CLIMATE ANALYSIS REPORT CONTINUED
Climate-related risk matrix
Estimated financial impact 1
Scenario sensitivity
Climate-related risks
Timeframe
1 Capital markets shift investment to low-carbon activities 2 Changing customers’ preference to low-emissions alternatives 3 New and emerging technologies substitute our customers’ existing products and services 4 Increased stakeholder concern or negative stakeholder feedback from lack of climate action plan 5 Increased energy costs due to increasing carbon taxes and alternative low emission energy sources 6 Increasing costs of commodity and raw materials
Short
Medium Long RCP2.6 RCP8.5
Transition risks
Unquantifiable
1 Capital markets shifting investment to low-carbon activities
1
2 Changing customer preferences
6
2
3
Medium
3 Substitution of existing customer products and services 4 Commodity and raw material price increases 5 Acute risks, e.g. extreme weather events 6 Chronic risks, e.g. rising sea levels and temperature
4
5 9
10
High
11
12
7 Increased borrowing costs 8 Mandatory environmental
7
8
Physical risks
standards or requirements for existing products and services 9 Extreme weather events such as cyclones or floods 10 Changes in precipitation patterns and extreme variability in weather patterns 11 Gradual changes in key climate variables such as temperature, humidity and precipitation 12 Rising sea levels
Low
Medium
High
Low
Likelihood of realisation of risk
KEY
Climate-related opportunities
7 Acceleration of renewable energy market
Priority C (low/medium) Priority B (medium/high) Priority A (high/very high)
Transition risk Physical risk
8 Electrification of transportation 9 Electrification and automation of plant and machinery
High
In summary, the estimated net financial impact of climate-related risks and opportunities is considered immaterial to the Group in the short term (up to 2030) under the RCP2.6 scenario. However, the potential impact under the worst-case scenario (RCP8.5) means that it is appropriate for us to provide commentary on the individual risks and opportunities identified. We also acknowledge that climate change remains a threat to the Group’s assets in the long term and that there are growing expectations amongst our stakeholders that we, as a responsible corporate citizen, address climate risks in our business operations. As such, we have incorporated climate-related risks into our principal risks and uncertainties and manage them as such.
Anticipated onset of risks and opportunities
Estimated full impact of risks and opportunities: Low likelihood
1 Estimated financial impacts rated as ‘High’ are those with the potential to have a material impact on the Group.
High likelihood
Aided by CLIMADA, we also assessed the emerging trends affecting the exposure of our physical assets to climate- related risks in the medium (up to 2050) and long term (up to 2100) under two scenarios: RCP4.5 and RCP8.5. We chose RCP4.5 instead of RCP2.6 for assessing physical risks because it is assumed that our assets would not be at risk if the long-term temperature rise stabilises at 2°C or below. RCP4.5 is the current climate development trajectory, which we have chosen for physical risk assessment for prudency. It is estimated that 32% of the Group’s 69 facilities would be exposed to some sorts of physical risks, such as heat stress, precipitation and river flooding. Fifteen sites (22%) across ten different countries were more vulnerable, the costs of which were also factored into the financial impact model.
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Annual Report and Accounts for the year ended 31 March 2026
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