related risks and the TCFD framework to educate senior management and prepare executives for the analysis the Company must undertake to assess and quantify its climate-related risks and opportunities over the short, medium, and long term. As part of its periodic enterprise risk assessment exercise, the Company identified weather risks specific to TTEC’s key delivery locations, cost of energy and other utilities, and availability of qualified labor in locations that may be impacted by climate change. The Company is working on strategies to mitigate these risks. TTEC generally defines the threshold for "financial material impact" to be 5% to 10% of total revenue. As it relates to business strategy and the useful life of an organization’s assets or infrastructure, TTEC considers: • Short term as fewer than three years • Medium term as three to five years • Long term as more than five and up to 10 years TTEC may consider this material financial threshold and these time horizons when considering climate- related risks and opportunities. Overall, chronic physical risks, transition risks related to policy, litigation and legal issues, technological and market changes, are identified as potential low- level risks to be considered by the Company. TTEC does not see the physical risks associated with climate change as having a strong impact on the Company; however, chronic physical risks related to long-term climate changes (e.g., sea level rise, increased frequency and severity of hurricanes) in TTEC’s areas of operations are seen as posing a low risk in the medium to long term. Transition risks related to policy change, litigation, or legal issues are viewed as medium-term risks posed to the Company in the next five years.
Technological advancements and risk associated with changing technology is viewed as a potential risk in the short term. Overall, TTEC identifies a number of potential climate- related opportunities related to: • resource efficiency • energy sources • resiliency of the organization Resource efficiency is identified as an opportunity in the short and medium term. Diversification of energy sources is identified as an opportunity in the medium term as is the resiliency of the organization's business strategy.
Impact of risks and opportunities
Financial impacts of climate-related risks:
TTEC continues to evolve its business continuity and disaster recovery plans and processes, extending beyond our delivery centers to include remote delivery. In a distributed remote delivery model, our current plans and processes may be limited, especially in the event weather impacts internet access and causes power grid downtime. This may be difficult to manage where system redundancies are not possible. Infrastructure challenges and a lack of sophisticated disaster and pandemic preparedness in some countries where we operate may affect our service delivery, insurance risks, losses related to property damage, and business interruption exposures. (TTEC 10-K 2023). Overall, chronic physical risks, transition risks related to policy, litigation and legal issues, technology, and market changes are identified as potential low-level risks, with minimal financially material impacts, to be considered by the Company.
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TTEC 2023 Impact and Sustainability Report
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