Moreover, our climate reduction initiatives as described on these pages, are anchored within our existing business model and financial planning. This is further supported by the fact that we do not currently have material climate-related financial risks (see page 29), and the fact that GN is not excluded from the Paris-aligned benchmarks.

Physical and transition risks We applied different climate scenario analysis over the short, medium and long term to identify and assess climate-related acute and chronic physical risks, such as extreme weather events, heat and water stress and sea level rise, as well as transition risks, such as carbon pricing, regulatory change, changing customer behavior, and availability of materials. For climate-related physical risks, geolocations data for our facilities and those of our suppliers was used to assess relevant risks.

A high-level qualitative assessment was carried out using the RCP8.5, IEA Net-Zero Emissions by 2050 Scenario (NZE) and IEA STEPS scenarios. The RCP8.5 scenario gives us the likely upper end of risk exposure of the business to climate-related hazards in the future. Here, the Shared Socioeconomic Pathway 3 was chosen to reflect recent trends in international affairs. The IEA’s new Net Zero Roadmap report and IEA’s NZE and STEPS scenario were applied to identify and assess climate-related transition risks and opportunities that GN may face in the future if the world pursues a path to net-zero emissions by 2050 or if climate action is less aggressive and policymaking is assumed to remain as today.