British Land : TCFD Climate-Related Financial Disclosures 2025

TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) CLIMATE- REL ATED FINANCIAL DISCLOSURES

British Land Group has reported on climate-related financial disclosures for the year ended 31 March 2025 consistent with the TCFD's 2021 guidelines. We consider climate change within our principal risk 'Environmental and Social Sustainability' on page 56 of our Annual Reports and Accounts 2025 and have therefore complied with all four TCFD recommendations and 11 recommended disclosures:

• Governance - recommended disclosures (a) and (b).

  Pages 64 to 65

• Strategy - recommended disclosures (a) to (c). Pages 66 to 71

• Risk Management - recommended disclosures (a) to (c).

  Pages 71 to 72

• Metrics and Targets - recommended disclosures (a) to

  (c). Pages 72 to 73

  In addition, we have considered the sector-specific guidance and recommended disclosures for Materials and Buildings Group. The statement is consistent with the requirements of the Financial Conduct Authority's UK Listing Rule 6.6.6R.

  Introduction

  Sustainability is embedded throughout our business and for more than a decade we have been recognised for this approach. We understand our responsibility and opportunity to support an equitable transition to a low carbon economy and to create resilient places for our customers. In addition, we believe that delivering on these sustainability targets will create value for our business as demand from occupiers and investors gravitates towards the best, most sustainable space. These sustainability goals are shared by our investors, customers and partners.

  In FY25, we continued to make good progress against our 2030 Sustainability Strategy. To ensure that we remain aligned with climate science and the evolving definition of net zero, we plan to review our SBTi targets in line with the SBTi Building sector guidance. Our corporate 2030 targets will remain unchanged, as a sustained marker for our progress.

  We are a signatory to numerous external climate commitments, including the Better Buildings Partnership's Climate Commitment, the World Green Building Council's Net Zero Carbon Buildings Commitment and the RE100 commitment to procure renewable energy. Along with these commitments we are a sponsor of the UK's Net Zero Carbon Building Standard (NZCBS).

  Following full consistency with the TCFD guidelines over the past few years, we are now developing a formalised transition plan aligned to the Transition Plan Task Force recommendations.

  RE A D M O RE

  
  
  

  about our approach to decarbonisation and climate resilience in our Sustainability Progress Report at https://www.britishland.com/SPR

  Governance (a) The Board has ultimate oversight of climate-related risks and opportunities and (b) delegates the responsibility for assessing and managing our response to material climate-related issues to the Executive Committee Climate change is considered within our internal risk management process captured in our principal risk 'Environmental and Social Sustainability', with the external aspects of climate-related risks being incorporated within our 'Major Event/Business Disruption' and 'Political, Legal and Regulatory' principal risks (pages 51 to 58). The key risk indicators we monitor within this principal risk include EPC ratings, the portfolio flood risk vulnerability and the future cost of carbon credits.

  Our process of identifying, assessing and managing known risks whilst identifying emerging risks is outlined in our risk management section pages (47 to 50).

  The Governance Framework for Climate-Related Issues overleaf outlines the oversight the Board has on climate-related issues and management's role in assessing and managing them.

  FY25 Governance in action:

• David Walker (CFO) sustainability training: in his previous role as the COO he led the delivery of the Sustainability Strategy so has extensive knowledge of our climate-related issues and has completed formal sustainability training.

• Emma Cariaga (COO) sustainability training: our new COO was previously Joint Head of Canada Water and a member of our Sustainability Committee so she is

  well-versed in our Sustainability Strategy and climate-related issues.

• Implemented the increase of our internal levy from £60 per tonne of embodied carbon to £90.

• ESG Committee activities: outlined on pages 86 to 93 including the sustainability-related updates provided to the Board by the Committee Chair.

  B OA R D

Sustainability Governance Framework

Board of Directors

• Has ultimate accountability for the Group's strategy and risk management.

• Updated on climate-related issues and progress against our science-based carbon and EPC ratings targets at least annually.

• Monitors principal risks (including 'Environmental and Social Sustainability') to ensure appropriate controls and processes are in place for effective management as recommended by the Audit Committee.

• Sets our risk appetite for Environmental and Social Sustainability as 'risk averse' signalling the nature and extent of the risk the Group is willing to take in achieving its strategic objectives.

• Considers climate-related issues when making strategic and investment decisions that require Board-level approval.

• Reviews and approves our TCFD disclosure as recommended by the Audit Committee.

  ESG Committee

  • Meets three times a year, comprised of four independent Non-Executive Directors and attended by the Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Chief Operating Officer (COO).

  • Oversees the delivery of our Sustainability Strategy including climate-related issues.

  • Monitors our performance and management controls against our Sustainability Strategy (guided by our science-based carbon targets, Pathway to Net Zero and EPC ratings).

Remuneration Committee

• Responsible for setting ESG targets for executive remuneration and updated on progress against these targets three times a year.

• The Long-Term Incentive Plan for Executive Directors includes KPIs linked to the reduction of operational carbon and improvement of operational energy efficiency and the Annual Incentive Plan is linked to our progress on portfolio EPC ratings and our performance in GRESB.

• Environmental KPIs are included in the Remuneration Policy for Executive Directors (see page 109).

Audit Committee

• Reviews and approves evidence of the effectiveness of risk management and internal control processes for climate-related risks throughout the year.

• Assesses significant and emerging climate-related risks as escalated by the Risk Committee twice a year.

E X E CU T IV E

Executive Committee

• The Board delegates day-to-day responsibility of delivering the Group's overall strategy to the CEO. He in turn leads the Executive Committee to ensure its delivery (including our Sustainability Strategy).

• The CFO is the Board Director responsible for climate-related issues and chairs the Risk Committee. In the CFO's previous role as the COO he led the Sustainability Strategy.

• The CEO and CFO (Board Directors) have both completed formal sustainability training.

• The COO leads the delivery of our Sustainability Strategy and chairs the Sustainability Committee and Transition Vehicle Committee. The COO gets regular updates from the Head of Environmental Sustainability on climate-related issues.

• Each Executive Committee member has at least one sustainability-related annual objective and supporting objectives are cascaded across their teams.

Sustainability Committee

• Chaired by the COO and includes the CFO, Head of Development, Head of Real Estate and Investment and other senior leaders.

• Monitors progress against our Sustainability Strategy, tracks our climate-related issues and assesses for emerging risks and regulation.

• Reports into the ESG Committee and the Remuneration Committee.

• Meets at least three times a year.

Investment Committee

• Chaired by the Head of Real Estate and Investment with membership spanning the Executive Committee (including the CEO and CFO).

• Climate change and sustainability considerations are fully integrated within our investment and development decisions and are reviewed by our Investment Committee.

• Material climate-related risks and the key risk indicators are considered during acquisition due diligence.

Risk Committee

• Chaired by the CFO with membership across the Executive Committee.

• Accountable for the effective management and reporting of our material climate-related risks.

• Tracks our climate-related key risk indicators and their performance.

• Identifies significant and emerging risks which get escalated to the Audit Committee.

MAN AG E M E N T

Sustainability team

• Led by the Head of Sustainability the team is responsible for the day-to-day assessment, monitoring and management of climate-related issues.

• The team works with different business areas to identify climate-related issues through a process involving formal horizon scans, trend analysis and stakeholder engagement.

• Identified climate-related risks are incorporated into our risk framework and managed by the appropriate business areas.

Transition Vehicle (TV) Committee

• Chaired by the COO and comprised of diverse range of senior managers.

• Meets three times a year - approving applications for funding to complete energy savings interventions (improving progress towards our climate-related performance targets and reducing climate-related risks).

• The TV is our mechanism to deliver on our operational energy and carbon targets and is financed by an internal levy on the embodied carbon in developments.

RE A D M O RE

about our Group Governance Framework on page 77

TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD)

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Strategy (a) Our identified climate-related risks and opportunities (issues) over our short, medium and long term time horizons.

Material risk and opportunities identification

TCFD separates climate-related risks into two categories - (1) risks associated with the transition to a lower carbon economy (e.g. policy and legal risks); and (2) risks related to the physical impacts of climate change - both acute (event-driven e.g. floods) and chronic (longer-term shifts in climate patterns e.g. heat stress).

For years we have worked with Willis Towers Watson (WTW) to identify and assess our exposure to climate-related issues including existing and emerging regulatory requirements. Where relevant, this modelling has included input from internal key business areas. In FY24 we updated our physical issues modelling and we are now in the process of updating our transition issues modelling.

We used the climate exposure diagnostic metric and the value at risk (VaR) to assess our portfolio's risk from climate-related physical impacts. The climate exposure diagnostic metric assesses an asset's level of exposure based on its location and the severity and intensity of potential impacts. The VaR is the financial impact quantification of associated asset damage and business

interruption from acute physical risks. The VaR analysis considers both the exposure to physical risks and evaluates the potential vulnerabilities and consequences in terms of financial impact. These results are considered as a 'residual' measure as risk adaptation measures could mitigate any potential financial impacts.

Time horizons and scenarios

Transition risks were modelled in two climate scenarios (see below) across two time horizons - short term (<12 months) and medium term (5-10 years, up to 2030). When quantifying transition risks beyond a 10-year timeframe, the underlying assumptions begin to play an increasingly significant role in the resulting values. These assumptions have significant levels of uncertainty so we have only presented transition risks in the short and medium term.

For physical risks we modelled risks in the current climate and in potential future climates across the short term (<12 months), medium term (5-10 years, up to 2030) and long term (post-2050). Physical risks are shown in the short term time horizon both to align with our annual financial planning and to outline current potential acute risks. Post-2050 was chosen for the long term time horizon as this is when future climate scenarios start to meaningfully differentiate from the current climate so when we can expect more frequent and severe climate-related impacts. This also aligns with our portfolio as the standard design life of a building is 60 years.

Transition risk scenarios and parameters

Time Scenario horizon name	IPCC scenarios	IEA scenarios	NGFS scenarios	Temperature rise1	2030 UK carbon price	Global net zero achieved by
Up to Net Zero World 2030 (1.5 °C) scenario	Orderly RCP1.9 SSP1	NEZ2050	Net Zero 2050	<1.5°C	$118 to $263	2050
Paris Consistent	Orderly RCP2.6	Sustainable	Below 2°C	<2°C	$53 to $82	2070
(2°C) scenario	Disorderly SSP1	Development Scenario	Delayed		$0 to $25

Transition

1. Temperature rise in 2100 compared to pre-industrial levels

Physical risk scenarios and parameters1

Time horizon	Scenario name	IPCC scenarios	Atmospheric CO2	Temperature rise2	Sea level rise	River flood modelling sources	Coastal flood modelling sources
Up to 2030	Current climate		410ppm	1.1°C	0.20m	Munich Re NATHAN3 based on JBA flood maps	WTW proprietary coastal flood exposure model
Post-2050	Paris Consistent (2°C) scenario	RCP2.6 SSP1	450ppm	1.6°C	>0.55m	Munich Re climate hazard conditioned based JBA flood	Munich Re climate hazard sea level rise data

Hothouse world

>4°C scenario

RCP8.5 SSP5

>1,000ppm 4.3°C >0.78m

maps & Coupled Model Intercomparison Project Phase 5

combined with storm surge

1. These scenarios assess the risk of increasing frequency and severity of acute weather events as recommended in the Section E Materials and Buildings group sector-specific guidance

2. Temperature rise in 2100 compared to pre-industrial levels

3. Munich Re NATHAN is a tool for assessing physical risks based on hazard zones

Defining a material risk and/or opportunity

We define a 'material' risk or opportunity in line with the combination of their potential impact, both financial and/ or reputational, and their likelihood. This approach is used across the business to assess all types of risk, and so climate risk is embedded into our broader risk framework. We generally deem a climate-related risk or opportunity as material if it would have at least a medium financial and/or reputational impact.

Low Medium High

The Likelihood of mean flood risk increased in FY24 following a change to our risk management Likelihood categories. The change meant that low-financial impact regularly occurring flooding events now fall within the High Likelihood category. In addition, the potential financial impact also slightly increased as we combined river flooding and flash flooding.

The increasing customer demand for green, low carbon buildings is an ongoing opportunity as it is occurring now and should continue for the foreseeable future.

Financial impact thresholds (£)

Less than

£10m

£10m to

£100m

Greater than

£100m

Identified climate risks and opportunities Continue to monitor

Our 'Continue to monitor' risks and opportunities are not currently material but have the potential to be in the

Likelihood

Unlikely

Could happen Likely to

coming years so we review them on an ongoing quarterly

thresholds (chance of occurrence in a given year)

to occur and/or there are limited instances of occurrence observed

and/or a few instances of occurrence observed

in past 3-4 years

occur and/or there is a recent history of occurrence of this threat within the last

basis. We believe that some of these risks, such as the 'Increased costs of raw materials', can open doors for further exploration in the realm of innovative low carbon materials that minimise our environmental impact.

Risks Opportunities

Reputational impact thresholds

in the past 5+ years

Limited reputational impact

Significant temporary or limited sustained impact

2 years

Significant sustained impact

Customer demand for sustainable space results in a 'brown discount' to rents at less sustainable assets

Occupier business model impacted by transition

Increased costs of

Premium pricing for sustainable space results in 'green' premium

Increased access to capital for sustainable businesses

Material risk and opportunities heat map

The most material risks and opportunities are shown in the heat map below, with these issues detailed in the next section.

raw materials

Increased costs of capital

Potential carbon taxes and levies

Potential financial Impact

High

Flash flooding

Low

Medium

High

1

4

2

3

Risk Opportunity

Low

Likelihood

High

Low

Key

Risk

1. Cost of MEES compliance (long term risk)

2. Mean flood risk vulnerability (short and long term risk)

3. Increasing price of carbon credits (long term risk)

   Opportunity

4. Increasing customer demand for green low carbon buildings

(ongoing opportunity)

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Material risks and opportunities

The following section considers the impact of the identified material climate-related risks and opportunities on our business, strategy and financial planning over the short, medium and long term. It considers the resilience of

Material climate-related risks

Short term risks (<12 months)

our strategy and seeks to quantify impacts where possible. We do not anticipate any of these material climate-related risks to have a major impact on our financial position, financial performance and/or cash flows.

Climate Likelihood scenario

Description of impact

Potential financial impact

Explanation and mitigation

#1 Current physical damage to assets from river and flash flooding (extreme weather events)

Current climate

Low to high Potential loss

of revenue from business interruption (closure of operations)

Increased capital expenditure (cost) to repair damaged assets

Potential increased insurance costs

Mean loss:

<£1.5m

(pre-insurance)

WTW performed climate risk modelling for our portfolio (simulating many thousands of events) based on current and future climate scenarios using the assets' total insured value (by British Land % ownership). Mean losses are the average loss of modelled events weighted by the probability of their occurrence. These losses are fully insured against and potential losses are shown before the impact

of insurance.

Since 2007, our (insured) actual annual mean loss is below the modelled value of £1.5m.

Since 2011, we have commissioned periodic portfolio-wide flood risk assessments and issued flood management plans to high risk assets. In the future we plan to build on these plans by creating detailed flood mitigation plans for our high risk assets.

Medium term risks (up to 2030)

Climate Likelihood scenario

Description of impact

Potential financial impact

Explanation and mitigation

#2 Increasing price of carbon credits (carbon pricing mechanisms)

Current

High Increased capital

£0.75m for every We have committed to offsetting the embodied

climate

expenditure as net zero commitments by corporates leads to increased demand for carbon credits, resulting in higher and/or volatile carbon credit prices

100% increase in the price of carbon

carbon of all new developments and major refurbishments. In FY22, when our transition risk modelling was conducted, we estimated this to be c.300,000 tCO2e by 2030 across the committed and near term development pipeline.

We estimated the annual additional cost of carbon credits between FY22 and FY30 to be £0.75m if the price rose by 100% from our FY22-FY24 price of £20 per tonne. At our new price of £30 per tonne, a 100% rise in price would increase this annual additional cost to £1.1m.

To mitigate this risk we pre-purchase carbon credits for our developments at the point of commitment. We have now purchased sufficient carbon credits to offset the embodied carbon in 95% of our committed development pipeline. In addition, our internal carbon levy would now cover a carbon credit price increase of up to £90 per tonne.