accounts 2025 for our progress in 2025).
Percentage of portfolio | |||
(by floor area - NIA) | 2025 | 2024 | 2023 |
BREEAM certified | 38% | 33% | 35% |
LEED certified | 27% | 22% | 22% |
As part of our commitment, we analyse our activities to ensure we are reducing our carbon footprint across all our spheres of influence. Our pathway focuses on five principal areas:
Reducing operational energy and carbon emissions through setting annual reduction targets and engaging with our occupiers.
Procuring and investing in renewable energy.
Reducing the embodied carbon of our future pipeline.
Offsetting residual carbon emissions we cannot eliminate.
Nature and resilience.
Further information on these commitments and our progress in 2025 is detailed on pages 69 to 73 in the Report & Accounts 2025.
Future prioritiesOn page 27 in the Report & Accounts 2025 we have outlined our priorities for 2026. In addition to these focus areas, we intend to action the following:
- Governance: The Board will continue to build its competency through training and monitoring of developing best practice.
- Strategy: Monitor construction of our 18.4 MW solar park in Scotland which is expected to complete in H1 2026.
2025 2024 2023
Percentage of electricity from renewable sources1 | 100% | 99% 99% |
On-site renewable energy generation (kWh) | 99,602 | 86,136 97,440 |
Percentage of gas from renewable sources2 | 100% | 100% 99% |
Electricity purchased on renewable tariffs backed by REGOs.
Gas purchased on renewable tariffs backed by RGGOs.
Derwent London plc TCFD Report 2025 14
Climate scenarios - assumptions and risk data sourcesWTW risk assessment
Scenario Name | 'Low Carbon World' (~1.5°C) | 'Current Policies' (~2 to 3°C) | 'Hot House World' (>4°C) |
Temperature range | 1.4°C (median, 2100, IEA NZE2050) ~1.5°C (median, 2100, RCP2.6) | 2.6°C (median, 2100, IEA STEPS) ~2.3°C (mean, 2100, RCP4.5) | ~4.2°C (mean, 2100, RCP8.5) |
Sources | IEA - Energy Outlook 2021: NZE2050 IPCC, 2014: Synthesis Report: RCP2.6 Narratives for Shared Socioeconomic Pathways (SSPs): SSP1 | IEA - Energy Outlook 2021: STEPS IPCC, 2014: Synthesis Report: RCP4.5 Narratives for SSPs: SSP2 | IPCC, 2014: Synthesis Report: RCP8.5 Narratives for SSPs: SSP5 |
Primary risks | |||
Transition risks (2025 and 2030) | Moderate transition (2025 and 2030) and physical risks (current, 2030, 2050) | Physical risks (current, 2030, 2050) | |
Underlying assumptions | |||
Global net zero achieved by: | 2050 (IEA NZE2050) | Not achieved before 2100 (IEA STEPs) | Not achieved |
Carbon price | Advanced economies 2025: $75/tonne 2030: $130/tonne 2040: $205/tonne 2050: $250/tonne (IEA NZE2050) | EU 2030: $65/tonne 2040: $75/tonne 2050: $90/tonne (IEA STEPs) | No carbon pricing in existence. (SSP5) |
Building sector policies | Implementation of more stringent building energy conservation building codes for existing and new buildings, including net zero emission requirements by 2030 and 85% of all buildings are zero carbon-ready in 2050. (IEA NZE2050) | In the UK, Low Carbon Heat Support and Heat Networks Investment Project; various retrofit incentive schemes for improving buildings efficiency as part of Plan for Jobs. It does not however assume increasing stringency of EPC requirements. (IEA STEPs) | Assumes current policies promoting sustainability are removed. (SSP5) |
Social assumptions | Assumes low growth in material consumption and increasing consumer pressure on businesses to drive sustainability. (SSP1) | The world follows a path in which social, economic and technological trends do not shift markedly from historical patterns. Global and national institutions work towards, but make slow progress in achieving, sustainable development goals. (SSP2) | The push for economic and social development is coupled with the exploitation of abundant fossil fuel resources and the adoption of resource and energy intensive lifestyles around the world. (SSP5) |
Technology assumptions | Promotion of alternative fuels and technologies such as hydrogen, biogas, biomethane and carbon capture utilisation and storage across sectors. The share of renewables by 2030 in the global electricity supply would increase to approximately 61%, shifting economies from being fossil fuel-dependent to renewable energy driven. (IEA NZE2050) | Phase out of traditional coal-fired power by 2024 in the UK and the Ten Point Plan, with up to 40 GW offshore wind capacity by 2030. Electrification component of the Sixth Carbon Budget and Industrial Energy Transformation Fund provides grant funding for energy efficiency projects. (IEA STEPs) | Little to no development in low carbon technology. (SSP5) |
Physical risk data sources | |||
Willis Towers Watson's Global Peril Diagnostic and Climate Diagnostic tools, data from the MunichRe hazard databases, and the Intergovernmental Panel on Climate Change (IPCC). For climate loss modelling, the catastrophe model of RMS (Risk Management Solutions) was used.
Derwent London plc
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T: +44 (0)20 7659 3000
https://www.derwentlondon.com Registered No: 1819699