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Strategic report
OCU Group | Annual report and financial statements 2025
Governance
Financial statements
Reporting and performance SECR statement for accounting period May 2024 – April 2025
Risk management continued Quantitative scenario analysis continued Impact and resilience continued
OCU Group recognises climate change as a significant risk and we have outlined risk management policies and processes on pages 91 to 93 of this report. We address specific climate-related risks identified in our comprehensive review through established protocols. Each risk undergoes a thorough assessment based on its potential impact, timing, likelihood, and effect on the Group’s financial position, overseen by the Audit & Risk Committee. Each identified risk is assigned to a dedicated risk owner responsible for its monitoring and management. These risks are regularly reviewed to ensure their ongoing relevance and to update mitigation strategies as needed. This proactive approach enables us to effectively address the challenges posed by climate change, integrating climate risk management into our broader strategic planning and operational processes. By doing so, we aim to enhance our resilience and capacity to adapt to the evolving environmental landscape while maintaining our commitment to sustainability and responsible governance. The ESG Taskforce has continued to lead the annual climate-focused workshop with subject matter experts from across our businesses and this will continue to be the case going forward. Metrics and targets As part of our commitment to sustainability, OCU is establishing clear metrics and targets to track and manage our environmental impact. We have now measured our full carbon footprint and are in the process of setting and submitting our targets for validation to the Science Based Targets initiative. Science Based Targets initiative (SBTi) OCU is committed to aligning its GHG reduction targets with the SBTi. The SBTi provides a framework for companies to set meaningful climate goals that are consistent with the level of decarbonisation required to limit global warming to 1.5°C above pre‑industrial levels, as per the Paris Agreement.
Transition technology risk: LCV fleet decarbonisation Description and overview
Transition risk associated with the electrification of LCVs becomes material only from the point at which internal combustion engine (ICE) LCV bans are enacted. Under the Net Zero, Delayed Transition and Current Policy scenarios, this is assumed to occur in 2030, 2035 and not at all, respectively. Consequently, risk exposure is concentrated around the respective ban activation years, when fleet operators are compelled to retire or replace ICE LCVs with electric alternatives that may not have reached cost and infrastructure competitiveness. DNV has used two primary components to analyse the risk caused by a premature fleet transition, for both leased and owned vehicles. 1. Total costs associated with vehicle purchase and energy requirements – diesel and electricity respectively. This is formed from average asset cost based on OCU internal data, alongside fuel costs from the NGFS scenarios. 2. Inefficiencies associated with EV LCVs created by mileage from charge ports and average charge speed. In the Current Policy scenario, the absence of a regulatory ban results in no transition risk, as there is no forced early adoption of electric LCVs. Under the Net Zero scenario, the annual technology risk peaks in 2030. This reflects the potential financial impact of higher upfront vehicle costs not being absorbed by lower operating expenses (i.e. affordable renewable electricity). This is compounded by limited charging infrastructure and slower port speeds, creating operational inefficiencies for the fleet workforce. However, this risk rapidly declines in subsequent years due to falling EV costs, improved charging infrastructure, and the effect of discounting future cash flows. The Delayed Transition scenario mirrors the Net Zero pathway but with a five‑year lag across all key variables. As a result, the peak risk is lower, benefiting from additional time for cost reductions and infrastructure improvements to materialise, as well as the mitigating effect of discounting over a longer horizon. • Consider purchasing hybrid LCVs during the transition to reduce emissions while maintaining flexibility. • Explore lease to ownership approach to minimise short-term technology risk. • Explore innovative options for increasing charging port access, given OCU’s changing project geography.
Financial impact
By aligning with the SBTi, OCU aims to:
• Set verifiable and science-based targets for reducing GHG emissions. • Ensure transparency and accountability in our sustainability reporting. • Demonstrate leadership in the energy and utilities sector by committing to ambitious climate goals.
Enabling actions
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