Threats and opportunities analysis with regard to climate change and climate change prevention
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GPW E-P3
The business model of the Capital Group has been adjusted to the current market situation and, in the opinion of the Management Board, it is not going to change significantly within a mid-term perspective considering the currently expected climate changes. The Capital Group companies have already taken actions in areas which support the climate protection and circular economy efforts. The above conclusions have also been based on an internal analysis of the impact of climate change in reference climate projections available on a portal created by the Institute of Environmental Protection. These projections include two variants of an increase in average temperature compared to the pre-industrial era: an increase of 2.5ºC and 4.5ºC. As a result of the analyses carried out, it was concluded that:
- the production activities of Grupa KĘTY S.A. as well as the other Capital Group companies are carried out in areas not directly exposed to flooding as a result of rising water levels in the seas and oceans caused by climatic changes;
- the production activities of Grupa KĘTY S.A. as well as of the other Capital Group companies are carried out in moderate climate zone, in areas that are not exposed to changes in climatic factors (temperature, precipitation, wind) that would make it impossible to conduct the current activities;
- the production activities of Grupa KĘTY S.A. as well as the other Capital Group companies are carried out in areas exposed to short-lasting weather events (intense rainfall, strong wind, whirlwind), the frequency of which may increase with climatic changes, however, their impact (possible value of assets exposed to the risk of losses) and frequency of occurrence do not threaten the continuity of the Capital Group operations.
Moreover, the Capital Group companies are not covered by the Community Emissions Trading Scheme (ETS) and are not exposed to the risk of stricter regulations in this respect.
It has, thus, been assumed that the issues related to the impact of climate change on Grupa KĘTY S.A. and the Capital Group would not have any significant impact on the business model and the financial statements in the next few/several years. At the same time, it was acknowledged that Grupa KĘTY S.A. and the Capital Group have a real influence on counteracting climate change by reducing greenhouse gas emissions, which will not affect the business model, but in the long term, due to the lower carbon footprint, it may increase the competitiveness of the products offered by the Capital Group. During the analysis, the following threats/opportunities were identified that should be monitored and mitigated (in the case of threats) or maximised (in the case of opportunities):
| Issue | Threat | Management |
|---|---|---|
| Loss of competitiveness, including exclusion from the market due to offering a product of high carbon footprint | Threat | By way of the implemented Climate Policy and the resulting goals for emission levels |
| Periodic water deficit for production purposes (EPS) | Threat | Monitoring of the water withdrawal sources and activities focused on water consumption reduction |
| Higher demand for aluminium products which reduce emissions from buildings and vehicles | Opportunity | Higher demand for aluminium products which reduce emissions from buildings and vehicles |
| Higher competitiveness compared with entities that do not implement the EU climate policy regulatory requirements in their operations | Opportunity | By way of the implemented Climate Policy and competitive environment monitoring |
At the Capital Group of Grupa KĘTY S.A. we identify sustainable development and social responsibility as being equivalent to ESG. It is the Management Board of the Company who is accountable for the issues, and specifically the President of the Management Board (CEO), pursuant to § 7 of the Organisational Regulations adopted by the Supervisory Board of Grupa KĘTY S.A.