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Nordic tcfd reporting summit 2020
The document discusses the state of climate-related financial disclosures, focusing on the alignment of companies with TCFD guidelines and the gaps in Nordic companies' implementation. Key strengths include policies and due diligence, while weaknesses are noted in TCFD integration and climate risk management. The report emphasizes the need for improved alignment and specific disclosures in environmental metrics and strategic responses to climate-related risks.
Nordic tcfd reporting summit 2020
- 1. December 20 |Tweet @CDSBGlobal 1
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- 6. December 20 |Tweet @CDSBGlobal The state of the market – Is reporting actually improving? Nontokozo Khumalo, Corporate Engagement Manager, CDSB
- 7. December 20 |Tweet @CDSBGlobal 50 companies across 10 jurisdictions and 10 sectors reviewed 3 NFRD content categories and TCFD Mainstream reports US$ 3.5 trillion market capitalisation Nordic TCFD Reporting Summit Qualitative and quantitative
- 8. December 20 |Tweet @CDSBGlobal The state of disclosure in 2020 4 Top 3 Strengths • Policies and Due Diligence • Business Model • KPIs Top 3 Weaknesses • TCFD • Principal Risks • Materiality Despite the release of climate-related disclosure guidelines and 68% of companies referencing TCFD, only 16% demonstrated reasonable alignment. Progress is still needed as companies are not fully adopting TCFD Nordic TCFD Reporting Summit
- 9. December 20 |Tweet @CDSBGlobal Governance 5 Most companies disclosed on both board and management-level responsibilities but there are inconsistencies. • Most companies address board and management-level accountabilities, with some inconsistencies; • Climate-related accountabilities often implied, not explicit; • Link to wider arrangements such as risk management processes is not always clear. RSG M Nordic TCFD Reporting Summit
- 10. December 20 |Tweet @CDSBGlobal Nordics 6 Nordic companies disclosure of a combination of board and management-level responsibilities is lower than EU average. Nordic companies disclosure of board and management-level responsibilities below EU average with a higher proportion disclosing only the board- level responsibilities. RSG M Nordic TCFD Reporting Summit
- 11. December 20 |Tweet @CDSBGlobal Strategy 7 Improvement in considering transition and physical risks but disclosure on strategic impact assessment of climate scenarios remains low. • Majority disclosed risks and increased evidence of consideration of both physical and transition risks; • Limited disclosure of business-specific impacts on strategy or time horizons; • Nordics disclosure below EU average with 57% disclosing environmental or climate risks versus 86%. MRSG Nordic TCFD Reporting Summit
- 12. December 20 |Tweet @CDSBGlobal Nordics 8 Strategy resilience to scenarios disclosure in line with EU average of limited disclosure, often with high-level reference only. Limited disclosure with smaller proportion of Nordic companies able to reach a conclusion on resilience using scenario analysis when compared to the EU average, 18%. MRSG Nordic TCFD Reporting Summit
- 13. December 20 |Tweet @CDSBGlobal Risk management 9 Integration of climate risks into wider risk management processes is often implied rather than explicitly stated. • More than a third of the companies not disclosing management actions for climate risks; • Integration of climate change into wider risk management processes increased but often no explicit mention. MRSG Nordic TCFD Reporting Summit
- 14. December 20 |Tweet @CDSBGlobal Nordics 10 Large gap between Nordic company risk disclosures and EU average. MRSG Nordic TCFD Reporting Summit
- 15. December 20 |Tweet @CDSBGlobal Metrics and Targets 11 • Despite improved GHG emissions disclosure, other issues such as biodiversity are not reflecting; • Companies are not providing climate-related financial metrics of relevance to investors. G MRS A strong area of disclosure but certain metrics that would enhance decision- usefulness are still not present. Nordic TCFD Reporting Summit
- 16. December 20 |Tweet @CDSBGlobal cdsb.net/NFR2020
- 17. December 20 |Tweet @CDSBGlobal Enhanced reporting Europe campaign 13 Access regular support from experts in climate and environmental mainstream disclosure. Access to experts Improve climate and environmental disclosure using CDSB feedback. Understand the policy context and improve preparedness for regulation and application. Disclosure feedback Policy briefings Learn from peers and experts through country and region- specific workshops. Obtain resources directly post- launch and notifications on upcoming publications. Resources Internal support Receive tailored briefings for reporting teams focused on sustainability and/or finance functions. Workshops https://www.cdsb.net/what-we-do/enhanced-reporting-europe Nordic TCFD Reporting Summit
- 18. December 20 |Tweet @CDSBGlobal CDSB resources 14 tcfdhub.orgcdsb.net/publications Nordic TCFD Reporting Summit
- 19. December 20 |Tweet @CDSBGlobal Thank you! With the contribution of the LIFE Programme of the European Union. Follow us on social media Subscribe to our newsletter www.cdsb.net/newsletter Contact Nontokozo Khumalo Corporate Engagement Manager nontokozo.khumalo@cdsb.net
- 20. TCFD response & development LukeBlower, Associate, Redefining Value, WBCSD
- 21. WBCSD is coordinatingPreparer Forums for priority non-financial sectors at the request of the TCFD – Oil & Gas, Electric Utilities, Chemicals, Construction & Building Materials, Food, Agriculture & Forest products and Autos. Forums seek to assess the current state of disclosure, identify effective practices, common challenges, understand user needs, outline guidelines and disclosure developments over time. Communicating responses to climate change and the energy transition. Climate-related financial disclosures allow companies to disclose risks and opportunities associated with climate change supporting informed investment, lending, and underwriting decisions. WBCSD TCFD Preparer Forums
- 22. Electric Utilities Oil andGas Chemicals TCFD Preparer Forum members
- 23. Construction & buildingmaterials TCFD Preparer Forum members Food, Agriculture & Forest Products Autos
- 24. In-depth description ofclimate-related financial disclosure among leading companies, with suggested developments and discussion of challenges. Highlights include: ● Integration of climate-related risks into enterprise risk management and governance processes ● Evidence of strategic responses to the low-carbon transition and pursuit of opportunities ● Climate-related business resilience reflecting shocks and stressors, effects, response & transformation ● Illustrative scenario analysis processes and key quantitative parameters and assumptions ● Value-chain and sectoral insights on climate-related risks and opportunities ● Illustrative climate-related metrics, progressing from operational to financial ● User perspectives from credit and equity analysts TCFD Preparer Forum outputs
- 26. INTERNAL 1.6 9.9 2019 Under construction Installed 22 Ørsteddevelops energy systems that are green, independent and economically viable – Global leader in offshore wind – Develop, construct, own and operate offshore wind farms – Ambition of ~15 GW installed capacity by 2025 – Route-to-market for own and customers’ generation portfolio – Market trading operations – Convert CHPs to sustainable biomass and phase out coal by 2023 – Recent divestment of Radius, B2C and City Light – US onshore wind portfolio – Develop, construct, own and operate onshore wind farms – Energy storage solutions and solar OnshoreOffshore Markets & Bioenergy 9.9 3.0 6.8 H1 2020 Segments Capacity GW 2.1 0.5 1.6 H1 2020 H1 2020 2.1
- 27. INTERNAL 23 Since 2007, Ørstedhas transformed from a black to a green energy company with strong financial results Business transformation EBITDA, DKKbn, % CO2 reduction g CO2e/kWh 2020 guidance 2007 7% 16-17 98% 9.6 424 64 2007 H1 2020 -85% 6.0 2007 10.8 H1 2020 Profitability ROCE, % Internationalisation Share of EBITDA outside DK 12% 91% 2007 2020 guidance Share of renewables
- 29. INTERNAL We have assessedthe impact that climate change can have on the resilience of our business by implementing the TCFD recommendations in our two latest annual reports for 2018 and 2019. Ørsted included as case example in TCFD Status Report from June 2019 and on the TCFD Knowledge Hub in 2020.
- 30. INTERNAL TCFD implementation roadmapin Ørsted – to date Implementation of climate-related financial disclosures Outcomes 2019 TCFD gap analysis and endorsement – Business model centred around climate change => already TCFD-aligned to a large extent – Science-based GHG reduction target – Official TCFD endorsement Annual report and climate KPIs – Established internal working group – Implemented low-hanging fruits in annual report – Established CEO and CFO climate KPIs 2020 Climate scenario analysis – Most significant gap – Focus: Physical climate risks in offshore wind – Two scenarios: 1.5-2°C and 3-4°C – Interviews and workshop Improved internal understanding of climate-related risks and opportunities Decision-useful climate- related information provided to investors 2018 Internal stakeholders - Sustainability dept. - Annual report dept. (Finance) - Top mgt. approval Internal stakeholders - Sustainability, IR, Finance, Risk dept., Strategy, ESG Accounting - Top mgt. and Board approval Internal stakeholders - Offshore wind business - Sustainability (project management) - Top mgt. approval Strategic carbon neutral targets – Become a carbon neutral company (scope 1 and 2) by 2025 – Achieve a carbon neutral footprint (scope 1-3) by 2040 – Launched supply chain decarbonization programme Internal stakeholders - Strategy, Sustainability, ESG Accounting, Procurement - Top mgt.
- 31. INTERNAL 5 key thingswe learned from TCFD implementation and scenario analysis 1. Use TCFD to provoke internal thinking and improve external reporting 2. Realistic scoping is key 3. Bring experts together from across your business 4. Work constructively with the best available science 5. Don’t wait for perfection. Get started.
- 32. 2020-11-24Nordic TCFD reportingsummit 2020 28 On the journey towards a carbon-free future Emilia Hagberg, Senior Sustainability Manager, Skanska Group
- 33. Our business streamsLocalpresence, global strength USA Sweden Finland Denmark United Kingdom Poland Slovakia Hungary Czech Republic Romania Norway 42% 40% 18% 2020-11-24Nordic TCFD reporting summit 2020 29
- 34. 2020-11-24Nordic TCFD reportingsummit 2020 30 We are committed to reaching net-zero Today -28%* -50% 0 2030 2045 *Within our own operations.
- 35. The value chainin focus 2020-11-24 31Nordic TCFD reporting summit 2020
- 36. 2020-11-24 32Nordic TCFDreporting summit 2020
- 37. Åparken skatepark, Sundsvall, Sweden 2020-11-2433 Electric Site Gothenburg, Sweden Making better mixes: Low-carbon and circular concrete Cutting carbon emission with AICustomer focus: The world´s northern most energy- positive building Powerhouse Brattørkaia Trondheim, Norway Nordic TCFD reporting summit 2020
- 38. Nordic TCFD reportingsummit 2020 Implementing TCFD • Climate target • Follow up performance by Board • Climate action plans • Business opportunities • Climate risks in Enterprise Risk Management • Climate in financial analysis • Economic incentives
- 39. 2020-11-24Nordic TCFD reportingsummit 2020 35 Thank you!
- 40. Renewable materials in a circularbioeconomy Roy Antink, SVP, International Policy Coordination, Sustainability, Stora Enso
- 41. Fossil carbon emissionsand resilience to global warming Aligned with the TCFD • Initial response to the TCFD recommendations • Published for 2018 and 2019 • Provides a summary of: − Governance − Strategy − Risk and Opportunity Management − Metrics and target − Highlights − External Recognition 37 https://www.storaenso.com/en/sustainability/environmental/carbon- dioxide/fossil-carbon-emissions-summary
- 42. Climate-related financial disclosures(TCFD Index) • Established internal cross functional TCFD coordination group and a TCFD Index • Our TCFD Index is located in the report of the Board of Directors (Financials 2019) • Lists our disclosures with reference to TCFD recommendations, and refers to the locations where these issues are addressed in our annual report. • The location references are complemented in the index with additional information, as necessary 38
- 43. Substituting materials fromfinite resources is our key competitive advantage Our products substitute fossil-based products, saving 20 Mt CO2 Our forests are carbon neutral and absorb 3 Mt CO2 Resource efficient value chain, emissions: 11 Mt CO2 Our total climate benefit: 12 Mt CO2
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