Page 127 - Sigmaroc Annual-Report 2023

Likelihood
127
1 Occurrence less frequently than once in 5 years
2 Occurrence within 5 years
3 Occurrence within one year or more frequently
Climate-related risks and opportunities were assessed against the following time horizons:
Remote
Probable
Frequent
From (years)
2022
To (years)
2024
Rationale
2025
2030
2031
2040 and beyond
Short-term Medium-term Long-term
The following three climate-related scenarios were examined, looking forward out to 2100, to identify and assess physical climate-related risks.
• RCP 2.6: a climate-positive pathway, likely to keep global temperature rise below 2 °C by 2100. CO2 emissions start declining by 2020 and go to zero by 2100.
• RCP 4.5: an intermediate and probably baseline scenario more likely than not to result in global temperature rise between 2 °C and 3 °C, by 2100 with a mean sea level rise 35% higher than that of RCP 2.6. Many plant and animal species will be unable to adapt to the effects of RCP 4.5 and higher RCPs. Emissions peak around 2040, then decline.
• RCP 8.5: a bad case scenario where global temperatures rise between 4.1-4.8°C by 2100. This scenario is included for its extreme impacts on physical climate risks as the global response to mitigating climate change is limited.
The following two climate-related scenarios were examined, looking forward out to 2050, to identify and assess the behaviour of transition risks and opportunities.
• Net Zero 2050 (NZE): an ambitious scenario which sets out a narrow but achievable pathway for the global energy sector to achieve net zero CO2 emissions by 2050. This meets the TCFD requirement of using a “below 2°C” scenario and is included as it informs the decarbonisation pathways used by the Science Based Targets initiative (SBTi), which validates corporate net zero targets and ambition.
• Stated Policies Scenario (STEPS): a scenario which represents the roll forward of already announced policy measures. This scenario outlines a combination of physical and transitions risk impacts as temperatures
In line with strategic cycles (noting 2023 is year 2)
In line with medium-term time horizons followed by peers
In line with the Road Map to Net Zero and the UK’s Net Zero by 2050 ambitions.
rise by around 2.5°C by 2100 from pre-industrial levels, with a 50% probability. This scenario is included as it represents a base case pathway with a trajectory implied by today’s policy settings.
Over 2024 SigmaRoc will be restructuring the business in order to integrate appropriately the newly acquired sites into the risk management process. Once appointed, the Group Sustainability Manager will collect data relating to environmental and climate-related risks as part of the quarterly review, maintain a central register and prepare a suite of reports to be reviewed by the Group ESG committee.
STRATEGY
Having assessed the climate-related hazards affecting the entire estate, SigmaRoc’s overall exposure to physical climate-related risks is considered to be low. By contrast, as a supplier of both low and high grade materials for use in construction, agriculture, environmental and industrial applications, SigmaRoc’s exposure to transition risks may be greater due to developing environmental regulation and stakeholder expectations in Europe. Nevertheless, given the longstanding work to identify and mitigate climate impacts on the Group, the strategy is considered to be resilient to climate risks and opportunities. As detailed against each risk, SigmaRoc is working to decarbonise its operations through energy efficiency, transition to renewable electricity, the development of carbon capture mechanisms and via strategic collaboration to minimise exposure such that any strategic and financial impacts from climate change are limited. Moreover, SigmaRoc considers itself at the forefront of the green transition by providing the materials that are essential to the green economy and will be enhancing its strategy to capitalise on these opportunities in the coming years.