Climate risk consists of physical climate risk and transition risk. Physical risk is associated with increased extreme weather and ecosystem changes. Transition risk is associated with changes in regulations, technology and the market situation in connection with the transition to a low-emission society.
In 2021, Selvaag Bolig carried out an assessment of potential climate-related risks and opportunities, as well as the company's management of these based on guidelines from the Task Force on Climate-related Financial Disclosures (TCFD). The assessment concluded that the property sector as a whole has a significant exposure to both physical risk and transition risk.
The assessment further concluded that Selvaag Bolig has a relatively low exposure to physical climate risks, but is exposed to transition risks. At present, identified climate risks have not affected the company's measurement of assets and liabilities.
Physical climate risk
As Selvaag Bolig develops homes and commercial property which are taken over by the buyer on completion, physical climate risk primarily applies to the selection of land. In all projects, climate risk is mapped through a risk and vulnerability analysis (RVA analysis). The analysis reveals conditions that are important for whether the area is suitable for development purposes, and any changes in such conditions as a result of planned development. Elements that are mapped follow the theme guide for civil protection in spatial planning from the Norwegian Directorate for Civil Protection (DSB).
Selvaag Bolig is experiencing increased demands for transparency, non-financial reporting, and climate requirements in connection with the regulation of property. Through its operations, the company has an impact on the climate and environment, including through the production of purchased materials and on construction sites.
Selvaag Bolig has therefore set targets for reducing greenhouse gas emissions. This has so far not had a significant financial impact on the company, but it is uncertain how this will affect the company in the future. It cannot be ruled out that it will affect the company financially in the form of increased construction costs, costs for compensatory measures, or increased sales prices for the company's products. During 2023, Selvaag Bolig will continue its work on mapping transition risks