Transurban FY26 Corporate Report Section C: Strategy
Climate-related physical risks may affect the Group’s financial position, financial performance and cash flows as presented below through the potential business impacts outlined above. Financial statement line items potentially impacted by climate-related physical risks – R1 and R2 Time horizons 1 Short Medium Long-term Short Medium Long-term Short Medium Long-term
Description Profit and Loss Operating costs:
Balance Sheet Concession assets and equity accounted investments: • More frequent and severe extreme weather events may affect the condition, availability and performance of concession assets. These impacts may influence projected cash flows used in impairment assessments of concession operating and maintenance costs and disruption-related revenue impacts. • Development projects may experience cost increases arising from extreme weather impacts. To the extent eligible for capitalisation, these costs may increase the carrying value of concession assets. Provisions: • Increased maintenance requirements arising from climate-related factors may affect the measurement of maintenance provisions. assets and equity-accounted investments through increased
Cash Flow Operating cash flows and capital expenditure: • Additional operating and capital expenditure may be required to
• Increased frequency and severity of extreme weather events may increase road operating and maintenance costs. • Climate-related impacts on the safety and wellbeing of road users, employees and contractors may increase incident response costs and expenditure on safety measures. • Operational disruptions arising from extreme weather events or safety- related impacts on employees and contractors may reduce productivity and efficiency, resulting in higher operating costs. • Increased incident frequency and severity may lead to higher insurance premiums and claims expenses. Construction costs and revenue: • Extreme weather events and increased project delivery costs may result in construction costs exceeding construction revenue. Revenue impacts: • Disruptions to road availability or traffic flows may result in reduced toll revenue. • Delays to the delivery or commissioning of development projects may defer future toll revenue generation.
enhance asset resilience, affecting the timing and quantum of operating and investing cash flows.
Current and anticipated financial effects from physical risks The quantification of current and anticipated financial effects associated with R1 is described below, and the associated scenario analysis is described in Section C4: Business resilience (relating to asset damage and traffic disruptions). Anticipated financial effects have been estimated with reference to the intermediate warming scenario. The financial effects of R2 have not been quantified due to the inherent difficulty in reliably estimating the impacts on safety and wellbeing of customers, communities, employees and contractors, including through increased
While certain discrete activities (e.g. CCAPs, training and advisory support) incur identifiable costs, these are not material. Other activities, including maintenance, monitoring and safety programs, are embedded within broader operational expenditure and driven by multiple factors. As a result, it is not practicable to isolate and reliably quantify the portion attributable to climate-related risks and opportunities, either individually or in aggregate. Any such allocation would involve a high degree of estimation uncertainty and is not considered to provide decision-useful information. Aggregated expenditure on initiatives and operational activities undertaken for broader business purposes that also deliver climate-related benefits, including energy savings, and support the achievement of the Group’s climate-related targets is provided in Section C3: Climate strategy (Mitigation and adaptation efforts). Gross cash flow impacts from incremental costs associated with prior loss events, including Tropical Cyclone Alfred (March 2025) and the South East Queensland floods (March 2022), were not material to the Group, excluding insurance recoveries. Based on current assessments, the Group does not expect material financial effects from physical climate-related risks in the short to medium-term, reflecting the resilience of existing road assets and operations under current regulatory and market conditions. In addition, the Group has not identified any significant risk of a material adjustment to the carrying amounts of the Group’s assets and liabilities for FY27.
exposure to extreme weather and heat-related conditions. These impacts are often indirect and can include factors such as changes in productivity, reputational effects, (including impacts on stakeholder trust, public perception and social licence to operate), and incident outcomes, which are difficult to isolate and attribute to climate drivers in a manner that supports robust modelling. The Group monitors the financial effects of extreme weather events through incident response activities and by tracking of repair costs. In addition, long-term financial effects are assessed through asset-level modelling of both acute and chronic physical risks, supporting the evaluation of potential damage, degradation, and operational disruption over time. Extreme weather events include acute and disruptive meteorological conditions, such as severe storms, significant rainfall, flooding, heatwaves or bushfires, that can reduce safe lane availability and impact the road network’s operational performance. Such events are characterised by their potential to materially disrupt traffic flow, infrastructure, operations, or surrounding communities, and generally require operational intervention to ensure that the motorway network remains safe and functional.
1 No material impacts observed in the current period or anticipated in the short-term. With increasing frequency and magnitude, there is potential for impacts to become material over the medium and long-term
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