In April 2019, the Quality and Sustainability Department organized a dedicated crossfunctional workshop on climate change-related business risks and opportunities.
The aim of the workshop was to identify top three climate risks for Nokian Tyres in each of the sub categories: physical, regulatory, market, technology and reputational risks. This was conducted along the recommendations of Task Force on Climate-Related Financial Disclosures. The workshop was facilitated by environmental experts. Risks and examples defined are reassessed annually.
Nokian Tyres is also committed to setting Science Based Targets in order to further reduce greenhouse gas emissions. In May 2020, these SBT’s were officially approved.
CLIMATE-RELATED RISKS
| Risk group | Sub category | Examples of concrete risks | Adaptation / mitigation plan |
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Regulatory |
Emerging regulation |
Deforestation-related regulation, mostly concerning natural rubber. Green regulation on aviation and maritime fuels can significantly increase costs of llogistics. |
Follow-up of emerging regulation |
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Further green labelling |
Additional taxes and duties e.g. EU’s CBAM for fossil raw materials can increase prices. |
Participation in industry sector working groups. |
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Stricter expectations to oversight |
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Follow-up of emerging regulations. |
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| Physical | Extreme weather events |
Disruptions in logistics. |
Alternative transportation routes. |
| Extreme temperatures | Contamination of raw materials. | Multiple supply sources. | |
| Technological |
Climate-related demands for new tire technology |
A+ rolling resistance tires required for EVs. 150 km/h max speed for EU – demand for UHP (Ultra High Performance) tires fall |
Anticipation of future expectations in R&D development roadmaps. |
Materials technology |
Requirements for non-renewable material replacements. |
Roadmap for renewable and recyclable raw materials. |
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Market and reputation |
Market changes |
Shift from car ownership to mobility-as-a-service i.e. changing customer base. |
Update product and service offering. |
| Green energy prices go up due to strong demand. | Long term power purchasing agreements. | ||
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Availability of renewable and recycled raw materials can limit plans for sustainability. |
Aiming for multiple sources. |
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Increased demand for year-round tires and less winter tires. |
Update product offering. |
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| Reputational risk | Deforestation scandals (natural rubber). | Co-operation with supply chain in line with GPSNR recommendations. |
CLIMATE-RELATED OPPORTUNITIES
| Opportunity group | Sub category | Examples of concrete opportunities |
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Innovation |
Raw materials |
Innovations with renewable materials. |
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Recycling |
Recycling system of tires still missing in many |
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Climate-friendly technology |
Lower rolling resistance. |
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| Energy-efficient production | Modern machinery used in Nokian Tyres’ factories. |
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Product range
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Competitive advantage |
Nokian Tyres is an expert in demanding and challenging weather conditions. We have a strong share in winter tire markets and are prepared to increase the share further, should the extreme weather phenomena increase in the future. |
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EU further labeling for sustainable tires |
Existing focus on sustainable natural rubber and developing wear resistance. |
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Industrial (heavy) tires |
We have existing expertise to provide climate-friendly solutions. |
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Engagement |
Consumers |
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Policy makers |
Increased preparedness for new regulations or incentives. |
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Shareholders/stakeholders |
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Regulatory |
Renewable Energy Directive |
More renewable energy available in EU, prices Global carbon tax or similar would improve |