KONGSBERG will contribute to the green transition
The climate is continously changing. Incidents caused by extreme weather, along with the danger that the world will not succeed in reducing its greenhouse gas emissions sufficiently to limit temperature rises in line with the Paris Agreement, bring risk and challenges also to businesses. KONGSBERG will contribute to the green transition to reduce this risk.
KONGSBERG has started a process of evaluating and reporting for climate risk, supporting the Task Force for Climate-related Financial Disclosures (TCFD)1).
Our managers and Board design our business strategy, fundamental components of which are sustainability and climate issues. Our overall risk assessments involve a range of scenarios including geopolitical conditions, climaterelated conditions, market conditions, etc. We evaluate opportunities and risks on the basis of what we regard as the most probable scenarios. Our business areas perform continuous risk assessments, including climate risk from 2019. This will be further developed from 2020, and will include the supply chain and logistics.
Our risk assessments are provisional and will be further developed and updated on an ongoing basis. We have determined that physical risk resulting from climate change, in the form of costs caused by physical damage such as floods, hurricanes, drought, fires, etc., is low in our operations. We have thoroughly surveyed production sites and offices and have relevant safety measures in place for the locations that could be affected by incidents such as flooding.
We have ascertained that transition risk, which is the financial risk associated with the transition to a zero emission society, is relatively low for KONGSBERG. At the same time, it may involve a risk to us that the maritime sector is generally exposed to market and transition risk, especially related to oil and gas business, which in turn may impact on demand for our products and services. Changes in climate policy could result in changes to framework conditions, such as more stringent legislation or an increase in carbon pricing with the aim of reducing emissions. Our production is not energy-intensive, and our total emissions are low. Significant increases in flight prices could result in increased costs for us, but this also apply to other parties in the market and is not expected to have a major effect on our competitiveness.
As a leading technology company, KONGSBERG will have considerable opportunities to develop competitive technology which responds to the market’s changing demands for low-emission products and services.
KONGSBERG has determined that liability risk, in the form of claims for damages linked to decisions or the lack of decisions which can in any way be connected to climate policy or climate change, is low. This also applies to reputational risk, which can affect companies who are considered to have contributed to climate change or have not done enough to limit the effects of climate change. Our assessment is that our technology is part of the solution and is helping towards the transition to a zero emission society.
- The G20 countries’ “Financial Stability Board” has established the Task Force on Climate-related Financial Disclosure (TCFD) to develop a method of evaluating and reporting on climate-related financial uncertainty.