The climate-related impacts, risks, and opportunities (IROs for short) were identified in the normal manner during the double materiality assessment process. Internal experts, and especially the sustainability managers at Corporate and in the other segments and departments (TechOps), were consulted in relation to the collection and assessment of the IROs. In addition, the results of the corporate carbon footprints (CCFs) for selected segments performed in previous years and information from the greenhouse gas footprinting process performed in fiscal year 2023 were compared with the results of the IRO assessment and analyzed. Here United Internet focused on direct (Scope 1 and 2) and indirect (Scope 3) greenhouse gas emissions, and on the resulting emission reduction levers.
United Internet used a process for identifying and assessing climate-related risks and opportunities to prepare for the double materiality assessment. This scenario-based climate risk analysis covers both physical risks and transition risks in own operations and throughout the value chain.
The physical risk assessment involved identifying a total of 27 relevant locations and examining them for their hazard exposure. They include 12 office locations in which a total of 70 % of employees work. In the case of the technical locations, the focus was on the four core data centers. Although these are protected by a redundancy policy, simultaneous outages could have a critical impact on business operations, as well as on the data centers run by United Internet and on a research and development location. Two logistics locations were also analyzed. Locations with only a small number of employees were excluded from the assessment. Locations with adequate back-ups – such as a redundancy policy in the case of small data centers or a national roaming back-up in the case of antenna locations – were also excluded. Equally, the downstream value chain was not analyzed, since for example the use of digital services is not location-specific.
The analysis was performed with the help of Munich Re’s Location Risk Intelligence Platform. Data from the Intergovernmental Panel on Climate Change (IPCC) was used. The IPCC is an international United Nations body that assesses scientific insights on climate change. A variety of different future scenarios for climate change progression were used to determine each location’s potential climate-related hazards. The main focus of United Internet’s assessment was on the SSP5/RCP8.5 scenario. This future scenario, also known as a “high-carbon scenario,” assumes a global temperature increase of 4.4°C by 2100. It assumes high global emissions in the coming years and decades and hence permits a detailed assessment of, and stress test for, physical climate risks. The 28 climate-related hazards defined by the EU Taxonomy and the CSRD were projected for each location using specific indicators and were normalized on a scale from 1 (very low) to 5 (very high). The Company focused on three core periods for this assessment: the present, the medium-term future (2030), and the long-term future (2050).
The net climate risks were derived from the climate hazards by specifying that a hazard exists in all cases of high (4) or very high (5) hazard exposures, regardless of the period in which it is forecast to occur. A per-hazard assessment was made for each location to determine whether an exposure exists in principle – i.e., whether the location assets could be exposed to a hazard – and how sensitive the assets are to the hazard concerned. No additional assessment of the climate hazard was performed in those cases in which sufficient adaptation options and precautions already exist, since no net climate risk was identified.
No net climate risks were identified for United Internet in the course of the climate risk analysis.
Transition risks and opportunities were assessed using a scenario-based analysis that assumes global warming is successfully capped at 1.5°C. This scenario takes factors such as regulatory developments, economic trends, technological advances, and changing consumer behavior into account. It is conceived as a stress test for transition risks. Where available and necessary, data from 1.5°C/net zero scenarios from sources such as the International Energy Agency (IEA) and the Network for Greening the Financial System (NGFS) was used. A comprehensive list was drawn up for use in identifying transition risks and opportunities; this was based on industry standards, best practices, and research, and was adapted to United Internet’s specific business model. The risks were broken down into four main categories: political and legal, technology, market, and reputational risks.
Following the identification of the risks and opportunities, the Company’s exposure and sensitivity to these gross risks and opportunities were assessed by Corporate Sustainability and the segment sustainability managers. The exposure to the risks was rated on a five-point scale (ranging from “no exposure” to “very high exposure”). The magnitude of the exposure was assessed on the basis of how much United Internet is affected by the risk or opportunity, measured in terms of the value creation for the Company as a whole. Among other things, this was evaluated by analyzing how many of the Company’s segments are exposed to the risk. In addition to looking at the exposure, the sensitivity to the risk or opportunity was also analyzed. This assessed how strong the potential impacts on the Company would be if the risk/the opportunity were to materialize. Where possible, forecasts of the financial impacts (measured in terms of EBIT) were already used so as to provide a more robust estimate of the sensitivity. Transition risks and opportunities were assessed using the same timelines as for the materiality assessment: less than two years (short-term), two to five years (medium-term), and more than five years (long-term).
If the assessments of the exposure or sensitivity factors exceeded a given threshold, the risk/opportunity was classified as a material gross risk or opportunity. The results will be incorporated in future into the Company’s strategic planning so as to develop robust measures to minimize the risks and leverage the opportunities presented by climate change.
To date, United Internet’s financial reporting has addressed location-based critical climate-related assumptions, including natural disasters and physical climate risks. These are partly compatible with those used in the physical climate risk assessment. Although the climate risk analysis makes more extreme assumptions in the SSP5/RCP8.5 scenario, the outcomes differ only marginally. Transition risks resulting from climate change mitigation actions in a 1.5°C scenario are only examined in the climate risk analysis for the Sustainability Report, not in the financial reporting.
The risk of “increased costs due to the consequences of climate change“ that was identified in the double materiality assessment combines a number of different physical climate risks. It should be noted that the double materiality assessment looked at the risks from a gross perspective, i.e., potential adaptation measures were not yet taken into account.
In its resilience analysis, United Internet took material gross risks that resulted from the climate risk analysis into account. These risks cover all material parts of the upstream value chain, the Company’s own value chain, and the downstream value chain. The physical climate risk analysis for location-based climate risks revealed that United Internet’s material locations are not currently exposed to any net climate risks. The analysis of the transition risks resulting from climate change mitigation based on the 1.5°C scenario determined three material transition risks. These were examined in more detail during the double materiality assessment so as to develop suitable actions and adaptive capacities.
Links
Downloads
