Risks and opportunities associated with climate change

Abengoa manages its environmental and climate change related risks in every of its projects and measures are taken to mitigate them.

As regards the risks associated with climate change, Abengoa has taken into account the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) to manage them. The company considers that alignment with the international standards and the need to raise the awareness on financial risks and opportunities associated with climate change are an essential step to improving transparency.

In general, the environmental and climate change risks with the biggest impact for the company are:

Riesgos y oportunidades

A series of procedures have been established to identify and control these risks, with the main purpose of creating a common management, mitigation and control culture across all levels of the organization.

These and other risks are monitored, as well as the mitigation measures applied, to develop the lessons learned, transforming risk management into a mature process that can provide feedback and be used to implement measures based on the experience gained in other projects, whether new or existing.

Likewise, assessing risks allows the organization to identify new business opportunities associated with climate change.

A low-carbon economy offers business growth opportunities:

  • Boosting the renewable energies business in the event stricter regulations are applied to the use of fossil fuels.
  • A greater demand for water due to the potential increase in temperature or the greater number of hours of light caused by a drop in the rainfall volumes.
  • Increased pressure from stakeholder groups in relation to the establishment of measures to combat climate change, arising from society’s greater awareness of the need to protect the environment.

Carbon price

Abengoa has developed a climate action mechanism through an internal carbon price, aligned with emerging climate regulation derived from the Paris Agreement.

The initiative consists in the inclusion of the need of calculating the costs derived from the potential GHG emissions of new projects using the internal carbon price defined by the company. This GHG monetization will allow Abengoa to optimize the decision taking and the business strategy, making the company conscious of the economic impact of GHG and making it possible to foresee potential regulatory changes towards the GHG emissions’ monetization.

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