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.

Transition risks and opportunities are identified through literature review, and engagement of internal and external subject matter experts. A list of sector-specific risks only is applied, however, market and opportunities are identified alongside a list of sector-specific opportunities related to resource efficiency, energy sources, products, service, and markets.

Afterwards, these risks and opportunities are ranked based on their potential impact on Vestas using a consequence/likelihood scale. The assessment of the potential impact of the most material transition risks and opportunities is based on two different scenarios and assessed across three different time horizons; short term (one-five years), medium term (five-10 years), and long term (10-30 years).

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.