E1
CLIMATE CHANGE
Resilience analysis [E1, SBM-3]
For transition risks, different time hori- zons are defined and used in the strategic management process: the short-term time horizon is defined as the current financial year, the medium-term as more than one year and up to 5 years and the long-term as 5–10 years. Two climate scenarios (4.5 and 8.5) are used to determine potential physical risks in the climate risk and vulnerability assessment. In terms of current climate im- pacts, the short-term time horizon is defined as one financial year and the medium-term as five years. The long-term time horizon is defined as 20 years and beyond, so that future changes can be identified and taken into account over the long term. The long- term time horizon for physical risk therefore differs from the long-term time horizon for transition risks. This distinction is made in order to be able to identify potential impacts of climate change at an early stage and take appropriate action. The Zumtobel Group focuses on the five-year medium-term time horizon. Due to the different long-term time horizons, the climate scenarios used differ methodologically from those in the financial report.
The Zumtobel Group operates on the basis of a robust business strategy that places a focus on long-term business success and sustainability. The Group-wide resilience analysis forms an integral part of the strate- gic management process and consequently of the integrated management system. The resilience analysis is based on as- sumptions regarding climate and regu- latory developments. Due to limited data availability and granularity along the value chain, individual assessments are based on assumptions whose occurrence cannot be predicted with certainty. These aspects are taken into account when carrying out the re- silience analysis; however, they do not limit the fundamental validity of the key findings. The resilience analysis shows that both the business model and the corporate strategy are resilient to climate change. Findings from this analysis may lead to adjustments to the physical risks stemming from climate change, as well as transition risks arising from the transition to a low-carbon econo- my. Key inputs for the resilience analysis include the corporate strategy, the context analysis and double materiality assessment, the cli- mate risk and vulnerability assessment, and Group-wide risk management. As part of its context analysis and materiality assessment, the Zumtobel Group identifies and assesses material internal and external topics related to political, economic, sociocultural, techno- logical, environmental and legal impact drivers as well as the requirements of its stakeholders. The assessment also involves identifying corresponding financial oppor- tunities and risks, reviewing the business model and strategic direction, and defining and planning corresponding actions and activities.
Climate-related physical risks
Climate-related impacts on all lighting and components plants are directly identified in a climate risk and vulnerability assess- ment and reviewed on an annual basis. All current potential environmental circums- tances that may affect the Zumtobel Group are evaluated at each location as part of the assessment. Actions that have already been implemented are also reviewed and new measures defined. At the time this report was being prepared, the assessment of the Zumtobel Group’s production facilities did not indicate exposure to any material cli- mate-related physical risks. Potentially high precipitation intensity, flooding and hail re- present potential moderate physical risks for the short-term time horizon. These risks are covered by an insurance policy and accoun- ted for through corresponding measures.
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