COP27 Integrating climate risks At COP27, our businesses advanced the conversation through new reports, perspectives and action-oriented initiatives. We focused on We understand that catastrophic climate change — and the speed and scale of transformation needed to avoid it — threatens disruption unlike anything that issues ― namely, the orderly investment transition, the insurance sector’s role in climate adaption, communities and businesses’ has come before. exposure to physical risks, and how companies need to address the inextricable link between climate and nature ― that illustrate the We’re helping our clients navigate a path from risk to opportunity in a breadth and depth of Marsh McLennan’s climate capabilities. variety of ways. Marsh and Guy Carpenter co-hosted the pre-COP27 conference • The goal of the Financial Stability Board’s Task Force on Climate-related Adapting to a changing climate in the management of catastrophic Financial Disclosures (TCFD) is to develop recommendations on the types of risks in Egypt in partnership with the Insurance Federation of information that companies should disclose to support investors, lenders and Egypt. The conference provided a platform for public and private insurance underwriters in appropriately assessing and pricing risks related to sector leaders to discuss the near and longer-term repercussions climate change. Serving as strategic advisor to the Task Force through 2021 of climate change in Egypt. Experts also discussed how advances and 2022, Oliver Wyman assisted in the development of the Task Force’s 2022 in risk mitigation, management, adaptation and risk transfer are status report, which sought to understand the current state of disclosure needed to address climate-related catastrophic risks. practices as well as progress in firms’ disclosures in line with the TCFD recommendations over the past five years. The report found encouraging signs Oliver Wyman hosted a series of side events to support discussions of progress in companies disclosing climate-related financial information but and help find solutions to the climate challenge. We brought also evidence that more urgent progress is needed to improve transparency. together climate and sustainability leaders from a range of • Marsh Advisory helps clients across all sectors understand, model and corporations, and our colleagues spoke at key side events hosted manage their evolving climate and ESG risk landscape, with a particular by strategic partners. Mercer hosted a panel discussion — focus on adaptation and resilience. Marsh worked with FirstGroup plc, a UK Harnessing the power of global capital to target local climate transportation operator, to prepare a fast turn-around climate and transition challenges — alongside esteemed guests. They debated and risk assessment for TCFD reporting. The national service provider is a complex discussed client actions, opportunities and challenges to business with public climate and net-zero commitments and had sought to investing for net-zero pathways. quantify and report on its transition and physical risks. Marsh conducted physical and transition scenario modelling, identified risk exposures and interviewed company stakeholders. Ultimately, Marsh’s analysis supported an ambitious report meeting the requiredTCFD criteria, including a full financial assessment of the costs and opportunities of climate transition. • Marsh and Oliver Wyman collaborated to integrate climate modelling into credit risk for multiple large financial institutions. For instance, we built bespoke climate models to translate robust physical and transition climate risk data into key attributes of credit risk for mortgage books. The clients now have full ownership of the climate-adjusted credit models. Oliver Wyman co-hosted a panel with CDP during COP27 in Egypt. Overview Environment Social Governance Appendix 2022 ESG REPORT 20