Planet
Task Force on Climate-Related Financial Disclosures (TCFD)
Introduction
The Task Force on Climate-related Financial Disclosures (TCFD) was established by the Financial Stability Board to develop consistent climate-related financial risk disclosures.
Our CSR report has been prepared, to the extent possible, with reference to the TCFD recommendations, particularly in the areas of governance, strategy, risk management, and metrics and targets. The TCFD framework supports the ongoing development in these areas during the energy transition and sets the metrics and targets for the years ahead.
TCFD framework
Governance
Mercuria is supported by a dedicated team of specialists with expertise in sustainability, supply chains, social responsibility, governance, and health and safety. This team meets regularly, often weekly, with the active participation of the Global Head of Corporate Responsibility & Compliance. The Global Head of Corporate Responsibility & Compliance engages frequently with other Board members, including Mercuria’s CEO, on these matters and reports to the Board on a quarterly basis. These ongoing interactions help ensure that climate-related and broader sustainability considerations are integrated into the Company’s strategy, including initiatives under Mercuria’s Agenda 2030 and its carbon emissions reduction plans. The Board is also informed of the Company’s exposure to both physical and transition climate-related risks whenever relevant to strategic and operational decision-making, supporting the effective integration of these risks across the business.
In addition, several functions contribute to projects aimed at improving the operational efficiency of equity companies (assets) and related commercial activities, such as fleet chartering, shipbuilding, and bunkering. These efforts support Mercuria’s approach to managing climate-related risks by enhancing operational resilience, supporting emissions reduction, and helping the business adapt to evolving market, regulatory, and physical climate-related challenges. Environmental, Social, Governance (ESG) risks are also assessed across product supply chains. Dedicated teams manage climate-related activities, including the management of ESG risks, compliance with applicable regulations, the delivery of annual training programmes, and the conduct of site visits, either directly or through independent third parties.
Strategy
Mercuria has set a net zero target for 2050, aligned with the climate objectives of the Swiss Federal Council climate goals, and continues to work towards achieving this goal. Our strategy is informed by the Swiss Energy Perspectives 2050+ (EP2050+), which identifies increased energy efficiency, the substitution of fossil fuels with renewable energy, and greater electrification as the main levers for reducing industrial emissions.
We also recognise that our operations are subject to both acute and chronic physical climate-related risks, in addition to transition risks associated with changes in policy, markets, and technology. To address these risks, we continuously identify and assess climate-related risks and opportunities across the short, medium, and long term through a range of processes, including ongoing monitoring of market developments, internal assessments, site-level insurance reviews, and ESG monitoring.
Since its establishment, Mercuria has strategically diversified its trading portfolio, transitioning from a predominantly traditional fuel-focused business model towards one with a stronger emphasis on lower-carbon energy sources, with a particular focus on gas and power trading. This is consistent with the objectives of the Swiss EP2050+, which highlights the importance of electrifying the energy system. Electrification serves as both a substitute for higher-carbon fuels and as a supportive backup for renewable energy sources, making it a key player in the energy transition.
In 2021, Mercuria also established a transition plan and committed to allocating more than 50% of its investments to the energy transition by 2025. This commitment was achieved and exceeded ahead of schedule.
Through our Climate Disclosure, we align our reporting with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Together with our emissions calculations and materiality analysis, this supports a double materiality assessment of our business and enables us to identify, assess, and actively manage climate-related risks and opportunities across the short, medium, and long term.
Climate-related risks
Transition risks
Physical risks
Climate-related opportunities
Resource efficiency
Energy source
Products & services
Markets
Resilience
*Horizons are short 1 year (S), medium 2-5 years (M), and long above 5 years (L)
Risk management
Mercuria’s strategic approach is closely aligned with its broader risk management framework. Risk management is a core function of the Company and covers a wide range of areas, including investments, trading activities, market developments, and the energy transition. Within this framework, both transition and physical climate-related risks are identified, assessed, continuously monitored, and proactively mitigated.
The identification and assessment of climate-related risks form an integral part of the Company’s overall risk management approach. Physical climate-related hazards, such as flooding, extreme weather events, structural vulnerabilities, and emergency response capabilities, are taken into account across commodity production, company assets, supply chains, and trading activities. These assessments help establish baseline risk levels and inform the prioritisation of mitigation measures. Mercuria also monitors regulatory developments that may introduce new compliance requirements or reporting obligations. Climate-related risks, including policy changes, technological developments, and energy price volatility, are considered as part of the Company’s risk identification process.
Mercuria has expanded its trading portfolio beyond its previous focus on traditional fuels to include a more diversified mix of lower-carbon energy sources. This diversified product mix helps reduce exposure to policy and regulatory changes affecting specific products or regions, while also providing access to new markets and revenue opportunities. More recently, Mercuria has expanded its metals business and started trading in critical minerals as part of its commitment to the energy transition.
We also capitalize on diverse investment opportunities, ranging from different types of assets, industries, and geographic locations. As covered by the investments section, our portfolio includes investments in sectors critical to powering the energy transition designed to mitigate the array of risks previously outlined. Furthermore, to enhance our understanding of new markets and incorporate varied perspectives into our investment decisions, we have strategically expanded our investment team to include professionals from a broad spectrum of relevant backgrounds. We have strengthened expertise within our analytics, trading and operational teams, enhancing our operations and driving greater profitability.
In relation to the management of physical risks, we undertake continuous due diligence of our asset holdings as highlighted in our Health, Safety, Security and Environmental (HSSE) section.
Please refer to Risk & Opportunity Oversight for more on our risk management.
Metrics and targets
At Mercuria, we establish climate-related targets and commitments and measure progress against them using defined metrics. The table below sets out the targets, commitments, and metrics used to monitor performance in relation to emissions, investments, and the proportion of traded products. In parallel, we continue to work with our asset companies to improve operational performance, increase efficiency, and reduce emissions, including through measures to prevent gas leakage, deploy carbon capture solutions, and strengthen overall asset performance. Given the dynamic nature of our portfolio, including changes in equity ownership, portfolio growth, and ongoing operational developments at the asset level, we have adopted an operational-efficiency-based approach rather than fixed targets that may become less representative over time.