Scenario analysis at the LUG Group – the key to business resilience and competitive advantage
Scenario analysis is a tool that allows companies such as the LUG Group to assess the resilience of their business models and value chains to climate change and prepare for future market challenges. The analysis is based on at least two scenarios – one in line with the Paris Agreement (keeping the temperature increase to 2°C by reducing greenhouse gas emissions), and the other assuming a business-as-usual scenario, i.e., no effective measures to reduce emissions.
MATERIALITY experts guided the LUG Group through an analysis process based on two extreme climate scenarios: Paris-aligned and Paris-missed, covering the short (2024-2030), medium (2031-2040), and long (2041-2050) time horizons. The study was conducted in accordance with the SA:CCR Scenario Analysis: Climate-Change Resilience methodology and based on IPCC and IEA reports.
Nine key elements of the LUG Light Factory value chain were analyzed:
- raw materials and components,
- delivery logistics,
- energy and fuels,
- design and production,
- distribution and sales,
- customer logistics,
- customers,
- use phase,
- waste.
The results of the scenario analysis provided the LUG Group Management Board with strategic knowledge about the potential threats and opportunities associated with climate change. This is key support in making business decisions, building competitive advantage, and obtaining financing and investor confidence. The analysis was included in the latest Report on the sustainable development of the LUG Group.
The LUG Group has been cooperating with MATERIALITY experts for over eight years, consistently implementing its sustainable development strategy and building value for customers, partners, and investors.
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