RESPONSIBLE BUSINESS CONDUCT

Nolato and TCFD

The Task force on Climate-related Financial Disclosures

The Task force on Climate-related Financial Disclosures (TCFD) is a market-based initiative that was launched in 2017. The aim is to develop recommendations for voluntary and consistent reporting of climate-­related financial risks and opportunities.

TCFD’s guidelines encompass governance, strategy, risk management, metrics and targets. For Nolato, this is about having financial control over how the Group is affected by climate change over time, and how operations are impacted by mechanisms aimed at limiting carbon dioxide emissions.

Supporting TCFD is voluntary. A growing number of companies and organizations are officially affiliated with TCFD, and Nolato is now taking the initial steps towards following the guidelines. TCFD outlines four key areas that investors and market operators are keen to be informed about. The Group’s climate work is focused on these areas, but there is still work to do in order to comply with TCDF’s guidelines:

  • Governance – Nolato’s Board has assigned one of its members special responsibility for following up sustainability work, including climate-­related risks and opportunities. The Board receives regular updates about how climate-related work is developing, and it has ultimate responsibility for the format and implementation of the Group’s climate goals.
  • Strategy – Climate change creates risks and opportunities for Nolato, and climate issues are part of the company’s overall sustainable development strategy. A scenario in which society decides to make dramatic changes in order to reduce emissions of fossil-based carbon dioxide will impact Nolato in the form of both increased costs (taxes, fees) and regulation, for example new or tougher legislation. The transition towards reducing the Group’s carbon footprint is ongoing, but will demand significant resources over the next few years.

Significant temperature increase is another scenario that will likely cause physical risks, with an effect on both Nolato and the company’s value­ chain. Our current risk analyses factor in flooding, extreme weather events and drought. To meet TCFD guidelines, the Group needs to work more on possible scenarios in order to quantify how earning capacity could be affected by these situations.

  • Risk management – To reduce the risks, the Group is moving away from fossil-based energy. Furthermore, opportunities are being created via the development of products containing bio-based and recycled raw materials.
  • Metrics and targets – For many years, Nolato has been reporting its carbon dioxide emissions and KPIs on how emissions change over time. A new, ambitious climate target was introduced for the Group in 2020.