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In addition, many of the project’s end-customers are large entities with wide ranging activities. A climate related event in a non-related part of the business could have a material adverse impact on the financial strength of such end-customer and their ability to honor their contractual obligations which could negativ...
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However, the implementation of a carbon tax may also have a negative impact on the financial health of utilities and corporate entities who also happen to purchase power from renewable energy projects in which we have invested. The credit ratings of these entities may be downgraded due to additional operating expenses ...
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In anticipation of climate change related physical risks, projects related to our investments in particularly vulnerable regions, such as low-lying coastal areas, may face increases in insurance costs. An increase in insurance costs may reduce the cash flows and financial returns from these investments and may cause us...
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A reduction in GHG emissions relies on the commercial viability and scalability of emission reduction strategies and related technology and products. In the event that we are unable to implement these strategies and technologies as planned without negatively impacting our expected operations or cost structure, or such ...
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Low Carbon Fuel Standards Existing and proposed environmental legislation and regulation developed by certain U.S. states, Canadian provinces, the Canadian federal government and members of the European Union, regulating carbon fuel standards could result in increased costs and reduced revenue. The potential regulation...
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DEFINITIONS Scope 1 emissions are direct emissions from owned or operated facilities. Cenovus accounts for emissions on a gross operatorship basis. This includes fuel combustion, venting, flaring and fugitive emissions. It does not include emissions from the 50% non-operated ownership in the company’s refineries or emi...
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Failure to comply and adapt to climate related matters is also a significant reputation risk which could result in e.g. lack of tenant interest, higher cost of capital in the financial market, and lack of ability to attract or retain talent. Also, not handling the company’s corporate social responsibilities in an infor...
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Climate change means climate risk, not only physical risk but also transition risk – the risk associated with economic impacts of the transition to a low carbon economy. Future social developments, climate policy developments and technology developments are subject to high uncertainty, and these factors have a major im...
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The analysis of economic implications of climate change is fraught with difficulty, and it is impossible to survey all potential impacts of climate change as no existing scenario or model can fully describe the workings of the entire physical world and how all physical, chemical, geological and biological processes inf...
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– Commonly used benchmarks are the current climate or the pre-industrial climate situation. Norway will probably experience increased precipitation, more flooding, more frequent landslips and rising sea level, and these physical changes and the uncertainty associated therewith constitute risk factors. Many of the physi...
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The two biggest emissions categories are car use and air travel. Compared to 2016, there was a decrease in the category ‘car’ as a result of the switch to electric lease cars. There were more kilometres of air travel in 2019, which resulted in higher CO 2 emissions in this area.
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■ While our facilities and operations are distributed across the globe, we can experience extreme weather, natural disasters, civil unrest, human-made disasters, power outages, pandemic, and other events which can prevent access to, and operations within, the facilities for our employees, partners, and other parties th...
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Financial losses stemming from climate-related factors adversely impacting the capital value of securities held within the Investment Vehicle portfolio and/or the ability of those companies whose securities are held to meet their financial obligations thereunder. Reputational damage stemming from the Company’s associat...
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Risk Impact Assessment of change in risk year-on-year Mitigation of risk absorber tubes, blades, PV panels or transformers are susceptible to being damaged by severe weather, including for example hail. In addition, replacement and spare parts for key components may be difficult or costly to acquire or may be unavailab...
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In addition, to the physical risks mentioned previously, rising temperatures could cause an increase in our operation and maintenance costs. Rising temperatures are associated to the reduction of the cycle efficiency of our turbines, a reduction of efficiency in solar photovoltaic modules, lower efficiency in wind faci...
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Climate-related physical risks are those risks resulting from climate change, which involve event-driven (acute) or longer-term (chronic) shifts in climate patterns. Acute physical risks refer to those that are event-driven, including increased severity of extreme weather events such as cyclones, hurricanes or floods. ...
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Climate change is one of the greatest challenges we face today, with the potential to significantly impact our business, as well as our planet, in a number of ways. Construction delays, loss in productivity, rising material, water and energy costs and damage to property are just some of the climate-related risks we fac...
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42_ Scope 1 concerns direct emissions from the combustion of fossil fuels, such as gas, oil, coal, etc. Scope 2 covers indirect emissions related to the consumption of electricity, heat or steam required to manufacture a product. Scope 3 concerns other indirect emissions, such as the extraction of materials purchased b...
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The impact of climate change presents a significant risk. Damage to assets caused by extreme weather events linked to climate change is becoming more evident, highlighting the fragility of global infrastructure. We also anticipate the potential effects of climate change will increasingly impact our own operations and t...
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Emerging risks are monitored proactively, their potential long-term impact on the Company is evaluated, and Senior Management and Risk Management Committee are informed on the subject. In this context, climate change risks stand out in terms of both impact and probability. Moreover, loss of reputation/brand damage, bus...
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Changes in the portfolio’s carbon footprint may occur for two reasons: a change in portfolio composition or a change in the emissions of investee companies. Not until companies reduce their real emissions will we see a reduction of atmospheric carbon and an improvement in the climate. In the past, it was not possible t...
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LafargeHolcim is exposed to a variety of regulatory frameworks to reduce emissions. In addition, a perception of the sector as a high emitter could impact our reputation, thus reducing our attractiveness to investors, employees and potential employees. Based on TCFD framework and risk categorization, LafargeHolcim asse...
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The cement industry is associated with high CO2 intensity and LafargeHolcim is exposed to a variety of regulatory frameworks to reduce emissions, some of which may be under revision. These frameworks can affect the business activities of LafargeHolcim. In addition, a perception of the sector as a high emitter could imp...
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MARKE T: As the carbon debate intensifies, cement and concrete could be challenged by our customers as the building material of first choice because of perceived high embodied CO2. In the long term, should regulatory frameworks fail to incentivize consumption of low-carbon products, customers may be unwilling to pay fo...
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Net CO2 emissions (kg per ton of cementitious material) Net CO2 emissions are CO2 emissions from the calcination process of the raw materials and the combustion of traditional kiln and non-kiln fuels. Cementitious materials refer to clinker production volumes, mineral components consumed in cement production and minera...
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Disengaging and divesting from thermal coal, oil sands and oil shale Fossil fuels emit carbon dioxide (CO2) when burned and extracting them can harm the environment. We are working with customers and companies in which we invest that have more than 30 percent exposure to thermal coal, oil sands and oil shales to help t...
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Climate-related physical risks Changes are expected in the frequency, severity and geographical distribution of extreme weather events such as tropical cyclones and extreme rainfall and associated flooding or heat waves in the event that society fails to limit climate change to well below an increase of two degrees Cel...
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Zurich could be exposed to transition risks if it fails to manage changing market conditions and customer needs as part of the transition to a low-carbon economy, resulting in asset impairment, opportunity cost and lost market share. In a transition scenario, industries unable to de-carbonize could experience declining...
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Climate change can pose material risks to sovereign debt due to its impact on national expenditures associated with disaster recovery from extreme weather events or preparedness through climate change mitigation and adaptation projects. Emerging market countries are particularly vulnerable since they often lack capital...
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Scope 3 greenhouse gas emissions Scope 3 emissions are indirect greenhouse gas emissions as a consequence of the operations of the Company, but are not owned or controlled by the Company, such as emissions from third-party logistics providers, waste management suppliers, travel suppliers, employee commuting, and combus...
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The impact of climate change may over time affect the operations of the Group and the markets in which the Group operates. This could include physical risks such as acute and chronic changes in weather and/or transitional risks such as technological development, policy and regulatory change, and market and economic res...
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It includes the risk that the Group fails to develop or to execute successful strategies to deliver acceptable returns in the context of the economic, competitive, regulatory / legal and interest rate environments that arise. It also includes non-financial risks such as people risks and risks relating to climate change...
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We have imposed restrictions on providing loans, advice and insurance to controversial and socially sensitive sectors and activities such as: the energy sector, project finance, arms-related activities, narcotic crops, gambling, fur, palm oil production, mining, deforestation, land acquisition and involuntary resettlem...
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Business risk is the risk arising from changes in external factors (the macroeconomic environment, regulations, client behaviour, competitive landscape, socio-demographic environment, climate, etc.) that impact the demand for and/or profitability of our products and services. Strategic risk is the risk caused by not ta...
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The physical risks identified were all expected to only manifest in the longer term. Physical risks include: reduced ability to complete construction on time in the case of extreme weather events; construction times may similarly be marginally prolonged from chronic changes in weather patterns, such as heavier rainfall...
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Human rights are being severely affected by climate change. Human rights outcomes related to climate impacts include the loss of land, forced migration, and loss of life and resources due to conflict. People also have their rights to livelihood and work affected. Consequently, human rights impacts are of primary concer...
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The downsides of disruptive technology have been apparent in other engagements. The Forum’s discussions with Tesla, a company that potentially will play a central role in decarbonising the car industry, have focused on health and safety concerns about their Freemont car plant. Despite introducing new technologies on th...
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Climate change exposes us to physical risks which may challenge our ability to effectively underwrite, model and price catastrophe risk particularly if the frequency and severity of catastrophic events such as pandemics, hurricanes, tornadoes, floods, wildfires and windstorms and other natural disasters continue to inc...
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Climate change-related risks may also adversely impact the value of the securities that we hold or lead to increased credit risk of other counterparties we transact business with, including reinsurers. In addition, our reputation or corporate brand could be negatively impacted as a result of changing customer or societ...
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Other regulatory risks entail litigation risk and potential direct regulations in line with increasing carbon neutrality ambitions in various jurisdictions, such as the EU’s European Green Deal. Climate-related policy changes may also reduce access to prospective geographical areas for future exploration and production...
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Reputational and financial impact: Increased concern over climate change could lead to increased expectations to fossil fuel producers, as well as a more negative perception of the oil and gas industry. This could lead to litigation and divestment risk and could also have an impact on talent attraction and retention an...
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Examples of parameters that could impact Equinor’s operations include increasing frequency and severity of extreme weather events, rising sea level, changes in sea currents and restrained water availability. There is also uncertainty regarding the magnitude and time horizon for the occurrence of physical impacts of cli...
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Fluctuations in weather and other environmental conditions, including temperature and precipitation levels, may affect consumer demand for electricity. In addition, the potential physical effects of climate change, such as increased frequency and severity of storms, floods and other climatic events, could disrupt NRG's...
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We are committed to net zero. At the same time, we cannot see a viable path to a 100 percent reduction in our greenhouse gas emissions based on our current or potential asset mix and technologies. Committing to 100 percent carbon- and methane-free operations, without adequate technology and forceful policy and regulato...
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Water stress Household water scarcity caused by climate change is another physical risk, which is exacerbated by population growth and urbanisation. During periods of drought consumers may reduce their use of certain products including laundry detergents, shampoos and conditioners, and toilet cleaners as they are unabl...
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Governments alone also cannot address the challenges laid out in the SDGs. The U.S. operating budget is the largest in the world at about $4.5 trillion. If all of it were dedicated to the SDGs only —meaning not funding national security, basic research, basic services for the U.S. taxpayers, and not paying the federal ...
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The Finnish Meteorological Institute (FMI) has issued a report helping UPM to predict the future physical long-term impacts of climate change on its business in Finland, Uruguay, Southern Germany and Eastern China. The Institute incorporated three alternative emission scenarios in the report. The biggest risks in the c...
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In Eastern China, the annual average temperature may rise by between 1.6°C and 2.7°C. The FMI predicts that the biggest related risk would be the flooding of the River Yangtze due to a potential increase in rainfall. In Southern Germany, the annual average temperature could rise between 1.6°C and 2.7°C by 2050, dependi...
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Climate change Climate change exposes UPM to variety of risks, that can be considered strategic, operational, hazard or financial. Strategic risks are related to competition, markets, customers, products and regulation. For example, unpredictable regulation and subsidies may distort raw material and final product marke...
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RISK TOLERANCE We have a low tolerance for risk, when it comes to protecting the human and environmental resources we all depend on. However, given the long-term nature of some sustainability risks and the level of uncertainty associated with their occurrence and impact, we accept that some risks are inevitable. We the...
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Electrical and electronic waste (WEEE) accounts for 7% of the total waste generated by Wavestone’s activities in weight. This type of waste represents a major challenge given its large carbon footprint throughout its entire lifespan (use of water, metal and energy resources at all stages from product design through to ...
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The current model for financing renewables is an example of inefficient distribution of effort, since, even though the electricity sector accounts for only around 25% of energy consumption, it is the electricity consumers who bear most of these costs (more than 80% in Portugal and Spain). This effect distorts competiti...
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Uncertainty around the evolution of the wholesale market design, given the current challenges: • Marginal remuneration system not adjusted to the current context of growing penetration of fixed cost technologies (renewables, backup, storage). • Growing penetration of technologies with 0 marginal cost (reducing prices a...
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We have and could suffer losses due to operational risks Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. It also includes, among other things, reputational risk, technology risk, model risk and outsourcing risk, as well as the risk...
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Climate change may have adverse effects on our business We, our customers and external suppliers, may be adversely affected by the physical risks of climate change, including increases in temperatures, sea levels, and the frequency and severity of adverse climatic events including fires, storms, floods and droughts. Th...
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Initiatives to mitigate or respond to adverse impacts of climate change may impact market and asset prices, economic activity, and customer behaviour, particularly in geographic locations and industry sectors adversely affected by these changes. Failure to effectively manage these transition risks could adversely affec...
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There is an increased focus by foreign, federal, state and local regulatory and legislative bodies regarding environmental policies relating to climate change, regulating greenhouse gas emissions, energy policies and sustainability, including single use plastics. This new or increased focus may result in new or increas...
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Climate change exacerbates existing risks in some areas, while also posing new risks. We identified a number of transitional risks as the world adapts to a new climate, including effects on the New Zealand electricity market, which is largely dependent on weather to provide fuel, increased pressure on our business to r...
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Climate change strategy Climate risks the Commissioners face include: • Transition risk – the risk that our asset allocation, asset managers or individual investment assets prove to be poorly positioned for the investment risks and opportunities associated with the transition to a net zero carbon economy. • Physical ri...
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Forests, which are home to 80% of Earth's biodiversity, are shrinking by 13 million hectares per year. More than 75% of the planet's land surface has already been altered in a more or less reversible way, leading to desertification, deforestation, pollution and salinisation. At the current rate, experts at the IPBES (I...
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In 2019, AP6 compiled its first high-level analysis of physical climate risks in the portfolio. Although it does not go into great depth, it does indicate that there are medi- um-high risks in nearly half of the portfolio. It is not currently possible for AP6 to, at the portfolio level, assess other climate-related ris...
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In recent years the impact of climate change is being felt throughout Japan. Its e ects include higher surface temperature, more frequent heavy rainfall events, declining quality of agricultural products, shifting plant and animal species distributions, and a higher risk of heat illness. �ere is a high probability that...
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Climate change Climate change is an external risk factor that is part of environmental risk. It is defined as an entity’s vulnerability to the negative effects of climate change, which could lead to financial losses. It includes:  physical risks, namely the risks resulting from damage caused by extreme weather events;...
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Changes in precipitation patterns and extreme weather conditions such as floods, storms, droughts and fires may impact our plantations and the forests we source wood from and could result in fibre supply chain interruptions and higher fibre costs. Higher temperatures may also increase the vulnerability of forests to pe...
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We are subject to a wide range of international, national and local environmental laws and regulations, as well as the requirements of our customers and expectations of our broader stakeholders. Costs of continuing compliance, potential restoration and clean-up activities, and increasing costs from the effects of emiss...
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The physical risks of climate change are divided into acute and chronic risks. Acute risks include risks related to extreme weather events, such as floods and hurricanes. Chronic risks include, for example, permanently higher temperatures and the ensuing sea level rise. Sectors particularly exposed to physical risks in...
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Group environmental impacts: With over 83,000 employees in more than 100 countries, the Group’s operations impact on the environment, particularly as a result of travel, energy consumption and waste. Impacts associated with climate change: Climate events (floods, storms, tsunamis, etc.) may disrupt or interrupt the ser...
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However, given the unprecedented global supply chain issues that we are now seeing with many car manufactures and dealerships, we may be unable to purchase new EVs in sufficient numbers. In addition, our latest assessments of EV readiness in Europe show that, while the growth in public charging points continues apace, ...
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Within our overall risk management categories, we recognise a number of key non-financial risks pertaining to our supply chain, environmental impact, employees, and social issues such as labour rights, human rights and corruption. These risks, as well as others that could emerge in the future, could hinder the company ...
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Our business model may also be adversely affected by risks related to the physical impacts of climate change and extreme weather conditions. As the risk of flooding, wildfires, storms or hail increases it could become more difficult for LeasePlan to offer affordable insurance protection and may impact our pricing of th...
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Developments in these and other external factors may affect customers’ use of EVs and, therefore, our EV transition goals. These may have a material adverse effect on the market prices of certain vehicle types in certain jurisdictions, which in turn could have a material adverse effect on our business, financial condit...
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As for climate-related risks, we have followed TCFD classification in considering (1) risks related to the transition to a low-carbon economy in the 2°C scenario and (2) risks related to the physical impacts of climate change in the 4°C scenario, which assumes that efforts to reduce global CO2 emissions have failed. Ri...
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Exposure to Extractives Industries It is important to identify exposure to business activities in extractives industries in order to assess the potential risk of ‘stranded assets’. ‘Stranded assets’ are assets that may suffer from premature write-downs and may even become obsolete due to changes in policy or consumer b...
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The Trustees believe that climate change will have significant and wide-ranging implications for the global economy and therefore presents a Significant risk to the long-term value and security of the pension fund's assets. The Trustees also believe that failure to consider ESG factors, including climate change, cou ld...
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Risks—Transition Risks and Physical Risks Clients to whom MUFG has provided credits may be exposed to risks arising in the course of the transition to a low-carbon society, such as stricter regulation and the introduction of low-carbon technologies (transition risks). They can also be exposed to risks arising from phys...
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A global increase in greenhouse gas (GHG) concentration in our atmosphere has caused a record-breaking pace of temperature rise, and the rate of change is still increasing. Since the 1880s, the average global temperature has increased by 1.1 degrees Celsius. A destructive trend of impacts has emerged, from stronger hur...
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PROHIBIT COAL GENERATION: There is no denying that coal is on the decline around the world. Even with artificial incentives being set up to extend the lives of coal plants in supply-strapped regions, it is clear that no amount of subsidies or lobbying will slow the global transition. The problem is with the laggards, c...
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In the Intergovernmental Panel on Climate Change (IPCC) special report, climate change poses an increasing threat to mankind and the global economy. Transitioning to a low-carbon economy may entail extensive policy, legal, technology and market changes. Physical risks such as frequent or severe weather events may also ...
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Over the past several years, changing weather patterns and climatic conditions, including as a result of climate change, have added to the unpredictability of natural disasters and to the frequency and severity thereof and created additional uncertainty as to future trends and exposures. In particular, the consequences...
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Group has divested from. Therefore, AXA also restricts insurance coverage for coal and oil sands-related assets (as well as in the other industries mentioned in the previous section), and arctic drilling. Since 2017, the underwriting restrictions ban Property and Construction covers for coal mines, coal plants, oil san...
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Business interruption An external hazardous event (floods, riots, fires etc.) or internal disruption (e.g. availability of critical spare parts, global supply chain complexity etc.) may result in a significant period of plant shutdown or disruption and hence in delayed/non-delivery of our products to internal and/or ex...
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7. OUR R E SIL IE NCE T O CL IM AT E CH A NGE The Group fails to respond appropriately, and sufficiently, to climate change risks or adapt to benefit from the potential opportunities. This could lead to damage to our reputation, loss of income and/or property values, and loss of our licence to operate.
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Climate change is a long-term risk associated with high uncertainty regarding timing, scope and severity of potential impacts. Climate risks can be grouped into physical risks and transition risks. Physical risks relate to losses from overall climate changes (i.e. changing weather patterns and sea level rise) and acute...
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Our current global economy’s linear business model of “take, make, and waste” is depleting natural resources faster than they can be replenished and straining ecosystems. Imagine repurposing a piece of plastic at the end of its use, giving it another life as something else. Its use is, in fact, circular, and the end of...
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25 large Dutch banks, insurers and pension funds are particularly exposed to these risks, these financial institutions have not yet sufficiently integrated them into their business operations. For example, they invest EUR 97 billion in shares of companies operating in areas with significant water scarcity and EUR 56 bi...
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When these damages are uninsured – and therefore borne by households, businesses or public authorities – this affects financial institutions’ exposure to these parties. The second type of risk, transition risk, is the result of the transition to a carbon-neutral economy. Climate policy, technological developments and c...
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Beith: Stranded carbon assets was the underappreciated risk back then. Today it’s policy risk. There’s a palpable sense of grass-roots alarm as we see real-world, real-time effects of climate change, and that could create a policy tipping point where governments have historically been skeptical. That is the case next d...
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Environmental and social risk is often associated with credit, operational and reputation risk. Environmental and social risk involves a broad spectrum of topics and issues, such as: pollution and waste; energy, water and other resource usage; climate change; biodiversity; human rights; labour standards; community heal...
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Ecological factors and environmental regulations for access to raw material deposits also create a degree of uncertainty. In some regions of the world, for example in West Africa south of the Sahara, raw materials for cement production are so scarce that cement or clinker needs to be imported by sea. Rising transportat...
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Climate change presents both physical and transition risks to our investment portfolio. Physical risks include the risk of loss due to extreme weather events or longer-term shifts in climate patterns. Transition risks include changes in government policy, regulation, consumer preferences and technology, which may incre...
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Physical risks have a higher probability to impact coffee, with higher temperatures and water shortages compromising quality and reducing availability. This may lead to an increase in raw material costs for the industry, and have economic and social impacts on coffee-growing communities. For wheat and dairy, there is a...
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Accordingly, data for FY2019 is not consistent with data for FY2018 or preceding fiscal years. 3.Data for FY2016 regarding CO2 emissions from Showa Shell business sites is not publicly disclosed. 4.In line with a change in the end of fiscal year, Showa Shell’s FY2018 data is based on emissions during the 15-month perio...
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CFRA Phase I confirmed that Vancouver is most vulnerable to flooding caused by the combined effect of a coastal storm surge and a king tide (exceptionally high tides that typically occur in December and January) rather than river-related flooding caused by spring run-off. In addition to mapping the areas vulnerable to ...
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Water is an essential input for our industrial activities. Concerns regarding the long-term availability and quality of water, and security of access to water, have increased due to changes to demography and climate. Damage caused by storm surges and strong winds can affect the availability of ports and critical infras...
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The majority of our Scope 1 emissions include fugitive emissions from the production of coal and consumption of fuel and reductants. Scope 2 emissions principally relate to purchased electricity for our operations, in particular our metals processing assets, which require secure and reliable energy 24 hours a day, 365 ...
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Responding to the threats of climate change Our exposure to climate change falls into two broad categories. Physical risks, particularly to our property assets from severe weather events; and transition risks from the move to a low carbon economy, which will impact the value of investments associated with higher levels...
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We fail to respond to the emerging threats from climate change for our investment portfolios and wider businesses As a significant investor in financial markets, commercial real estate and housing, we are exposed to climate related transition risks, particularly should abrupt shifts in the political and technological l...
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At CEMEX, we are seeking to invest in upgrading our cement plants, trying to maximize the use of alternative fuels to power our kilns and transition away from fossil fuels. In 2019, we pledged more than US$50 million to invest in an innovative global program to replace fossil fuels with alternative fuels. Among our ini...
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The EIB also supports innovative investment funds that are tackling adaptation challenges. A new fund called CRAFT, the Climate Resilience and Adaptation Finance & Technology Transfer Facility, is developing new technologies and specialised services to help developing countries address droughts, bad weather, disease, w...
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The Bank also signed a €19 million deal in 2019 in Poland with BNP Paribas Bank Polska to improve energy efficiency in existing homes. The Polish bank will use the money to give loans to farmers and homeowners to install solar panels. The money also will help housing associations improve energy efficiency.
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