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Flender/Flender Gear Units/Helical gear Reduction Boxes H4

ks. hysical risks resulting from direct acute damage or longer-term shifts in climate patterns. From these two groups of risks, we clearly see physical risks having the greatest potential impact on our business. According to the transition to lower-carbon economy and consumer direction of travel, as well as politics/regulations, we see acertain risk in some of our customer areas. However, we estimate this as not material considering our broad product and service portfolio across several industries. An analysis carried out together with one of our insurance partners (seesection on Risk Management) revealed that Flender was rated with an overall natural catastrophe score considered moderate to high. This indicates an elevated risk for Flender on average, taking into account all regions and locations. At the same time, it shows that Flenders diversified global presence with production facilities across all continents has positive effect on the organizations resilience to regionally contained, climate-related risks. With respect to opportunities, we follow the TCFD recommendations and include opportunities arising from resource efficiency, alternative energy sources, innovative products and services as well as market developments in our analysis. Savings from rising energy efficiency in our production facilities and self-produced renewable energy will have positive impact on Flenders cost structure in the future. We are convinced that the biggest short- to medium-term opportunities derive from the global rising demand for carbon-neutral energy infrastructure.Risk managementAnalyzing climate-related risks is becoming an increasingly important part of ourannual risk assessment and risk management system. As part ofthis, we haveperformed Global Peril Diagnostic with one of our insurance partners. This covered wide range of climate-related physical risks across allworld regions andcountries where Flender is operative. The analysis includes extreme weather e