Transurban FY26 Corporate Report Section C: Strategy
Key judgements and uncertainties Quantification of anticipated financial effects
The anticipated financial effects of climate-related risks and opportunities rely on forward-looking assumptions that involve significant judgement. These include assumptions about future climate policies, technology availability and adoption, customer behaviour, traffic patterns, and the frequency and severity of climate-related events. Actual outcomes may differ materially from estimates due to the inherent uncertainty of climate projections, variability in underlying data, and potential changes in economic, regulatory and market conditions. As a result, anticipated financial effects should be interpreted as indicative estimates rather than precise forecasts. Where applicable, the assessment of anticipated financial effects incorporated historical climate and traffic data, including analysis of historical extreme weather impacts on toll revenue. Impacts were assessed against normal (baseline) conditions using defined thresholds for extreme weather events, such as extreme heat and heavy rainfall, based on representative city- level data. The assessment reflects the Group's historical experience and may not capture future changes in climate patterns, traffic behaviour or other external factors. There is inherent uncertainty in isolating the financial effects of climate-related events on traffic volumes, as these may also be influenced by broader economic conditions and behavioural changes. In addition, the use of baseline traffic conditions may not fully reflect future changes in traffic patterns arising from climate- related impacts. Where quantified financial effects are not provided due to measurement uncertainty, the Group has exercised judgement in determining that quantitative estimates would not provide relevant or reliable information until greater certainty and observable data become available. ¢
C3: Climate strategy To address climate-related risks and support early alignment with the Taskforce on Climate-related Financial Disclosures, the Group established a Climate Change Framework in FY20, which summarised the Group’s organisational response to climate change, with priority areas related to the transition to net zero, resilient infrastructure and operations, and governance. The Group’s response to climate change continues to evolve in line with corporate strategy and emerging risks as outlined in this report. The Group's decarbonisation approach includes actions within its direct control as well as actions that depend on broader value chain transformation. Achievement of the Group's FY50 emissions reduction target will be influenced by the availability, cost and adoption of lower- emissions technologies, materials and energy sources, together with evolving policy, regulatory and industry settings. The Group continues to work with suppliers, industry participants and governments to support the development and deployment of these solutions. The Group’s approach to managing climate-related risks and opportunities is informed by scenario analysis that has, to date, been primarily qualitative in nature, and is now increasingly supported by quantitative analysis to enhance the assessment of potential financial and operational impacts. As outlined in the following section on business resilience, this combination of qualitative and quantitative scenario analysis assists the Group in evaluating its preparedness across a range of plausible climate futures. In the short to medium-term, the Group’s focus is on managing operational risks and opportunities as well as monitoring climate- related developments over the long-term, reflecting the resilience of the existing business model and asset base. The Group currently considers that it has sufficient financial resources and capacity to manage climate-related risks and opportunities. This assessment is supported by the strength and stability of cashflows generated from existing operations, as well as the Group’s ongoing access to funding and financial flexibility to continue investing in climate mitigation and adaptation initiatives. This assessment is based on current conditions and may change over time in response to evolving climate-related risks, regulatory developments and broader market factors. See also Section C4: Business resilience.
Climate transition action plan The Group adopted its current GHG emissions reduction targets in 2020, supported by key decarbonisation and climate risk management activities as outlined in this report. While the Group continues to be guided by its existing GHG emission reduction targets, and is taking steps towards achieving them, a multi- year effort is currently underway to review and enhance Scope 3 emissions calculation methodologies and supplier emissions-related engagement practices. This will include a review of current targets and performance tracking, taking into consideration the Australian Government’s updated 2035 emissions reduction targets and evolving guidance from the GHG Protocol and the Science Based Targets Initiative’s (SBTi) revised Corporate Net Zero Standard. The Group intends to develop and disclose a Climate Transition Action Plan (CTAP) in line with internal planning and external guidance and disclosure requirement timeframes, currently anticipated by FY28. Mitigation and adaptation efforts The Group undertakes a range of mitigation and adaptation measures to address both physical and transition climate-related risks and opportunities across its assets, operations and value chain. These efforts help the Group manage current exposures while preparing for anticipated future impacts. The Group’s mitigation initiatives are designed to support the achievement of its climate-related targets across Scope 1, 2 and 3 emissions, while adaptation initiatives are designed to ensure the continued resilience of assets and operations under changing climate conditions. The Group has undertaken targeted investments in operational infrastructure to improve energy efficiency and support emissions reduction outcomes. Examples include upgrades to tunnel lighting through LED and pacemaker lighting technology, optimisation of ventilation systems (including jet fans), and consolidation of control centres. These investments are expected to improve operational efficiency and reduce electricity consumption across the Group's assets. While primarily undertaken to support operational and asset management objectives, these initiatives also contribute to the Group's decarbonisation pathway and support progress towards its Scope 1 and Scope 2 emissions reduction targets.
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