Task Force on Climate-Related Financial Disclosure (TCFD)

The Financial Stability Board Task Force on Climate-related Financial Disclosure (TCFD) has developed a voluntary, consistent climate-related financial risk disclosure for use by companies in providing information to investors, lenders, insurers and other stakeholders. The TCFD framework rests on four main tenets.

Disclosure Focus Area Recommended Disclosure Source Comment / Disclosure examples
Governance
Disclose the organization’s governance around climate-related risks and opportunities   Sustainability Report & CDP GM's 2018 Sustainability Report and its 2018 CDP Climate Change survey response includes information related to GM's governance around climate-related risks and opportunities.
  a) Describe the board’s oversight of climate-related risks and opportunities 2018 Sustainability Report Governance & Ethics
2018 CDP Climate Change survey response, Questions C1.1a and C1.1b

(i) The Governance and Corporate Responsibility Committee (GCRC) of the GM Board of Directors (ii) is comprised of three independent directors. The Committee selects members of the Board; provides leadership in shaping GM’s corporate governance which is important for long-term environmental, social and corporate governance “ESG” success; and oversees GM’s policies and strategies related to Sustainability which is achieved through frequent strategic discussions for ESG related activities which includes climate-related updates. The members of this committee have extensive leadership and strategy experience gained at companies respected for their ESG performance. Their input is valuable as GM further integrates sustainability into its business strategy and addresses climate change on its drive toward a future of zero emissions.


The Governance and Corporate Responsibility Committee (GCRC) of the board of directors of General Motors assists the board in its oversight of the company's governance structures, programs, and policies., It brings to the attention of the Board and management as appropriate, current and emerging global political, social, and policy issues that may affect the business operations, profitability, or public image or reputation of the Company. The GCRC oversees global public policy matters as well as specific functions of the Company, as appropriate, including strategy, action plans, and risk management. Company functions reviewed by the GCRC include Legal, Global Public Policy, sustainability including climate change, corporate social responsibility, and philanthropic activities.

  b) Describe management’s role in assessing and managing climate-related risks and opportunities 2018 Sustainability Report CEO Letter to Stakeholders, Sustainability Strategy, Products, Governance & Ethics
2018 CDP Climate Change survey response, Question C1.2a

GM’s CEO is also Chairman of the Board of Directors. Under the CEO’s leadership, GM envisions a world with zero crashes, to save lives; zero emissions, so future generations can inherit a healthier planet; and zero congestion, so customers get back a precious commodity—time.

The CEO is focused on strengthening GM’s core business of light-duty vehicles, while also working to lead the transformation of personal mobility through advanced technologies like connectivity, electrification, autonomous driving and car sharing. The CEO has also established a strategic direction based on putting the customer at the center of everything the company does, and GM’s customers expect GM to help mitigate, if not eliminate, issues such as congestion and emissions.

The CEO receives regular updates and is involved in key decisions that further our long-term strategic objectives including our efforts to reduce GHG emissions toward a future of zero emissions.

The Cybersecurity and Risk Committee of the Board is responsible for overseeing GM’s management of enterprise-level risks. The Strategic Risk Management (SRM) team, led by an executive director with dedicated resources, has risk management responsibility and is supported by the Risk Advisory Council (RAC)—executives who directly report to the Executive Leadership Team (ELT). A global network of executives representing GM’s key functions and markets are given additional responsibilities as risk officers to support the overall SRM program and process. GM’s risk and opportunities identification process is as follows: - RAC and Risk officers appointed - Annual identification, evaluation and assessment of Company and asset risks and opportunities. - Ongoing mitigation plan development and monitoring by RAC and Risk Officers and approval by the ELT. (i) Risks and opportunities are categorized based on frequency, velocity, and impact on financials, operations, reputation, etc. - All top risks have approved mitigation plans, and are reviewed regularly by the ELT and the Board. - All other risks have either an approved mitigation plans and are reviewed at least once a year by the ELT, or after being fully analyzed, are put on a “watch list” and are monitored by the risk officer and their respective ELT member. (ii) Asset level risks have mitigation plans that are the responsibility of local management. Exposure to and experience with catastrophic risk or losses from climate change or other natural events are continuously analyzed and reviewed for ongoing operations and when evaluating new sites and supplier selection. Asset level risks are generally those that are anticipated to occur with regular or high frequency, but have a low impact on the Company and can be managed locally. Lessons learned are incorporated into future site planning, supplier selection process, and risk mitigation and strategic development. For Manufacturing, each site has a Plant director (PD) that has profit and loss responsibility for operations. PD often need support for asset level risk and rely on the Manufacturing Leadership Team (MLT), comprised of Executive VP for Global Manufacturing, regional VPs of Manufacturing, VP of Sustainable Workplaces, Manufacturing representative on RAC, and other resources for risk management and action planning and implementation. The MLT has subject matter experts in risk management and sustainability as resources to PD for risk management.

Strategy
Disclose the actual and potential impacts of climate‐related risks and opportunities on the organization’s businesses, strategy and financial planning.   Sustainability Report, CDP and 10K GM's 2018 Sustainability Report, 2018 CDP Climate Change survey response and its fiscal year 2018 10K include information on actual and potential impacts of climate-related risks and opportunities on GM.
  a) Describe the climate-related risks and opportunities the organization has identified over the short, medium and long term. 2018 Sustainability Report CEO Letter to Stakeholders, Sustainability Strategy, Products, Personal Mobility, GRI Content Index
2018 CDP Climate Change survey response, Question C2.2a & 2.2d, C2.3a, C2.4a One of the most significant risks likely to impact GM are regulatory risks. Due to the potentially catastrophic effects of climate change, governments around the world have or are likely to enact policies and regulations that could impact our operations and products. Because it may take 3-5 years to design and develop a vehicle before it is launched in the market and then remain competitive and compliant for another 4-7 years, GM uses a long-term approach to regulatory risks.
2018 CDP Climate Change survey response, Question C2.2d

In the short term (0-5 years), GM is responding to climate change in multiple ways. For its operations to reduce physical risk of rising energy prices and take advantage of the opportunity to reduce cost, it has set aggressive energy and GHG intensity reduction targets through 2020. This internal process used is to integrate energy reduction into our business plan. Annually, we develop energy and GHG reduction targets at a global, regional, and facility level and include methods in our annual business planning process which GM calls its Business Plan Deployment (BPD). These methods include behavioral — cold shutdown, energy efficiency - LED lights, HVAC controls, and low carbon solutions—for example use landfill gas to generate electricity. An example of how this process has influenced the business strategy is the development of an ongoing dedicated fund for energy savings projects of $20 million USD and use of energy performance contracting to fund the energy and carbon reduction methods.


To achieve our long term (>5 years) carbon reduction plans, we are focusing on our total carbon footprint, including use of sold products (vehicles). For our vehicles we have established and publicly disclosed carbon reduction goals and we have made a commitment to launch 20 new electric vehicles by 2023. Annually, we track our progress to these goals using market sales and measured vehicle emission factors by our Public Policy Group and regional resources. To ensure that we meet these goals on a long term basis, in 2018 we invested $7.8 B in research and development activities. This includes strategic planning to develop and bring to market affordable products that incorporate technologies that improve vehicle safety, displace petroleum with biofuels and electricity, increase fuel efficiency, reduce emissions, and provide additional value and benefits to our customers. In keeping with this strategy, we remain committed to bringing more electrified and fuel-efficient options to market. By the end of 2018, GM had over 350,000 vehicles on the road in US with some form of electrification- which includes eAssist, two-mode hybrid, extended-range electric vehicle and all electric vehicle models. These products represent mitigation of climate change risk for our value chain and provide an opportunity to sell low carbon products into the market.

FY 2018 10K Item 1A. Risk Factors
  b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy and financial planning. 2018 Sustainability Report CEO Letter to Stakeholders, Sustainability Strategy, Products, Operations, GRI Content Index
2018 CDP Climate Change survey response, Question C.2.3a

Risk type: Transition risk

Primary climate-related risk driver: Policy and legal- Mandates on and regulation of existing products and services

Type of financial impact driver: Technology-Capital investments in technology development

Company- specific description: CARB's latest requirements include increasing ZEVs offered for sale in CA and ZEV volumes for 2018 model year and later. Quebec plans to adopt ZEV requirements starting with 2018 model year; other jurisdictions may follow. The Clean Air Act permits states with air quality compliance issues to adopt CA emission standards in lieu of federal requirements; 13 states use these standards, 10 of which have adopted ZEV requirements. GM’s cost profile is private. We intend to mitigate this risk by launching 20 new profitable EVs by 2023 and are working to reduce near-term total enterprise costs associated with the Bolt EV.

Time horizon: Medium-term


Risk type: Physical risk

Primary climate-related risk driver: Chronic: Changes in precipitation patterns and extreme variability in weather patterns

Type of financial impact driver: Reduced revenue from decreased production capacity (e.g., transport difficulties, supply chain interruptions)

Company- specific description: Increases in the frequency of drought conditions can further depress water availability for production in water-stressed areas. GM has production facilities in Mexico, an area that was hit hard by drought in 2016-2017, and there is a risk that increases in the frequency of such events could disrupt production due to lack of water availability. Mexico accounts for approximately 7% of GM’s global production.

Time horizon: Short-term


Risk type: Transition risk

Primary climate-related risk driver: Market-Changing customer behavior

Type of financial impact driver: Market-Reduced demand for goods and/or services due to shift in consumer preferences

Company- specific description: Changing consumer behavior could weaken the demand for our higher margin full-size pick-up trucks and sport utility vehicles, which could reduce our market share in affected markets, decrease profitability, and have a material adverse effect on our business if we are unable to offer alternatives that are of interest to our customers. (i) Volatility in fuel pricing and tax incentives may affect consumer behavior. As of 2017, carbon-pricing schemes are operating in at least 33 countries and 18 sub-national jurisdictions, covering around 20 percent of global emissions. Though CO2 pricing schemes vary widely around the world, all are intended to encourage consumers to purchase vehicles that emit less carbon or, at a minimum, to help raise public awareness about the importance of CO2 reduction. (ii) There is a risk that there may be less demand for GM's larger, less fuel efficient vehicles.Time horizon: Medium-term

  c) Describe the potential impact of different scenarios, including a 2⁰C scenario, on the organization’s businesses, strategy and financial planning. 2018 Sustainability Report Governance & Ethics
2018 CDP Climate Change survey response, Question C2.4a

Opportunity type: Products and services

Primary climate-related opportunity driver: Development and/or expansion of low emission goods and services

Type of financial impact driver : Increased revenue through demand for lower emissions products and services

Company- specific description: Autonomous electric vehicles offer GM a significant business opportunity to combat climate change. AV systems integrate more seamlessly with EVs than vehicles with conventional internal combustion engines. All-electric AVs also will help accelerate more widespread adoption of electric propulsion technologies. We see autonomous technology leading toward a future of zero congestion, zero emissions and zero crashes, since more than 90% of crashes are caused by driver error, according to the National Highway Traffic Safety Administration (NHTSA).


Time horizon : Short-term

Opportunity type: Resource efficiency

Primary climate-related opportunity driver: Move to more efficient buildings

Type of financial impact driver: Reduced operating costs (e.g., through efficiency gains and cost reductions)

Company- specific description: Energy Efficiency projects implemented in our manufacturing operations in South Korea results in the opportunity to sell carbon credits into the Emission Trading Scheme in South Korea. Implementing energy efficiency in GM operations in Korea began with an energy treasure hunt in early 2017 and ended with the implementation of various initiatives - LED lights, compressed air and building management. These initiatives represents an opportunity for us to reduce our operational costs and to sell carbon credits into the Korean Carbon Emission Trading Scheme.

Time horizon: Current

Opportunity type: Resource efficiency

Primary climate-related opportunity driver: Reduced water usage and consumption

Type of financial impact driver: Increased production capacity, resulting in increased revenues

Company- specific description: As extreme drought conditions occur, GM facilities in Mexico with water reuse systems are resilient and can continue to operate. Increases in the frequency of drought conditions can cause disruptions to GM production in our highest water use and production critical process of painting vehicles, due to water stress. Proper mitigation using water conservation and water reuse allows production to continue without added water stress on local water systems. GM’s water management approach at production facilities located in water stressed areas offers an opportunity to continue production without disruptions due to lack of water for people and critical paint shop production. In our San Luis Potosi Assembly plant in Mexico, GM uses a Zero Liquid Discharge system to minimize the reliance on well water withdrawal.

Time horizon: Current

FY 2018 10K Item 1. Business: Research, Product and Business Development and Intellectual Property (pages 3-5); Environmental and Regulatory Matters (pages 5-8); Item 1A. Risk Factors (pages 10-16)
Risk Management
Disclose how the organization identifies, assesses and manages climate-related risks.   Sustainability Report, CDP GM's 2018 Sustainability Report and its CDP Climate Change survey response includes information related to how GM identifies, assesses and manages climate-related risks.
  a) Describe the organization’s process for identifying and assessing climate-related risks. 2018 Sustainability Report Sustainability Strategy, Products, Governance & Ethics
2018 CDP Climate Change survey response, Question C2.2b

GM’s Executive Director of Strategic Risk Management (SRM), is fully dedicated to risk management at GM and supports executive leadership, including our Chairman and CEO who considers herself the Chief Risk Officer, as well as GM’s Board and Risk Committee. The Cybersecurity and Risk Committee of the Board is responsible for overseeing the Company’s management of enterprise-level risks, including climate-related risks such as climate-related policies and regulations that can impact our products, services, and operations, along with the Strategic Risk Management (SRM) program and processes. This executive director leads the SRM team and is supported by the Risk Advisory Council (RAC)—executives who directly report to the Executive Leadership Team (ELT). A global network of executives representing GM’s key functions and markets are given additional responsibilities as Risk Officers to support the overall SRM program and process. GM’s risk and opportunities identification process is as follows: - RAC and Risk officers appointed; Annual identification, evaluation and assessment of Company and asset risks and opportunities conducted; Ongoing mitigation plan development and monitoring by RAC and Risk Officers and approval by the ELT.

- Asset level risks have mitigation plans that are the responsibility of local management. Exposure to and experience with catastrophic risk or losses from climate change or other natural events are continuously analyzed and reviewed for ongoing operations and when evaluating new sites and supplier selection. Asset level risks are generally those that are anticipated to occur with regular or high frequency, but have a low impact on the Company and can be managed locally. Lessons learned are incorporated into future site planning, supplier selection process, and risk mitigation and strategic development.

- The process and terminology in place for assessing relative significance of all identified risks, including climate-related risks such increased and more stringent GHG emission regulations, is as follows: (i) Risks and opportunities are categorized based on frequency, velocity, and impact on financials, operations, reputation, etc. - All top risks have approved mitigation plans, and are reviewed regularly by the ELT and the Board. - All other risks have either an approved mitigation plans and are reviewed at least once a year by the ELT, or after being fully analyzed, are put on a “watch list” and are monitored by the risk officer and their respective ELT member.

- GM assesses risks based on management’s professional judgment, the relevant case law, definitions and guidance from the U.S. Securities and Exchange Commission (the “SEC”) and discussions with external auditors. This includes both a quantitative and qualitative assessment. From a quantitative perspective, GM considers the risk as a percentage of various financial statement amounts (e.g., assets, liabilities, revenues, earnings, etc.). From a qualitative perspective, GM considers all of the relevant circumstances including, whether the risk is strategically integral or important to the company’s business plan, whether the risk will have an impact on future results of operations or financial condition, and whether the risk is important to an understanding of the company’s business. As a result, risks that we have identified as having a substantive impact will vary from risk to risk in terms of quantitative and qualitative perspectives.

  b) Describe the organization’s processes for managing climate-related risks. 2018 Sustainability Report Sustainability Strategy, Products, Governance & Ethics
2018 CDP Climate Change survey response, Question 2.2a In the short term (zero to five years), GM is responding to climate change by setting aggressive energy and GHG intensity reduction targets through 2020. The internal process used is to integrate energy reduction into our business plan. Annually, we develop energy and GHG reduction targets at global, regional and facility levels and include methods in our annual business planning process which GM calls its Business Plan Deployment (BPD). These methods include behavioral)—cold shutdown, energy efficiency)—LED lights, HVAC controls, and low carbon solutions)—for example use landfill gas to generate electricity. Each month data is collected on energy use and carbon emissions performance that is compared at each site to the target, and, if the target is not met, countermeasures are developed to meet them.
  c) Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organization’s overall risk management. 2018 Sustainability Report Governance & Ethics
2018 CDP Climate Change survey response, Section C3.1c

Climate change (CC) has influenced our short- and long-term business strategy. We recognize that we need to find lower carbon solutions for our products and operations and have publicly stated that we see an economic opportunity by lowering our carbon footprint. Our business strategy includes five key priorities, namely 1) Earn Customers for Life; 2) Grow our Brands; 3) Lead in Technology & Innovation; 4) Drive Core Efficiencies; and 5) Build a Culture to Win. In the short term (0-5 years), GM is responding to CC by setting aggressive energy and GHG intensity reduction targets through 2020. Our 2020 GHG target is to reduce GHG intensity by 20% from 2010. We met that target three years ahead of plan and in 2018 set a new goal to reduce absolute Scope 1 and 2 GHG (CO2 equivalent) emissions by 31 percent by 2030 compared to a 2010 baseline. This goal is consistent with the level of decarbonization required by the science-based target initiative methodology to limit warming to less than 2-degrees celcius compared to preindustrial temperatures by 2050.

The internal process used is to integrate energy reduction into our business plan. Annually, we develop energy and GHG reduction targets at a global, regional, and facility level and include methods in our annual business planning process which GM calls its Business Plan Deployment (BPD). These methods include behavioral - cold shutdown, energy efficiency - LED lights, HVAC controls, and low carbon solutions - for example use landfill gas to generate electricity. Each month data is collected on energy use and carbon emissions performance which is compared, at each site, to the target and if it is not met, countermeasures are developed to meet the targets. An example of how this process has influenced the business strategy is the development of an ongoing dedicated fund for energy savings projects of $20 million USD and use of energy performance contracting to fund the energy and carbon reduction methods. In 2018, energy and carbon reduction projects resulted in 0.5 million metric tons of carbon reduction on an absolute basis.

GM’s global risk management process includes CC issues such as policy/regulatory changes and changing consumer behaviors are discussed at our Board of Directors, Executive Operations Committee (highest management committee), Corporate Strategy Committee, and the Product Development Committee.

To achieve our long term (>5 years) carbon reduction plans, we are focusing on our total carbon footprint, including use of sold products (vehicles). For our vehicles we have established and publicly disclosed carbon reduction goals. Annually, we track our progress to these goals using market sales and measured vehicle emission factors by our Public Policy Group and regional resources. To ensure that we meet these goals on a long term basis, in 2018 we invested $7.8B in research and development activities. This includes strategic planning to develop and bring to market affordable products that incorporate technologies that improve vehicle safety, displace petroleum with biofuels and electricity, increase fuel efficiency, reduce emissions, and provide additional value and benefits to our customers. In keeping with this strategy, we remain committed to bringing more electrified and fuel-efficient options to market. By the end on 2018,

GM had over 350,000 vehicles on the road in US with some form of electrification- which includes eAssist, two-mode hybrid, extended-range electric vehicle and all electric vehicle models.

Metrics & Targets
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities.   Sustainability Report, CDP & 10K GM's 2018 Sustainability Report, 2018 CDP Climate Change survey response and its fiscal year 2018 10K include information the metrics and targets used to assess and manage relevant climate-related risks and opportunities.
  a) Disclose the metrics used by the organization to assess climate- related risks and opportunities in line with its strategy and risk-management process. 2018 Sustainability Report Products, Supply Chain, Operations, GRI Content Index
2018 CDP Climate Change survey response Section C4. Targets and Initiatives
FY 2018 10K Item 1. Business: Environmental and Regulatory Matters
  b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks. 2018 Sustainability Report GRI Content Index
2018 CDP Climate Change survey response, Section C6 Module: GHG Emissions Accounting, Energy and Fuel Use, and Trading
  c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets. 2018 Sustainability Report Products, Supply Chain, Operations, GRI Content Index
2018 CDP Climate Change survey response Section C4. Targets and Initiatives
FY 2018 10K Item 1. Business: Environmental and Regulatory Matters