Sustainability risk and reporting

Governance alignment and reporting structure

During the year, the Board agreed that the Sustainability Committee should report through this committee, reflecting the increasing regulatory, risk and assurance focus of sustainability and climate‑related matters. This change aims to make sure that sustainability disclosures are subject to the same level of oversight, discipline and assurance as financial and other non‑financial reporting.

Regulatory and reporting environment

The evolving sustainability reporting landscape, including the Corporate Sustainability Reporting Directive (CSRD), IFRS Sustainability Disclosure Standards (IFRS S1 and S2) and the anticipated UK Sustainability Reporting Standards, places greater emphasis on data quality, internal controls, governance and external assurance. Aligning Sustainability Committee reporting with this committee’s work enables these requirements to be considered holistically alongside financial reporting and risk management.

Risk management and internal controls

Reporting through the our committee also strengthens integration between sustainability‑related risks, including climate‑related risks, and the Group’s enterprise risk management framework. This supports clearer ownership of sustainability risks, enhanced internal control design and readiness for future Board declarations on the effectiveness of material controls.

Audit and Risk Committee oversight

Since this change in reporting line, we have regularly considered sustainability matters such as including regulatory readiness, reporting standards, data and systems maturity, assurance planning and disclosure governance. Sustainability updates are now embedded within our committee’s broader oversight of risk, controls and assurance, ensuring consistency across principal risks and disclosures.

Role of management engagement

The regular attendance of senior management, including the chief compliance and risk officer, has strengthened the quality and depth of sustainability discussions at our committee meetings. This has supported informed challenge, clearer regulatory interpretation and improved coordination between sustainability strategy, compliance, risk management and reporting, enhancing the Board’s overall oversight of sustainability‑related matters.