Slide 1: Climate Change Risks - TCFD
CLIMATE CHANGE RISKS - TCFD Agosto - 2023
Slide 2: Contenido
CONTENIDO 1 TCFD Report’s Structure 2 Climate-related risks and opportunities results
Slide 3: TCFD Report
TCFD Report 01
Slide 4: Importance of implementing the TCFD Framework
Climate change affects everyone and it is imperative for companies to reduce vulnerabilities as well as take advantage of the associated opportunities. Importance of implementing the Transparency to financial markets and investors who demand 1 quality information on financial impact and climate risk
Slide 5: TCFD Report's Structure
TCFD Report’s Structure The four pillars recommended by the TCFD framework are: Governance BD monitoring on climate-related risks and opportunities Strategy Climate-related risks and opportunities in the short, medium and long term. TCFD Task Force on Climate- Risk Management related Financial Inclu
Slide 6: Climate-related risks and opportunities
Climate-related risks and opportunities Climate Change Risks Physical Risks Short-term:2030 Transition Risks Opportunities Medium-term:2040 Climate risks associated with Climate risks derived from Long-term:2050: Efforts to mitigate and adapt climatic phenomena the transition to a low-carbon to clim
Slide 7: 1. Government
1. Government 01
Slide 8: 1. In Governance
1. In Gov e rnance STRATEGY, SUSTAINABILITY AND RISK COMMITTEE 1) Regularly monitor the progress and implementation of the decarbonization strategy. 2) Oversee the identification and management of material We have a strengthened climate-related risks and the treatment of environmental issues where t
Slide 9: 2. Strategy
2. Strategy
Slide 10: 2.1 Climate Scenarios
2.1 Climate Scenarios The 3 scenarios that served as the basis for the quantification of climate risks and opportunities are as follows. These weretaken from TCFD guidelines and best market practices, combining the IEA and IPCC scenarios is recommended as a source to obtain complete climate scenario
Slide 11: 2.1 Climate Scenarios
2.1 Climate Scenarios There are currently several recognized organizations that propose different models and scenarios for making climate change projections The most recognized climate scenarios IPCC ❑ The AR5 Report: Climate Change (2014) uses RCPs. ❑ Its latest report (AR6 Climate Change, 2021) IE
Slide 12: 2.1 Climate Scenarios - IEA scenarios
2.1 Climate Scenarios IEA scenarios The International Energy Agency (IEA) models four scenarios according to the policies and times at which they are implemented Stated Policies In the STEPS scenario, the announced policies and objectives are considered, but taking into account the Announced Pledges
Slide 13: 2.1 Climate Scenarios - IPCC scenarios
2.1 Climate Scenarios IPCC scenarios IPCC presents five different SSP scenarios, varying the relationship between mitigation and adaptation challenges and covering physical and transition aspects SSP5: Fossil-fueled SSP1: SSP2: Middle of SSP3: Regional SSP4: Inequity Development Sustainability the R
Slide 14: 2.1 Climate Scenarios - NGFS scenarios
2.1 Climate Scenarios NGFS scenarios The NGFS has six different scenarios with similar socio-economic assumptions intended to cover a wide range of physical and transition risks Net Zero 2050 Divergent Net Zero ✓ Limits global warming to 1.5°C. ✓ This scenario reaches net zero in ✓ Strict policies a
Slide 15: 2.2 Climate scenarios
2.2 Climate scenarios Climate scenarios framework: General narratives The 3 scenarios that served as the basis for the quantification of climate risks and opportunities are as follows: SSP1 –1.9 + NZE; SSP1 –2.6 + SDS; SSP2 –4.5 + STEPS This scenario considers that the w orld energy sector w ill ach
Slide 16: 2.2 Methodology for Risk Quantification
2.2 Methodology for Risk Quantification The quantification has been performed under the TCFD recommendation by risk type, climate scenario and time horizon. Timeframe: 2030 – 2040 - 2050 Scenarios Geography Risks/Opportunities Colombia • Physical Risks • Transition Risks Perú • Opportunities Technic
Slide 17: 2.2 Climate risks - Slow Transition Sc. - 2030
2.2 Climate risks - Slow Transition Sc. - 2030 Estimated Financial Physical Risks Identified Risks Likelihood Impact– V@R Landslide Acute Risks: Extreme events - rains/floods originated by extreme Risk Value: weather phenomena Extreme events - fires (Forest) COP $270.093 M whose frequency and Heatwa
Slide 18: Likelihood
D E FI N I I TO N O F L I MI T S CORPORATE Evaluation Period: STRATEGIC 2023- 2 0 2 5 RISKS* KEY CONTROLS Adaptation Pipeline integrity risk analysis. Plans TECHNICAL DATA SHEET Follow-up on the execution of the activities associated with the high priority equipment defined in the Short-term (2 year
Slide 19: 2.2 Climate Change Risks - Transition
2.2 Climate Change Risks - Transition Dismantling of tax benefits for • Loss of opportunity (higher cost) of • Increased participation of • Decrease in residential NG • energy solutions projects. financing or insurance for being in a renewable sources in the demand due to utilities fossil fuel busin
Slide 20: 2.4 Risk evolution 2030-2040-2050 Slow / Moderate Transition Scenario
2.4 Risk evolution 2030-2040-2050 Slow / Moderate Transition Scenario TRANSITION RISKS 2030 2040 2050 1 Dismantling of Tax Benefits S.E. 2 Environmental constraints 3 Carbon tax extension 4 Full electric buildings 5 Accelerated industrial transition 6 Decrease in NGV demand due to vehicle electrific
Slide 21: 2.3 Climate Change Opportunities - Transition
2.3 Climate Change Opportunities - Transition INCREASE IN DEMAND FOR GNV IN THE HEAVY VEHICLE FLEET HYDROGEN INPUT ✓ Increase vehicle fleets for public Likelihood: High Hydrogen is identified by multiple stakeholders as an important future energy transportation and especially cargo Impact: Between t
Slide 22: Risk Management
Risk Management 03
Slide 23: Alignment of Climate Risks to the Integrated Risk System
Alignment of Climate Risks to the Integrated Risk System The process of identifying, assessing and responding to climate-related risks is part of Promigas' Integrated Risk Management System Catastrophic Infrastructure Breakdown due to the threat of climate change phenomena • Key and Emergent • RIMI
Slide 24: Description of the process for identifying and assessing Climate Risks
Description of the process for identifying and assessing Climate Risks PLANNING MONITORING AND FOLLOW-UP 1 • Context analysis. • Definition of time horizons and construction • Monitoring is performed from the of climate scenarios. three lines of defense according to their scope. • Controls and treat