Task Force
Climate-Related
Financial Disclosures(TCFD) Report 2021
London Stock Exchange Group plc
Task Force Climate-Related Financial Disclosures (TCFD) Report 2021

CONTENTS

Contents2

Our Group

3

About TCFD

5

TCFD Recommendations

7

LSEG and TCFD

82021 Approach and Evolution of TCFD

9

LSEG’s Climate Targets

10

TCFD Disclosures

11

Governance

12Strategy

15

Risk Management

26

Metrics and Targets

28

Next Steps and Action

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TASK FORCE CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) REPORT 2021

Our GroupWho we are

Our purpose

LSEG is a leading global financial
markets infrastructure and data
provider. We play a vital socialand economic role in the world’s
financial system. With our trusted
expertise and global scale, weenable the sustainable growthand stability of our customers andtheir communities.

Driving financial stability, empowering
economies and enabling customers to create
sustainable growth.

We are leaders in data andanalytics, capital formation andtrade execution, and clearing andrisk management.

Our vision
We are a leading global financial markets
infrastructure and data provider. We want toshape the future of our industry to serve ourcustomers and markets better.

Where we operate
LSEG is headquartered in the United Kingdom,with operations in 70 countries across EMEA,
North America, Latin America and Asia Pacific.
We employ 23,000 people globally, more thanhalf of whom are located in Asia Pacific.

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Overview of Group activities
Our diversified business is built on an Open Model approach – identifying opportunities and creating value
for financial markets across the globe in three main areas:

Data & Analytics
Provides high-value data, indices, workflow
solutions and data management capabilities.
The Division is split into five areas to address
the needs of customers:– Trading & Banking solutions– Enterprise Data solutions– Investment solutions– Wealth Management solutions– Customer & Third-Party Risk solutions

4

Capital Markets

Post Trade

Provides businesses with access to capitalthrough issuance and offers secondary market
trading for equities, fixed income and Forex.

Provides clearing, risk management, capital
optimisation, and regulatory reporting solutions.

The Division is split into three areas by asset
class:– Equity– Forex– Fixed Income, Derivatives and OtherTASK FORCE CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) REPORT 2021

This Division is split into four areas by type ofbusiness and income:– Over-the-counter (OTC)– Securities & Reporting– Non-cash Collateral– Net Treasury Income

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About TCFD
The Task Force on Climate-Related Financial Disclosures(TCFD) was created by the Financial Stability Board in
December 2015 to improve and increase reporting ofclimate-related financial information.
The aim of more effective climate-related disclosures is to enable more
informed investment, credit, and insurance-underwriting decisions and, inturn, enable stakeholders to understand the concentrations of carbon-related
assets in the financial sector and the financial system’s exposures toclimate-related risks.
The TCFD published its original climate-related financial disclosure
recommendations in 2017. These recommendations are designed to help
companies provide better information to support informed capital allocation.
The recommendations apply to all organisations across all sectors
and jurisdictions. The disclosure recommendations are structured in fourthematic areas that represent the core elements of how an organisation
operates: governance, strategy, risk, and metrics and targets.

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Climate-related risks and opportunities
The Task Force identifies several categories of climate-related risks and opportunities that may give rise to financial impacts on revenues, expenditures, assets andliabilities, and capital and financing.
Risks
Transition

Opportunities

Policy and Legal– Carbon pricing andreporting obligations– Mandates on and regulation ofexisting products and services– Exposure to litigation

Strategic Planning Risk Management

Technology– Substitution of existing products
and services with lower emissions
options– Unsuccessful investment in newtechnologies
MarketFinancial Impact

IncomeStatement

Cash Flow
Statement

Balance
Sheet– Changing customer behaviour– Uncertainty in market signals– Increased cost of raw materials

Resource
Efficiency– Use of more efficient modes oftransport and production anddistribution processes– Use of recycling– Move to more efficient buildings– Reduced water usage
and consumption

EnergySource– Use of lower-emission sourcesof energy– Use of supportive policy incentives– Use of new technologies– Participation in carbon market

Products
andServices– Development and/or expansion of
low emission goods and services– Development of climate adaption
and insurance risk solutions– Development of new products
or services through R&D andinnovation

Markets– Access to new markets– Use of public-sector incentives– Access to new assets and locations
needing insurance coverage

Resilience– Participation in renewable energy
programs and adoption ofenergy-efficiency measures– Resource substitutes/diversification

Reputation– Shift in consumer preferences– Increased stakeholder concern/
negative feedback– Stigmatisation of sector
Physicial

REVENUES– Acute: Extreme weather events– Chronic: Changing weather
patterns and rising mean
temperature and sea levels

Source: TCFD_Booklet_FNL_Digital_March-2021.pdf
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EXPENDITURESASSETSAND
LIABILITIESCAPITALAND
FINANCING

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TCFD Recommendations
Governance

Strategy

Risk Management

Metrics and Targets

Disclose the organisation’s
governance around climate-related risks
and opportunities.

Disclose the actual and potential impactsof climate-related risks and opportunities
on the organisation’s businesses, strategy,
and financial planning where suchinformation is material.

Disclose how the organisation identifies,
assesses and manages climate-related risks.

Disclose the metrics and targets used toassess and manage relevant
climate-related risks and opportunities
where such information is material.

Recommended Disclosuresa) D escribe the board’s oversight ofclimate-related risks and opportunities.

a) Describe the climate-related risks
and opportunities the organisation
has identified in the short, medium
and long term.

a) D escribe the organisation’s
processes for identifying andassessing climate-related risks.

a) Disclose the metrics used by theorganisation to assess climate-related risks
and opportunities in line with its strategy
and risk-management process.

b) D escribe management’s role inassessing and managing climate-relatedrisks and opportunities.

b) Describe the impact of climaterelated risks and opportunities on theorganisation’s businesses, strategy
and financial planning.

b) Describe the organisation’s processes for
managing climate-related risks.

b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas(GHG) emissions, and related risks.

c) Describe the resilience of theorganisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C-or-lower
scenario.

c) D escribe how processes for identifying,assessing, and managing climate-relatedrisks are integrated into the organisation’s
overall risk management.

c) Describe the targets used by theorganisation to manage climate-relatedrisks, opportunities and performanceagainst targets.

Source: FINAL-2017-TCFD-Report.pdf

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LSEG and TCFD
Sustainability is a key priority for
LSEG as we aim to be a strategic
enabler of sustainable economic
growth.
Using our unique position at the centre offinancial markets, we help to enable the transition
to a low-carbon sustainable economy. This iscore to our sustainability strategy.
We are committed to improving transparency
and understanding of environmental, social andfinancial risks associated with the transition to aeconomy.
We do this by providing clear, comparable
and comprehensive data, analytical tools andresearch to inform investment decisions,deeper engagement between companies andinvestors, and market-wide collaboration.

8

We also promote the development and adoptionof global disclosure standards on climate risk andsustainability more broadly; we were membersof the EU High Level Expert Group and theTechnical Expert Group on Sustainable Finance,
shaping consistent disclosure standards. We aremembers of the FCA/PRA Climate Financial Risk
Forum and the Green Technical Advisory Group(GTAG) advising the UK Government on green
taxonomy.
LSEG has been a supporter of TCFD since its
launch in 2017 and has disclosed climate change
as an emerging risk in both our annual andsustainability reports since 2019. We disclose
information on our greenhouse gas (GHG)
emissions, our emission-reduction targets andhow we plan to achieve these (see our Climate
Transition Plan).

TASK FORCE CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) REPORT 2021

In this TCFD report, we disclose how we expect
climate change, and the transition to a
low-carbon economy, to impact our business inthe near to long-term future. We will continue
to evolve and enhance our management anddisclosure of climate-related risks, aligned with
TCFD’s recommendations.
We also submit our environmental progress
through various disclosure frameworks,
including our annual CDP climate disclosure
where we have achieved an A- for six
consecutive years.

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2021 Approach and Evolution of TCFD
Since the publication of our last TCFD report,
LSEG completed its acquisition of Refinitiv.
This report reflects our first steps in incorporating
the new business into our analysis, using the TCFD
recommendations to outline our approachand activities.

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We have developed and enhanced our models for both physical andtransition risks to reflect the newly combined organisation, in line withincreased disclosure requirements for corporations and financial market
participants. Going forward, we will evolve and enhance our approach,including the use of additional scenarios that are appropriate for our businessand address both physical and transition risks. We will also enhance ourdisclosure of financial impacts associated with climate-related risks.
The aim is to reinforce the Group’s resilience to physical risks today andin the future; to address transition risks and opportunities; to meet existingmandatory reporting requirements and prepare for future ones; and to protect
the Group’s reputation.

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LSEG’s Climate Targets
In January 2021, LSEG joined the United Nations Climate
Change ‘Race to Zero’, thereby becoming the first global
exchange group to commit to net zero. We aim to halve
our carbon emissions by 2030, against a 2019 baseline,
and will work towards net zero by 2040. We have set
science-based targets (SBTi) aligned to 1.5°C.

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Having combined the targets of the heritage organisations, we have set newscience-based targets covering the whole enlarged Group:– Carbon-reduction target: we commit to reducing our absolute Scope 1,
Scope 2 & Scope 3 (Fuel and Energy Related Activities, Business Travel &Employee Commuting) GHG emissions 50% by 2030.
– Supplier-engagement target: we commit that 67% of our suppliers,
by emissions, covering our Scope 3 Purchased Goods & Services, will
have set science-based targets by 2026.​

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TCFD Disclosures
Governance

Strategy

RiskManagement

Metrics
andTargets

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Governance
The Board’s oversight of climate-related risks and opportunities

Disclose the organisation’s
governance aroundclimate-related risks
and opportunities

The LSEG Board has ultimate oversight of the organisation’s sustainability
strategy, including its management of climate-related risks and opportunities.
The Board is responsible for the long-term success of the company andensuring that the interests of stakeholders are considered and their
expectations of us are understood and met.
Sustainability, including climate, is considered by the Board at least twicea year. Topics covered will vary, but include both our sustainable financeand investment products and services as well as our progress against ournear-term science-based targets across our operations and supply chain. In
February 2021, following the acquisition of Refinitiv, the LSEG Board approved
our new Sustainability Policy in February 2021.
The Board Risk Committee has oversight of the Group’s Risk Framework andrisk appetite. Sustainability risks, including those related to climate change,
are embedded in and raised through this forum.
The CEO is responsible for, and reports to the Board on, sustainability matters.
The CEO chairs the Executive Committee, which is responsible for setting thestrategic ambition for the Group regarding sustainability.

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Management’s role in assessing andmanaging climate-related risks andopportunities

For example, products and services associatedwith climate transition, such as climate indices, aremanaged by the Data and Analytics division.

The Executive Committee, chaired by the CEO,is responsible for setting the strategic ambition
for the Group regarding sustainability and has
overall accountability for LSEG’s sustainability
strategy and performance, including climaterelated performance.

The Environmental Management Group(EMG) reports into the Sustainability
Committee and is chaired by LSEG’s Chief
Operating Officer. The role of the EMG is tooversee and manage LSEG’s environmental
commitments and performance, most notably
its near-term emissions-reduction targets.

The Executive Risk 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.
The Sustainability Committee reports to the
Executive Committee and is chaired by the Chief
Corporate Affairs and Marketing Officer.
This Committee oversees and directs the Group’s
overall sustainability strategy and programme,
which incorporates strategic input from the
Executive Committee.
It helps coordinate the work undertaken acrossthe Group to ensure the Group’s Sustainability
objectives are achieved. While the Sustainability
Committee oversees climate-related risks
and opportunities, at a Group level, these aremanaged day-to-day in the businesses
and functions.

Both the Sustainability Committee and EMG’sterms of reference were updated in 2021 toreflect LSEG’s business model.
The composition of both Committees was also
reviewed to ensure there is appropriate senior
executive representation. In addition to thesechanges, we also bolstered our sustainability
expertise in 2021 and created a new Group-levelsustainability function following the acquisition of
Refinitiv.
Sustainability-related risks and opportunities,
including those arising from climate change,
are embedded within our risk taxonomy andEnterprise Risk Management (ERM) framework.
Following the acquisition of Refinitiv, a new risktaxonomy was developed, giving sustainability
risk greater visibility by elevating it to a
strategic risk.

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In addition, Risk and Control Owners havedirect access to the Sustainability Risk teamand are provided with a dedicated climate andsustainability-risk-training pack, updated at least
annually and available within the risk registerdatabase for reference and support.
The Group Risk function is represented in every
tier of our sustainability governance structure,
which ensures that risks and opportunities
identified in these forums are duly assessed fortheir relevance and materiality in a timely manner.
One of the Group’s six strategic objectives for2022 is focused on sustainability. This means that
all functions and business divisions must adopt
an appropriate divisional strategic objective on
sustainability.
The Group Sustainability team, lead by the Group
Head of Sustainability, is responsible for shaping
and managing LSEG’s climate strategy.
Other functions involved in the day-to-day
management of climate-related activities
include the property team, the travel team andthe procurement team. The Group Risk
function is involved in the oversight of climate risk
management.

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Roles and responsibilities related to sustainability and climate

LSEG
Board

Oversees LSEG’s sustainability agenda in context of Directors Duties on promoting the long-term success of the Company (s172 companies Act).
Ensures LSEG’s sustainability strategy meets shareholder expectations and approves the risk strategy and appetite; reviews the effectiveness of the risk
management system; and reviews any significant issues that are raised to it.

Board Risk
Committee

Advises the Board on the Company’s overall risk appetite, tolerance and strategy; the current risk exposure of the Company, emerging risks and future risk
strategy; reviews the Company’s risk assessment processes; and considers and approves the remit of the Risk Management function.

Executive
Committee

The Executive Committee, chaired by the CEO, is responsible for setting the strategic ambition for the Group regarding sustainability and has overall
accountability for LSEG’s sustainability strategy and performance, including climate-related performance.

Executive Risk
Committee

Chaired by Chief Risk Officer with representation from Executive Committee with oversight of Group’s risk taxonomy and enterprise-risk framework.

Sustainability
Committee

Senior executive committee providing strategic direction and approval to the Group’s overall sustainability strategy and programme. Chaired by the Chief
Corporate Affairs and Marketing Officer. Supports and reports to the Executive Committee.

Sustainability
Working Committee

Comprises sustainability subject matter experts from across LSEG who work together to design, shape and deliver the Group’s sustainability strategy.
Chaired by the Group Head of Sustainability. Supports the Sustainability Committee with reports on progress and areas for further development.

Environmental
Management Group

This group oversees and manages LSEG’s environmental performance, most notably its commitment to reduce GHG emissions by 50% by 2030 andachieve Net Zero by 2040 or sooner. Chaired by the Chief Operating Officer.

Environmental
Operating GroupThe Environmental Operating Group is responsible for the programmatic delivery of environmental targets through project delivery plans. EOG members
lead coordination of required actions within their functions to meet the deliverables set out by the group strategy. The EOG reports to the EMG.

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Strategy
Climate-related risks and opportunities identified over the
short, medium and long term
Understanding climate-related risks and opportunities is essential toeffective management of the business and our strategic objective to enable
sustainable economic growth.
Taking into account the target dates of our near-term science-based targets
approved with 2026 and 2030 and our long-term net zero target by 2040,
we have used the following time horizons in our analysis:– Short term: 1-3 years– Medium term: 3-10 years– Long-term: 10-30 years
We have gathered and assessed qualitative and quantitative information
to identify potential climate-related risks and opportunities that may impact
LSEG. All information gathered has been validated using publicly available
data which includes emerging policy aligned with the scenarios andtimeframes selected.
Building on the identification and assessment of risks and opportunities, wehave developed quantitative scenario analysis models to test the inherent
climate-related risks and opportunities to our operational and commercial
long-term strategy.

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Disclose the actualand potential impactsof climate-related risks
and opportunities on
the organisation’s
businesses, strategy
and financial planningwhere such information
is material.

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In 2022, we will explore the use of additional scenarios (such as thosepromoted by the Network for Greening the Financial System - NGFS) to
identify potential transition risks and opportunities which will enhance ourrisk assessment and strategic decision making.
Our consideration of both physical and transition risks and opportunities
encompasses the following:Transition risks:
These risks arise from the transition to a low-carbon economy. These
encompass changes to policy and legal frameworks, technology, themarket and reputational impacts. The transition risks which are most
relevant for LSEG include:– Policy and legal: such as changes to carbon pricing, reporting
requirements and regulation of products and services.
– Market risk: such as changing customer needs and expectations withrespect to sustainable finance and investment products.
– Reputational risk: potential risks arising from increased scrutiny overcorporate sustainability performance and greater focus on the quality,
credibility and marketing of sustainable finance and investment
products and services.

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Physical risks:
These risks arise from the physical impacts of climate change and include
both the impact of acute weather events and the longer-term shifts inclimate patterns. Financial impacts could arise from direct damage to property
and other company assets, business interruption, changes to insurance andindirect impacts from supply chain disruption.
The financial impacts arising from physical risks that are most relevant for
LSEG include:– Physical risks that may impact our offices and data centres or local
infrastructure such as power and transport, which could lead to businessdisruption for LSEG as well as disruption of the customer services LSEG
provides, which in turn could lead to loss of revenues.
– As the physical impacts of climate change become more severe, it ispossible that the cost of insurance may rise for some risks.
If this were to occur, the business could experience increased expenditure
for insurance premiums.
– Potential for some physical climate-related risks to become uninsurable.
In this instance, the business would need to meet the cost of related repairs
to offices, data centres or other company assets.

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Climate-related opportunities
LSEG is a leading provider of sustainable finance and investment products
and services. These include a wide range of sustainability-related research,data and ratings, covering public and private companies, funds, sovereigns
and carbon markets.
We also help companies raise capital to fund environmental and social
projects and fund climate-transition activity via the London Stock Exchange
Sustainable Bond Market.
A key area in which we support investors is the provision of climate and
ESG-related indices, enabling investors to allocate capital in line with theirsustainable investment strategy.
Over the short, medium and long term, we expect customer demand toincrease for sustainable finance and investment products and services.
There is an opportunity for us to enhance revenues from these products andservices going forward if we are effective at innovating to anticipate and meetcustomer needs.

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Impact of climate-relatedrisks and opportunities
on the organisation’s
businesses, strategy,
and financial planning

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Products, services and partnerships
Our business strategy is influenced by climate-related risks and opportunities
due to increasing policy and regulation and awareness and demand forsustainable finance and investment products and services.

LSEG’s purpose is driving financial stability,
empowering economies and enabling customers tocreate sustainable growth. Climate-related risks andopportunities, particularly those related to transition,
have a direct bearing on our purpose and ourbusiness strategy, as climate change directly affects
financial stability and economic growth.

Examples of some climate-related developments in 2021 that affect ourbusiness strategy include:
Glasgow Financial Alliance for Net Zero (GFANZ)
LSEG was a founding member of GFANZ, launched in April 2021 and led byMark Carney, UN Special Envoy on Climate Action and Finance. GFANZ is a
global coalition of leading financial institutions committed to accelerating thedecarbonisation of the economy. Collectively, signatories commit to achieving
the objective of the Paris Agreement to limit global temperature increases
to 1.5°C. LSEG CEO David Schwimmer is a member of the GFANZ CEO
Principals Group.
Net Zero Service Provider Alliance (NZSPA)
Under the GFANZ umbrella, the NZSPA is a global group of service providers
committed to the goal of global net-zero greenhouse gas emissions by 2050
or sooner, in line with the ambition to limit the global temperature increase to
1.5°C above pre-industrial levels. Alliance members have committed to alignall relevant products and services to achieve net zero by 2050, scaling andmainstreaming Paris Agreement-alignment into the core of business.
Transition Bond Market
In February 2021, London Stock Exchange launched the Transition Bond
Segment within its Sustainable Bond Market, supporting issuers with robust
and credible transition strategies to raise capital. The Transition Segment joinsGreen, Social, Sustainability and Sustainability-linked segments which makeup the London Stock Exchange’s Sustainable Bond Market.

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FTSE EU Climate Benchmarks Index Series
To help investors allocate capital in line with thetransition to a low-carbon economy, FTSE Russell
launched the FTSE EU Climate Benchmarks IndexSeries in July 2021. The series covers developedand emerging equity markets, including FTSE AllWorld, FTSE Developed, FTSE Emerging, Russell
1000, FTSE All-Share and FTSE Australia 200.
The index series applies the FTSE Target
Exposure Framework, which includes atransparent tilt exposure towards and away fromindex constituents according to several exposure
objectives, such as fossil fuel reserves, carbon
reserves and green revenues to achieve
Paris-alignment.
Japan Climate Index
LSEG and the Japan Exchange Group (JPX)
announced the launch of net-zero climate indicesin November for Japan’s equity market, to enable
investors to reallocate capital based on the
climate credentials and carbon performance ofthe constituent companies in the index.
Voluntary Carbon Markets
In November 2021, the London Stock Exchangeannounced its intention to develop a newmarket solution for voluntary carbon markets
to accelerate the availability of financing for
projects that support the just transition to a
low-carbon economy.

The solution aims to address two major
challenges inherent in the scaling up of thevoluntary carbon markets: access to capitalat scale for the development of new climate
projects worldwide; and primary market accessto a long-term supply of high-quality carbon
credits for corporates and investors. This will
enable companies and investors to confidently
augment credible net-zero transition strategies,
by financing additional projects to offset
unavoidable carbon emissions during their pathto net zero.
Model Guidance for Climate Disclosure
LSEG is a member of the United Nations
Sustainable Stock Exchange (UNSSE) initiativeand contributed to the creation of its model TCFD
reporting guidance in June 2021. This provides atemplate for stock exchanges to guide issuers on
TCFD implementation.
The London Stock Exchange was the first toissue guidance based on the UNSSE’s modeland is tailored to the UK’s regulatory and policy
environment for public companies. The guidancehelps companies to integrate climate risks andopportunities into operational decision making
and report carbon performance.
Climate Transition Centre
In October 2021, LSEG committed to help fundthe creation of the Transition Pathway Initiative

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(TPI) Global Climate Transition Centre at the
London School of Economics. It will dramaticallyscale publicly available research on the climatetransition pathways of 10,000 businesses,
covering global equity markets, fixed-income
and private markets. This builds on our existing
relationship as FTSE Russell is TPI’s data partner.
Climate Governance Scores
To strengthen its support for issuers, the London
Stock Exchange introduced Climate Governance
Scores for more than 400 issuers. This provides
a private educational resource to help companies
understand their current progress on climate
reporting and transition planning, discover
best practice and areas for improvement, andultimately mobilise credible transition plans.
The scores will help to drive improved disclosure
on climate-related risks and opportunities tosupport more informed investment
decision making.
FTSE Russell created the Climate Governance
Score which is based on the methodology it
uses to create the Transition Pathway Initiative’s
Management Quality Score.
The assessments take into account a company’s
carbon-management practices and how they
incorporate climate-change considerations into
their business strategy.

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Operations
LSEG’s commitment to net zero is supported by near-term science-basedtargets to 2030.
Following the acquisition of Refinitiv, we have strengthened our emissions
data and targets, and identified different paths to achieve them as set
out in our climate transition plan. The Environmental Management Group
coordinates workstreams with representatives from the business units andfunctions such as Group Procurement, Group Risk Property, Travel, People
and Communications. We have established several working groups tointegrate these targets into departmental strategic objectives.
For example, the procurement of low-carbon energy is essential to achieving
our goals; however, the volatility of the market is a significant financial risk
if not integrated into our business planning. We have assessed how we
can switch to renewable tariffs, reduce our reliance on Energy AttributeCertificates (EACs) and are exploring a possible shift to power-purchaseagreements or virtual power-purchase agreements in future.
The majority of our emissions arise from our purchased goods and services.
As a result, we have set a target to engage with two-thirds of our suppliers(by scope 3 purchased goods and services emissions) to set science-basedtargets by 2026. This presents an opportunity to support the transition to
net zero more broadly through external collaboration, and we will begin aproactive engagement campaign with our suppliers in 2022.

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Resilience of theorganisation’s strategy,
taking into considerationdifferent climate-related
scenarios, including a
2°C-or-lower scenario

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In order to assess inherent climate-related risks we have used different scenarios to define and model the potential financial impacts of physical and transitionalrisks and opportunities.

ScenarioIntergovernmental Panel on
Climate Change (IPCC) SSP 126

IEA Sustainable Development
scenarioIntergovernmental Panel on
Climate Change (IPCC) SSP 245

Intergovernmental Panel on
Climate Change (IPCC) SSP 585

Description

Very low GHG emissions with minimal
challenges to mitigation and adaptation

Assumes a surge in clean energy
policies and investment and that all
current net zero pledges are achieved
to realise near-term emissions reductions

GHG emissions broadly consistent withcurrent levels with high challenges tomitigation and adaptation

Very high GHG emissions with highchallenges to mitigation and low
challenges to adaptation

Outcome

1.5°C warming

2°C warming

2°C warming

4°C warming

Risk
category

PhysicalTransition

PhysicalPhysicalTimeframes

2030 & 2050

2030 & 2050

2030 & 2050

2030 & 2050

For each highly significant risk, we developed impact pathways. This helped us to understand and establish the causal links between changes in climate andweather patterns, related national and global policies and the impacts on the business in terms of costs and revenue.

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The NGFS Scenarios have been developed to provide a common starting
point for analysing climate risks to the economy and financial system.
Reaching net-zero emissions by 2050 on a global basis will require an
ambitious transition across all sectors of the economy. The NGFS scenarios
highlight a few important themes: rapid decarbonisation of electricity,
increasing electrification, more efficient uses of resources, and a spectrumof new technologies to tackle remaining hard-to-abate emissions. There arethree main scenario groupings:
1. Orderly scenarios assume climate policies are introduced early andbecome gradually more stringent. Both physical and transition risks are
relatively subdued.
2. Disorderly scenarios explore higher transition risk due to policies being
delayed or divergent across countries and sectors. For example, carbon
prices would have to increase abruptly after a period of delay.
3. Hothouse world scenarios assume that some climate policies are
implemented in some jurisdictions, but globally efforts are insufficient tohalt significant global warming. The scenarios result in severe physical risk,
including irreversible impacts like sea-level rise.

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Transition Risk
In 2021, LSEG progressed further with thedevelopment of business unit-specific transition
risk models, producing preliminary models for
two out of three business units - Capital Markets
and Data & Analytics - which were formed
following the acquisition of Refinitiv. We plan tobuild on these preliminary models by improving
data quality and refining assumptions andbusiness impacts. In time, we intend to apply
the same analysis to the third business unit, Post
Trade, as well as to the overall Group.
Data & Analytics
Our models show that both risks andopportunities associated with increased demand
for sustainable finance and investment products
and services will grow from 2025 to 2035 underthe IEA Sustainable Development Scenario.
The potential growth in revenue from seizing
this opportunity is balanced with the risk of not
maintaining a competitive offer for sustainablefinance and investment products and services.
The modelling shows that the likely rate of
growth of the opportunity is much greater than
the growth in the impact of associated risks up
to 2035. This means that the upside from climate
opportunities could outweigh the risks. However,this is primarily dependent on LSEG’s ability toeffectively capture the opportunity.
Capital Markets
Under the IEA Sustainable Development
Scenario, green revenues are predicted toincrease between 2025 to 2035.
This means there is potential opportunity forrevenue growth for LSEG. For the purposes of
the Capital Markets modelling exercise, green
revenues included revenues associated with
the Green Economy Mark and the Sustainable
Bond Market.

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Physical risk to operations
Following the acquisition of Refinitiv in 2021, we expanded our physicalclimate-risk model to incorporate the enlarged footprint of the organisation.
This new model focuses on three main impact pathways:– Physical impacts on our offices, data centres and local infrastructure suchas power and transport which could lead to additional expenditure or cause
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 businessmeeting the cost of any repairs to offices, data centres or othercompany assets.
We analysed the following climate-related hazards to assess the potential
impacts on the business:– Floods– Extreme wind speeds– Hail probability– Thunderstorm probability– Wildfire risk
The analysis highlighted that scenarios associated with higher temperatures
would result in higher potential losses. For all scenarios, the most significant
potential financial loss due to physical risks lies in incurred repair costs
for sites exposed to physical climate risks that could become uninsurable.
Flooding represents the highest financial loss potential, followed bythunderstorms and hail.
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Risk Management
Processes for identifying and assessing climate-related risks
Climate and other sustainability-related risks and opportunities
are embedded within our risk taxonomy and our enterprise riskmanagement (ERM) 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 and opportunities with a potentially substantial impact will beraised and factored into business strategy and operations. Principal
risks are those considered to have highest potential financial or
strategic impact and are defined based on magnitude of financial
costs to the Group as well as reputational impact.

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Disclose how
the organisation
identifies, assesses
and manages
climate-related risks.

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Processes for managing climate-related risks

Integration of climate-related risks into overall risk management

Responsibility for management, mitigation and adaptation of climate-relatedrisks rests with the business units.

Sustainability-related risks are incorporated into risk-management processes
and procedures, including the ERMF. The Group Risk function is represented
at every level of our sustainability governance structure.

This process is supported by the Group Risk function and by the governancegroups which provide oversight, independent assessment and, as
appropriate, challenge back to the business. LSEG’s risk appetite is cascaded
through each business unit and strategic function, ensuring that risk limits are
set and managed appropriately.
The uncertainty of many aspects of climate change means we need to havean adaptive risk approach to monitor, prepare for and minimise LSEG’s
exposure to climate risks. Our approach is presently aligned with our existingrisk 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 the climate changes,
to allow for a continually adaptive response.

27 TASK FORCE CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) REPORT 2021

Looking ahead, we will continue to integrate climate risk into our risk
management frameworks and will enhance our use of scenarios to informfuture strategic decisions.
This will help us with decisions related to our property footprint and thedevelopment of products and services, which will inform our financial planningand strategic decision making for the medium to long term.

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Metrics and Targets
Metrics to assess climate-related risks and opportunities

Disclose the metrics andtargets used to assess
and manage relevant
climate-related risks andopportunities where suchinformation is material.

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Using our scenario analysis, we have explored the potential financial impactsof climate-related risks and opportunities to determine if these are substantial
or not. This analysis will be further expanded in 2022 with consultation acrossthe business.
Capturing and measuring our operational emissions data was a high priority
in 2021; we enhanced our data-collection processes and expanded them tocover the enlarged property footprint. This supports the timely collection ofdata and has been expanded to include metrics on water, energy and waste
at a site level across our whole property portfolio. In 2022, further training
will be provided to teams responsible for internal reporting against our
public commitments.
We expect to begin measuring additional metrics associated with products
and services due to our membership of the Net Zero Service Providers
Alliance, which commits members to align all relevant services andproducts to net-zero by 2050 or sooner, scaling and mainstreaming Paris
Agreement-alignment into the core of the business. In 2022, the Alliancemembers will agree and publish metrics to track the alignment of products
and services with net zero.

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Disclosure of scope 1, scope 2, and scope 3 greenhouse gas (GHG) emissions and the related risks
In 2021, we established baseline environmental data to reflect the combined organisation. We disclose our emissions through LSEG’s Annual Reportand Accounts, our Sustainability Report and through our CDP climate-change submission. Additional details on our emissions and methodology can befound in our 2021 Sustainability Report.
Overall performance
Total group carbon footprint (tCO2e)1, 5
per m2
per FTEper £m revenue11
Scope 12
Scope 2 Market based3
Scope 2 Location based
Renewable electricity (%)7
Scope 34, 5, 6
1. Purchased Goods & Services
3. Fuel-and energy-related activities (FERA)
5. Waste
5. Water
6. Business travel
7. Employee commuting
7. Home working
8. Upstream leased assets
Exclusions (market-based)10
Exclusions (location-based)10

2021

20208

20198

Change9571,885

640,693

657,008

-13%

1.35

1.50

1.54

-12%

24

27

27

-10%

80

90

96

-17%

1,000

1,960

2,163

-54%

3,138

6,492

10,189-69%

106,566

111,644

143,206

-26%

100%

98%

96%

4%

567,747

634,175

646,569-12%

550,861

603,613564,107

-2%

5,659

6,371

9,082

-38%

185

369

1,879

-90%

80

1,166

1,282

-94%

3,169

9,593

42,662

-93%

1,907

4,745

27,422

-93%

5,805

8,236

55

10,455%

81

81

80

1%

767

1,933

1,914

-17%

1,886

4,264

4,829

-60%

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Footnotes
1.

All Group totals and electricity breakdowns use market-based Scope 2 emission factors. Group carbon footprint includes tenant consumption, excludes clientbased workers.

2.

Scope 1 Emissions Combustion of fuel and operation of facilities – includes Natural Gas, Diesel, LPG, Fugitive Emissions and Fleet Vehicles.

3.

Scope 2 Emissions purchase of electricity and heat by the Group for its own use. Market-based emissions use supplier-based emission factors, and energy
attribute certificates for where 100% renewable supplier tariffs are not in place.

4.

Scope 3 includes emissions from Purchased goods and services, Fuel-and-Energy Related Emissions, Air Travel, Rail Travel, Taxis, Hotels and Ground Transfers,
Waste, Water, Employee Commuting (including home working) and Upstream leased assets.

5.

DEFRA UK Government GHG Conversion Factors are used for our UK sites, and all business travel, water, waste, upstream leased assets and extrapolated data.
US EPA factors are used for United States electricity and employee commute factors. IEA and GHG Protocol emissions factors are used to calculate Scope 1, 2
and Scope 3 fuel-and-energy-related emissions for international sites where available. Defra IO factors have been adjusted to reflect reporting year consumer
index pricing to estimate emissions related to purchased goods and services. US and UK National Travel Surveys have been used to inform our estimations for
employee commuting. Emissions related to working from home have been based on EcoAct’s ‘Homeworking emissions whitepaper’ (2020).

6.

Scope 3 emissions are not separately reported by UK and Rest of Group, due to the collection of travel, purchased goods and services and other data at theGroup level.

7.

Energy attribute certificates have been purchased to claim renewable electricity consumption for all sites where 100% renewable supplier tariffs are not in place.
These certificates have been sourced from an internationally recognised trader who is an IETA member and gold partner of CDP.

8.

2019 and 2020 total carbon emissions have been restated to reflect the acquisition of Refinitiv.

9.

% Change is calculated between 2021 and 2019, the Group’s target baseline year.

10. Emissions from sites not included within the reporting boundary relate to the divestment of Borsa Italiana and have been published for transparency.
11.

The revenue figures for 2019, 2020 and 2021 are based on a ‘pro-forma’ approach to align with our global GHG inventory.

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Targets used by the organisation to manage climate-related risks andopportunities and performance against targets
Following the establishment of the new combined data inventory, we now use
2019 as our baseline year for all environmental reporting and targets.
One of our first priorities was to set new near-term targets to reduce ouroverall emissions.
In December 2021, we received approval from the Science Based Targets
initiative for the following targets, aligned with a 1.5°C trajectory:– Carbon-reduction target: we commit to reducing our absolute Scope 1,
Scope 2 and Scope 3 (Fuel and Energy Related Activities, Business Travel &Employee Commuting) GHG emissions by 50% by 2030.
– Supplier-engagement target: we commit that 67% of our suppliers,
by emissions, covering our Scope 3 Purchased Goods & Services, will
have set science-based targets by 2026.​
In 2021, we established an Environmental Operating Group to support thedelivery of our near-term science-based targets across the following areas:climate risk, travel, property data centres, supply chain, renewable energy,
neutralisation and removals. With delivery owners and subject matter experts
from across the business, we have been able to identify clear levers anddeliverables to help achieve these targets by 2030.
We are members of UN Race to Zero and are committed to achieving net zeroby 2040.

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Next Steps and Action
In 2021, we focused on reviewing
the climate approaches of Refinitiv
and LSEG and created a unified
data inventory, set new targets
and established an Environmental
Management Group and plan toachieve our targets.

Going forward, we will enhance our approach further, by for example, expanding our scenario analysis toreflect our business better and encompass all three business units – Capital Markets, Data & Analytics andPost Trade. We also aim to disclose further quantitative data associated with our climate-risk models.
Furthermore, we are exploring setting an internal carbon price to drive ownership and accountability,
particularly considering the increasing role of voluntary carbon markets to achieve global targets.
We will continue to provide customers with sustainable finance and investment products and services, andwill evolve these to meet customers’ changing needs.
We will also continue to champion transparency and disclosure of high-quality climate data. We willcontinue to collaborate with leading partners, including the Transition Pathway Initiative, to increase theavailability of robust sustainability-related metrics.
Our strategic partnerships with the Climate Transition Centre, Glasgow Financial Alliance for Net Zero andthe Net Zero Service Providers Alliance will provide key outputs in 2022 for global businesses.

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LSEG is more than a diversified global financial
markets infrastructure and data business.
We are dedicated partners to our customers, with an open model and commitment to excellence. Withextensive experience, deep knowledge and global presence across financial markets, we enablebusinesses and economies around the world to fund innovation, manage risk and create jobs. It’s
how we’ve contributed to supporting the financial stability and growth of communities and economies
globally for more than 300 years.

Discover more at lseg.com

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