The physical risks and opportunities involve changes in temperatures and precipitation, and they will materialise if climate change is not mitigated.
Acute changes Risks and opportunities
Extreme weather phenomena
Storms, drought and floods cause disruptions in production or complicate the transport of raw materials and products.
Metsä Board prepares for the risks arising from extreme weather phenomena through both company and mill-level risk assess- ments. Examples of such measures include sufficient reserves of wood, the control of water levels with dam arrangements, and ensuring power distribution in exceptional situations. The supply chain is preparing for alternative partners or transport routes.
Risks and opportunities
Rising average temperature and changes in precipitation
Metsä Board’s mills are not located in high water risk areas, which supports the company’s competitiveness in the face of climate change. The company’s target to reduce the use of process water and enhance the recycling of water within the process also reduces the water risk.
The increased frequency of droughts weakens the availability of the process and cooling water needed by mills and causes production breaks.
Metsä Board has drawn up plans on how to secure paperboard de- liveries in the event that production is interrupted at one of its mills.
Increased precipitation and floods impair the quality of surface waters, thereby impairing the availability of process and cooling water and causing production breaks. Harvesting conditions are complicated due to a lack of snow and frost and because of increased precipitation. Damage caused by snow, storms, drought, forest fires, insects and fungi are increasing in forests, and changes are occurring in the prevalence of tree species. Alien species are likewise causing problems in forests. Global warming is expected to increase the growth of forests and the wood removal, which will increase the availability of wood and lower the costs of wood supply.
Metsä Group actively monitors which areas allow harvesting and what are the alternative wood supply areas. When necessary, wood reserves can be increased during good harvesting conditions. Metsä Board’s long-term contract with Norra Skog increases the delivery reliability of wood, particularly in Sweden. Metsä Group’s wood supply provides sustainable forest manage- ment services which support forests’ adaptation to climate change and help to secure the biodiversity of forests.
Cooperation and long-term wood supply contracts (with e.g. Norra Skog) will improve the delivery reliability of wood even further.
Potential negative impact on business operations
Potential positive impact on business operations
Reporting in accordance with TCFD’s recommendations pp. 64–65 .
Reporting required by the European Union’s taxonomy on sustainable finance pp. 82–85 .
Sustainability report | METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
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