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Ölgerðin’s responsibility

Climate-related risks and opportunities

It is clear that climate change can cause both risks and opportunities for our operations. Increased awareness and understanding of climate-related risks and opportunities within the companies lead to better risk management and a better informed strategic organisation. Nasdaq’s EGS guidelines ask whether companies cover climate change-related risks in board meetings (as part of the formal programme). In executive board meetings (as part of the formal programme) a positive response has been given to that question with a reference to tcfd (task force on Climate-Related Financial Disclosures) for support. An importance analysis based on the ESRS standards, which took effect in 2024, has yet to be made. In the analysis, the categories published by ESRS are used as a reference, and risks and opportunities are analysed based on factors in excess to those established by tcfd.

Committee appointed

On 12th September 2023 a working group was appointed to cover risks and opportunities in connection with climate change, composed of the CEO, CFO, human resources manager, managing director of production, production manager and sustainability and improvement manager. A questionnaire based on the tcfd metrics was reviewed and the main risks and opportunities summarised. Risk was evaluated based on four factors[EA1] : What is the likelihood of the risk materialising; To what extent will the risk impact the company; How vulnerable is the company towards the risk; and, How rapidly will the risk impact the company.

[EA1]Þetta er örugglega til á ensku - best að nota upprunalegt orðalag

Risk evaluation

Factor 01

What is the likelihood of the risk materialising?

Factor 02

To what extent will the risk impact the company?

Factor 03

How vulnerable is the company towards the risk?

Factor 04

How rapidly will the risk impact the company?

Main risks

The risk was estimated to be at a medium level in most areas covered.

Item Description Preventive Measures Risk Assessment
Reduced Access to Capital Access to capital will be easier for sustainable companies Fit within the sustainability framework of banks and investors

acceptable

New Bills and Regulations New bills and regulations restricting the sale of products, insufficient time to respond, or certain products not allowed Closely monitor new EU regulations, assess the risk of each regulation, management training, opportunity analysis

under monitoring

Emission Fees and Pollution Tariffs Targeted efforts to reduce the company’s CO2 emissions and invest in certified units, e.g., through forestry Targeted efforts to reduce the company’s CO2 emissions and invest in certified units, e.g., through forestry

under monitoring

Increased Transport or Supply Chain Fees Targeted efforts to reduce the company’s CO2 emissions and invest in certified units, e.g., through forestry Closely monitor developments

under monitoring

Icelandic Energy Fund Possible to apply for grants for energy transition Opportunity to accelerate energy transition

under monitoring

Certificates of Origin Certificates of origin incentivize energy transition Dialogue with government authorities

under monitoring

Item Description Preventive measures Risk assessment
Failed Investment in New Technology Investment in new technology considered environmentally friendly, but development is not yet mature, or the environmental benefits do not meet expectations Risk assessment of investments

acceptable

Item Description Preventive measures Risk assessment
Risk of Decreased Product Demand, Sector Stigmatization Customers and consumers prefer to buy from sustainable companies, and employees want to work for such companies Targeted efforts to reduce the company’s CO2 emissions and invest in certified units, e.g., through forestry

acceptable

Changes in Consumer Preferences and Behavior Risk of reduced demand for current product offerings due to shifts in consumer preferences and needs, e.g., demand for alternatives to single-use packaging Targeted efforts to reduce the company’s CO2 emissions and invest in certified units, e.g., through forestry

under monitoring

Quality of Recycled Packaging Risk that it does not have the same properties as other packaging because the technology is still immature Risk that it does not have the same properties as other packaging because the technology is still immature

under monitoring

Item Description Preventive measures Risk assessment
Reputational Risk Customers and consumers prefer to buy from sustainable companies, and employees want to work for such companies Targeted sustainability efforts and stakeholder communication

medium

Reputational Risk – Suppliers and Partners Reputational risk from suppliers and partners Implement a supplier policy and renew supplier assessments, establish procedures for working with influencers

medium

Item Description Preventive Measures Risk assessment
Risk of Increased Production Costs Due to changing prices of inputs (e.g., energy, water) Analyze use of inputs (e.g., CO2), aim to utilize resources more efficiently

under monitoring

Raw Material Shortages Due to Extreme Weather Inability to obtain supplies or products, rising product prices Alternative suppliers

under monitoring

Power Shortages Insufficient electricity to meet demand Explore self-generation of electricity, e.g., solar power

under monitoring

Item Description Preventative measures Risk assessment
Circularity of Packaging in Sales Product not designed according to circular economy principles Strong recycling system in Iceland, purchase recycled materials for packaging, conduct LCA (Life Cycle Assessment) of packaging, ensure recyclability of products sold

medium

Atriði Lýsing Fyrirbyggjandi aðgerðir Áhættumat
Iceland Spring Water Source There is no monitoring of the impact of Iceland Spring’s water source usage on biodiversity Explore possibilities to monitor regional developments, e.g., using technological solutions

medium

Cultivation Methods for Key Raw Materials Cultivation methods for Ölgerðin’s key raw materials (e.g., sugar, barley, hops) harm biodiversity in regions, potentially contributing to climate change Explore purchasing organic products, engage in supplier dialogue about methods, and monitor ecosystem impacts

medium

Atriði Lýsing Fyrirbyggjandi aðgerðir Áhættumat
Water Will Not Be as Readily Available as It Is Now Reduce water consumption Measure water consumption

medium

Atriði Lýsing Fyrirbyggjandi aðgerðir Áhættumat
Human Rights Violations in the Value Chain Supplier is involved in human rights violations Supplier assessments, supplier risk assessments, and follow-up

medium

Atriði Lýsing Fyrirbyggjandi aðgerðir Áhættumat
Pollution from Operations and the Value Chain No response to pollution The company has set SBTi targets for 2030 and 2040

medium

Contact person regarding sustainability and responsibility

Skrifstofa

Ingibjörg Karlsdóttir

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