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Environment

We are aware of our impact on the natural environment and our effort to improve it

Arrow recognises the responsibility to reduce our impact on the natural world whether that be our use of offices and travel or the products and services we provide to clients. Management of the environmental effect we have and the risks that may face our business today and over a long-term horizon are increasingly in focus.

 

As a vertically integrated asset manager operating across Europe, we recognise that our business has a direct and indirect environmental impact. This section covers how our business is responding to climate change and energy management.

Climate change represents a material financial risk to the global economy. The Group has reflected on the climate change focus evident across the global and European political and regulatory landscape including the UK Government’s commitment to be a net-zero carbon economy by 2050. Senior leaders understand the urgency of the climate crisis and the Group has initiated a long-term plan for identifying, measuring and managing climate- related risk, benefitting from a third-party review of climate and environmental risks and opportunities, coupled with local expertise to enable success aligned with commercial and regulatory needs. Our Sustainability and ESG Forum has been tasked with leading a robust and proportionate response to the climate and environmental risk factors that are relevant to our business, recognising the work of the Task Force for Climate-related Financial Disclosures (TCFD) recommendations, the European Union’s Sustainable Finance Disclosure Regulation (SFDR), and a desire to support a pathway to net zero through the use of data, third-party expertise and external standards so that we can hold ourselves to account and evolve our ability to report against progress to our stakeholders. Ensuring that physical and transition risks and opportunities are understood in the context of our operational activity and our investment programme will be an area of focus during the coming years and we welcome the moves by industry bodies and regulators to push forwards with attempts to increase use of common reporting standards to improve efficiency and transparency.

The Group’s emissions for the 2021 period remained broadly stable following a full year of variable working patterns across Europe as our colleagues adapted to the ongoing pandemic. Our reporting processes for the period followed the improved standards implemented during 2020 to how we collect and report our Scope 1, 2 and 3 greenhouse gas emissions (GHG) which forms part of our overall approach to managing climate- related risk. The scopes table below outlines our definition of material GHG emissions by source and the annual CO2 emissions table includes our current and historic performance.

Scopes

Scope Type Reportable items
1 Direct emissions by the Company Refrigerant, natural gas  and owned vehicle fleet
2 Indirect energy consumed but not owned by the Company Electricity usage
3 Other indirect emissions not included in Scope 2 Business travel

  

Scope CO2 emissions
(tonnes) per
annum 2020
CO2 emissions
(tonnes) per
annum 2021
1 433.8 487.1
2 506.9 436.7
Total Scope 1 and 2 940.7 923.8
3 378.7 332.1
Total 1,319.4 1,255.9
Tonne of CO2 per employee (using average number of employees for the year) 0.5 0.5

Greenhouse gas emission reporting methodology

In line with previous years, we have followed the requirements of the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) to measure and report greenhouse gas emissions. This aligns with the disclosure requirements in Part 7 of the Companies Act 2006 (Strategic report and Directors’ report) Regulations 2013. 

The financial control method, which captures the sources that fall within our consolidated financial statements, has been used. Where we operate an outsourced model working with partners, these partners do not work exclusively for the Group and, therefore, it is not deemed appropriate to include emissions outside of the Group consolidated financial statements. The reporting period aligns to the financial period (i.e. the year ended 31 December 2021).


In response to the Streamlined Energy and Carbon Reporting requirements, we have included within the energy consumption table below our Group and UK energy consumption for the reporting period. Our business predominantly operates from our offices. We consider our average energy consumption to be in line with the industry and will investigate the possibility of renewable energy solutions across our offices by engaging with relevant third parties (e.g. landlords or energy providers) to determine an appropriate solution.

Energy consumption

Energy consumption 2020
‘000
2021
‘000
Group energy consumption 1,853.3 2,059.8
UK energy consumption  691.0 554.6
Total CO2e from energy consumption 506.9 436.7
Natural gas 17.7 40.2
Electricity 1,853.3 2,059.8
Kwh per employee (using average number of employees for the year) 733.1 806.8

Tackling the climate crisis will require innovative and bold solutions and quantifying the GHG emissions associated with our supply chain and investment portfolio presents a new challenge but one that is recognised as important for the Group. Our Sustainability & ESG forum is made up of key functional experts from across our senior leadership team who will centre on our ambition for business operations to be carbon-neutral and are working to identify third party support to assist with defining our Group’s role in the net-zero carbon economy. The Group will work to determine and manage our indirect impact on global warming and establish targets aligned with methodologies that represent good practice for the sectors in which we operate, whilst continuing to report our GHG emissions. We are committed to being a responsible business and investor and recognise that our plans will need to be refined and updated to keep abreast of the latest intellectual capital and regulatory standards. We are proud of recent achievements which include a 17% reduction of our office footprint and the move towards recognising ESG goals within our approach to travel, company car schemes and office waste disposal initiatives.