The analysis of physical climate risks covers a wide range of chronic and acute climate-related hazards in line with the EU Taxonomy, excluding hazards that have been deemed irrelevant such as avalanche, saline intrusion, and permafrost thawing.

The physical risks are assessed on site level using geospatial coordinates for our manufacturing facilities, warehouses, and critical suppliers, while they are assessed on a national level for our construction and service sites. Detailed desktop analysis, including assessments of a wide range of climate metrics, is always conducted in the initial phase of a development project. The analysis of transitional climate risks follows TCFD’s recommendations and covers Vestas at entity level, our supply chain, and key stakeholders, such as customers and investors. No transition risks are excluded from the analysis.

Climate-related impacts, risks and opportunities were identified through engagement of internal and external subject matter experts, as well as external stakeholders such as NGOs and customers. Through workshops and interviews both within and outside our organisation, we have collected input that strengthens our understanding of the importance of areas related to climate change. Through life cycle assessments and carbon accounting, we calculate our GHG emissions and estimate paths to reach carbon neutrality in line with our targets.

Physical climate risks are assessed using third-party software that allows site-level analysis of a wide range of acute and chronic climate hazards and projections of climate variables across multiple future looking scenarios and time horizons.

The scenarios used are the International Energy Agency’s Net Zero Emissions by 2050, representing a climate scenario in line with limiting global warming to 1.5°C, and the Stated Policy Scenario, representing a more conservative benchmark for the future, not taking for granted that governments will reach all stated goals and energy-related objectives.

These scenarios are all relevant to Vestas as they cover both a very optimistic and a more realistic future scenario. Opposite to physical risks, transition risks and opportunities are more extreme in scenarios that assume successful mitigation of the worst effects of climate change, as drastic political and regulatory measures are necessary to change the current path. Therefore, these scenarios prepare companies well to adapt to changes in status quo.

The scenarios used are the International Energy Agency’s Net Zero Emissions by 2050, representing a climate scenario in line with limiting global warming to 1.5°C, and the Stated Policy Scenario, representing a more conservative benchmark for the future, not taking for granted that governments will reach all stated goals and energy-related objectives.

These scenarios are all relevant to Vestas as they cover both a very optimistic and a more realistic future scenario. Opposite to physical risks, transition risks and opportunities are more extreme in scenarios that assume successful mitigation of the worst effects of climate change, as drastic political and regulatory measures are necessary to change the current path. Therefore, these scenarios prepare companies well to adapt to changes in status quo.