Integrated Report / JSL 2021
JSL
INTEGRATED REPORT / JSL 2021
ENTENDER PARA ATENDER
INTRODUCTION
JSL
PLANNING
AND FUTURE
PEOPLE AND
CULTURE
BUSINESS
IMPACT
ENVIRONMENTAL
MANAGEMENT
CLIMATE CHANGE:
OUR APPROACH
FINANCIAL
PERFORMANCE
GRI AND SASB
SUMMARY
ASSURANCE
REPORT
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CLIMATE CHANGE GRI 201-2, TCFD - STRATEGY (A) (B)
CLIMATE-RELATED RISKS AND FINANCIAL IMPACTS
Type of
Risk
transition risk
Sector /
Geographical Area
region
Potential Impact
Time
horizon
Probability
Impact
Magnitude
Estimated
Financial Impact
Explanation of the Financial Impact
Cost of risk
response
Political
and Legal
Regulation
of carbon
pricing
mechanisms
in Brazil
• Products and
services;
• Adaptation
and mitigation
activities;
Investment in
research and
development;
• Acquisitions or
divestments
INCREASE IN DIRECT
COSTS. Currently,
there is no carbon
pricing policy in Brazil.
However, it is possible
that this mechanism will
be established in the
coming years, following
international climate policy
negotiations. In this scenario
of carbon tax collections
on Greenhouse Gas (GHG)
emissions from burning
fossil fuels, the company
will either have to pay
additional compliance costs
or seek to reduce emissions.
Between
R$ 19,396,597.00
and
Long
Probable
High
term
R$
116,379,582.00
Among the goals of the Sustainable
Development Goals (SDGs) we have as one
of the priorities until 2030 the fight against
climate change. Carbon pricing is seen as an
alternative to the problem, however, in Brazil,
currently, there is no pricing policy. Therefore,
the PMR Brazil studies were taken as a
reference - the PMR (Partnership for Market
Readiness) represents the alliance of 30
countries and is managed by the World Bank -
which indicates the value of USD10 (R$50.00)
per ton of carbon emitted and the price of
allowances from the EU ETS (European Union
Emissions Trading System) which indicates
the value of USD 60 (R$ 300.00). The cost of
taxation on tons of carbon directly emitted
by the Company was considered of Scope 1
and 2 nature, based on research carried out
on the operational model of carbon taxation
systems implemented in the international
scenario and national studies. Thus, for the
purpose of identifying the potential direct
financial impact that a possible carbon tax
could have on JSL, a hypothetical cost in
the range of R$50.00 to R$300.00 per ton of
carbon was adopted. In 2021, the company
issued 387,931.94 (scope 1+ 2), when
simulating the implementation of a possible
carbon tax system, the cost varies between
R$ 19,396,597.00 and R$ 116,379,582.00.
R$
410,000,000.00
Mitigation and
Adaptation Measures
As a response to this risk,
the Company sees the need
to implement emission
mitigation initiatives to
address this risk within the
scope of Scope 1 emissions
(where emissions from fuel
purchases are allocated),
with the objective of reducing
the total balance of the
carbon tax to be paid in a
possible carbon taxation
scenario (tax system that
prices the Companies'
Scope 1 and 2 emissions.
One of the main mitigation
measures is the replacement
of combustion vehicles with
electric vehicles, using
vehicles powered by less
polluting fuels such as
natural gas and biomethane,
in part of the fleet, in addition
to telemetry in all vehicles,
in order to encourage less
fuel burn and consequent
reduction in emissions. This
scenario would imply an
investment of R$410 million
over the next 10 years.
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