Two major projects to install around 8,000 solar panels were completed at sites in China – helping to accelerate our ambition of cutting carbon emissions in half by 2030. The panels were installed at two of our Decorative Paints plants – more than 5,000 in Shanghai and almost 3,000 in Guangzhou – representing further progress for our greener manufacturing plans.
Climate change adaptation and water risk
As recommended by the Task Force on Climate-related Financial Disclosures (TCFD), we continue to monitor our risks and opportunities related to climate change. As a company, we’re exposed to physical risks – such as those associated with water scarcity, flooding and weather events. We also consider transitional risks that can lead to changes in technology, market dynamics and regulations.
For the last six years, we’ve implemented an internal carbon price for investment decisions, anticipating the impact of any future carbon pricing. We have sustainability assessments in place for investment projects, including water risk assessment for new locations. Annually, we also quantify the potential transitional risk impact of any global carbon taxation by multiplying our carbon footprint with the internal carbon price. The financial impact is well below 1% of revenues.
We continue to assess risks related to water. We use the Aqueduct water risk atlas developed by the World Resources Institute to assess the level of risk related to water at our production locations. Around 10% of our sites are in areas rated “extremely high” for overall water risk (with standard weighting factors). Aqueduct is also used to assess current climate related risks (coastal flooding, river flooding and drought). Around 14% of our locations are in areas rated “extremely high”. These account for 3% of our fresh water use.
Future risks for 2030 were also evaluated using Aqueduct (water stress, business as usual). Around 25% of our locations are in areas rated “extremely high”, accounting for 7% of our fresh water use. All locations confirmed as “extremely high” in any of these assessments will develop a risk mitigation plan.
We continued to assess our suppliers in 2021 and challenged them on their water risk, particularly in regions affected by river or coastal flooding. We’re working with them to look for solutions to these challenges.