KONGSBERG will contribute to the green transition
The climate is continously changing. The risk that the world will not succeed in reducing its greenhouse gas emissions sufficiently to limit temperature rises in line with the Paris Agreement, bring risks and challenges also to businesses.
The Group Management and Board design our business strategy, where sustainability and climate issues are fundamental components. Our overall risk assessments involve a range of scenarios including geopolitical conditions, climate-related conditions, market conditions, etc. In general, we evaluate opportunities and risks on the basis of what we regard as the most probable scenarios.
KONGSBERG has conducted a mapping and identified improvement plans for our internal risk process for climate assessments according to the Task Force for Climate-related Financial Disclosures (TCFD). On this basis, we will further develop our risk process to include climate risk to a greater extent in 2021.
Our risk assessments are that physical risk resulting from climate change, in the form of costs caused by physical damage such as floods, hurricanes, drought, fires, etc., is relatively 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 low to moderate 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. New technology could also lead to disruptive market changes.
Changes in climate policy could result in changes to constraints, such as more stringent legislation or an increase in carbon pricing with the aim of reducing emissions. This can give negative effects, particularly in oil & gas sector, and for specific segments as cruise ships. KONGSBERG is exposed to these markets but has over the last ten years significantly expanded our supply scope, both in terms of the markets we supply to and the products and systems delivered. Kongsberg Maritime’s products and systems contribute greatly to more energy efficient utilisation of the device on which it is installed. KONGSBERG has made a significant effort, and will also, as a leading technology company, have considerable opportunities to develop competitive technology which responds to the market’s changing demand for low-emission products and services. We invest significantly in research and development for innovative and sustainable solutions for our customers to meet this risk.
We do not have energy-intensive production and have low internal emissions. We focus on environmentally friendly transport methods, and are in process of further developing circular economy, both in our internal operations and from a delivery perspective.
KONGSBERG has assessed 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.