TCFD Index
Governance
Requirement | Link or reference | Additional detail |
Governance (a) – Describe the board's oversight of climate-related risks and opportunities | 2024 Proxy statement, Framework for Board Oversight of ESG | See Note 1 |
Governance (b) – Describe management's role in assessing and managing climate-related risks and opportunities | 2024 Proxy statement, Framework for Board Oversight of ESG Climate-related Risks and Opportunities | See Note 1 |
Note 1: Our sustainability organization is responsible for developing our corporate sustainability strategy and working alongside our businesses and functions to execute that strategy. The organization is led by the vice president of global sustainability, and collaborates with teams across PPG to drive our environmental, social and governance (ESG) efforts, including assessing and managing climate-related risks and opportunities.
PPG's programs, initiatives and activities in the areas of environment, health, safety, technology and sustainability are overseen by the Sustainability and Innovation Committee of the Board, with support from other Board-level committees depending on the issues and risks involved. The Board engages with management on ESG strategy, risks and opportunities, and has oversight of the tracking of our sustainability progress.
Strategy
Requirement | Link or reference | Additional detail |
Strategy (a) – Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term | Examples of climate-related risks and opportunities with associated strategies | See Note 2 |
Strategy (b) – Describe the impact of climate-related risks and opportunities on the organisation's business, strategy and financial planning | Climate-related risks and opportunities | |
Strategy (c) – Describe the resilience of the organisation's strategy, taking into consideration different climate- related scenarios, including a 2 degrees C or lower scenario |
Note 2: Our paints, coatings and specialty materials are key enablers of the transition to a low-carbon economy. We sell a wide range of products in varied markets around the world, and the company is well positioned to take advantage of climate-related opportunities. These factors help make our business resilient, and ensure that we will be able to respond appropriately to any climate-related occurrences.
We have analyzed a range of climate scenarios and have incorporated important climate-related risks and opportunities into our growth strategy. See more detail on our scenario analysis exercise in the climate-related risks and opportunities section.
Risk Management
Requirement | Link or reference | Additional detail |
Risk Management (a) – Describe the organisation’s processes for identifying and assessing climate-related risks | Climate-related risks and opportunities | See Note 3 |
Risk Management (b) – Describe the organisation's processes for managing climate-related risks | ||
Risk Management (c) – Describe how the processes for identifying, assessing, and managing climate-related risks are integrated into the organisation's overall risk management | Governance Overview |
Note 3: PPG's physical risk assessment process uses global climate models to assess the relative risk to our facilities from six climate change stressors. The assessment identifies the most at risk PPG sites for more detailed analysis and resiliency planning. Transition risks from climate change, including market impacts, are considered at the business unit level. Each of our businesses conduct a climate risk assessment to define priority risks and opportunities. This work is being integrated into the overall business strategy process.
Climate-related risks are managed within the respective business or function based on the outcomes of the ERM process, the results of our physical risk assessment and input from our Sustainability function. This process is overseen by the Corporate Sustainability Committee. The vice president, global sustainability serves as the risk owner for ESG within the Enterprise Risk Management (ERM) process and is responsible for working across the organization to facilitate and drive action on many of the climate-related risks that we have identified.
Our annual ERM process separately identifies business and enterprise risks that could be related to climate change. The Enterprise Risk Committee (ERC) meets three times per year, and considers climate-related risk as one of many ESG-related risks. Through the standard ERM process, the ERC identifies climate-related risks, determines the company’s priorities for addressing those risks, and monitors progress of addressing these risks over time. We recognize that climate-related risks are also drivers of other risks, and are working to improve our consideration of these interconnected risks in our ERM processes.
The vice president, global sustainability, is accountable for reviewing the outcomes of the ERM process with functional teams and business leadership. Specific key performance indicators are provided to businesses and functions to mitigate greenhouse gas emissions from operations and from product solutions at customer sites.
Metrics and Targets
Requirement | Link or reference | Additional detail |
Metrics and Targets (a) – Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process |
Climate-related risks and opportunities | See Note 4 |
Metrics and Targets (b) – Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and related risks | ||
Metrics and Targets (c) – Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets | 2023 Progress Summary |
Note 4: Our 2030 targets continue to guide our work. By 2030, we aim to achieve a 50% reduction in GHG emissions from our own operations (scope 1 and 2 emissions), and a 30% reduction in GHG emissions in our value chain (scope 3 emissions).
We have set a goal for 50% of sales to come from sustainably advantaged products by 2030. This target represents our focus on capturing market opportunities driven by the transition to a low carbon economy. To increase sales from sustainably advantaged products, our customer sustainability business partners work directly with customers to identify novel uses for existing PPG products and needs for new innovations.
These targets and our performance to date are described in the 2023 Progress and Highlights section.
Examples of climate-related risks and associated PPG strategies
Climate-related risk category | Potential financial impact and associated strategy |
Physical risks from increased severity and frequency of severe weather | Damage from increasingly frequent and severe weather may lead to disruption in our supply chain, production delays and increased costs associated with remediating damage to our locations. PPG undertakes detailed assessments to understand likely climate-related impacts on our facilities and the surrounding infrastructure. We work with sites with the nearest-term risks to define action plans to remediate the risk. Read more in the climate-related risks and opportunities section. |
Risk of increased government regulation and carbon pricing | PPG is exposed to a range of government regulations across our global footprint. Where governments pass carbon pricing regulations, we may be exposed to increased operating costs. We are working to reduce our carbon emissions across our operations by increasing energy efficiency and working with partners to increase our renewable electricity sourcing. |
Market risks | Market demands may shift in response to regulation and changing consumer sentiment, including if PPG falls behind our competitors in our sustainable product offerings. Shifting market demands may result in reduced revenue from some of our products and services. PPG invests resources in research and development of new products and services in markets that support the transition to a low-carbon economy. We also work to find alternative markets for existing products by engaging with customers through regular strategic customer meetings. |
Examples of climate-related opportunities and associated PPG strategies
Climate-related opportunity category | Potential financial impact and associated strategy |
Resource efficiency | Using fewer natural resources to produce our products saves us money, and helps reduce competition for stressed resources. We're researching ways to make our products more efficient across their lifespan and improve circularity, which also helps us meet customer expectations to reduce environmental impact across the product lifecycle. Learn more about our resource conservation work in the environmental section. |
Energy sources | Sourcing renewable energy offers opportunities to reduce our energy costs over time, and insulates us from price fluctuations of conventional energy production. We work with external suppliers to increase the percentage of our electricity that comes from renewable sources. We source renewable energy through a variety of means, including direct investment, PPAs, renewable energy certificates and green tariffs. Learn more in the energy and emissions section. |
Products and services | Creating new products with lower environmental impact and communicating the sustainable attributes of our products offers opportunities to increase our revenue. PPG has established processes to consider sustainability at each stage of our research and development pipeline. We also work with customers to identify their outstanding needs and help support their sustainability goals. We recognize that our customers are searching for new solutions and more sustainable products to help them reach their sustainability goals. Read more in the sustainably advantaged products section. |
Markets | Capturing opportunities to reach new markets allows PPG to increase revenues from our existing product portfolio. We develop paints and coatings that are key enablers to industries that support the transition to a low-carbon economy, including coatings for batteries that are used in electric cars and for renewable power generation. Where we identify markets that will grow to support adaptation needs, we invest time and resources in understanding how PPG paints, coatings and specialty materials can support the industry. Our customer sustainability business partners meet regularly with our customers to identify new end uses for existing PPG products, and identify needs for new innovations. Read more in the sustainably advantaged products, governance overview and product stewardship sections. |
Resilience | PPG works to increase our business' capacity to identify and adapt to impacts related to climate change, including those that stem from physical and transition risks. We consider climate-related risks in our enterprise risk management process and embed members of our sustainability organization throughout the business to help identify risks and opportunities. Read more in governance overview and climate-related risks and opportunities sections. |