10 May 2023

Three ways UK retailer Wickes integrates climate intelligence into its business decisions


By Cervest

Three ways UK retailer Wickes integrates climate intelligence into its business decisions

The economic losses from natural disasters totaled an astonishing USD313 billion in 2022 alone, with 10 climate-driven severe weather events costing more than USD3 billion in damages each. Climate hazards such as extreme wind, flooding and drought can destabilize supply chains, put buildings such as factories, shops and warehouses out of action, decrease the availability of materials and restrain production outputs.

In addition to increasing climate volatility, companies are also under pressure from stakeholders and regulators to monitor and report on climate risks, in line with disclosure reporting frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) and EU taxonomy rules.

UK retailer, Wickes, recently published its 2022 Annual Report with clear transparency on disclosure reporting alongside its sustainability targets. Wickes worked with Cervest to assess and understand the physical risks facing its assets and supply chain networks. Through our product, EarthScan™, Wickes was able to integrate climate intelligence (CI) into multiple workflows and make climate-informed decisions to support its business strategy.

Climate intelligence insights to inform actions on sustainability and physical risk

Wickes wants to help customers transition to a low-carbon economy. One of its initiatives is an online Sustainable House guide which allows customers to explore energy saving and sustainable products for their homes, including smart heating and lighting for energy efficiency, and understand their environmental impact.

Wickes has used insights from Cervest’s climate intelligence product EarthScan to help analyse climate risk across three different climate scenarios to help it identify and mitigate against climate-related risks.

“The Board considers climate-related issues and risks when guiding strategy, annual budgets and business plans as well as performance objectives.”

Wickes Group Plc

On-demand asset level CI gives Wickes insight into the probability of climate shocks and long-term stresses facing its assets now and in the future. It allows it to baseline, monitor, forecast and report on climate risk and vulnerabilities across any asset in its supply chain, in addition to the assets it owns and manages.

CI helps Wickes to build resilience, and take the adaptation measures needed to mitigate against climate hazard events and safeguard against disruption and revenue loss.

“Using Cervest’s EarthScan, Wickes has created portfolios of property and supply chain assets, and assesses the risk of climate change through various warming scenarios and physical climate risks such as temperature, flooding and wind.”

Wickes Group Plc

Using climate intelligence for internal and external climate risk reporting

Cervest CI supports regulatory climate risk disclosures in-line with the TCFD and EU Taxonomy frameworks. Wickes has used insights generated by EarthScan to support its reporting obligations.

Wickes is able to look at multiple time horizons to monitor climate-related risks and opportunities across the short-, medium- and long-term, identifying any significant risks to its assets and assessing the impact of those risks on its ability to operate.

Wickes uses scenario analysis of rapid warming (4°C), high emission ‘limited transition’ (3°C) and ‘rapid transition low emissions’ (1.5°C). This is important because the TCFD recommends companies to refer to multiple scenarios, which has often been a gap in climate disclosures.

“Now that our climate related risks and opportunities are fully assessed, we can undertake further analysis to better understand their potential impacts across areas of the business including products and services, value chain, adaptation and mitigation activities … acquisitions or divestments, and access to capital.”

Wickes Group PLC

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Building resilience across owned and supply chain assets

From raw material resources to production facilities, supply chains are at risk from increasing climate volatility, with the total cost of environmental risks projected to reach USD120 billion by 2026.

Businesses like Wickes who are dependent on others to manufacture and transport goods will suffer if any link in the supply chain is put out of action. To develop robust climate-resilient plans, companies must also look outside their own organizations to understand the risks facing their supply chain.

"We will continue to build out our supply chain portfolios, to include a wider range of suppliers covering a large geographic range, with special focus on locations which are particularly susceptible to the physical risks of climate change."

Wickes Group PLC

CI supports Wickes' work with its suppliers to create contingency and business continuity plans to avoid climate-related operational and financial disruptions. Wickes is building out its supply chain portfolios with a special focus on those locations that are particularly susceptible to the physical risks of climate change.

Wickes has set out a clear ambition to decarbonise its operations and supply chain, and help its customers have more sustainable homes. Its commitment to understanding and mitigating its climate-related risks positions it well to support the UK's transition to a low-carbon economy and will help it deliver long-term sustainable success for the business.

To discover more about how climate intelligence can power action, download our free ebook.

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