Climate Risks and Opportunities

El Puerto de Liverpool is aware of the climate risks that may affect our activities. Our aim is to address these preventively through adaptation and mitigation plans according to internationally accepted methodologies like the recommendations of the TCFD and IFRS S1 and S2 sustainability standards.

Physical risks

Category	Risk	Impact	Risk rating
			RCP 4.5		RCP 8.5
			2030	2050	2030	2050
Acute	Increase in intensity and frequency of tropical storms	Impact on product arrival (supply chain) at stores and households Shutdown or interruption of store or distribution center operations Inventory damage losses Difficulty for customers to get to stores Higher cost of insurance	Uncertain	Uncertain	Moderate	Moderate
	Increase in the frequency, intensity and duration of extreme precipitation events		Moderate	Moderate	Moderate	High
	Increase in the frequency and intensity of river floods		High	High	Moderate	Moderate
Chronic	Rising sea levels and coastal flooding	Possible impact on distribution routes in coastal areas Possible partial loss of property values in those areas Development of new infrastructure less viable	Low	Low	Low	Low
Chronic	Increase in frequency, intensity and duration of droughts	Low availability of raw materials Possible increase in product prices and impact on availability Impact on coverage of department stores if population emigrates due to lack of water Impact on operations and increase in utility bills because of higher water stress	Moderate	High	Moderate	High

Transition risks

Category	Risk	Impact	Risk rating
			RCP 4.5		RCP 8.5
			2030	2050	2030	2050
Political	New carbon pricing mechanisms such as carbon taxes or emission trading system	Increase in operating costs due to increase in national carbon tax, subnational taxes and introduction of a national emission trading system	Low	Low	High	Low
Political	Execution of circular economy policies	Increase in the price of plastic containers due to changes in supplier raw materials Creation of public policies that involve consumers in economic requirements or regulations on use of plastic containers	Moderate	Low	High	Moderate
Market	Reduced demand for products due to higher prices and production costs	Increase in value chain production costs due to: Expansion and increase in carbon tax Higher cost of fuel in the short and medium term Development of policies aimed at reducing emissions in the building industry	Moderate	Moderate	High	Moderate
Technology	Use of technologies to improve energy efficiency and resource consumption in sustainable buildings	Increasing incorporation of devices that use less energy Reduction of operating costs Increased creation of energy efficiency standards in equipment and building codes Short-term investment opportunities in installation of efficient equipment Reduced operating costs in the medium and long term due to energy efficiency savings	Moderate	Low	High	Moderate
Technology	Technological advances in transportation and distribution toward efficient, low-carbon, non-polluting vehicles	Possibility of replacing company’s internal combustion vehicle fleet with hybrid and/or electric vehicles, which reduce emissions Gradual reduction in acquisition cost of hybrid and/or electric vehicles as technology becomes standardized	Moderate	Low	High	Moderate