TELE2 AB OUR CLIMATE-RELATED
RISKS AND OPPORTUNITIES
Task Force on Climate-related
Financial Disclosures (TCFD) Report 2020
1
Why a TCFD report
Understanding climate change and the associated climate risks is fundamental to future-proofing the Tele2 business. Through the implementation of the Task Force on Climate-related Financial Disclosures' reporting recommendations, we invite our stakeholders to take part of our current knowledge about the climate risks and opportunities most material to us.
About the TCFD framework
The TCFD has developed a framework to help public companies and other organizations more effectively
disclose climate-related risks and opportunities through their existing reporting processes.
Governance | Strategy | Risk Management | Metrics & Targets | |||
Disclose the organization's governance around climate- related risks and opportunities.
Disclose the actual and potential impacts of climate-related risks and opportunities on the organization's businesses, strategy, and financial planning where such information is material.
Disclose how the organization identifies, assesses, and manages climate-related risks.
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
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Introduction
For Tele2 it is important to remain a reliable and outstanding industry actor, and to be that, we not only need to mitigate our contribution to climate change, we must also understand the impact that climate change has and can have on our business. As a company located in northern Europe around the Baltic Sea, we are by no means exempt from the consequences of anthropogenic climate change, nor will be in the future.
Tele2's business and offerings are heavily dependent on business continuity - both individuals and corporate customers expect reliable Tele2 networks and services. Additionally, our networks are designated as critical infrastructure, as the ability to use communication networks is considered vital to uphold core societal functions. To that end, we are for the first time, reporting on climate risks following the recommendations of the TCFD, the Task Force on Climate-related Financial Disclosures. This follows our ambition to tackle climate change, as manifested in the adoption and approval of our Science-based targets in line with the 1.5°C target.
Our Sustainability strategy
Tele2's sustainability strategy is a set up to achieve our ambition to lead in sustainability, focus our resources on the most material sustainability issues, drive performance and to engage internal and external stakeholders.
Read more
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Governance
The Tele2 Board of Directors holds the responsibility to approve the sustainability strategy, which supports the Tele2 business strategy. The Board is also responsible for the ongoing evaluation of the quality of the company's internal control functions and risk management, ensuring that the company is adequately equipped to mitigate and manage all kinds of risk. Through its integration into the sustainability strategy, climate change and climate risks are part of the overall risk registry. Climate risks are listed as one of the strategic risks in the risk registry.
The Board reviews and approves the sustainability strategy and strategic risk registry once a year, whilst the mandate to execute on the strategy has been delegated to the Head of Sustainability and for the strategic risk registry to the Head of Internal Audit, who reports to the CFO. The audit committee reviews the sustainability strategy and the progress made on a quarterly basis. As part of the advancement of our sustainability strategy and our deepened understanding of how climate risks can affect Tele2, we will assess how we should best strengthen our proactive approach to climate change and climate risks.
Tele2's governance structure
External Steering | External Auditors | Election |
Documents, such as | ||
Swedish Companies Act
The AnnualReporting Accounts Act
The Swedish Code of
Corporate Governance Rule Book for Issuers Nasdaq Stockholm Industry regulations, etc.
Figure 1 The Tele2 governance structure.
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Proposals | |||||||||
for Board | |||||||||
Shareholders AGM | and Auditor | Nomination Committee | |||||||
Evaluation | |||||||||
Election | |||||||||
Charters | |||||||||
Audit and Remuneration | |||||||||
Board of Directors | |||||||||
Committees | |||||||||
Reports | |||||||||
Strategies & | Execute strategies & plans and report progress | ||||||||
Plans | |||||||||
President and CEO | Reporting | Leadership Team & | |||||||
Second Line functions | |||||||||
InternalSteering | Reporting | Reporting | |||||||
Documents | |||||||||
Business Units
Strategy
Tele2's vision is to be the "smartest telco in the world, creating a society of unlimited possibilities". We will reach this vision through the implementation of our strategy:
Unique People & Culture
We walk the talk, being a value driven company, based on a diverse organization. We always strive to attract, retain, and develop the strongest talents.
Winning Customer Focus
Distinctly positioned leading brands, aiming to win the customer through FMC. We aim to be an outstanding partner to businesses and the public sector.
Radical Simplification
Out mindset allows us to quickly adapt to the world around us, and continuously modernize our operations.
Individually, each of the three pillars of the Tele2 strategy can be used as a motivation of why it makes business sense to comprehend what climate change means to us. The drastic progression of anthropogenic climate change and associated issues such as biodiversity loss and water stress that we are already seeing today and will see more of in the not-too-distant future, require all societal actors to contribute to both climate change mitigation and adaptation. Part of this rests in familiarizing ourselves with what climate risks may mean to us on a more granular level.
Lead in sustainability
Tele2 has set as its ambition to lead in sustainability. We believe that sustainability needs to be ingrated in our core business for our long-term success as a company, and that having a strong sustainability agenda enables us to meet increasing demands from our most important stakeholders, such as customers, investors and employees.
To achieve this ambition Tele2 has a sustainability strategy with four focus areas, that are areas in which we can differntiate ourselves from our competitors, which will
enables us to retain current, and win new, customers, investors and employees.
One of the four focus areas is Advancing circular economy to combat climate change. Our long-term goal is that by 2025, Tele2 will develop winning offerings for relevant customer segments, based on a circular business model and reduced climate impact.
Climate risk assessment
To gain this understanding, we initiated a risk assessment to gain a more complete picture of the Tele2 climate risk landscape, assessing both physical risks and transition risks, according to the TCFD recommendations. These include acute and chronic physical risks, and transition risks concerning reputation, market, technology, and policy and legal risks. The assessment includes activities upstream and downstream as well as the daily operations.
In the assessment, the potential financial impact was put into context in terms of whether it could have an impact on tangible assets, such as infrastructure, or on intangible assets, such as our reputation. The assessment also included how the risk potentially impacts either our income statement or balance sheet - climate change may lead to increased network maintenance costs, impacting our result and income statement, but also lead to a need for investments to floodproof our sites, which decreases our liquidity, possibly impacting our liabilities and balance sheet negatively. The risk assessment was done considering potential financial impact, risk likelihood, and timeline for risks to manifest. The climate risks were then put into the perspective of existing mitigative measures at Tele2 and the potential risk exposure in two future scenarios. An illustration of the risk assessment can be seen in figure 2.
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Figure 2: The climate risk assessment process.
It became apparent that the foundation for climate risk mitigation is already present in the daily workings of the company, partly given the characteristics of the industry. For example, the internal knowledge and competence of assessing and handling impacts on physical infrastructure is already in place, which is a prerequisite to be a reliable and outstanding partner to businesses and the public sector alike. The societal role our industry plays also means that it would probably be a prioritized sector during times of crisis or resource shortages relative to other industries, which also acts as a mitigating factor. A total of 18 climate risks were identified as having a potential material impact to Tele2 (please see the appendix for the complete list).
The risk assessment is not based on definite numbers, due to the complexity and the sheer number of variables included, some of which are unknown until they manifest. Please refer to the Risk Management section for more information on the risk management process. The details and context of the climate risks are described in the section about the scenario analysis.
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TELE2 AB published this content on 20 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 May 2021 08:49:05 UTC.
