Climate-Related Financial Risk Report

1. Governance

1.A. Board Oversight of Climate-Related Risks and Opportunities

The FRP Board of Directors has delegated formal oversight of sustainability matters to the Sustainability & Resiliency Committee (the “Committee”).  This Committee is responsible for identifying, implementing, and evaluating key climate-related initiatives.  Chaired by a member of the FRP Board, the Committee is comprised FRP employees and department heads including FRP’s Chief Legal Officer.   The Committee ensures appropriate governance structures are in place to support environmental best practices across FRP’s agencies nation-wide.

1.B. Management’s Role in Assessing and Managing Climate-Related Risks

FRP’s Committee includes executive sponsors, board members, and cross-functional leaders from legal, finance, marketing, HR, operations, integration, and facilities. Meeting quarterly, the Committee drives climate strategy, monitors progress and promotes internal education on sustainability both externally and throughout our organization. Management integrates climate-related considerations into operational resiliency, vendor selection, and infrastructure development.

In September of 2024, FRP published its inaugural Sustainability & Resiliency Report, marking a significant milestone in the company’s commitment to transparency and climate-related governance. The report, developed under the oversight of the Sustainability & Resiliency Committee, outlines FRP’s environmental, social, and operational initiatives and serves as a foundational tool for tracking progress and reinforcing accountability across the organization.

2. Strategy

2.A. Climate-Related Risks and Opportunities Identified Over the Short, Medium, and Long Term

FRP has identified climate-related risks across three time horizons and has taken decisive steps to strengthen its operational resilience and reduce exposure:

  • Physical Risks: These include acute events (e.g., hurricanes, floods) and chronic conditions (e.g., heat stress, drought) that may disrupt operations, increase insurance costs, and affect workforce productivity.
  • Transition Risks: These arise from regulatory changes, market shifts, reputational pressures, and technology adaptation challenges associated with the transition to a low-carbon economy.

    Time Horizons:

    • Short-Term (0–2 years): Acute weather events such as hurricanes, floods, and wildfires pose immediate threats to business continuity, especially in coastal regions. Regulatory uncertainty around ESG disclosures may increase compliance complexity.
    • Medium-Term (3–5 years): ESG reporting obligations, energy efficiency mandates, and potential litigation risk related to climate disclosures or services.
    • Long-Term (5+ years): Sectoral transitions in insurance and risk management, evolving client expectations, and infrastructure vulnerability due to chronic climate conditions.

        Opportunities:

        FRP recognizes that climate-related risks are reshaping the insurance and risk advisory landscape. As a national brokerage firm, FRP is uniquely positioned to support clients in adapting to these changes through innovative insurance solutions, data-driven risk assessments, and strategic advisory services. Opportunities include:

        • Client Resilience Advisory: FRP’s advisory services help clients manage climate risk and develop mitigation strategies through insurance related optimization.
        • Operational Efficiency: Technology adoption, including AI and integrated platforms, and flexible work models reduce emissions and enhance resilience.
        • Community Engagement: FRP’s internal campaigns and outreach programs foster environmental awareness and social impact.

          2.B. Impact of Climate-Related Risks and Opportunities on FRP’s Business, Strategy, and Financial Planning

          FRP’s business strategy integrates climate-related considerations through:

          • Operational Resilience: Cloud-based systems, redundant data centers, disaster recovery, and business continuity protocols mitigate physical risk impacts.
          • Governance and Oversight: The Sustainability & Resiliency Committee ensures alignment with strategic priorities and oversees climate-related initiatives.
          • Financial Planning: FRP evaluates climate exposure in its real estate portfolio and vendor relationships, prioritizing energy efficiency and sustainable sourcing.
          • Workforce Strategy: Investments in wellness, learning, outreach, and inclusion support employee engagement and retention amid climate-related transitions.

          2.C. Resilience of Strategy Under Climate Scenarios

          While FRP has not yet conducted formal scenario analysis (e.g., 2°C or lower), its proactive measures, including energy-efficient practices, digital transformation, and remote work infrastructure, position it well to adapt to future climate conditions.

          • Physical Risk Mitigation: Office consolidation, remote work, and energy-efficient infrastructure reduce exposure to heat stress and flooding.
          • Transition Risk Planning: FRP monitors regulatory developments and adapts its compliance and reporting strategies accordingly.
          • Client Resilience Support: FRP’s risk advisory services help clients navigate climate transitions, manage insurance coverage, and meet ESG expectations

          3. Risk Management

          3.A. Processes for Identifying and Assessing Climate-Related Risks

          FRP’s Sustainability & Resiliency Committee surveys agencies to identify environmental risks and improvement opportunities. Internal campaigns such as “Don’t Get Trashed,” “Paper Cuts,” and “Turn Offs” promote awareness and behavioral change by encouraging responsible practices in the workplace.

          • “Don’t Get Trashed” focuses on reducing landfill waste through increased recycling efforts.
          • “Paper Cuts” aims to minimize paper consumption by limiting unnecessary printing.
          • “Turn Off’s” reminds employees to conserve energy by turning off lights and power-consuming devices when not in use.

          Together, these initiatives support FRP’s commitment to environmental stewardship and operational resilience.

          3.B. Processes for Managing Climate-Related Risks

          FRP manages risks through:

          • Disaster recovery protocols (minimization of physical dependencies, secure cloud systems, off-site backups)
          • Validation of SAAS vendor redundancy plans to ensure continuity of FRP's operations
          • Cybersecurity and phishing awareness programs
          • Privacy and HIPAA compliance reviews
          • Employee training on sustainability and risk mitigation

          3.C. Integration into Overall Risk Management

          Climate-related risks are integrated into FRP’s overall risk management framework. Dedicated associates monitor risks and execute plans designed to mitigate damage and impacts related to climate-related risks.  As part of FRP’s Risk Management Committee’s oversight, Disaster Recovery planning and Business Continuity planning are reviewed and tested routinely.

          4. Metrics & Targets

          4.A. Metrics Used to Assess Climate Risks and Opportunities

          With global legislation and policies on sustainability disclosures continuing to evolve, the process of collecting and interpreting relevant data demands increased diligence and transparency. In collaboration with Warburg Pincus and Partners Group, and aligned with the EU Taxonomy Regulation, FRP engages in annual sustainability data collection initiatives.

          FRP tracks the following metrics:

          • Scope 1 and Scope 2 greenhouse gas emissions
          • Office consolidation and energy efficiency
          • Employee engagement in sustainability programs
          • Volunteer hours (20,000+ annually)
          • Preventive care participation rates (to be reported in future editions)

          4.B. GHG Emissions

          With respect to Scope 1 and Scope 2 GHG emissions monitoring, FRP’s sample size is significantly impacted by the triple net leases that are associated with many sites.  Scope 3 GHG emissions are not currently measurable by FRP.  However, to the extent that emissions are measurable, combined data collection related to Scope 1 & Scope 2 shows a 26% decrease from 2023 when emissions measured 2,654 carbon dioxide tons versus 1,965 carbon dioxide tons in 2024.  FRP is committed to monitoring and improving our environmental performance year over year.

          4.C. Targets and Performance

          While FRP has not set formal net-zero targets, its sustainability efforts focus on:

          • Reducing single-use plastics and paper
          • Promoting energy and water conservation
          • Enhancing digital workflows to reduce environmental impact