PHYSICAL RISKS WITH CLIMATE CHANGE IN THE FOREST SUPPLY CHAIN

In the forest products industry, the most significant physical risk from climate change is changes to wood supply. These changes could occur gradually over time with species shifts or suddenly due to events such as wildfire, pest outbreaks, or windthrow.

The Woodlands team continues to engage with expert researchers to understand the physical risk associated with a changing climate. A recent analysis on forests in New Brunswick1 provides insight into the gradual species shifts that could impact the softwood wood supply under various scenarios. The Report indicates “RCP2 2.5 and RCP 4.5 were not expected to result in significant impacts to timber supplies over time.” In the most probable scenario, RCP 4.5, any timber softwood supply decline can be mitigated by site-specific decisions around planted species.

We continue to monitor and engage with local researchers to build an understanding of climaterelated impacts to our forests and potential future adaptation strategies.

Physical risk is not limited to forest growth and long-term wood supply. Infrastructure at manufacturing sites, forest access roads, and industrial processes that are water dependent, like papermaking, are all subject to risks associated with changing precipitation. This could mean too much precipitation causing flooding or too little precipitation, increasing risk of wildfires and impacting papermaking operations requiring significant surface water.

Shifts in temperature can also impact our wood supply, leading to increased strength and frequency of winds, including Atlantic hurricanes. It also impacts shifts in seasons such as shorter and/ or warmer winters, potentially impacting logging operations in the region that require careful scheduling (e.g., poorly drained areas are suitable for operation in frozen conditions only, roads built from clays or silty soils are only accessible during dry summers or frozen conditions).

While these risks will likely present themselves over the medium- to long-term, they have the potential to disrupt operations and increase costs.

Table 4-1 on page 100 outlines current physical risks identified by our approach and our strategy to mitigate them.

Doing it right: Lee Cove Flood
Mitigation Climate change will impact infrastructure because of rising sea levels and/or an increase in river flooding events. In both 2018 and 2019, the Saint John River experienced significant flooding that intruded into the IPP mill operation. To address this, IPP has proceeded with the Lee Cove Flood Mitigation project, a raised rock berm to protect the IPP operation from future flooding by the neighbouring Saint John River and Bay of Fundy. Started in 2020, this project will be fully complete in the spring of 2022.

TABLE 4-1. Physical Risks of Climate Change and Mitigation Strategies in the Forest Supply Chain

A changing climate, government policies, and changes in consumer behaviours associated with a concern for the environment could also result in opportunities for the Supply Chain. Beginning with a healthy diverse forest and as part of a wellcapitalized, modern manufacturing base, our Supply Chain can respond to increased tree growth and the increasing demand for renewable forest products and energy.

TABLE 4-2. Opportunities from Climate Change in the Forest Supply Chain