ERM SUSTAINABILITY REPORT 2024

ERM Climate-Related
Financial Disclosures
Supplement

Sustainability is our businessIntroduction

Contents

This document comprises the Climate-related Financial
Governance of climate risks & opportunities

4

The information set out in this supplement has been produced

Strategic consideration of climate-relatedrisks & opportunities

6

Our material climate-related risks & opportunities

12

in pursuance of the recommendations of the Taskforce on
Climate Related Financial Disclosures (TCFD) and in fulfilmentof the requirements for The Non-Financial and Sustainability
Information Statement, as prescribed under The Companies

Metrics for monitoring climate-related risks& opportunities

Disclosures Supplement to the ERM Sustainability Report 2024.

21(Strategic Report) (Climate-related Financial Disclosure)
Regulations 2022 (CFD).
The Non-Financial and Sustainability Information Statement ispublished in The ERM Group International Ltd group financial
statements / statutory accounts for the year ended 31 March 2024
and is published in its’ entirety within this Supplement.
During FY25, we will continue to refine our approach to financial
impact assessment in line with both CFD and TCFD requirements,
as part of our preparation towards publication of an ERM
Transition Plan consistent with The Transition Plan Taskforce(TPT) and UN Integrity Matters Report (HLEG requirements).

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

2Where information is provided in this Supplement consistent with CFD and TCFD requirements
Section of this Supplement

CFD Requirement

TCFD Pillar

Decarbonising our own operations& FY24 Performance Data

Context information.

Metrics and targets: disclose Scope 1, Scope 2
and, if appropriate, Scope 3 greenhouse gas(GHG) emissions and related risks.

Governance of climate related risks
and opportunities

Governance of climate related financial risk and opportunities.

Governance – organization’s governancearound climate-related issues andopportunities.

Our strategic approach toconsideration of climate related
risk and opportunity

Description of how processes are integrated into overall risk management.

Risk Management – how the organization
identifies, assesses and manages climaterelated risks.

Our material climate related risk
and opportunity

Description of principle climate-related risks and opportunities arisingin connection with the operations of the company and the relevant time
periods.; Impact of principle climate-related risks and opportunities on businessmodel and strategy;  Analysis of resilience of business model and strategy, taking
into account different climate-related scenarios.

Strategy – the actual and potential impacts
pf climate-related risks and opportunities
on the organization’s business, strategy andfinancial planning where such information ismaterial.

Monitoring our performance

Description of targets used to manage climate-related risks and realize climaterelated opportunities and performance against those targets; KPIs used to assess
progress against targets used to manage climate-related risks and realize climaterelated opportunities and a description of the calculations which KPIs are based on.

Metrics and targets – the metrics and targets
used to assess and manage relevant climaterelated risks and opportunities.

Identification, assessment, and management of climate-related risks andopportunities.

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

3

Governance of climate
risks & opportunities

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

4Governance structure

Board oversight of climate-related risks
and opportunities

Structure

The Board of Directors of the Group parent
company The ERM International Group
Limited is responsible for the direction
and oversight of the Group on behalf of
its shareholders and is accountable tothem, as owners, for all aspects of ERM’s
business. Further information on the roleof the Board is set out on page 25. The
Board meets six to seven times per year
to review performance and consider key
strategic growth plans, which includes
the impact of climate related risks andopportunities on ERM’s business strategy,
such as our approach to accessing andcapitalizing upon the market for energy
related transition services.

Responsibility for the consideration ofclimate-related risks and opportunities
is embedded throughout our corporate
governance structure. As a professional
services business which delivers market
leading climate-related and wider
sustainability consultancy to clients,
consideration of climate-related risks
and opportunities comprehensively
informs our strategic management andoperational planning.

Board

Executive
Committee

ERM ESG Risk
& Sustainability
Steering GroupExComWorking
Group

Group
Functions andOperations

Supporting the consideration of climate
related risks and opportunities is the ESG
Risk and Sustainability Steering Group,
which serves as an advisory committee
to the Board. It works with the Board to
identify and manage risks relating to
ERM’s strategy, reputation, reporting anddisclosures. This includes horizon scanning
across evolving regulatory, client and wider
stakeholder requirements and expectations
to inform our positioning on ESG issues,
including identifying and managing
climate related risks to protect ERM’s brandand commercial position.

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENTManagement’s role in assessing andmanaging climate-related risks andopportunities
On a day-to-day basis, the Group is
managed by the Executive Committee(“Excom”), comprised of four of the fiveexecutive directors of the business anda number of other senior Partners inexecutive management roles who lead
geographic, service, industry and client
divisions of our operations, legal, people
development, sustainability & risk andother professional support functions.
The Excom has accountability for
managing business operations andgenerally meets monthly to discuss
performance and plans in support of this.
This includes ensuring that the strategic
management of our climate related risks
and opportunities is being undertaken
effectively to optimize current and futurebusiness performance through regionaland country level planning, recruitment
and renumeration, and aligned to ourability to capitalize upon climate related
opportunities for commercial growth.
The Excom is supported by the Excom
Sustainability Working Group, which
advises on all aspects of operationalizing
sustainability across our value chain,including our management of climate
related risks, operational strategy,
programmatic priorities, target setting

and resourcing. The Working Group
comprises representatives from the Board,
Excom and our Global Sustainability
Director and Head of Sustainability.
This Working Group has oversightand reports into the Excom on ERM’sdecarbonization strategy and performanceagainst targets, which includes our netzero and science-based targets (“SBT”)
commitments, as well as our approach to
managing residual emissions and beyond
value chain mitigation measures. This isundertaken as part of our wider approachto operationalizing sustainability andinvolves the identification of relevant
KPIs/metrics which support our ability
to mitigate against financial material
impacts arising from emissions abatement
and mitigation, as well as strengthen
our positioning as a credible leader inclimate advisory services through our own
operational decarbonization.
To support our senior leadership, a
Climate-related Financial Disclosures/
Taskforce on Climate-related Financial
Disclosures (“CFD/TCFD”) Working
Group was created to input and review
the identification of climate related risks
and opportunities for the business. This
Working Group comprises representativesof Risk, Sustainability, Operations, Finance,
Client and Services, who provide specialist
subject matter expertise on what and how
the business should respond to such risks.
5Strategic considerationof climate-related risks& opportunities

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

6Description of how we identify, assess and manage
our principal climate related risks and opportunities
Our approach
ERM strategically considers all aspects of potential climate related impacts to ouroperations, including people, industry and service line, operational, financial,geopolitical and legal parameters, to comprehensively assess potential risks andopportunities to our business.
Strategic risks and opportunities are identified through a multi-faceted approach
involving ongoing market, regulatory and horizon scanning, engagement with clients
and wider stakeholders, the input of our subject-matter experts and senior operational
leaders across the globe and is supported by our annual Double Materiality Assessment
process.
Supplementing this approach and consistent with the recommendations of the TCFD,
a further detailed analysis and review of current or emergent climate related risks andopportunities is undertaken annually. This is supported by the CFD/TCFD Working
Group who have responsibility for driving implementation of our management ofclimate risk, working in conjunction with senior management to deliver our strategicand operational work programs. Our senior management include regional and business
unit managing partners, service and client leads. The output of this analysis support
visibility of the potential impacts across the short, medium and longer-term horizons
and informs the content of this statement.
Scope of assessment
The assessment of climate related risks and opportunities draws upon the scenario
analysis and impact identification set out in our FY23 TCFD reporting (publishedseparately in our annual Sustainability Report), augmented by supplementary inputs
and analysis from our subject matter experts and CFD/TCFD Working Group during
FY24. This process enables the business to review potential climate-related risks andopportunities, expand our understanding of where material exposures may exist andrefresh the drivers and timeframes of potential impacts.

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENTBusiness strategy and Enterprise Risk Management
ERM’s business strategy strategically considers all aspects of potential climate related
impacts to our operations, including people, sectoral and service line, operational,
financial, geopolitical and legal parameters, to comprehensively assess potential risks
and opportunities to our business.  
Strategic risks and opportunities are identified through a multi-faceted approach
involving ongoing market, regulatory and horizon scanning, engagement with clients
and wider stakeholders such as our investors, the input of our subject-matter experts
and senior operational leaders across the globe and is supported by our annual Double
Materiality Assessment process.
Supplementing this approach and consistent with the recommendations of theTaskforce on Climate Related Financial Disclosures (TCFD), a further detailed analysis
and review of current or emergent climate related risks and opportunities is undertaken
on an annual basis. This is supported by the CFD/TCFD Working Group. The outputsof this analysis help provide full visibility of the potential impacts across the short,medium and longer-term horizons and informs this disclosure.
Collectively this analysis feeds into our enterprise risk management system, which
remains live and subject to ongoing review from our ExCom and Board, and which
informs the identification of key strategic risks and opportunities for the business andsupports commercial planning, investment strategy and our operational programs.
Our enterprise risk management process aligns broadly with the Committee ofSponsoring Organizations of the Treadway Commission (COSO) framework, which
addresses control environment, risk assessment, information and communication,
monitoring, and existing control activities. This includes the integration of material
climate-related issues into our risk management and our strategy. Under the oversightof our Global Head of Risk, our Risk function serves as a second-line support andchallenge role to help our organization deliver on our goals, anticipate and manage
risks, flow risk information to decision makers and implement and continually improverisk management strategies.

7

Planning & Approvals

Inputs & Analysis

Market and regulatory
analysis & horizon
scanning

Double Materiality
Assessment

Service line, client andoperational program
reviewEnterprise Risk
Management
Climate related risks& opportunities
CFD/TCFD
working group

Business planning andbudget: global, regionaland BU

Investment planning:
Capex, Opex

Key Strategic Outputs & Reporting

Business Plans

Investment Plan

Annual Disclosures:
Financial &Sustainability

Operational Strategies
Operational Programs

Scenario analysis

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

8Assessment of climate risks and opportunities

Scenario

Timeframe

Context

Associated Plans

Scenario analysis

Short-term

Up to 2026

Consistent with our previous TCFD disclosures published separately in our annual
Sustainability Reports, the impact assessment is based on three timeframe scenarios,
which this year also considers our latest operational decarbonization targets, validated
as in alignment with the SBTi Net Zero Standard.

Representing our
immediate and short-termplanning scenario whichtakes the business to 2026

Current Business
Plan

Medium-term

Up to 2030  

Representing our mediumterm planning scenario andaligning to key operational
decarbonization SBTitargets of 2028 and 2030

Decarbonization
Strategy: SBTi 2028
& 2030 emissions
reductions targets

Long-term

Towards 2040

Representing our longerterm planning scenario andaligning to our SBTi 2040
net zero target and further
horizon scanning to 2050

Decarbonization
Strategy: SBTi 2028
& 2030 emissions
reductions targets

Our scenario analysis considers time horizons for physical climate and the transition
to a low-carbon economy, as well as the changes in the global economy and markets
we operate in. We recognize that climate-related issues can manifest over medium
and longer-term timeframes. We have reflected this in our selection of time horizons
outlined in the table below, which are linked to our strategic commitments andplanning horizons. We have also considered the impacts on our own operations andservices over shorter timeframes to reflect the interests of our investors.
Each scenario takes into consideration the potential impacts arising from physicalclimate change and the transition to a low-carbon economy respectively. The scenarios
selected align with guidance and reflect the latest dataset available from the leadinginternational bodies and combine qualitative storylines of social features andquantified measures of development alongside climate data to create plausible scenarios
for how quickly society can curb emissions.
To assess trends related to the transition to a low-carbon economy, we used theInternational Energy Agency (IEA) and Network for Greening the Financial System (NGFS).
As per previous analyses, the greatest level of surety exists around the short-term
scenario planning and identification of potential climate related risks and opportunities.
As the scenarios progress towards our longer-term timeframe of up to 2040 the analysis
represents horizon scanning based on analysis of the impacts of ongoing climatic changeon the physical environment, anticipated variability in terms of adaptation across ourgeographical operations and potential evolution of the market and client demand.

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

9Impact assessment parameters and assessment offinancial materiality
To support our analysis, we have assessed differing parameters by which climate
related risks or opportunities may impact our business, these including:• Point of impact on our operations• Whether the impact is realized now (actual) or potential• The likely duration of impact• The geographical scope of our operations impacted and potential variation within this
• The estimated magnitude of potential impact to our operations• The probability of potential impacts being realized and• Whether mitigation is possible and what this may look like
The consideration of these impact parameters informs the next stage of ourassessment, namely the analysis of the financial implications of the identified residual
risks and opportunities. This is assessed through consideration of:• The cost of required mitigation and/or enhancement of the identified risk oropportunity respectively – this is assessed as a capex/opex cost and considered in thecontext of our overall investment strategy and operational budgets. This is rated as
low, medium, or high in terms of financial cost and impact on our business.

Based on this analysis, an assessment is made of the projected financial impactof the risk or opportunity against each of the three scenarios timeframes – short,medium and long term. A final determination is then made of whether the identified
risks and opportunities are currently regarded as material to our business or not,with accompanying narrative. Where we anticipate materiality to change over thetimeframes, this is also noted.
Management of risk
The key risks and opportunities identified are incorporated into the enterprise risk
register, overseen by our Global Head of Risk, who uses this to report to ExCom and to
our Board. The register remains live and subject to ongoing review from our ExComand Board, and informs the identification of key strategic risks and opportunities
for the business and supports commercial planning, investment strategy and ouroperational programs.
Our enterprise risk management process aligns broadly with the Committee ofSponsoring Organizations of the Treadway Commission (“COSO”) framework, which
addresses control environment, risk assessment, information and communication,
monitoring, and existing control activities. This includes the integration of material
climate-related issues into our risk management and our strategy. Under the oversightof our Global Head of Risk, our Risk function serves as a second-line support to help ourorganization deliver on our goals, anticipate and manage risks, flow risk information todecision makers and implement and continually improve risk management.

• The potential impact to our revenue generation and profitability of the residual risk oropportunity post mitigation/enhancement. This is considered in the context of overall
current and projected growth of the business and rated as low, medium, or high interms of financial impact and either positive or negative subject to whether this is
generation/value creation or extraction.

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

10Our material climate-relatedrisks & opportunities

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

11Key climate-related risks and opportunities
Topic

Potential
financial impact

Risk oropportunity

Short-term:
up to 2026

Medium-term:
up to 2030

Long-term
Towards 2040

Change indemand forclimate-related
services andtransition ofhigh carbon
sectors

Opportunity

Material

Material

Material

Our business is predicated on providing professional services toenhance sustainability performance in our client base. We see thedemand for such services as continuing to escalate and therefore
presents as a material opportunity. Our geographical scope, breadth of
our technical expertise and ability to diversify our service offering in
anticipation of/response to client need, positions us well to capitalize
upon this market opportunity which we anticipate will be sustainedand demand then accelerate as we progress towards 2040 as theurgency of addressing climate change intensifies.

Decline of spend
for activities
within sectorsthat cannot
transition

Risk

Decreasingly
Material

Not Material

Not Material

Our business supports our client base in transitioning to a low carbon
future, including working with those currently in more carbon
intensive industries who are seeking to make this transition. Our
business model is predicated on shifting away from those projects/
activities which do not support transition to a low carbon future. As
such, the potential future state decline of activities within sectorsthat can’t transition represents an increasingly diminishing financial
impact to our business.

Retirement ofhigh carbon
production
assetsOpportunity

Material

Material

Material

We are already supporting clients with the divestment of high-carbon
assets worldwide and predict the demand for services will continue
to increase, particularly within certain regions/geographies. We
have a strong and growing service line which supports the transitionof assets to facilitate renewable energy generation and, whilst thishas emerged more strongly in certain geographies, it is anticipatedthat this will become global in scope in the short to medium term.
Anticipating this demand, we have catered service line development
and team capacity to meet this and view this as a financially material
opportunity for the business.

Rationale

Market Drivers
Changing
customer
behavior
influencing
market demandfor our services

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

12

TopicAccess to newmarkets

Potential
financial impact

Risk oropportunity

Short-term:
up to 2026

Medium-term:
up to 2030

Long-term
Towards 2040

Increase indemand for
low carbon
infrastructure,
products andservices

Opportunity

Material

Material

Material

The business is already seeing the demand for low carbon
infrastructure, products and services materializing and we anticipatea sustained increase in the demand for our professional services insupport of this, across the time horizons. This represents a financiallymaterial opportunity for the business and one which we havestrategically positioned ourselves to capitalize upon through capacity
building across our operational geographies. This includes acquisitionof specialist capacity which has significantly enhanced our ability tomeet ever increasing client demand and further capitalize upon ourmarket presence.

Increased
revenues
through accessto new andemerging
markets (e.g.,partnerships
withgovernments,
banks)

Opportunity

Material

Material

Material

Our business strategy includes investment in strategic partnerships
which bolster our capacity to access or enhance our positionin emerging markets globally and materially increase revenue
generation. A recent example of this is our formation of a partnershipwith Sumitomo Mitsui Trust Bank, Limited (“SMTB”), aimed atadvancing climate change solutions in Japan. Emergent markets forclimate-related services represent a financially material opportunity
to the business both now and in future state. As with aforementioned
opportunities, we anticipate this opportunity will be sustained anddemand accelerate as we progress towards 2040 as the urgency ofaddressing climate change intensifies.

Opportunity

Material

Material

Material

Key to our business strategy is a dual approach of acquisitions
and service line development to meet the current and anticipatedevolving market demand for carbon trading and beyond value chain
mitigation. ERM acquired specialist expertise in the form of Cohoand has also developed ERM Climate Markets, a new capability
and business line that supports clients to mitigate their unabatedemissions through investment in high-quality carbon credits that
support their broader net zero and sustainability goals. The demand
for these services is already evident and anticipated to increase acrossnear, medium, and long-term scenario planning and presents afinancially material impact to the business.

Rationale

Policy and regulatory environment
Increasedpricing of GHG
emissions

Increased clientdemand forcarbon trading
and beyond
value chain
mitigation

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

13

Potential
financial impact

Risk oropportunity

Short-term:
up to 2026

Medium-term:
up to 2030

Long-term
Towards 2040

Increased
costs and/or
reduced demandfor products
and services
resultingfrom fines andjudgments

Increased costs
and/or demandfor products
and services
resulting fromfines andjudgments
within clientbase

Opportunity

Material

Material

Material

We provide specialist support to our clients to enable them to meetcurrent and future state regulatory requirements and enhance thesustainability of their operations. This serves to bolster their ability tomeet stakeholder requirements and reduce their exposure to potential
fines and judgments. The provision of services to operationalize
sustainability in our clients is a commercial opportunity for us, which
is material in terms of financial impact. Our strategy is to continue toinvest in technical expertise and technology enablement to support
our service delivery and escalating market need in this context.

Exposure to
litigation

Impact toclient strategy
and demand
for advisory
services

Opportunity

Material

Material

Material

Across the globe but particularly in developed economies, there has
been an increase in stakeholder led litigation, as stakeholder scrutinyof corporate performance has evolved into direct legal challenge,
with both the efficacy of transition planning and compatibility ofcorporate investment with climate regulatory frameworks being twoof the central foci for litigation. We expect this trend to continue
with escalation anticipated across our scenario timeframes as thedrive for net zero gains ever increasing urgency and societal scrutiny
intensifies. We already see our client base responding to this trend
and anticipate ongoing increase in demand for our services tosupport pre-emptive measures to mitigate litigation. We view thisas a financially material opportunity for the business, with ongoing
review of specialist capacity being critical to meet demand.

Capitalinvestments
in technology
development toaddress clientneed & market
opportunity
for technology
services to client

Opportunity

Material

Material

Material

The business has been strategically investing in technologicaladvancements which support our diversification of services tomeet evolving client demand, key amongst which is investment intechnology which supports ever increasing disclosure requirements.
Our technology portfolio now contains an array of products directly
created to meet identified need and positions strongly to capitalize
upon growing market demand. This is augmented by commercial
partnerships with many third-party digital software providers.
Across all scenario planning, this represents a financially material
opportunity for the business.

Topic

Rationale

Technology
Technologicalinvestment

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

14

Potential
financial impact

Risk oropportunity

Short-term:
up to 2026

Medium-term:
up to 2030

Long-term
Towards 2040

Physical risks acute

Increased
severity of
extreme weather
events such as
cyclones andfloodsRisk

Not Material

Potential to beMaterial

Potential to beMaterial

In the event of an acute physical risk, such as a cyclone or floods,
our operational priority is focused on prioritizing the safety andwellbeing of our employees. Once secured, delivery of our services toclients can be maintained through switching to home-based working
and through the leasing of temporary office facilities, should ouroffices be physically impacted. Disruption to business continuity
in the respective location is, therefore, anticipated to be temporary
and can be mitigated through the aforementioned measures, as
our recent experience in managing the impacts of flooding to our
Brazilian business unit has reinforced. Our business continuity andtravel planning should help minimize impacts to employees working
remotely or in-field. Repairs to the physical infrastructure of theoffice are anticipated to be recoverable through our insurance and thefinancial impact to the business whilst material in the immediate
impact is not considered material in respect of the global financial
performance of the business. We will actively monitor changing
climatic conditions and the potential for acute physical risks to
become chronic and impact a wider geographical area. We have,therefore, noted the potential for chronic physical risks to becomematerial in the medium to long term, though offset by mitigation
measures.

Resource
substitutes/
diversification

Increased costof retaining
supply chain
ability to operate
under various
conditions

Risk

Not Material

Not Material

Potential to beMaterial

Future state, suppliers and specifically subcontractors, may
face increased challenges and cost in operating within physicalenvironments impacted by climatic change, particularly those who
conduct in-field services for us. There is also recognition that as
regulatory requirements for decarbonization and enhanced disclosure
continue to grow, this may increase costs for SME and niche suppliers.
The business is focused on engaging our subcontractors to understandand build capacity in terms of decarbonization, adaptation andresilience to ensure continuity of service provision. This does not
currently present a material risk to the business, but we remain alert
to the need to pre-emptively mitigate against this and diversify the
supplier base if required.

Topic

Rationale

Resilience

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

15

Physical climate related risks andopportunities
As noted previously, the assessment considered a broad
range of potential climate related risks and opportunities
which includes physical risks, both acute and chronic,
and the impact this could potentially have on ourbusiness operations.
The impact of climate change in terms of temperaturerise, changes in precipitation patterns and volume,
variability and extreme weather is already being seen
across the globe. We are alert to the risks that thismay pose in the future to our operations, as with any
multinational business.
The nature of our business is primarily office based,
either in our own offices or those of our clients. With
respect to our own operations, our Global Operations
teams oversees the running of our offices, working
with regional and local facilities teams which annuallyplan for the requirements associated with each
office, consistent with our stringent Health & Safety
requirements. Air conditioning and/or heating is
integral to our office running and we are strategicallycommitted to the use of renewable energy across all ouroffices, pursuant to our decarbonization strategy andalso purchase renewable energy certificates (“REC”s)to offset residual emissions. We proactively budget forthe cost of this, whilst also seeking to incrementally
introduce energy efficiency measures through our office
optimization program. The cost - both current and futurestate - is not financially material.

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

Acute physical risks pose potential disruption to any
business and have been considered in relation to thephysical location of our offices, specifically those inlocations identified as being current or potentially prone
to extreme weather conditions. This also takes into
consideration existing and predicted capacity to adapt tosuch conditions. In the event of an acute physical risk,such as a cyclone or flood, our operational priority is thesafety and wellbeing of our employees. Once secured,delivery of our services to clients can be maintained
through switching to alternative working environments,
including home working and alternative premises.
Subject to the scale of impact of the specific physical risk,for example, if the impact is felt on a national or regional
geographical basis, the impact to our business has thepotential to be material in the immediate term. This
impact will be mitigated by the operational measures wewould deploy.
In the event that physical risks are anticipated to become
chronic, for example, increased and sustained hightemperatures, adaptation measures will be considered
in respect of the relevant office and business unit
operational planning. Actions would then be undertaken
through our office optimization and business unit
planning, to adjust our office working environment or
relocate to alternative premises. Employee commuting
to work and work undertaken in-field would also be
adjusted to reflect changed climatic conditions andincorporated into our working practices, Health & Safety
protocols and service delivery plans. This would be
proactively assessed, factored into the respective business
unit budget and implemented in a manner which we do
not anticipate to be financially material to the business

unit or wider business but have conservatively noted asa potential material risk in the medium to long term,
which will be actively monitored and mitigated against.

Impacts to our operational strategy
and business resilience
Our operational strategy actively considers the potential
varying impacts to business continuity and resilience inthe short, medium and long-term which would emerge
from the different assessment scenarios. Whilst it ishoped that we will see the realization of the SSP1/NZE
low emissions, net-zero emissions scenario, the businessis also prepared for the possibility of the SSP2/STEPS
high carbon emissions scenario, in the event that there isa more passive approach adopted to decarbonization bystates, businesses and wider stakeholders.
SSP1/NZE Low or net-zero emissions scenario
In the scenario of SSP1/NZE net-zero emissions scenario,
we anticipate demand for our commercial services willcontinue to increase across the three time horizons.
Immediate and short-term demand arises from clients
who are actively transitioning now, the early movers and/or those preparing for future state transition. Demand
for services is anticipated to continue and likely escalate
as we move towards 2030 and a further wave towards
the 2040 time horizon for those industries/sectors which
may require a more staged or elongated timeframe fortransition. Through a strategy of targeted acquisitions
and strategic hires, service line development andconsolidation of our technical communities, employee
retention and recruitment programs, we are positioned
16

to meet the anticipated increasing and diversified clientneed. This also enables us to capitalize upon anticipatedclimate related commercial opportunities across short-,
medium- and long-term horizons.
As a global sustainability consultancy, we operate inaccordance with our longstanding commitment todemonstrate credible net zero leadership and implement
operational programs consistent with this. From an
operational perspective, our established decarbonization
program which has been validated to align with the
SBTi Net Zero Standard, sees us on a sustained pathwayof emissions reduction in pursuit of net-zero by 2040.
This positions us to be beyond compliant with bothcurrent and projected escalating regulatory commitments
to reduce emissions across medium and longer-term
scenario timeframes. Our incremental emissions
reductions also buffer the business against potential
rising costs associated with market-based mechanisms
delivering credits and beyond value chain mitigation.
Even under a low or net-zero emission scenario, acutephysical risks are likely to continue to become manifest,
with varying ability to adapt to such risks in geographies
across the world. As outlined in the assessment, however,
we believe the impact of such risks to be temporal innature and limited in terms of their potential financial
materiality to the business. We have establishedadaptation measures integrated into our businessplanning to enable continuity of services to clients andbusiness resilience.
Our operational strategy actively considers the potential
varying impacts to business continuity and resilience inthe short, medium and long-term which would emerge

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

from the different assessment scenarios. Whilst it ishoped that we will see the realization of the SSP1/NZE
low emissions, net-zero emissions scenario, the businessis also prepared for the possibility of the SSP2/STEPS
high carbon emissions scenario, in the event that there isa more passive approach adopted to decarbonization bystates, businesses and wider stakeholders.
SSP1/NZE Low or net-zero emissions scenario
In the scenario of SSP1/NZE net-zero emissions scenario,
we anticipate demand for our commercial services willcontinue to increase across the three time horizons.
Immediate and short-term demand arises from clients
who are actively transitioning now, the early movers and/or those preparing for future state transition. Demand
for services is anticipated to continue and likely escalate
as we move towards 2030 and a further wave towards
the 2040 time horizon for those industries/sectors which
may require a more staged or elongated timeframe fortransition. Through a strategy of targeted acquisitions
and strategic hires, service line development andconsolidation of our technical communities, employee
retention and recruitment programs, we are positioned
to meet the anticipated increasing and diversified clientneed. This also enables us to capitalize upon anticipatedclimate related commercial opportunities across short-,
medium- and long-term horizons.
As a global sustainability consultancy, we operate inaccordance with our longstanding commitment todemonstrate credible net zero leadership and implement
operational programs consistent with this. From an
operational perspective, our established decarbonization
program which has been validated to align with the

SBTi Net Zero Standard, sees us on a sustained pathwayof emissions reduction in pursuit of net-zero by 2040.
This positions us to be beyond compliant with bothcurrent and projected escalating regulatory commitments
to reduce emissions across medium and longer-term
scenario timeframes. Our incremental emissions
reductions also buffer the business against potential
rising costs associated with market-based mechanisms
delivering credits and beyond value chain mitigation.
Even under a low or net-zero emission scenario, acutephysical risks are likely to continue to become manifest,
with varying ability to adapt to such risks in geographies
across the world. As outlined in the assessment, however,
we believe the impact of such risks to be temporal innature and limited in terms of their potential financial
materiality to the business. We have establishedadaptation measures integrated into our businessplanning to enable continuity of services to clients andbusiness resilience.
SSP2/STEPS High carbon emissions scenario
ERM is committed to working with stakeholders to avoid
the realization of the SSP2/STEPS high carbon emissions
scenario but we nonetheless take into consideration
the potential for this scenario to be realized. Even in
the scenario of other state or business actors seeking to
adopt a more passive approach to decarbonization, we
believe wider societal, consumer and investor demand
will at least partially mitigate against this. As previously
noted, ERM seeks to work with those businesses who areinvested in delivering a low-carbon future, providing
ongoing demand for our services.

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Our cross-sectoral and global coverage enables us to flex
and remain agile and resilient in the face of geo-politicaluncertainty impacting the speed or scale of policy andregulatory driven change and potential variability inthe rate of transition across sectors or geographies. In
the event of industry or country specific policy andregulatory uncertainty impacting market demand,
our operational model enables rapid retraining and/or
redeployment of personnel, to mitigate against potential
material financial impact. This can be undertaken on atemporary or sustained basis, subject to projections of
how we anticipate the respective sector or country will
respond in the short to medium term.
We will also seek to continue the decarbonization of ourown operations. Through our strategic approach, we
reduce the financial impact of carbon credits and beyond
value chain mitigation, supporting our ability to deliver
net-zero in a cost efficient and resilient manner.
Under the high carbon emissions scenario, there is anincreased likelihood of physical risks becoming chronic
and a reduced potential for certain economies to adapt orincreased level of investment required to support this. Our
ongoing constraints mapping will actively consider this andinform our planning around office location and deploymentof personnel in-field, working with clients, to ensure we
continue to deliver services and remain resilient. Any
potential realization of the high carbon emissions scenario
will be gradual and actively monitored. Our operational
strategy supports the business to capitalize upon market
demand, reflecting our assessment of current and projectedclimate related commercial opportunities and taking into
consideration foreseeable geo-political, regulatory andsectoral disparities to support business resilience.
ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

Targets and monitoring of performance
The nature of our business means that the suite of ourmetrics/targets are collectively focused on supporting
our own operational decarbonization and that of ourclients, and the commercial opportunity which thiscreates. Our business plan integrates targets aimed
at sustaining and growing our business across short-,
medium- and long-term planning, and takes into
consideration our geographical scope, sectoral presence,and projected demand for our service lines across the
scenarios set out in this assessment. Commercial targets
are set accordingly for service teams, sector, and client
workstreams, and for our business units and regions,which are integrated into business planning. Progressagainst these commercial targets is monitored on aquarterly, half-yearly and annual basis.
A wider set of sustainability metrics are also establishedeach year to support our operational programs,
including in key areas such as people management andthe recruitment and retention of staff which supports
our ability to be agile in the face of increasing market
demand or climate related professional services.
Performance against these targets is published in ourannual Sustainability Report and our wider financial
performance is set out in these financial statements.

Target

KPI

Adaptation to changing physical environment
Protection of health, safety
and wellbeing of officeworking environment
for employees in faceof changing climate
and extreme weather
conditions

New: Track % of offices
with updated business
continuity plans thattake into account climate
related physical risks.

Protection of health,safety and wellbeingof employees in-field/
conducting survey workin face of changing
climate and extreme
weather conditions

New: Develop
methodology and KPI to
track productivity loss
arising from physicalrisks (e.g., days lost due
to inability to conduct
in-field survey activity
due to extreme weather/changing climaticconditions).

Transition of operations
Decarbonization ofoperations, including
supply chain, to reduce
financial cost of emissions
abatement, credits andbeyond value chain
mitigation

Reduce scope 1, 2 and 3
emissions in line with
SBTi targets against FY20
baseline.
For historical performance
data; see table 1 below.

Changing market for climate-related service delivery
Capitalizing uponincreased market demandfor professional services tosupport client transition

Year on year growth innet revenue; see summary
results on page 3.

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Historic performance data
Table 1: GHG emissions reduction

FY20 baseline(tCO2e)FY24(tCO2e)% reduction against
baseline

Scope 1

1,350

1,037

23%

Scope 2

2,582

1,750

32%

Scope 3

51,571

41,52419%

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

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Metrics for monitoringclimate-related risks& opportunities

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

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Metrics
The nature of our business means that the suite of ourmetrics/targets are collectively focused on supporting ourown operational decarbonization and that of our clients,
and the commercial opportunity which this creates.
Our business plan integrates targets aimed at sustaining
and growing our business across short-, medium- andlong-term planning, and takes into consideration ourgeographical scope, sectoral presence, and projecteddemand for our service lines across the scenarios set out
in this assessment.
Commercial targets are set accordingly for service teams,
sector, and client workstreams, and for our business units
and regions, which are integrated into business planning.
Progress against these commercial targets is monitored
on a quarterly, half-yearly and annual basis.
A wider set of sustainability metrics are also establishedeach year to support our operational programs,
including in key areas such as people management andthe recruitment and retention of staff which supports
our ability to be agile in the face of increasing market
demand for climate related professional services.
Performance against these targets is published in ourannual Sustainability Report.

Category

Description of Target  

KPI

Adaptation tochanging physicalenvironment

Protection of health, safety and wellbeing of
office working environment for employees
in face of changing climate and extreme
weather conditions

New: Track % of offices with updated
business continuity plans that take into
account climate related physical risks

Protection of health, safety and wellbeing of
employees in-field/conducting survey workin face of changing climate and extreme
weather conditions

New: Develop methodology and KPI to track
productivity loss arising from physical risks(e.g., days lost due to inability to conduct infield survey activity due to extreme weather/changing climatic conditions)

Decarbonization of operations  , including
supply chain, to reduce financial cost ofemissions abatement, credits and beyond
value chain mitigation.

Reduce scope 1, 2 and 3 emissions in line with
SBTi targets against FY20 baseline

Transition ofoperations

Historical performance data – Table 1

To note land water and waste are not material
operational topics/impacts
Changing market
for climate related
service delivery

Capitalizing upon increased market demandfor professional services to support clienttransition

Year on year growth in net revenue
Historical performance data – Table 2

The key metrics used to manage our climate related risks
and opportunities is summarised in the table below.
Performance against these metrics is monitored on an
ongoing basis and reported to our senior leadership.

ERM CLIMATE-RELATED FINANCIAL DISCLOSURES SUPPLEMENT

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