RESILIENCE UNDER THE DIFFERENT
CLIMATE SCENARIOS
After identifying climate risks and alternative scenarios, the Group performed an initial analysis to assess the nature and significance of the impacts of each risk on the Group’s short-, medium- and long-term performance, in order to prioritize the issues. The impacts of each risk on performance were assessed according to several criteria, each of which was broken down into sub-criteria for a more granular analysis. This impact analysis is fully integrated into the Group’s risk management process. For example, the tools used to assess climate risk impacts on performance are also employed to conduct an overall analysis of Renault Group’s risks.
The following table is a simplified illustration of an analysis of the climate risk impacts on each business criterion, based on the following scenarios.
Simplified illustration of the analysis of the financial impact of each risk on the Group’s performance, under each scenario:
| RISKS AND OPPORTUNITIES | 1.5°C SCENARIO | 3°C SCENARIO | 4°C SCENARIO | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Market size and structure | Revenues | Cost of sales | Other costs (Capex, R&D, financing, labor, etc.) | Market size and structure | Revenues | Cost of sales | Other costs (Capex, R&D, financing, labor, etc.) | Market size and structure | Revenues | Cost of sales | Other costs (Capex, R&D, financing, labor, etc.) | ||
| TRANSITION RISKS AND OPPORTUNITIES | Changes to regulations and standards |  | |  | | | | | | | |||
| Technological changes | | Technological changes 3°C SCENARIO
| | | | | | | | | |||
| Market changes | | Market changes 3°C SCENARIO
| Market changes 4°C SCENARIO
| | | ||||||||
| Reputation risks & opportunities | Reputation risks & opportunities 1.5°C SCENARIO
| | Reputation risks & opportunities 4°C SCENARIO
| | | | | | |||||
| Workforce changes | Workforce changes 1.5°C SCENARIO
| | | | | | | ||||||
| PHYSICAL RISKS AND OPPORTUNITIES | Extreme weather events / Natural disasters | PHYSICAL RISKS AND OPPORTUNITIES 1.5°C SCENARIO
| PHYSICAL RISKS AND OPPORTUNITIES 3°C SCENARIO
| | | | | | | | |||
| Resource scarcity | Resource scarcity 1.5°C SCENARIO
| Resource scarcity 3°C SCENARIO
| | | | | | | |||||
| Structural geographic and geopolitical changes | Structural geographic and geopolitical changes 1.5°C SCENARIO
| | | | | | | | | | |||
| Spread of diseases | | Spread of diseases 3°C SCENARIO
| | | | | | | | | |||
= strong impact
= medium impact