The Group strategy to address climate-related risks (as defined by TCFD[*]) could be ineffective and damage Solvay’s reputation, causing business losses, undervaluation, and difficulty attracting long-term investors.
- Policies and legal context: regulations and actions to limit CO2 emissions, for example increasing the price of greenhouse gas (GHG) emissions,
- Technology: unsuccessful investment in new, lower-emission technologies,
- Markets: failure to adapt to changing customer behavior,
- Reputation: negative stakeholder attitudes if their climate change concerns are not addressed effectively,
Prevention and mitigation actions
- Solvay’s strategy focuses on businesses with higher added value and less environmental exposure.
- Every year, the Sustainable Portfolio Management (SPM) tool assesses the environmental exposure of our sales and our innovation projects portfolio. SPM includes climate-related criteria aligned on 2°C scenarios.
- Solvay has a GHG emissions reduction plan.
2019 main actions
Solvay mainly works on four workstreams:
- Review of climate-related risks and opportunities for each product in each market with Solvay Sustainable Portfolio Management tool. 19% of our sales are ranked in climate-related solutions, while 3% of our sales are ranked as climate-related Challenges.
- Realization of a 2040 scenario analysis in line with the TCFD recommendations and using as reference the International Energy Agency’s Sustainable Development scenario. The study showed that sales’ opportunities could be larger than negative impacts on costs.
- Realization of a mapping of acute climate-related physical risks with insurers. Seven production sites are located in areas with a 2% annual change of exposition to floods. 11 sites production sites are located in wind exposed areas.
- The mapping of water scarcity risks has been updated based on a database from Hoekstra & al (2016). 21 sites have been identified “at risk”, combining location, water consumption and business interruption costs. Action plans are being developed for each plant, based on their specific situation.
[*] : TCFD – Task Force on Climate-related Financial Disclosures