Caring for the Planet Press Metal Aluminium Holdings Berhad SECTION 5 • DELIVERING SUSTAINABLE VALUE FOR OUR STAKEHOLDERS 142 Potential Risks Implications Potential Opportunities IPCC RCP 8.5 IPCC RCP 2.6 Type of Transition Risk: Market Category: Shift in customer preferences • Revenue loss due to lack of low-carbon products. Increased competition in meeting evolving preferences. • Scarcity of raw material sources that can meet their requirements for lower carbon emission products. • High risk arises from customer demands for cheaper products rather than low-carbon alternatives, resulting in lower profits and sales, which can potentially impact business sustainability. • High risk associated with evolving customer preferences towards low-carbon products, necessitating increased investment in low-carbon technology, thereby raising both operating expenses (“OPEX”) and capital expenditures (“CAPEX”). • Developing lowcarbon products and circular economy offerings to meet market demands. Category: Overall market changes • Increased investment in GHG emissions reduction technology. • Reduced availability of recycled aluminium. • Increased risks of equipment shut-down or write-off if unable to meet low-carbon requirements of the market. • High risk due to the low demand for low-carbon products in the market, reducing Press Metal’s competitiveness despite its commitment to decarbonisation efforts in producing such products. • High risk associated with rising demand for lowcarbon products by major market players, requiring greater compliance efforts and resources for sourcing and production to meet market demands. • Generating revenue through sectorspecific initiatives and higher-margin products aligned with market demands. • Development of new products which contribute favourably to revenue. Type of Transition Risk: Technological Category: Low-carbon technologies • High R&D costs and disruptions during technology transitions. • Potential investment loss from investing in R&D and new technologies. • Increased disruptions in existing work processes when implementing new technologies. • Low risk associated with limited motivation to deploy decarbonisation technology to achieve carbon neutrality targets and the underdevelopment of R&D in the market, resulting in minimal impact on CAPEX. • High risk associated with the deployment of technology at a premium cost due to limited in-house R&D capabilities. • Long-term cost savings, regulatory compliance, and GHG emissions reduction. Category: Product changes and effects • Heightened competition for leadership in low-carbon products. • Low risk associated with both the low demand for recycled aluminium by customers and the availability of low-carbon aluminium in the market. • High risk associated with the growing demand for recycled aluminium from customers, driven by increasing regulatory requirements for climate action. This surge in demand is leading to a shortage of secondary or recycled aluminium in the scrap market. • High risk arises from diverging fundamental criteria for low-carbon aluminium in the market. Different countries have varying requirements, and these criteria may change with shifts in market perspectives. • Enhanced innovation and emerging market penetration for low-carbon products.
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