Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

LONDON STOCK EXCHANGE GROUP PLC
CLIMATE REPORT 2022

Accelerating thetransition to net zero

01

London Stock Exchange Group plc
Climate Report 2022

Sustainability
governanceIntroduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governanceContents

LSEG’S CLIMATE AMBITION
See page 9

ACTIONING OUR PLAN:
IMPLEMENTATION STRATEGY
See page 11

ACTIONING OUR PLAN:
ENGAGEMENT STRATEGY
See page 19

Introduction

2

Market developments in climate-related reporting5

Our role in market development of sustainability disclosuresand transition planning6

A step forward in climate transition planning guidance

7

Establishing a global baseline for sustainability-related disclosures

8

LSEG’s climate ambition

9

Objectives and priorities

10

Business model implications

10

Actioning our plan: implementation strategy

11

Business planning and operations

12

Products and services

14

Policies and standards

18

Financial planning and sensitivity analysis

18

Actioning our plan: engagement strategy

19

Engagement with value chain

20

Engagement with industry

21

Engagement with government, public sector and civil society

21

Climate risk management

24

Physical climate risk assessment

25

Transitional climate risk assessment

25

Processes for identifying and assessing climate-related risks

26

Processes for managing climate-related risks

27

Integration of climate-related risks into overall risk management

27

Metrics and targets

28

Governance, business and operational metrics and targets

29

Financial metrics and targets

29

GHG emissions metrics and targets

29

Carbon credits

30

Sustainability governance

31

Board oversight and reporting

32

Roles, responsibilities and accountability

32

Culture33

Incentives and remuneration

33

Skills, competencies and training

34

Further information

35

Further information on London Stock Exchange Groupcan be found at: www.lseg.com

01

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Introduction

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governance

WHO WE ARE

LSEG is a leading global
financial markets infrastructureand data provider. We play avital social and economic rolein the world’s financial system.
With our trusted expertiseand global scale, we enable
the sustainable growth andstability of our customers
and their communities.
LSEG is headquartered in
the United Kingdom, withsignificant operations in
65 countries across EMEA,
North America, Latin Americaand Asia Pacific. We employ
24,000+ people globally.
OUR PURPOSE

Driving financial stability,
empowering economies
and enabling customers tocreate sustainable growth.
About the photography in this report
In March 2022, employees and contractors across the globe
helped to bring LSEG’s sustainability strategy to life throughour Picture our Priorities photography competition.
The photographs reflect the three pillars of our sustainability strategy:— Accelerating the just transition to net zero— Enabling the growth of the green economy— Creating inclusive economic opportunity
Many of the images used in this report are photographs submitted
as part of that competition.

02

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governanceOur sustainability strategy

Our purpose is driving financial stability,
empowering economies and enablingcustomers to create sustainable growth.
We are committed to supporting sustainableeconomic development which requires
the harmonisation of economic growth withsocial inclusion and environmental protection.

Our sustainability strategy focuses on thoseissues of greatest relevance to our businessand our stakeholders, and where we can havethe greatest positive impact. We are working
towards three strategic sustainability priorities,
while embedding sustainability into ourcustomer propositions, market engagement
and our own operations.

STRATEGIC PRIORITIESPriority 1

Priority 2

Priority 3

Read more on pages 9 and 10

Read more on pages 16 and 17

Read more on pages 20 and 21

Accelerating thejust transition to
net zeroEnabling the
growth of thegreen economy

Creating inclusive
economicopportunity

ENABLING ACTIVITY

Supporting customers to create sustainable growthMarket engagement and policy advocacy
Embedding sustainability into our operations

03

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governanceIntroduction

In 2022, we published our first
Climate Transition Plan, which
detailed our approach to support
our short-term science-basedtargets (SBTs), as well as ourlonger-term net zero ambition.
We also published a separate
report aligned to the Taskforce
on Climate-related Financial
Disclosures (TCFD), which outlined
how we manage and respondto climate-related risks.

This year we are publishinga single climate report which
provides an update on both
our transition plan as well as our
TCFD report. This is in line with
the initial guidance from the UK
Government’s Transition Plan
Taskforce and this report isstructured according to its
recommendations. This isa holistic approach whendemonstrating LSEG’s response
to climate-related risks andopportunities, and how weare contributing to an
economy-wide transition.

UK Government’s Transition Plan Taskforce framework
Taskforce on Climate-related
Financial Disclosures(TCFD) pillars

The UK Transition Plan
Taskforce (TPT) framework
elements and sub-elements

In this report, we disclose how
we expect climate change, andthe transition to a low-carbon
economy, to impact our businessin the near to long-term future.
As such the primary audiences
for this report are investors,
regulators and other financial
institutions with an interest
in LSEG.
We show how our Climate
Transition Plan is aligned withTransition Plan Taskforce
guidance, and describe progress
we’ve made in 2022 towards oursustainability objectives, and how
we will deepen implementation
throughout 2023 and beyond.

In this report, we disclose how we expect
climate change, and the transition to a lowcarbon economy, can impact our business.

Governance
StrategyFoundations— Objectives and priorities— Business model implications
Implementation strategy— Business planning andoperations— Products and services— Policies and conditions— Financial planning— Sensitivity analysis
Engagement strategy— Value chain— Industry— Government, public sector
and civil society
organisations
Metric and targets
Risk management

04

This report reflects the continuing
evolution in approach, using
the TCFD recommendations
to report on our climate risk
activities. We have developedand enhanced our capability foraddressing both physical andtransition risks. In future, we will
evolve and enhance our approachand disclosure of financial impacts
associated with climate-relatedrisks. The aim is to address theGroup’s transition risks andopportunities, including its
resilience to climate-relatedrisks today and in the future
and to meet existing mandatory
reporting requirements andprepare for future ones.

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategyMarketdevelopments
in climaterelated
reportingEngagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governance

The regulatory environment
and investor expectations aredeveloping at a rapid pace,
and we are at the forefrontof global initiatives supportingorganisations on their journey
to net zero.

In this section
Our role in market developmentof sustainability disclosuresand transition planning
More information can be foundon page 6

A step forward in climatetransition in planning guidanceMore information can be foundon page 705

London Stock Exchange Group plc
Climate Report 2022

Establishing a global baseline forsustainability-related disclosures
More information can be foundon page 8

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Our role in market development of sustainability disclosuresand transition planning

We believe we have an importantrole to play in supporting
companies listed in London,and companies further afield,
to understand how to approachtransition planning and climaterelated reporting. The effective
flow of climate-related information
supports capital allocation andengagement between companies
and investors, while helping to
improve the climate resilienceof global capital markets.

1

06

This is an agenda that LSEG
has supported for many years,
from launching one of the first
methodologies to assess
corporate climate strategies
in 2007 when FTSE4Good
unveiled its first set of climate
criteria1. In 2021, the London
Stock Exchange publishedguidance on climate-related
reporting to help companies
understand and deliver bestpractice disclosure to investors,
prepare for regulation and derivecommercial value from improved
management information.

We shoulder our responsibility
at the heart of global financial
markets to provide the industry
with the tools, data and market
infrastructure required to achieve
important sustainability goals.

FTSE launches climate change criteria
for index series | News | IPE.

London Stock Exchange Group plc
Climate Report 2022

Metrics
and targets

Sustainability
governanceIntroduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governanceA step forward in climate transition
planning guidance

The transition to a low-carbon
sustainable global economy isa highly complex task, with eachcountry, sector and company
facing different challenges.
Part of our role is to provide data,
research and analytics to help
capital market participants tonavigate the transition andsupport the development ofhigh-quality comparable reporting.
HM Treasury Transition
Plan Taskforce
The UK Transition Plan Taskforce(TPT) was launched by HM
Treasury in April 2022 to develop
the gold standard for private
sector climate transition plansin the UK. The Taskforce has
facilitated a multi-stakeholder
approach, bringing in expertisefrom government, regulators,
academia, finance and the private
sector. It has helped to developtransition plan guidance that is
fit for purpose, striking theright balance between being
principles-based, but prescriptive
where necessary.

07

The TPT’s work will help to drive
decarbonisation by ensuringthat financial institutions andcompanies prepare rigoroustransition plans which enableorganisations to achieve net-zerotargets. In addition, the UK
Government and the Financial
Conduct Authority will draw on
the TPT’s outputs to strengthen
disclosure requirements acrossthe UK economy. LSEG is
proactively contributing to the
TPT, as LSEG CEO David
Schwimmer serves on theTaskforce Steering Committee
and we are also members of
the TPT Delivery Group.
GFANZ Guidance on Credible
Net-zero Transition Plans
The Glasgow Financial Alliance for
Net Zero (GFANZ) was launchedin April 2021 by Mark Carney(UN Special Envoy on Climate
Action and Finance) and the
COP26 presidency. It is theworld’s largest coalition offinancial institutions and iscommitted to transitioning the
global economy to net-zerogreenhouse gas emissions toachieve the objective of theParis Agreement to limit global
temperature increases to 1.5°C
from pre-industrial levels. As afounding member, LSEG plays anactive role in GFANZ workstreams
and LSEG CEO, David Schwimmer,
is a member of the GFANZ
Principals Group, which sets
the strategic direction andpriorities of the Alliance andmonitors progress.

LSEG is proactive in contributing and shaping
the TPT recommendations through our
involvement in the Taskforce Steering Group
as well as the Delivery Group.

LSEG plays an active role in GFANZ
workstreams and LSEG CEO, David Schwimmer,
is a member of the GFANZ Principals Group.

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governance

Establishing a global baseline forsustainability-related disclosures

Developments in sustainabilityrelated disclosures continues
apace, and we actively promote
the development and adoption of
global disclosure standards on
climate risk and sustainability.
For example, we were membersof the EU High Level Expert Groupand the Technical Expert Groupon Sustainable Finance, shaping
consistent disclosure standards.
We are also members of the FCA/PRA Climate Financial Risk Forumand the Green Technical Advisory
Group (GTAG) advising the UK
Government on green taxonomy.

08

The formation of the International
Sustainability Standards Board(ISSB) was a watershed moment for
the global economy as it moves
towards a net zero, sustainable
future. Building on the framework
developed by the Taskforce on
Climate-related Financial Disclosure(TCFD) and other internationalframeworks, the ISSB’s global
baseline sustainability reporting
standards have the potential
to provide the international
consistency that is needed to
unlock comparable, actionable
information to inform sustainabilityrelated decision-making.

The ISSB is in close
communication with the European
Financial Reporting Advisory
Group (EFRAG) as it develops
reporting standards for theEU, which is essential to avoid
divergent reporting standards
and international fragmentation.
We also welcome thecollaboration between the Global
Reporting Initiative (GRI) and the
ISSB to ensure close alignment
between these standards. Many
jurisdictions, including the UK,
New Zealand, Japan, and more
recently, the US Securities andExchange Commission (SEC),
have already made significant
progress in introducing mandatory
disclosure rules or proposals
to incorporate the TCFD
recommendations in theirdomestic frameworks.

London Stock Exchange Group plc
Climate Report 2022

LSEG has been a supporter of
TCFD since its launch in 2017and has disclosed climate change
as an emerging risk in both
our annual and sustainability
reports since 2019. In this report
we disclose information on
our greenhouse gas (GHG)
emissions, our emission-reduction
targets and how we plan toachieve these.

Introduction

Marketdevelopments

LSEG’sclimateambition

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Sustainability
governance

LSEG was an early adopter
in developing a climatetransition plan, which
we published in March,and for which we received
shareholder support at
our AGM in April 2022.

In this section
Objectives and priorities
More information can be foundon page 10

Business model implications
More information can be foundon page 10

09

Metrics
and targets

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Objectives and priorities

Business model implications

We published our first Climate
Transition Plan in March 2022,
setting out how we aim to achieve
our targets which have been
approved by SBTi (ScienceBased Target initiative) against
a 1.5°C trajectory.

Operational response
In January 2021, LSEG joined
the United Nations Climate
Change ‘Race to Zero’ becoming
the first global exchange group tocommit to net zero. To achieve ournear-term targets by 2030 and to
identify our path to net zero, welaid out our roadmap in our first
Climate Transition Plan, withquantifiable emission reduction
pathways covering properties,
data centres, travel and suppliers.

At our AGM in April 2022, we
invited our shareholders to voteon our Climate Transition Planand received almost 99% support.
We have continued to build on
initial work, and in this report
describe activities we’ve worked
on regarding governance,
operations and delivery.

Targets
Carbon reduction
Halve our Scope 1, Scope 2 andselected Scope 3 emissions(fuel and energy related activities,business travel and employee
commuting) against a 2019baseline by 2030.
Supplier engagement
Engage with suppliers responsiblefor 67% of our Scope 3 emissions(purchased goods and services) to
set science-based targets by 2026.

Ambition
Our long-term ambition is toachieve net-zero by 2040.

99%

Reduction by 2030

-50%

Our Climate Transition Plan canbe found here

Scope 3 emissions (purchased
goods and services) covered byscience-based targets by 2026

67%

Products and services
Sustainability and the global
climate transition is reshaping
entire industries, and it is essentialthat we build capabilities thatenable market participants tonavigate this agenda andunderstand the implications forcapital markets. Building this into
our business is a commercial
necessity. It is also a Groupstrategic objective and a factor
which is becoming increasingly
important for our clients andsubsequently impacts on theway we do business.
With this context, we continue tobuild on our Sustainable Financeand Investment capabilities acrossour Data & Analytics, CapitalMarkets and Post Trade divisions
to support the long-term growthof the Group.

Emissions by 2040

Net zero-50%

Sustainability
governance

Shareholder support for our Climate Transition Plan

Target reduction of total emissions by 2030

10

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governanceActioning
our plan:
implementation Through our involvement in
the Net Zero Financial Service
strategy
Providers Alliance, we are

Turning our ambition into reality
requires action across ouroperations and through thesuite of products and services
we offer to our customers.

working to support the market
and develop a clear framework
to structure commitments,
targets and reporting.

In this section
Business planningand operations
More information can be foundon page 12

11

Policies and standards
More information can be foundon page 18

Products and services

Financial planning andsensitivity analysis

More information can be foundon page 14

More information can be foundon page 18

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governanceBusiness planning and operations

We have optimised ourgovernance and operational
structure to ensure ownershipand accountability across theGroup in how our transition planis implemented. Over the medium
term, our activity is driven by our
supplier engagement and carbon
reduction targets to 2026 and2030 respectively, key milestoneson the path to our ambition to be
a net zero business by 2040.
In our first Climate Transition Plan
we showed key areas of activity
across six glidepaths. As ourapproach has evolved, we havestreamlined our approach, tofocus in on four glidepaths,
supported by climate risk.
These glidepaths encompass
the key areas of activity enabling
us to act on our ambition.

Our 2022 Climate Transition
Plan can be found here.

Data reconciliation
Over the course of 2022 wemade progress on our carbon
accounting capability across thebusiness, allowing us to capture
and calculate emissions and build
a more in-depth and granular
understanding of our emissions
profile to inform decision-making.
This enhancement has enabled
us to move away from estimatedemissions data, which allows us towork with a more robust data set.
Using a centralised tool, we havegathered data directly from ourproperty portfolio in 68 countries(up from 10) with data from 1,061
sources (up from 202).

Glidepath: Places
In addition to developing ourdata management capability,
we continue to focus on energy
efficiency improvements to
reduce our overall emissions
footprint. To this end, in 2022 we
carried out decarbonisation audits
across several of our highest
emitting locations to determine
and prioritise the greatest
emissions saving activities.
We continue to actively manage
our property portfolio to reduce
waste and increasingly embedcircular economy initiatives.
During our 2022 upgrade andrefurbishment programme, we
diverted waste away from landfill
in collaboration with our vendor
partners who donated or recycled
items, such as at our St Louis,
USA site where we utilised items
from an existing office which had
been consolidated instead ofpurchasing new items. At ourPaternoster Square office, London,
we converted from standard
diesel to biofuel.

Working with our landlords andenergy providers we have
explored renewable energy
options, which includes theconversion of a number of sites
to a green tariff.
We currently report 100%of our electricity across ourportfolio as renewable, thisincludes the purchase of Energy
Attribute Certificates (EACs) andaligns with the requirements ofRE100. LSEG is a member ofRE100, which is a corporate
renewable energy initiative
bringing together hundreds ofbusinesses committed to sourcing
100% of their energy fromrenewable sources.
Our longer-term strategy is tocontinue to review our energy
options, moving away from EACs,
switching to green tariffs whereavailable and prioritising on-site
generation where possible.

Streamlined glidepaths
Previous glidepaths

Net-zero operations glidepaths

Climate risk

PlacesProperty and data centres, renewable energy, upstream leased assets

Renewable energy
Property and data centres
Supply chain

PeopleHomeworking and employee commuting
TravelBusiness travel by air, rail, and road

Business travel
Neutralisation and removals

12

Procurement
Purchased goods and services

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governanceBusiness planning and operations continued

Following significant extreme
weather events, we are reviewing
our due diligence and business
continuity plans. As described in
our TCFD report last year, we areundertaking an assessment ofphysical risk of LSEG’s operations,driven by a high value at risk
(exposure) and a greater change
in the physical risk of extreme
weather events. We have
expanded our physical climaterisk model to incorporate theenlarged footprint of theorganisation, focusing on
three main impact pathways:— Physical impacts on our
offices, data centres and local
infrastructure such as power
and transport which could leadto additional expenditure orcause business disruption
and loss of customer service
and revenue.
— Potential physical impacts
resulting in increased
insurance premiums.
— Potential physical impacts
being uninsurable, leading
to the business meetingthe cost of any repairs to
offices, data centres or othercompany assets.
With regards to physicalclimate-related risks and given
incidences of flooding in India and
Sri Lanka which impacted LSEG
over the course of 2022, we
continue to carry out extensive
reviews, including the initiationof a detailed environmental
assessment of our property
locations. This work will continue
in 2023 and will feed into ourenhanced mitigation response
across our portfolio.
This will involve a review of ourentire property portfolio at acountry and regional level, toidentify areas of higher risk forincidents, such as floods, wildfires,
wind, earthquakes and hurricanes.
This work will look at the potential
severity and frequency ofclimate-related perils, and forregions and countries where
there is a significant risk, athorough site assessment will
be undertaken to understand thespecific site risk and appropriate
mitigation activities.

13

Glidepath: Travel
Managing emissions related totravel, we have developed aroad map to 2030 to allow us
to move towards our ambitious
50% reduction targets, with key
initiatives based on education,
promoting behaviour change andreviewing our policy framework.
In 2022, alongside other global
businesses we saw our businesstravel increase on 2021 figures
attributed to the lifting ofrestrictions. We have beenenhancing our personalised
dashboards and messaging within
our travel tools to encourage
more conscious forms of businesstravel with employees being
prompted to consider why,
how, and when they travel.
With regards to accountability,
we have made significant
progress in developing divisionallevel carbon emission reporting,allowing the business to develop
a granular view of travel carbon
emissions. We will look to develop
our reporting capability, which
will allow us to review thepotential allocation of
departmental carbon budgets
ahead of the application of aninternal carbon pricing strategy.

We have been enhancing our personalised
dashboards and messaging within our
travel tools to encourage more conscious
forms of business travel.

As we have returned to our offices,
we have seen a steady decrease in
homeworking emissions from 2021.

Glidepath: People
As we have returned to ouroffices, we have seen a steadydecrease in homeworking
emissions from 2021 and we
expect this to decrease further
as more employees return to theoffice as part of our hybrid
working approach. In line with this,we have seen an increase in our
employee commuting emissions
from 2021. There is scope to
improve our data quality for
employee commuting andhomeworking and we will befocusing on this in 2023.
Glidepath: Procurement
Please see Engagementwith value chain on page 20of this report.

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governance

Products and services

Indexes, data and analytics
We’re helping to shapesustainable investing in ourmarkets, by using our indexes,
data, and analytics solutions,innovative forward-thinking
technology, and expertise to
inform investor decision-making.
We provide accurate, decisionready, transparent, andcomparable sustainability-relateddata, and we are expanding
our suite of sustainability-related
propositions: strengthening
existing capabilities, working
with partners, and innovating in
new areas.
Sustainable indexes
We provide a unique suiteof sustainable indexes acrossasset classes, to support investors
in their investment strategies.
Our standard index families
include an increasing numberof ESG and climate alternatives,offering a growing varietyof options to investors.
We also design innovative
sustainable indexes, leveraging
our unique index expertise andexclusive intellectual property
developed by a global teamof sustainability experts.

Our flexible and modular
approach enables us to provide
standard and custom indexes
to asset owners and asset
managers, with global investment
strategies or more specificinvestment universes.
Our extensive and proprietary
ESG and climate data sets,
combined with advanced index
methodologies, allow us todesign targeted indexes for avariety of investment universes,
for different asset classes suchas equity, fixed income, sovereign,real estate, and infrastructure.

Our index offering is structured
around investors’ objectives.
For climate indexes, three main
objectives are pursued:1) Transition to a
low-carbon economy,2) Accelerate green economy,3) Align with regulatory
climate objectives.

Since 2001, with the launch of
FTSE4Good, we have developed
and maintain hundreds of Climate
and ESG indexes, that are tracked
by more than $300 billion ofassets under management.

For ESG indexes, the threemain objectives are:1) Integrate ESG into
investment strategies,2) Select investments,3) Align with ESG regulatory
requirements.

Dedicated sustainability offerings
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London Stock Exchange Group plc
Climate Report 2022

tin

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Sustainable data & analytics
We provide ESG data points andanalytics for 80% of global market
cap based on publicly reported
company data. We create anumber of ESG scores designed
to transparently and objectively
measure a company’s relative
ESG performance, commitment
and effectiveness. We publish our
Scores Methodology including
category scores calculation,category benchmarks andcategory weights. Products whichcontain this data include: Refinitiv
Eikon, Refinitiv Workspace,
Sustainable Leadership Monitor,
Datastream, Quantitative
Analytics, Commodities Research,and World-Check, with a range
of dedicated ESG offerings
highlighted in the diagram below.

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governance

Products and services continued

ESG data and scores
LSEG provides customers witha wide range of environmental,social and governance (ESG) data
across different asset classes.
This includes Refinitiv’s highly
granular data and scores ofover 14,000 companies globally,drawing on over 600 metrics toprovide advanced ESG analytics.
Refinitiv’s services sit alongside
FTSE Russell’s ESG researchcovering thousands morecompanies. With respect to debt
markets, Beyond Ratings provides
ESG-related data on thousands ofcorporate credit issuers and over
175 sovereign issuers.
Commodities Research
Our Commodities Researchteam consists of industry expertsthat cover more than 11 commodity
assets and enable LSEG
customers to make highly
informed decisions. We use robust
methodologies to bring deep
insights of the market, supporting
our customers in their trading.
The analysis is available via
Workspace or Eikon, and alsoenabled via direct feeds. Our
team consists of economists,
mathematicians, meteorologists,hydrologists and sea captains
who run more than 200 models
daily across more than one billion
data points.
Carbon Market Research
The Carbon Research teamprovides comprehensive
coverage of the European carbon
market. Trading data, market
fundamentals, price forecasts,
a comprehensive database ofemitters and a combinationof quantitative and policy
analysis help explain compliancecarbon markets.

15

We closely follow international
climate negotiations to understandtheir impact on the future ofcarbon trading globally, bothUN-regulated and voluntarycarbon market (VCM). Our teamis constantly in touch with the
VCM participants representing
both exchange and over thecounter trading to keep ourcustomers updated on the VCM
price movements and policy
developments. As the post-2020
carbon world is especially focusedon the quality of carbon credits,
we follow the evolution ofvoluntary market requirements
and explain the implications
on the prices of emission
reduction units.
Infrastructure360
The long-term and diversified
nature of infrastructure projects,
and the strong return profile, hasseen the asset class gain interest
from the fund management andpension fund industry. The world
currently faces a $15 trillion
infrastructure investment gap by2040. We offer comprehensive
news, data, insights andanalytics on global infrastructuredevelopments, including deal
structuring, financing, risk profiling,
regulatory compliance and lender,
investor and advisor profiles.

14,000ESG data on 14,000 companies globallyc.14%

Green economy compound annual growth rate since 2010

Our Sustainable Infrastructure
Investment Report 2022 explores
the trends, participants anddata, powering a sustainableinfrastructure boom, and highlights
some of the major trends driving
the market, along with dataon key players – the mostimportant metrics to monitor,and highlights the challenges
looming for both investors andgovernment sponsors.

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governance

Products and services continued

Our customisable and flexible platform is atrusted source for complex analytics acrossfixed income, and enables ESG and climate
metrics to be integrated.

Beyond Ratings data offers institutional grade
fixed income sustainable investment data sets,sustainable fixed income indexes, based on
FTSE Russell’s index families and data.

Beyond Ratings
Beyond Ratings data and scores
enable ESG integration into fixedincome, and multi asset research,
complementing traditional credit
analysis, with the goal of assisting
financial sector clients in thetransition towards a sustainableeconomy. The data is built on
in-house expertise on climate/
ESG, data science, and financial
risk assessment, and covers
over 175 countries and 10,000
companies. Beyond Ratings dataoffers institutional grade fixedincome sustainable investment
data sets, sustainable fixedincome indexes, based on FTSE
Russell’s index families and datathat includes smart risk andclimate metrics, in addition
to underlying models.
Climate Governance Scores
In 2022, London Stock Exchange
introduced Climate Governance
Scores for over 400 issuers.
These scores provide anevaluation of corporate carbon
management practices and how
climate change considerations
are built into business strategies.
These scores are provided toissuers privately, helping them toassess and refine their approach
to climate management.
Green Revenues data
FTSE Russell has been
researching and developing
green industry taxonomies formore than a decade. Our Green
Revenues 2.0 data model enables
a better understanding of thegreen economy, classifying green
products and services withenvironmental benefits, andassessing companies’ revenue
from them.
The data set is global andcomprehensive. The data model
is applied to nearly 99% of total
global market capitalisation,
capturing over 16,000 small,medium and large publiccompanies across 48 developedand emerging markets. It covers
a wide range of FTSE Russell’sequity indexes, including theFTSE Global Equity Index Series
and the Russell US Indexes.

16

London Stock Exchange Group plc
Climate Report 2022

The EU Taxonomy and FTSE
Russell’s Green Revenues
Classification System are highlyaligned and give investors atool to identify companies
involved in the green economy,
and to quantify the share of theirrevenues that is likely to qualify
under the EU Taxonomy.
Green economy report
Published by FTSE Russell in
May 2022, this report tracks
the growth and performancein green equities. Channelling
more capital towards low-carbon
investment, meeting new
regulatory requirements of green
taxonomies and capturing green
thematic investment opportunities
requires better and more granular
data on the green economy.
This report helps achieve this.
It discusses key trends andinsights in the global green
economy based on the FTSE
Russell Green Revenue data –a unique source providing
granular, bottom-up informationon corporate revenues fromgreen products and services.
The research showed that thegreen economy has grown rapidly
and represents a sizeable
investment opportunity. In
response to global environmental
challenges, including climatechange, the green economy
recorded a compound annual
growth rate of c.14% over thelast 12 years. With a market
capitalisation of over $7 trillion
and a weight of 7.1% of global
equity markets, the green
economy by itself would be
the fifth largest industry.
Number of companies assessedin Green Revenues Model

16,000Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governance

Products and services continued

Sustainable finance across
our capital markets
We are committed to supporting
the global transition to a lowcarbon economy through ourcapital markets. We do this byproviding tools, resources, andeducation to help companies
with transition plans and climate
reporting, develop and implement
credible transition plans andunderstand best practice in ESG
disclosures. We also innovate andbuild our markets to help issuers– governments, companies andfinancial institutions worldwide– access the capital they needfor climate action and other green
or sustainable activities, acrossa range of asset classes.
Sustainable Bond Market
Our Sustainable Bond Market
offers the most comprehensive
platform for sustainable debt
financing, with separate segmentsthat help investors to identify
the use of capital raised for
different purposes:— Sustainability-linked bonds
link interest payments toperformance against specificsustainability performancetargets, which contain key
performance indicators(KPIs), for example on
decarbonisation targets.
— Transition bonds provide aroute for companies in sectors
not traditionally part of thegreen economy to raise
capital to finance credible
transition plans.
— Green bonds raise funds
for activities that deliverenvironmental benefits anda more sustainable business(or economy, in the case ofgovernments). ‘Green’ caninclude renewable energy,
sustainable resource use,conservation, cleantransportation and adaptation
to climate change.
— Social bonds are used tofinance activities with a clear
and measurable social purpose,for example the developmentof social housing, supporting
education and development of
women-led businesses.

17— Sustainability bonds can beused to finance both green andsocial project categories. This
segment can cover broader
thematic bonds such as blue
bonds for marine-based activity.
— Green-revenues segment forbonds by issuers with theGreen Economy Mark and over
90% of revenues from green
sectors aligned to the FTSE
Russell Green Revenues
Classification System.
Green Economy MarkThe Green Economy Mark isprovided to companies and funds
on the Main Market and AIM thatderive over 50% of their revenues
from sustainable products andservices. Revenues are measured
against alignment to FTSE
Russell’s Green Revenues
Classification System. Demand for
low-carbon products and services
has increased as addressing
climate change and environmental
concerns becomes a key strategic
priority for businesses acrossthe economy and a driver ofconsumer purchase behaviour.
The Green Economy Mark raises
the visibility of these companies
and funds to investors that arefocused on green investment
strategies. This supports access tocapital for companies in transition
and those in fast-growing areas ofthe economy, such as cleantech.
Voluntary Carbon Market
Our Voluntary Carbon Market
designation enables funds andoperating companies to raise
capital to be channelled into
projects that contribute to
reducing the amount ofgreenhouse gases in theatmosphere, both nature-based
and technology led, and thatare expected to generate
carbon credits.

It has been created to provide
investor confidence in the carbon
markets and flows of capital toclimate action worldwide,
particularly in the Global South.
It does this through additional
listing rules that provide guardrails
to support high quality projects;
mandatory performance
disclosures to increase investor
visibility, and evidence-based
claims associated with theenvironmental and social impacts
delivered. In turn, funds andcompanies with the Voluntary
Carbon Market designation
provide a new route forcorporates who seek to offset
their residual or unavoidable
emissions on their net-zerojourney and provide exposurefor investors to an asset class,with a long-term supply ofcarbon credits.
ESG ETFs
ESG ETFs offer a way to diversify
across a wide range ofinvestments, while owningcompanies or other assets thathave strong ESG characteristics.
ETFs invest in a basket of stocks,
bonds, or other assets. ESG ETFs
can focus on companies with high
ESG ratings. Some screen out
certain ‘controversial’ industries,
and others may focus on certain
themes, such as climate transition
or diversity & inclusion.

Green Sukuk
Green and sustainability sukuk
enables countries and companies
to access finance in a mannerconsistent with their faith andvalues. Linked to assets that may
be eligible for green and social
projects, they may become vital
tools to fund the UN Sustainable
Development Goals and the justtransition to net-zero.
Issuer Services
Issuer Services supports ourissuers to effectively communicate
their story to millions of investors
on www.lseg.com as well as
access data, know-how andservices. As climate andsustainability become core tocorporate narratives, public
disclosures and access to capital,
we have added a wide range ofrelated services. Issuers canaccess FTSE Russell and Refinitiv
ESG and Climate-related data andbenchmarking tools; educational
resources on areas such as
TCFD reporting – guidance that
LSEG pioneered with the
UN Sustainable Stock Exchange
Initiative, and access tosustainability support services
from leading providers.

Demand for low-carbon products andservices has increased as climatechange becomes a key strategic
priority for businesses industry wide.

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

Products and services continued

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Sustainability
governance

Policiesand standards

Financial planningand sensitivity
analysis

Our sustainability approach isunderpinned by a series ofpolicies and standards which
apply globally across LSEG.
Our Sustainability Policy sets out
the requirements for LSEG toensure it manages its sustainability
performance effectively. The
policy is approved by the LSEG
Board and is supported by several
issue specific standards such asenvironmental management andsupplier code of conduct. The
policies ensure we effectively
manage relevant environmental,social and governance issues.

We have made progress overthe course of 2022 to develop
capabilities and build robust
assessment frameworks andoperational models to deliveron our objectives, as well as
understanding risks andopportunities presented to us
as we transition to a low-carbon
world. Moving forward, our plan
is to build on this work andto integrate analysis andassessments into businessplanning and strategy
considerations, along withappropriate sensitivity analysis
to show the impact of criticalassumptions on our forward plan.

More information can be found here.

18

Metrics
and targets

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Actioning
our plan:engagement
strategy

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governanceEngagement and collaboration
is a critical component oftransition activity, at botha local and global level.
We’re engaging with our
suppliers at an operational
level, and peers and policymakers at a global level,
enabling an economy-widechange in behaviour andexpectations.

In this section
Engagement with value chain
More information can be foundon page 20

Engagement with industry
More information can be foundon page 21

19

London Stock Exchange Group plc
Climate Report 2022

Engagement with government,
public sector and civil society
More information can be foundon page 21

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governanceEngagement with value chain

The majority of LSEG’s
greenhouse gas emissions arise
from Scope 3 purchased goods
and services, demonstrating
how critical engagement with
our suppliers is to the overall
reduction of our emissions.
Our Climate Transition Planpublished in 2022 introduced the
supply chain glidepath and overthe last year, we have created afirm foundation for engagementwith our diverse supply chain.
We have set a target whichaims to ensure that suppliers
responsible for 67% of our Scope
3 emissions (purchased goods
and services) set their own
science-based targets by 2026.
In 2022, we launched ourSupplier Engagement Programmewith three key focus areas:— Data analysis;— Initial supplier engagement;— Training.

Data analysis
We have worked with an external
consulting company to analyse
5,000 suppliers which resulted
in a segmentation based ona sustainability tiering. The
segmentation considered factors
such as publicly available
sustainability reports, the maturityof our relationship and future
strategy as a supplier for LSEG.
We have applied this evaluation
to create a tailored engagement
approach for each supplier.
LSEG sustainability specialists
and Group Procurement Category
Managers will engage acrossour supply chain to discuss
their sustainability ambition andspecific next steps with regards
to science-based targets with the
suppliers in scope.
We continue to make progresson the design of a comprehensive
dashboard, which is expected to
be operational as we move into
2023, allowing us to track how our
suppliers are progressing against
targets and informing an holistic
supplier engagement approach.

Initial supplier engagement
In 2022, our Supplier Code of
Conduct was strengthened tobetter reflect our sustainabilityrelated ambitions, a policy
which all suppliers are required
to adhere to.

Training
LSEG’s procurement team is
focused on collaboration, learningand growth, to ensure it isequipped with relevant expertiseto anticipate and respond to therapidly changing environment.

A subset of our key vendors(by emissions) were engaged
which allowed us to gather
insights, verify data and ensure
we provide appropriate support
and communications in line with
our partner requirements. The
conversations were consolidated
into this exercise and the outcome
has allowed us to consider andshape further planning for how
we engage in 2023. Where
our supplier services may bechanging in line with Groupstrategy, we have been able
to incorporate this into ourforecasts for emissions andprovide guidance to the category
managers on the most suitableapproach for the individual
suppliers. Sustainability is
becoming a key evaluation
metric alongside our strategy
and commercial considerations.

We have facilitated learning
through one-to-one and formal
knowledge sharing sessions.
In 2022, our Group Procurement
Category Managers and Vendor
Managers attended a series ofinteractive sessions introducing
sustainability and net zero. The
final session consisted of carbon
knowledge training, covering
how this applies to LSEG andto those within our supply chain.

For the suppliers who arein the preliminary stages ofdeveloping their own sustainability
strategy, we will provide
enhanced support, sharing
our own vision and sustainability
goals and ambitions, as well aspractical assistance to support
their sustainability approach.

Suppliers (by emissions) to set science-based targets
to reduce their own emissions by 2026

67%
20

London Stock Exchange Group plc
Climate Report 2022

We have also developed atoolkit for Category and Vendor
Managers as they kick off formal
engagement plans in 2023.

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Engagement with industry

Engagement with government,
public sector and civil society

Glasgow Financial Alliancefor Net Zero (GFANZ)
GFANZ was launched in April
2021 by Mark Carney (UN Special
Envoy on Climate Action and
Finance) and the COP26
presidency. It is the world’s largest
coalition of financial institutions
and is committed to transitioning
the global economy to net-zerogreenhouse gas emissions toachieve the objective of theParis Agreement to limit global
temperature increases to 1.5°C
from pre-industrial levels.
As a founding member, LSEG
plays an active role in GFANZ
workstreams and the LSEG CEO,David Schwimmer, is a memberof the GFANZ Principals Group,
which sets the strategic direction
and priorities of the alliance andmonitors progress.

This year we published LSEG’s
policy recommendations forsustainability disclosure to help
mobilise capital needed toaccelerate the transition to
net zero and grow the green
economy. This calls for economywide mandatory disclosure ofclimate risk and opportunity(in line with TCFD) for privateand listed companies. The paper
also recommends mandatory
disclosure of revenues derived
from green solutions, and climatetransition plans.

Net Zero Financial Service
Providers Alliance (NZFSPA)
The NZSPA is a sector-specificalliance under the GFANZ
umbrella which encompasses
a global group of financial service
providers committed to supporting
the goal of net zero in line withthe ambition to limit the global
temperature increase to 1.5°C
from pre-industrial levels. As adiversified financial market
infrastructure provider, theGroup’s engagement in the
NZFSPA is coordinated acrossseveral workstreams, with an
overarching commitment toaligning all relevant products andservices to net zero by 2050.

Read more about our climate
disclosure policy recommendations.

Climate Investment Summit
In 2022, we hosted the Climate
Investment Summit in our London
headquarters which brought
together key members of the
Climate Investment Coalition,a group of 41 Nordic and UK
pension funds which set out theirown climate commitments at
COP26 involving allocating USD$130bn to clean energy andclimate investments by 2030.

$130bnSustainability
governance

UN Sustainable Stock
Exchanges initiative (UN SSE)
LSEG has been a member of the
UN SSE since 2014. The SSE
initiative is a UN Partnership
Programme organised by
UNCTAD, the UN Global Compact,
UNEP FI and the Principles for
Responsible Investment. The
SSE’s mission is to provide a
global platform for exploring
how exchanges, in collaboration
with investors, companies(issuers), regulators, policymakers
and relevant internationalorganisations, can enhance
performance on ESG issues
and encourage sustainable
investment, including thefinancing of the UN Sustainable
Development Goals. The SSE
seeks to achieve this mission
through an integrated programmeof evidence-based policy analysis,
facilitating a network and forum
for multi-stakeholder consensusbuilding, and providing technicalassistance and advisory services.

Climate Investment Coalition investments by 2030 in USD

We published LSEG’s policy recommendations
for climate disclosure to help mobilise capitalneeded to accelerate the transition to net zeroand grow the green economy.

21

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governanceEngagement with government,
public sector and civil society continued

Green Technical Advisory
Group (GTAG)
LSEG is a member of GTAG
which is the technical expert
group advising the UK
Government on the developmentof its green taxonomy. It advises
on market, regulatory andscientific considerations fordeveloping and implementing a
UK taxonomy which facilitates
more informed investment
decisions. The taxonomy will
be a common framework defining
what investments can be classed
as environmentally sustainable.
This will help tackle potential
greenwashing, improveunderstanding of environmental
impact to help companies andinvestors make informed choices,support investment in sustainableprojects and boost efforts totackle climate change.

22

The Climate Financial
Risk Forum
Launched in 2019 the Climate
Financial Risk Forum (CFRF)
is an industry forum convenedby the PRA and FCA. The CFRF
aims to build capacity, share bestpractice and develop practical
tools and approaches to address
climate-related financial risks.
The Forum is chaired by the
Bank of England and LSEG
is represented on the CFRF
alongside banks, insurers, asset
managers and pension funds.
UK Voluntary Carbon
Market Forum
LSEG is represented on the
UK Voluntary Carbon Markets(VCM) Forum which wasestablished in 2021 to convene
the considerable expertise of
UK organisations across the
VCM and financial markets, in
support of operationalising therecommendations of the global
Taskforce for Scaling Voluntary
Carbon Markets (TSVCM) andto ensure that the UK remains
a global hub for the VCM. The
Forum seeks to ensure a highintegrity market ecosystem thataims to develop verifiable,
and effective offset solutions.
The Forum is chaired by Dame
Clara Furse, with the City of
London Corporation providing
secretariat support.

High-Level Working Group on
Green Sukuk
LSEG is a founding member ofHigh-Level Working Group (HLWG)
on Green and Sustainability Sukukwith HM Treasury, the Islamic
Development Bank, the Republicof Indonesia and the Global
Ethical Finance Initiative todevelop and promote green
and sustainable sukuk throughour markets and data, allowing
governments, multilateralagencies and companies toaccess finance in a mannerconsistent with their faith andvalues. In 2022, the HLWG
launched its first report, whichfinds that despite the increasein the issuance of green andsustainability sukuk, there is scopefor greater capacity building
across issuers, investors andprofessional services to scale themarket to serve the Islamic world.
Net Zero Delivery Summit
LSEG initiated, co-created andco-sponsored the Net Zero
Delivery Summit, hosted by
City of London Corporation at
Mansion House in May, whichmarked the mid-point between
COP26 and COP27.
The summit was attended
by senior representatives
from business, finance andgovernment, focused on moving
the climate transition fromambition to action.

London Stock Exchange Group plc
Climate Report 2022

Transition Plan Taskforce
The UK Transition Plan Taskforce(TPT) was launched by HM
Treasury in April 2022 to develop
the gold standard for private
sector climate transition plansin the UK. The TPT’s work will
help to drive decarbonisation by
ensuring that financial institutions
and companies prepare rigoroustransition plans which enableorganisations to achieve netzero targets.
In addition, the UK Government
and the Financial Conduct
Authority will draw on the
TPT’s outputs to strengthen
disclosure requirements acrossthe UK economy. LSEG is
proactive in driving the TPT
through our involvement on theSteering Group as well as the
Delivery Group.

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governanceEngagement with government,
public sector and civil society continued

UK Green Finance Institute
LSEG is an active member of
the Green Finance Institute.
The purpose of the Instituteis to bring together the UK’s
existing capabilities, create
new business opportunities
and communicate to the wider
market what London’s offer is ingreen finance and insurance.
UN Climate Data Utility
In 2022, LSEG joined the
Climate Data Steering Committee,
which in September, unveiled
recommendations on the designof a new open-data utility, theNet-Zero Data Public Utility.
The utility will address data gaps,
inconsistencies, and inaccessibility
that slow climate action by making
the data openly available to all.
ESG Data and Ratings Codeof Conduct Working GroupAs financial services firms
integrate ESG into their activities
and expand their ESG focused
products, they are increasingly
reliant on third-party ESG data
and ratings services. There isa critical need for ESG data andratings to be transparent andreliable to ensure their usability
such that preparers and users canbetter understand and apply them.
LSEG is a member of a working
group convened by the FCA todevelop a voluntary code of
conduct for the ESG data industry.

23

Transition Pathway Initiative
We support the work of theTransition Pathway Initiative(TPI) which assesses theclimate transition plans of large
corporations. FTSE Russell
provides the data which creates
the TPI climate management
quality score and the LSEG
Foundation provided a donation
to establish the TPI Global
Climate Transition Centre within
the London School of Economics
and Political Science. This fundingis helping to scale TPI research
to cover thousands of companies
around the world.

In 2022, LSEG joined the Climate Data Steering
Committee, which in September, unveiled
recommendations on the design of a new
open-data utility, the Net-Zero Data Public Utility.

Emissions Trading
Scheme design
Our Carbon Research analysts
have been contributing to theEmission Trading Scheme
set up in EU, suggesting themost efficient strategies forpolicymakers to curb emissions.
The team’s inhouse EU ETSmodelling tool has been used by
the European Commission in theassessment of climate policies.
Transferring its expertise, the teamhas also been invited to adviseon the creating of China’s ETS.
Since 2021, the team has
contributed to the annual China
Energy Transformation Outlook
report by Energy ResearchInstitute of National Development
and Reform Commission, a major
publication on China’s energy
transition pathway.

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Climate risk
management

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governance

Understanding climate-relatedrisks and opportunities that
may impact LSEG, is essential
to the effective managementof our business.

In this section
Physical climate risk assessment
More information can be foundon page 25

Transitional climate
risk assessment
More information can be foundon page 25

Processes for identifying andassessing climate-related risks
More information can be foundon page 26
24

London Stock Exchange Group plc
Climate Report 2022

Processes for managing
climate-related risks
More information can be foundon page 26

Integration of climate-relatedrisks into overall risk
management
More information can be foundon page 27

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governancePhysical climate risk assessment

Transitional climate risk assessment

Our previous TCFD report
describes the scenarios to assess
the potential impacts of climaterelated risks and opportunities
and developed impact pathways
to help us establish the causal
links between changes in climate
and weather patterns, related
national and global policies andthe impacts on the business.

Products and services
We believe sustainability is core
to our growth ambition, in linewith our strategic objective
to be a strategic enabler ofsustainable economic growth.

We continue to build capability
in this area, and over the courseof 2022 we developed our own
assessment modelling capability.
We are evaluating emissions fromour property portfolio utilising thegross floor area of our buildings to
represent our footprint. This effort
is being trialled, and we plan toexpand this to allow us to makeinformed decisions on capital
allocation and project selection,
to efficiently align efforts with
our net zero target and ambition.
Building on our initial work on
physical climate risk assessment,
we continue to carry out extensive
reviews of our property portfolio,
including the initiation of detailed
environmental assessments of ourproperty locations, work which willcontinue in 2023, and will feed
into our mitigation response
across our portfolio.

This will involve a review of ourentire property portfolio at acountry and regional level, toidentify areas of higher risk
for incidents, such as floods,
wildfires, wind, earthquakes andhurricanes. This work will lookat the potential severity andfrequency of climate-related
perils, and for regions andcountries where there is asignificant risk, a thoroughsite assessment will be
undertaken to understand thespecific site risk and appropriate
mitigation activities.
Building on our longer-term
global exposure analysis, which
considers exposure level andranks locations based on risk
levels identified, we plan to
conduct a portfolio level analysisof exposure to natural hazards
and climate change. This will
use specific climate scenarios
over discrete time horizons,and alongside risk, we willconsider our exposure level,
hazards and controls such as
critical equipment location.

We have worked extensively
across our business, and withour customers, to develop
products and services to meetmarket needs. To this end, we
have conducted a thoroughreview of the sustainable financeand investment market landscapeto identify future market needs
and opportunities for LSEG.
This work will help to shape
the future development ofour products and services.

Operational transitionalrisk assessment
We have made progress indeveloping divisional-level carbon
emission reporting, allowing thebusiness to develop a granular
view of travel carbon emissions.
In 2023, we aim to develop ourreporting capability, which willallow us to review the potential
allocation of departmental carbon
budgets ahead of the potential
application of an internal carbon
pricing strategy.
Regulatory environment
LSEG monitors the evolutionof regulatory regimes in thejurisdictions in which we operate.
We engage with a range of
relevant stakeholders tounderstand the potential impactsof climate-related policy andregulation on our business.

We have made significant progressin developing divisional-level carbon
emission reporting, allowing the businessto develop a granular view of travel-related
carbon emissions.

25

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Processes for
identifying and assessing
climate-related risks

Processes for managing
climate-related risks

Climate and other sustainabilityrelated risks and opportunities
are embedded within our risktaxonomy and our enterpriserisk management framework.
All business functions within
the Group are responsible for
identifying risks for inclusion in
LSEG’s risk register and these
may be sustainability-related,
including climate risks. Risks andopportunities with a potentiallysubstantial impact will be raised
and factored into businessstrategy and operations. Principal
risks are those considered to havethe highest potential financial or
strategic impact and are defined
based on magnitude of financial
costs to the Group, as well as
reputational impact.

Responsibility for management,
mitigation and adaptation ofclimate-related risks rests withthe business units and corporate
functions. This process is
supported by the Group Risk
function and by the governancegroups which provide oversight,
independent assessment and,as appropriate, challenge backto the business.

26

London Stock Exchange Group plc
Climate Report 2022

Sustainability
governance

LSEG’s risk appetite is cascaded
through each business unit andcorporate function, ensuring thatrisk limits are set and managed
appropriately. The uncertainty ofmany aspects of climate changemeans we need to have an
adaptive risk approach to monitor,
prepare for and minimise LSEG’s
exposure to climate risks. Our
approach for sustainability risk
is aligned with our existing risk
process for non-financial risks. We
recognise that residual risks could
always be present due to climate
uncertainty, thus ongoing climate
risk monitoring through scenario
analysis will be essential as theclimate changes, to allow for acontinually adaptive response.

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Integration of climate-related risks
into overall risk management

Sustainability risks, including thoserelated to climate are incorporated
into risk-management processes
and procedures such as thosewithin the Enterprise Risk
Management Framework (ERMF),
with key sustainability risks
featuring in the Risk Taxonomy
at a strategic level. The Group
Risk function is represented atevery level of our sustainability
governance structure.

27

We continue to enhance oursustainability-related risk
management. In 2022, we
reviewed the Group’s risktaxonomy, and we reviewed
roles and responsibilities forsustainability risk. This will
ensure consistency andenhance management ofsustainability-related risks.

Looking ahead, we will continue
to integrate climate risk into ourrisk management frameworks
and will enhance our use of
scenarios to inform future strategic
decisions. This will help us withdecisions related to our property
footprint and the development of
products and services, which will
inform our financial planning andstrategic decision-making for the
medium to long term.

London Stock Exchange Group plc
Climate Report 2022

Metrics
and targets

Sustainability
governanceIntroduction

Marketdevelopments

LSEG’s climate
ambition

Metrics
and targets

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governance

We have set science-basedtargets to reduce ouremissions by 2030.

In this section
Governance, business andoperational metrics and targets
More information can be foundon page 29

Business and operational metrics
More information can be foundon page 29

28

London Stock Exchange Group plc
Climate Report 2022

GHG emissions metrics
More information can be foundon page 29

Carbon credits
More information can be foundon page 30

Introduction

Marketdevelopments

Business and operational
metrics and targets
We published our first Climate
Transition Plan in March 2022,
setting out how we aim to achieve
our targets which are approved
by SBTi (Science-Based Target
initiative) against a 1.5°C trajectory.

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

The LSEG Board approved thesetargets and the Climate Transition
Plan. At the LSEG AGM in April, we
invited our shareholders to voteon our Climate Transition Plan,
and we received 98.6% support.

Targets
Carbon reduction
Halve our Scope 1, Scope 2 andScope 3 emissions (fuel andenergy-related activities, businesstravel and employee commuting)against a 2019 baseline by 2030.

Supplier engagement
Engage with suppliers responsiblefor 67% of our Scope 3 emissions(purchased goods and services) to
set science-based targets by 2026.

Ambition
Our long-term ambition is to achieve
net-zero by 2040.

Reduction by 2030

-50%

Scope 3 emissions (purchased
goods and services) to be coveredby science-based targets by 2026

67%

Emissions by 2040

Net-zero

GHG emissions metrics
Read more about ouremissions metrics here.

29

London Stock Exchange Group plc
Climate Report 2022

Metrics
and targets

Sustainability
governanceIntroduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governance

Carbon credits

LSEG recognises that carbon
offsets – however credible –do not replace the urgent needto reduce emissions along a
trajectory aligned with climate
science. Reducing our emissions
is the primary focus of ourdecarbonisation strategy.
Nevertheless, on the road to
net zero, we also recognise theneed to take responsibility today
for the emissions that we are
generating in our day-to-day
activities. Quality certified offset
projects are a vital way for us to
support nature-based solutions
and take responsibility for ouremissions now as we work to ournear-term science-based targets
and long-term net-zero ambition.
Our action in 2022
LSEG is a certified CarbonNeutral®
company in accordance with
The CarbonNeutral Protocol,
the leading global framework
for carbon neutrality. This means
we have offset our emissions fromScope 1, Scope 2 and Scope 3(business travel).
In order to source high quality
carbon offsets, we have worked
with leading experts in thevoluntary carbon market,
Climate Impact Partners, toensure that all the projects
we support, are at a minimum:— Verified to industry recognised
carbon-crediting programmes,
such as the Verified Carbon
Standard (VCS) andGold Standard.
— Support a robust and credible
approach which aligns with
the Carbon Neutral® Protocol.
— Considerate of the impacts inthe communities and locations
we operate, ensuring thatthose most impacted byclimate change on the
ground see the benefits.

Projects we support
Previously LSEG has achieved
carbon neutrality by investing inoffsets that primarily avoid or
reduce emissions. In 2022, ourcarbon offset portfolio included
a mixture of both carbon removal
and carbon avoidance projects.
It is imperative that we support
carbon removal projects while
also protecting existing carbon
sinks through avoided emissions,for example conserving existing
forests and grasslands. Some ofthe projects supported in 2022
are summarised in this section.
Looking ahead
In addition to maintaining our
status as a carbon neutralcompany, we will continue
exploring options for removals
to support us in our path tonet zero – we aim for 100% of
unavoidable emissions to be
neutralised with an equivalentamount of high-quality carbon
removals by 2040. In 2023, we
will also be exploring how we canutilise LSEG’s Voluntary Carbon
Market to offset our residual or
unavoidable emissions on our
net-zero journey.

Project
Three Rivers
Grassland
Restoration
Type
Carbon offset:
Removals |Nature-based
solution |Grasslands
Location
China
Standard(s)VCS, CCB

Project
Mississippi Valley
Type
Carbon offset:
Removals |Nature-based
Solutions |Afforestation and
Reforestation
Location
USA
Standard(s)ACR

30

Description
The plateau region of the Yangtze, Yellow and
Lancang Rivers, also known as the Three Rivers,
has suffered grassland degradation over the pastfew decades due to overgrazing and warming.
Thriving grasslands are important for stabilising soils
and slowing the snowmelt from nearby mountains.
The project removes carbon from the atmosphereby restoring the plateau’s degraded grasslands.
Located in the central Chinese province of Qinghai,
this project is restoring over 160,000 hectares ofdegraded grasslands by seeding three species ofnative grass.

Description
The project aims to reforest one million acres of theLower Mississippi Alluvial Valley, an area which wasonce covered by 22 million acres of dense forest.
As a result of sustained deforestation andagricultural land use conversion over the last
50 years, less than 20% of this forest remains.
Landowners who voluntarily enrol in the projectcommit to planting and protecting trees, reducing
an estimated 200 tonnes CO2 equivalent per acre.
The project creates revenue for participants, brings
jobs to the area, and enhances local water quality
and biodiversity.

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Sustainability
governance

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governanceStrong oversight andgovernance is an essential
component of how we execute
our sustainability strategy.

In this section
Board oversight and reporting

Incentives and remuneration

More information can be foundon page 32

More information can be foundon page 33

Roles, responsibilities
and accountability

Skills, competencies and training

More information can be foundon page 32

CultureMore information can be foundon page 33

31

London Stock Exchange Group plc
Climate Report 2022

More information can be foundon page 34

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governance

Board oversightand reporting

Roles, responsibilities
and accountability

The LSEG Board has ultimate
oversight of the organisation’ssustainability strategy, including its
management of climate-relatedrisks and opportunities, ensuring
the long-term success of theCompany and that stakeholders’expectations are understoodand met. Sustainability, including
climate, is considered by the
Board at least twice a year. Topics
covered will vary but include
both our sustainable finance andinvestment products and services
as well as our progress against
our near-term science-basedtargets across our operations andsupply chain. In 2022, the Board
discussed sustainability on three
separate occasions.

Group

Responsibility

Chair

Executive
Committee

This Committee is responsible for setting the strategic ambition
for the Group regarding sustainability and has overall
accountability for LSEG’s sustainability strategy andperformance, including climate-related performance.

Group Chief Executive

Executive
Risk Committee

This Committee is responsible for the Group’s overall approach
to risk, defining risk management processes, policy frameworks,
and defining the Group risk appetite for Board approval. This
includes sustainability-related risks, including those posed byclimate change.

Group Chief Risk Officer

Group
Sustainability
Committee

This Committee reports to the Executive Committee and ischaired by the Chief Corporate Affairs and Marketing Officer.
It oversees and directs the Group’s sustainability strategy andprogramme and it helps coordinate the work undertaken
across the Group to ensure the Group’s sustainability objectives
are achieved. The oversight of our climate targets sits with theGroup Sustainability Committee.

Chief Corporate Affairs
and Marketing Officer

Climate Transition
Steering
Committee

The Climate Transition Steering Committee is responsible forproviding strategic direction on the Group’s climate strategy
and monitoring progress against targets, and it reports to theGroup Sustainability Committee.

Group Head of
Sustainability andGroup Head ofOperations

The Group
Risk function

Risk is represented in every tier of our sustainability governancestructure, which ensures that risks and opportunities identified
in these forums are duly assessed for their relevance andmateriality in a timely manner. Sustainability-related risks andopportunities, including those arising from climate change,
are embedded within our risk taxonomy and Enterprise Risk
Management Framework (ERMF). In addition, Risk and Control
Owners have direct access to the Sustainability Risk team andare provided with a dedicated climate and sustainability-risktraining pack, updated at least annually and available within
the risk register database for reference and support.

Group Chief Risk Officer

Group
Sustainability
team

The Group Sustainability team are responsible for defining
and shaping the Group’s sustainability strategy, and working
with a wide range of stakeholders to deliver on the Group’s
ambition. The team is also responsible for the Group’s climate
strategy, including the Climate Transition Plan, ensuring that wecontribute to the acceleration of the transition to net zero. Other
functions involved in the day-to-day operational managementof climate-related activities include the property team, the travel
team and the procurement team.

Group Head of
Sustainability

Business divisions
and corporate
functions

One of the Group’s six strategic objectives for 2022 wassustainability and this continues to be the case in 2023.
This means that all business divisions and corporate functions
must adopt an appropriate divisional strategic objective
on sustainability.

The Board Risk Committee has
oversight of the Group’s Risk
Framework and risk appetite.
Sustainability risks, including,those related to climate change,
are embedded in and raised
through this forum. In 2022,
the Board Risk Committee held
a session on sustainability risk
and the Audit Committee held asession on regulatory reporting
requirements relating to climate.

32

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governance

CultureIncentives andremuneration

Sustainability is explicit in LSEG’s
purpose, and is one of our six
Group Strategic Objectives,
which is reflected in our culture,
leadership behaviours andincreasingly our employee
experience. For example, it isreflected in our employee
benefits, such as sustainablepension fund options, personalcarbon offsetting, and electric
car and bicycle subsidy schemes.
In our workplaces and facilities,
this means adopting
environmental practices toreduce our footprint. This isfurther demonstrated in how wework with customers, suppliers
and the wider market to promotesustainable finance solutions.

The link between sustainability
performance and executive
pay is an important issue forshareholders. We reward highperformance that leads tobusiness sustainability, as wellas linking incentives for Executive
Directors to sustainability
performance. Variable pay for
all employees is linked to thedelivery of our Group Strategic
Objectives, one of which commits
LSEG to being a strategic enablerof sustainable growth.

33

London Stock Exchange Group plc
Climate Report 2022

Introduction

Marketdevelopments

LSEG’s climate
ambition

Implementation
strategy

Engagement
strategy

Climate risk
management

Metrics
and targets

Sustainability
governance

Skills, competencies and training

Our climate ambition requires
appropriate expertise in LSEG
to deliver across a range ofdifferent factors. This includes ouroperational targets as well as ourrole within financial markets. This
is why we are working across thebusiness to ensure our people are
adequately skilled and understandthe importance of sustainability
within their daily roles.
Our Group Sustainability teamengages across the businessto support the delivery of ourclimate ambition.
In 2022, the team worked in
key areas of the business toraise awareness of the strategy
through presentations at town
halls, team meetings, divisional
offsites and at large-scale internal
events. We have also taken a firststep to understand employee
sentiment on sustainability, witha specific question in our global
employee survey. This information
will support our engagement andeducation approach in 2023
as we roll out formalised
learning programmes.

34

Sustainability-related training
will be tailored to individual
business functions and will be
integral in ensuring all employees
are equipped to deliver on our
ambition. Underpinning thislearning will be an increasein communications tools andchannels for all employees acrossthe business to better understand
LSEG’s role, strategy, and market
position on sustainable growth.
Our governance structure ensuresappropriate oversight, challenge
and approval of sustainability andclimate-related decisions andreporting. The effectiveness of
our governance committees
is bolstered with briefings onsustainability topics delivered to
the Board, Executive Committee
and other senior leaders acrossthe business. Group Sustainability
is working with the Company
Secretary and our Learning teamto create and deliver a learning
plan that covers all relevantinternal audiences, including ourgovernance groups. The learning
plan will incorporate sustainability
topics relevant to roles as well as
key risks for both the businessand industry.

Our Group Sustainability team engages
across the business to support the deliveryof our climate ambition.

Sustainability-related training will be tailored
to individual business functions and will be
integral in ensuring all employees are equipped
to deliver on our ambition.

London Stock Exchange Group plc
Climate Report 2022

LONDON STOCK EXCHANGE GROUP PLC
GROUP CLIMATE REPORT 2022

For more information
please visit our website
www.lseg.com or email
sustainability@lseg.com

London Stock Exchange Group plc
10 Paternoster Square
London EC4M 7LS
Telephone +44 (0)20 7797 1000