Climate change-related risks and opportunities
Nokian Tyres is committed to reducing greenhouse gas emissions according to its science-based targets, aiming for net zero by 2050. We assess climate-related business risks and opportunities of different types every year as part of enterprise risk management (ERM). Different factors are considered when scoring the risks and opportunities, such as:
- Time horizon (short: up to 1 year; medium: 1-5 years, long: over 5 years). These time horizons are consistent with those used for all topics that ERM covers.
- Severity: scale from insignificant to significant
- Probability: scale from rare to almost certain
The most significant risks and opportunities identified in 2026 were the same in all time horizons, and they are presented below.
Climate-related risks
| Risk group | Sub-category | Examples of concrete risks | Adaptation/mitigation plan | |
| Transition risks | Regulatory | Emerging regulation | Deforestation-related regulation (EUDR), concerning natural rubber | Follow-up of emerging regulation |
| Further environmental fees | Additional taxes and duties e.g. EU’s CBAM for fossil raw materials can increase prices. Carbon taxes. Certification costs | Participation in industry sector working groups | ||
| Tire raw materials | Replacing fossil-based raw materials with more expensive renewable and recycled materials | Road map for selective use of renewable and recycled raw materials | ||
| Replacing raw materials that have a high carbon footprint with materials with a lower carbon footprint. Availability and price of materials | Selective use of lower carbon footprint materials | |||
| Raw material and transportation price increases due to higher energy prices | Long term contracts | |||
| Tire demand | Increased demand for all-season tires, decreased demand for winter tires | Update product offering | ||
| Physical risks | Physical | Extreme weather events | Disruption in own production | Location selection and building design. Insurances. |
Climate-related opportunities
| Opportunity group | Sub-category | Examples of concrete opportunities | Implementation plan |
| Innovation | Raw materials | Innovations with renewable / recycled / local materials | Material development road map to reach 50% share of renewable or recycled raw materials by 2030 |
| Innovations with low carbon footprint raw materials | |||
| Recycling | Cooperation with innovative recycling companies | Screening of opportunities and widening of cooperation | |
| Climate-friendly technology | Lower rolling resistance products. Low-emissions production | Product development road map. New zero-CO2-emissions (Scope 1 & 2) factory in Romania. | |
| Product range | Industrial (heavy) tires | Existing expertise to provide solutions that consider climate, e.g. intelligent sensor technology | Product development |
| Engagement | Consumers | Increase awareness on how tires can affect safety and carbon footprint | Consumer education through communications and marketing |
In 2023, we prepared climate-related financial risk disclosures according to the IFRS S2 standard. The disclosures can be downloaded here (pdf).