Initiatives for TCFD

NSG Group has been aligning its climate related disclosures with the Taskforce on Climate related Financial Disclosures (TCFD) recommendations since 2017 utilizing CDP framework. The table below summarizes the main aspects of the current efforts in disclosure.

Following the TCFD recommendations, NSG Group has committed to developing an action plan using climate scenario analysis to assess potential impacts from climate related risks and opportunities. This activity will further supplement the existing climate change roadmap focused on minimizing risk and maximizing opportunity associated with the decarbonization of NSG Group activities.

Governance

TCFD Recommendation

  • Describe the board’s oversight of climate related risks and opportunities

NSG Group Approach

  • The Group CEO and Board of Directors establish the basic policies and goals of all Group activities including climate change. Climate related issues are discussed at both Management Committee (MC) and Sustainability Committee (SC) level with the aim of ensuring targets & action plans fulfil all sustainability goals and connect to all relevant business aspects. This includes, for example, strategies and actions based on risk and opportunity analysis to achieve both corporate growth and positive social contribution.

Further Disclosure / Information sources

CDP report 2021 C1.1 - C1.1b

https://www.nsg.com/en/about-nsg/governance/corporate-governance

TCFD Recommendation

  • Describe management’s role in assessing and managing climate related risks and opportunities

NSG Group Approach

  • At the Sustainability Committee the concrete actions for the sustainability policies, goals and targets are managed. The principle roles of the SC include; to act as an advisory body for the CEO to review the strategy, coordinate all sustainability activities within the Group and ensure effective communication of these matters with our stakeholders. The membership of the SC consists of global leaders of all Group functions and SBU heads.

Further Disclosure / Information sources

CDP report 2021 C1.2

Strategy

TCFD Recommendation

  • Describe the climate related risks and opportunities the organization has identified over the short, mid and long term

NSG Group Approach

  • Risks & opportunities identified include impacts from:
  • Current regulation - e.g. European Energy Directive - opportunity in supplying high performance products associated with the directive Emerging regulation, e.g. new industrial Emissions Trading Schemes (ETS) leading to risk of increased operational costs. New EU building ETS leading to opportunities to supply high performance energy saving products.
  • Technology development - e.g. EV market growth, low energy buildings market growth.
  • Legal compliance - risk & cost of meeting future compliance, opportunities associated with more stringent product demands and NSG competitive product development.
  • Market aspects - e.g. customer specifications for building / vehicle efficiency with associated opportunities for product development
  • Reputation - e.g. risk associated with customer or other stakeholder perceptions.
  • Acute Physical - e.g. flood, typhoon risk impact to operations & value chain (supply continuity) opportunity for specific product development e.g. storm glazing.
  • Chronic Physical - e.g. sea level rise primarily risk impact to current and future operations and value chain.

Further Disclosure / Information sources

CDP report 2021 C2.1 - C2.4

TCFD Recommendation

  • Describe the impact of climate related risks and opportunities on the organizations business strategy and financial planning

NSG Group Approach

  • NSG Group business strategy already incorporates the risks and opportunities identified from the 2019/20 materiality assessment and the 2℃ scenario analysis. Examples of key initiatives regarding mitigation of climate impacts and maximising opportunity include; Working with supply chain and value chain partners to establish win win scenarios for product development supporting the low carbon transition. Investment in R&D technology developments to reduce operational GHG emissions as well as development of new products to support society decarbonisation. Such activities match precisely to the NSG Group mission of ‘Changing our surroundings, improving our world’.

Further Disclosure / Information sources

https://www.nsg.com/en/investors/management-policy-and-sustainability/management-strategy

https://www.nsg.com/en/investors/management-policy-and-sustainability/materiality

https://www.nsg.com/sustainability/ceo

https://www.nsg.com/en/sustainability/sustainability-of-nsg-group/climate-change/va-products-and-services

TCFD Recommendation

  • Describe the resilience of the organization strategy, taking into consideration different climate related scenarios including a 2℃ or lower scenario

NSG Group Approach

  • NSG undertook an analysis of climate reliance based on a 2℃ warming scenario in 2019/20. The output from this analysis led to the implementation of a Science Based Target (SBT), the achievement of which is fully integrated into the business strategy. Adherence to this target will improve the resilience of the Group to climate related risks from both physical and transitional impacts.

Further Disclosure / Information sources

CDP report 2021 C2.3a - C3.1f

Risk Management

TCFD Recommendation

  • Describe the organizations processes for identifying and assessing climate related risks

NSG Group Approach

  • The Group maintains a formal Enterprise Risk Management (ERM) process, managed by the Strategic Risk Committee (SRC) and based on ISO31000. The SRC defines the risk appetite and tolerance thresholds associated with the Group activities and undertakes a regular process to identify and assess the risks to the achievement of its strategy. Climate related risks are included within the risks identified and monitored by the SRC, and these are assessed using quantitative criteria across four vectors: financial impact; operational impact; compliance impact and reputation impact.

Further Disclosure / Information sources

CDP report 2021 C2.1 - 2.2a

https://www.nsg.com/en/investors/management-policy-and-sustainability/risk-management

TCFD Recommendation

  • Describe the organisations processes for managing climate related risks

NSG Group Approach

  • Climate related risks are assessed and monitored by the SRC following the same criteria as other strategic risks. The SRC evaluates the controls and mitigations which address the risk and directs additional treatment measures to be implemented as necessary. A risk owner is defined who takes responsibility for monitoring and reporting the progress against the defined action plans to manage the risk within the Group’s appetite. Individual controls and countermeasures are managed within the SBU’s and Group Functions and operational reports are also made to the MC and SC.

Further Disclosure / Information sources

CDP report 2021 C2.2

TCFD Recommendation

  • Describe how processes for identifying, assessing and managing climate related risks are integrated into the organizations overall risk management

NSG Group Approach

  • Climate related risks are assessed and monitored by the SRC following the same process and criteria as other strategic risks. The identified risks and opportunities presented to the SRC are also presented to the MC on a regular (minimum 6 monthly) basis to ensure full integration of the overall risk management and business strategy.

Further Disclosure / Information sources

CDP report 2021 C2.2

Metrics and Targets

TCFD Recommendation

  • Describe the metrics used by the organisation to assess climate related risks and opportunities in line with its strategy and risk management process

NSG Group Approach

  • NSG Group monitors all GHG emissions across the supply chain (scope 3), own operations (scope 1 & 2) and customer impacts (scope 3). The primary metric tracked is absolute tonnes of CO2 (e) emissions across these three emission scopes. Supplier sustainability impacts are also tracked using software tools such as the EcoVadis platform. Future predictions of the GHG emissions are used to estimate the impact of the various actions for GHG emission mitigation, with a hierarchal approach of these actions to ensure investment and implementation is optimised according to the strategic risk and opportunity for each action and overall impact to the Group goals and targets.

Further Disclosure / Information sources

https://www.nsg.com/en/sustainability/sustainability-of-nsg-group/target-and-results

TCFD Recommendation

  • Disclose scope 1, scope 2 and if appropriate scope 3 greenhouse gas (GHG) emissions and the related risks

NSG Group Approach

  • CO2 (e) emissions in the baseline year for the NSG Group SBT were as Scope 1 = 3,103 ktonnes. Scope 2 (location) = 1,050 ktonnes. Scope 3 = 2,513 ktonnes. In the latest report year (CY2020) the emissions across the three scopes were as follows; Scope 1 = 2,817 ktonnes. Scope 2 (location) = 728 ktonnes. Scope 3 = 2,952 ktonnes A program of operational decarbonisation actions has supported and will continue to support achievement of GHG emission reductions. These actions play a key part in the climate change risk mitigation strategy of NSG Group.

Further Disclosure / Information sources

CDP report 2021 C4,C6,C7.

TCFD Recommendation

  • Describe the targets used by the organisation to manage climate related risks and opportunities and performance against targets

NSG Group Approach

  • The NSG Group has a SBT verified in 2019. This target is a 21% reduction in absolute CO2 (e) emissions across Scope 1 and Scope 2. 2020 performance is on track to deliver this SBT, with absolute emission reduction of 15% achieved, although significant proportion of this reduction was associated with reduced production activities due to the Covid19 pandemic. In addition, the Group has the following two key climate change related targets; To reduce CO2 emission / tonne of glass packed (e) by 2% year on year between FY21 & FY24 Performance against this target in CY2020 was 6% behind the target primarily due to the impact of the Covid19 pandemic on the Group’s operational utilisation. To achieve a level of 50% of consumed electricity from certified renewable sources by end of FY24. Performance against this target in CY2020 was on track, with 25% of consumed electricity from renewable sources. Other targets regarding supply chain compliance with NSG sustainability goals are also in place Finally, the Group is also planning to re-establish a target for the proportion of revenue generated from ‘eco friendly’ products.

Further Disclosure / Information sources

CDP report 2021 C4.1a - 4.2b

https://www.nsg.com/en/sustainability/sustainability-of-nsg-group/climate-change/reducing-CO2-emissions

About this report:
This report includes information that has already been disclosed by NSG Group (e.g. within the Integrated report 2020 or as part of its CDP climate change reporting). Information from these existing disclosures has been summarized to provide a relevant, succinct disclosure of the current status of activities. The timeframe for risk and opportunity analysis is consistent with that previously reported, in that short term = 1-2 years, mid term is 2-4 years and Long term is 4 years and beyond (typically up to 15 years). Further references are provided in case readers are interested to seek further information within the existing NSG Group publications of relevance.

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