Climate-Related Financial Risk Report
About Us
Purchasing Power, LLC serves employees in the United States (U.S.) as a voluntary employee benefit purchase program available to eligible employees and members of our client employers/associations. Our employee purchase program gives the employees and members the opportunity to purchase from an online catalog that contains more than 45,000 of the latest brand-name consumer products, online education services, and vacation packages through payroll deduction. Participants make fixed payments over a fixed term, with no interest, credit check, hidden fees, or late fees – it is a transparent payment plan for the customer.
• Our current catalog includes more than 45,000 products and services from 2,000 brands.
• Our program is available to millions of U.S. employees through more than 400 mid-size to large organizations.
• Our customers can place an order on its user-friendly, front-end interface.
With this model, Purchasing Power, LLC does not own any of the physical assets required for operations. Offices, data centers, warehouses, and the transportation of goods are all owned or conducted by third parties. The physical risks of climate change therefore lie within our supply chain, most of which are mitigated by our diversity of customers and vendors spread across North America.
Governance
Purchasing Power, LLC’s Board of Directors (“Board”) is responsible for overseeing and approving strategic business and financial plans and providing general oversight. The Board considers and reviews strategic and financial plans at least once a year, monitors their performance, and assigns relevant functions to develop respective action plans to address issues. Attention is required from the Board and senior leadership for high-risk issues with significant or devastating consequences; moderate and lesser risks require Management attention.
Purchasing Power, LLC analyzes business risks regularly, however this report describes our first investigation specifically into the potential risks and opportunities of climate change as required by SB 261. The project is headed by our Chief Legal Officer with support from internal function leaders within Finance & Risk, Compliance, Supply Chain, Merchandise & Pricing, and IT Operations and Infrastructure.
Material risks and opportunities will be reported to senior leadership and the Board. Future assessments will be carried out every three years to align with our strategic planning cycle. When material risks and opportunities are identified, responsibility for disseminating information and organizing response lies with the Chief Legal Officer and the leader of the Risk function.
Strategy
Purchasing Power, LLC’s climate strategy is driven by the ongoing identification and prioritization of material risks and opportunities. Our analysis of the potential impact of climate change on business, described in the Risk section of this report, has shown all risks identified to be short-term and immaterial, due to our diverse vendor and customer base, and because we do not own any of the physical assets required for operations.
The following table describes the impact, and timing of the physical and transitional risks and opportunities identified using our Enterprise Risk Management Program matrix, scenario analysis and internal discussion. Potential physical risks identified include increased severity of extreme weather events, changes in precipitation patterns, extreme variability in weather patterns, and increasing temperatures. Potential transitional risks identified include policy and legal changes, uncertainty in market signals, regulatory risk, shifts in consumer preferences, and negative impacts on our reputation for mishandling the transition. All risks are mitigated under current controls.
We will continue to monitor all potential risks and opportunities as discussed in the Strategy and Risk sections of this report.
Federal government regulation changes between administrations can cause uncertainty in the market in relation to fossil fuel vs renewable energy manufacture, availability, incentives and use. This uncertainty and confusion could lead to an increased cost of manufacturing or transporting goods, which can directly impact vendors, manufacturers, transporters, and customers, as the costs are potentially covered by any or all of these stakeholders, potentially impacting Purchasing Power, LLC's revenues.
This risk has not shown itself to be a material concern in the current reporting period.
Inability to comply with regulatory requirements, for example CA SB-261, could lead to inadvertent regulatory non-compliance resulting in a fine. Non-compliance could result in financial penalties and potentially exclusion from government contracts.
To mitigate this potential risk, Purchasing Power, LLC's Chief Legal Officer & Corporate Secretary has engaged external consultants to track and, where necessary, implement activities to stay ahead of potential requirements.
Changing preferences among buyers and sellers could negatively impact our reputation and revenues.
However, through ongoing engagement with our largest customers, we are able to aggregate and evaluate important trends, customer demands and shifts in end-user priorities. We use this insight to continuously assess our offerings and services against market needs and adjust accordingly. Should the opportunity become apparent, Purchasing Power, LLC can develop and expand offerings to help customers achieve their objectives, for example highlighting sustainable commerce and circular economy strategies as a competitive advantage, which may result in increased revenues.
Extreme weather events such as cyclones, hurricanes, flooding, drought, and wildfires can directly impact vendors, manufacturers, transportation, customers and employees. They may be unable to access the internet, data centers could lose power, shipping and delivery of products could be delayed as roads are unpassable and flights cancelled or delayed, facilities and infrastructure could be damaged or destroyed, customers could be displaced and unable to receive delivery of products, and employees may be unable to physically get into the office or work remotely. While Purchasing Power, LLC does not own the physical assets it relies upon for operations, the impact on leased facilities and facilities within our supply chain could interfere with operations.
To mitigate these risks, Purchasing Power, LLC purchases appropriate insurance to protect against loss of inventory; we have a Temporary Customer Hardship/Payment Deferral Assistance Program; as a dropshipper, we can and re-distribute the catalog to different suppliers or different products to accommodate a loss in products resulting from a disabled port or route. Our robust supplier network and customer base spans the whole U.S., so this risk is not material in the reporting year.
Extreme weather events are tragic, often requiring owners to replace damaged or lost appliances, furniture, clothing etc. These items could be purchased through Purchasing Power LLC leading to increase in revenue.
Long-term climate and weather patterns, including increasing temperatures and sea-level rise can create disruptions to our business both upstream and downstream and potentially impact revenues.
Mitigation efforts for this indicator are the same as for increased severity of extreme weather events.
Higher temperatures require longer use of air conditioning and extra cooling; longer periods of warming weather in specific regions can negatively affect the energy efficiency of offices and datacenters.
Purchasing Power, LLC does not own any physical locations, buildings, infrastructure. We rent space in two data centers (DC), one in Atlanta and the other in Dallas, both owned by QTS. QTS has energy, water and green building efficiency initiatives, environmental and social sustainability goals and programs; they voluntarily report progress through GRESB, CDP, EcoVadis and the EPA Green Power Partnership. The Atlanta DC was designed to support high-density power and cooling requirements, with a $10 million multi-year investment in energy efficiency initiatives; Phase II of the facility is LEED Gold Certified. The Dallas DC has achieved LEED Gold Certification for Phase I of its facility.
Purchasing Power, LLC has a CTO initiative to eliminate our physical DC footprint and move to the cloud by 2027. Although we do not take up much space in the QTC DCs, shifting data centers to the cloud can reduce carbon impact and water usage. We will shift to Microsoft Azure, whose data centers feature advanced cooling technologies and renewable energy. Microsoft has a goal to be carbon negative, water positive, and zero waste by 2030.
Risk
Purchasing Power, LLC’s Enterprise Risk Management (ERM) Program is designed to enhance value by identifying, monitoring, and verifying the mitigation activities of key risks as they relate to our strategic objectives and overall operations. The mission of the program is to establish and enforce risk management practices and processes that provide meaningful and actionable risk insights with a focus on managing risk, meeting regulatory expectations, optimizing decision making, improving planning, and increasing the value of business operations.
Purchasing Power, LLC conducts an enterprise risk assessment at least annually to identify the key risks throughout the enterprise. During this process, the most significant risks are identified and assessed. The severity and likelihood of the enterprise risks are assessed based on five-point scales. If risk reduction is needed, current mitigation plans are evaluated, and additional steps are taken as needed.
Risks are evaluated for the severity of their impact (minimal, low, moderate, significant, devastating) and likelihood (remote, unlikely, possible, likely, almost certain). Where they overlap defines their Risk Category as minimal, minor, substantial, major, or catastrophic
In July of 2025, Purchasing Power, LLC conducted a desktop review of the latest climate-related policies, regulatory landscape, market trends, hazard screening, and historical weather events in our areas of operation, including a qualitative assessment of how these risks and opportunities may affect various parts of the business. We also reviewed the risks and opportunities reported by our peers, where available.
In parallel with the desktop review, key leaders met to discuss how their departments view climate-related risks and opportunities. The results of these discussions became part of the developing climate risk register.
Scenario analysis
Purchasing Power, LLC utilized scenario analysis to evaluate climate-related risks in the short term, medium term, and long-term time horizons:
• Short term: Less than 5 years
• Medium term: 5 - 10 years
• Long term: More than 10 years
We focused on the "business as usual" scenario (SSP3 RCP7.0), which represents a middle-of-the-road future where temperatures increase by 2.8°C to 4.6°C by 2100, as well as SSP5 RCP8.5, where temperatures increase up to 3.3°C to 5.7°C by 2100.
Purchasing Power, LLC’s exposure to climate risks and water risks was evaluated by mapping our leased data centers and offices using the World Resources Institute (WRI) Aqueduct Risk Water Atlas tool to identify locations with drought, flood, and seasonal variability risks. We also ran our U.S. locations through a second model, Climate Check, to evaluate risks to fire, precipitation, and heat in addition to flood and drought.
Risk Register
Once the risk indicators and their materiality were identified and assessed, we considered the implications of each in various aspects of our business, from our upstream supply chain vendors to downstream customers. These, along with the desktop review and leadership insight, inform the climate risk register.
Material physical and transitional risks of climate change are being evaluated for incorporation into the ERM process.
Metrics & Targets
Purchasing Power, LLC operates in 5 leased facilities. We rent space in 2 data centers and 3 offices, without ownership, financial control, or operational control.
We do not generate scope 1 or scope 2 emissions from any owned or controlled facilities.
Purchasing Power, LLC does not have any metrics or targets associated with decreasing greenhouse gas emissions.
Conclusion
This report was prepared as per the requirements of the State of California Senate Bill (SB) 261, using the IFRS S2 Climate-related Disclosures framework. It is Purchasing Power, LLC’s first investigation into the risks and opportunities of climate change specifically.
We have assessed the physical and transitional risks of climate change and determined that our risks from both classifications are immaterial due to our diverse vendor and customer base, and because we do not own any of the physical assets required for operations. The risks have no impact on Purchasing Power, LLC’s financial position, financial performance, or cash flows for the reporting period.
Nonetheless, we will continue to monitor all potential risks and opportunities as discussed in the Strategy and Risk sections of this report.