New Wave Group Annual Report 2025 2025 | Page 49

NWG // SUSTAINABILITY STATEMENT
Categories related to climate risks and opportunities linked to potential transition events
Transition risk / Opportunity / Physical risk
Description of potential business impacts arising from transition events
Strengths(+) and weaknesses(-) in existing plans for climate change adaptation and mitigation
Next steps for risk-based improvements and actions
Physical risks
Chronic climate-related risks such as changing wind, water and landmasses.
Acute climate-related risks such as heatwave, wildfire, cyclones, heavy rain, flooding, avalanches and landslides
Physical risk
Physical risk
Under the IPCC SSP5 8.5 scenario with a slow transition, increasing physical risks from climate change will increasingly affect the availability of raw materials and resources such as water and energy, with consequences for where and how garments and other products can be produced. Extreme and acute weather events may also cause disruptions to production and distribution. Price increases and shortages of traditional raw materials are to be expected, particularly for cotton, on which New Wave Group has a significant dependency.
Risk of impacts on tangible assets( primarily buildings) as a result from physical climate related events such as flooding.
+ High business flexibility
- Wide assortment and multiple business segments.
+ Ongoing processes in developing more sustainable products and materials( and reducing dependence on cotton).
- Significant acute physical climate related events will affect the sector as a whole.
Include climate risks as part of the assessment when evaluating new production countries and suppliers.
Investments to develop alternative / more sustainable materials that are less sensitive to physical climate related risks.
Assessment of the resilience of the strategy in relation to climate changes The analysis indicates that the strategy is more resilient under an IEA NZE scenario, where demand for more sustainable products increases. Strengthened sustainability requirements benefit the Group and its value chain by driving technological
development, innovation, and market demand. At the same time, a faster pace of transition is required, along with further development of circular business models.
In an IPCC SSP5 8.5 scenario, the business model is more exposed. The supply chain is threatened by water scarcity, extreme weather events, raw material shortages and rising raw material costs, all of which affect the Group’ s operational activities and will require significant adaptation. Since New Wave Group largely works with subcontractors, there is an opportunity to transition and switch suppliers and geographic regions when necessary. However, under severe climate change, the entire sector will be affected, and alternative options will be limited.
ANNUAL REPORT // 049