Page 128 - Sigmaroc Annual-Report 2023

SIGMAROC ANNUAL REPORT 2023 STRATEGIC REPORT
TCFD Report
KEY RISKS
Five key-climate related risks that could have a financial impact on the Group have been identified.
Risk
1. Disruption due to fluvial and coastal flooding
2. Carbon pricing within operations
3. Carbon pricing in value chain
4. Operational decarbonisation
5. Failure to meet/maintain expected ESG credentials
Type
Area
Primary potential financial impact
Time horizon
Likelihood
Location or service most impacted
Metrics
Physical (Chronic and Acute)
Own Operations
Loss of revenue due to operational disruption
Long
Medium
River flood: Site specific, risk identified at 7 sites across operations.
Sea level rise:
Site specific, risk identified at 8 sites across operations.
• Number of flooding
incidents
• Days lost due to flooding
incidents
• Costs of flooding
incidents
Transition (Current and Emerging Regulation)
Own Operations
Higher costs associated with energy and other inputs
Medium
High
Group
Transition (Current and Emerging Regulation)
Downstream
Higher costs associated with carbon tax on Scope 3 emissions
Medium
High
Group
Transition (Technology)
Own Operations
Increased capex, increased operating costs
Short/Medium
Medium
Group
• CO2 intensity
• Energy intensity
• Total energy consumption
• % alternative energy
consumption (including renewables & Biofuels)
Transition (Reputation)
Own Operations
Increased cost of capital, loss of investment
Short/Medium
High
Group
• External ESG scores
• Share Price
•
Scope 1&2 emissions
•
Scope 3 emissions
1. Disruption due to fluvial or coastal flooding
Following an assessment of climate-related hazards affecting the Group’s portfolio, flood risk exposure from rivers and sea level rise was identified for several sites.
While 92% of the portfolio is at minimal risk of river flooding, 7 sites are currently in the highest flood risk zone and will remain in this risk bracket under all future scenarios and time horizons. Flooding is likely SigmaRoc’s most material physical risk at present due to its potential to destabilise assets.
Sea level rise is a growing risk, with 7 sites at medium or high risk under RCP 2.6 and 4.5. Under a severe RCP 8.5 scenario, 7 of these sites would be exposed to high risk, with the final site exposed to extreme risk.
Mitigation
Mitigation of hydrological risks in some operations is already business as usual. Whereas some sites naturally drain and consequently remain dry, others require periodic de-watering. Historically the Group has found that water logging does not tend to stop operations altogether at an