Climate-Related Risks and Opportunities

We do not anticipate any significant benefits or opportunities from a changing climate. As ADP is not a manufacturer of physical goods, our GHG emissions are considerably less impactful than industries focused on the manufacture of such goods, where material environmental opportunities would be more prominent.

ADP reviews its identified climate related risks and opportunities that would have a material effect on the business. The criteria for determining materiality / priorities include: (1) the evaluation of likelihood and severity of the risk and opportunity based on the nature and size of the risk or opportunity, (2) scope of impact on stakeholder communities, including associates, clients, shareholders, local and global communities, which could be enough to damage company reputation or result in business losses, (3) investment required to implement changes and (4) potential financial and environmental return on investment. Business Resiliency plans are developed by ADP to avoid being impacted by such risks.

Relevant risk factors are disclosed in our annual 10-K filing with the Securities and Exchange Commission. Enterprise risks are identified and managed through a comprehensive Enterprise Risk Management (ERM) program. In addition, in our annual CDP Climate Change response, we provide further detail on the risk types considered in our climate-related risk assessments. We will continue to periodically review climate-related issues to assess their potential to have substantive financial or strategic impact on our business in the future.

Climate Matters management

Our Board is committed to sound environmental practices, and our Nominating/Corporate Governance Committee of the Board of Directors has oversight of environmental sustainability, a responsibility which has been enshrined in the Committee’s charter for several years. The Committee is supported by our ESG Steering Committee and ESG Operating Commitee on these matters and routinely reviews with the Board our emission reduction matters, including our progress towards fulfilling related commitments. ADP has also embedded ESG, including environmental matters, into its Enterprise Risk Management program to identify, assess, monitor and mitigate risks that could impede our objectives related to the Company’s initiatives and targets. Further details can be found in the Company’s 2023 proxy statement.

Green Business Resource Group

In 2022, ADP launched its sustainability-focused business resource group, Green. To date, we have over 4,000 associates around the globe that have joined Green to help ADP on its journey to promote conservation and restoration of our communities’ natural resources.