Orsted
ESRS disclosure: ESRS ESRS 2 \ DR IRO-1 \ Paragraph 53 c iii
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- Provide a detailed account of the methodology employed to identify, evaluate, prioritize, and monitor risks and opportunities with potential financial implications. Specifically, elucidate how sustainability-related risks are prioritized in comparison to other risk categories, including the application of risk-assessment tools.
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Question Id: IRO-1_10
When scoring sustainability risks and opportunities, we assessed the potential 'magnitude' of possible financial effects on, for example, revenue, CAPEX or OPEX, which constitutes one part of the score, and the 'likelihood of occurrence', which constitutes the other part. The possible financial effects of the individual risks and opportunities were assessed through sustainability-matter-specific scenarios, operationalised through stress tests. Mitigation measures put in place are reflected in either the magnitude or likelihood of the assessed scenarios. Some scenarios were assessed quantitatively. In cases where a quantitative assessment was not possible or insufficient, qualitative assessments were used to supplement or inform the magnitude of the risk or opportunity. This approach was necessary due to the complexity of defining exact values for potential sustainability scenarios. For risks and opportunities, we consolidated the score by assigning weights over the short-, medium-, and long-term horizons. The weights were evenly distributed or adjusted to emphasise either the short term or medium and long term.
Report Date: 4Q2024Relevance: 85%