The Group strategy to address climate-related transition risks (as defined by TCFD[*]) could be ineffective and damage Solvay's reputation, business losses, undervaluation, and difficulty attracting long-term investors. The Group has decided to include water-related risks in climate-related transition risks, rather than in physical risks
Climate transition risks stem from various causes:
- Policies and legal context: regulations and actions to limit CO2 emissions, for example increasing the price of greenhouse gas (GHG) emissions;
- Technology: unsuccessful investment in new, lower-emission technologies;
- Markets: failure to adapt to changing customer behavior;
- Reputation: negative stakeholder attitudes if their climate change concerns are not addressed effectively.
Prevention and mitigation actions
- Solvay’s strategy focuses on businesses with higher added value and less environmental exposure;
- Every year, the Sustainable Portfolio Management (SPM) tool assesses the environmental exposure of our sales and our innovation projects portfolio. SPM includes climate-related criteria aligned on 2°C scenarios;
- Solvay has a GHG emissions reduction plan.
2018 main actions
Solvay updated in September 2018 its greenhouse gas emissions approach. Solvay commits to reducing greenhouse gas emissions by 1 million tons by 2025, by improving its energy efficiency and energy mix and by investing in clean technologies. Climate risks and opportunities will be reviewed in 2019.
(*) : TCFD – Task Force on Climate-related Financial Disclosures