Kao Data_ESG Report 25-26_SP - Flipbook - Page 63
Appendix
2. Transition Risks
Risk ID
TR1
Risk Category
Policy &
regulation
Description
Possible
Consequences
Reputational risks.
Carbon costs:
Reduced
Tightening UK/EU carbon
competitiveness;
regulation impacting
margin pressure;
compliance costs.
contract
renegotiations.
TR2
Energy pricing
Volatility in electricity
pricing impacting
operating costs.
Reduced
competitiveness;
margin pressure;
contract
renegotiations.
Heightened exposure
to climate hazards.
TR3
Embodied
carbon
Increased scrutiny of
construction materials
and embodied carbon in
builds.
Carbon pricing,
increased CAPEX.
TR4
TR5
Customer
expectations
Hyperscalers demanding
low-carbon, highef昀椀ciency facilities.
Stranded assets.
Technology shift
Rapid adoption of AI/
high-density computing
increasing cooling and
power demand.
Grid constraints,
increased water
stress, security risk
proliferation.
Time Horizon
Likelihood
Impact
Risk
Rating
Mitigation /
Controls
Residual Risk
Owner
Medium
HSE /
Compliance
Short–Medium
High
High
High
Climate Neutral Roadmap,
SBTi alignment, ISO
14001, carbon tracking
tools. Active in industry
bodies e.g. techUK ESG+
Group, ASHRAE.
Short–Medium
High
High
Critical
Renewable PPAs, energy
hedging, ef昀椀ciency
improvements.
Medium
Finance / Ops
Medium
Medium
High
High
Low-carbon materials,
supplier engagement,
lifecycle carbon
assessments.
Medium
Construction
High
Renewable energy
sourcing, PUE / WUE
optimisation, ESG
reporting transparency.
Joint innovation with
customers.
Low
Commercial
Critical
Liquid cooling readiness,
high-density design
standards, R&D
investment. OCP-Ready
partnership. NVIDIA
partnership.
Medium
Engineering
Short–Medium
Short–Medium
High
High
High
High
Kao Data ESG Report 2025-26
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