Transurban FY26 Corporate Report Section C: Strategy
Scenarios used to assess physical and transition climate-related risk exposure under different warming levels: Below 2°C (Low warming) 1 2 to 3°C (Intermediate warming) Above 3°C (High warming) Physical risk scenario RCP 2.6 / SSP1-2.6 2 RCP 4.5 / SSP2-4.5 RCP 8.5 / SSP5-8.5 and SSP3-7.0 Transition risk scenario NGFS Net Zero 2050 (1.5°C-aligned) NGFS Delayed Transition NGFS Current Policies Risk focus Low physical risk High transition risk Medium physical risk Medium transition risk Higher physical risk Low transition risk
While physical climate-related risks such as extreme weather events remain present, the scenario focuses on evaluating transition risks and
Evaluating the threats and opportunities associated with increasing acute and chronic physical impacts, as well as delayed and inconsistent decarbonisation. Delayed Transition assumes global annual emissions do not decrease until 2030. Strong policies are then needed to limit warming to below 2 °C. This scenario assumes new climate policies are not introduced until 2030 and the level of action differs across countries and regions based on currently implemented policies. Gradual electrification of transport, buildings and industry, accelerating after 2030 with greater reliance on carbon removal technologies. Emissions levels give a 67 % chance of limiting global warming to below 2 °C.
Assessing resilience against increasing acute and chronic physical risks under a high emissions scenario.
opportunities associated with accelerated decarbonisation.
Key assumptions
Net Zero 2050 limits global warming to 1.5°C through stringent climate policies and innovation, reaching global net zero CO 2 emissions around 2050. This scenario assumes that ambitious climate policies are introduced immediately, including rapid electrification across transport, buildings and industry, with carbon dioxide removal technology used to accelerate decarbonisation. Net CO 2 emissions reach zero around 2050, giving at least a 50 % chance of limiting global warming to below 1.5 °C by the end of the century.
Current Policies assumes that only currently implemented policies are preserved, with slow pace of technological change, leading to high physical risks. Limited electrification of transport, buildings and industry and adoption of other decarbonisation technologies is inconsistently adopted across markets. Emissions grow until 2080 leading to about 3 °C of warming and severe physical risks.
The following key assumptions have been applied across scenarios. Additional scenario-specific assumptions are outlined in Physical risk: climate-related scenario analysis and Transition risk: climate-related scenario analysis in this Section C4. Transition risk: Climate-related policies Future carbon prices derived from NGFS for Australia, the United States, Canada and global average. Energy use and mix Renewable electricity share determined by current national and regional grid mix in Australia, the United States, and Canada, with future change informed by announced government targets and future country-level energy mix changes derived from NGFS. Macroeconomic trends Interest rate projections derived from historic Australian consumer price index and assumed Reserve Bank of Australia annual inflation targets of 2.5%. Corresponding interest rate spread on borrowing cost associated with reference to economy-wide emissions intensity determined by expert consultant judgement informed by empirical findings from academic literature. Developments in technology No specific parameters used in quantification but scenarios assume varying pace and scale of renewable deployment, electrification of transport, buildings and industry, and implementation of carbon removal technologies. Physical risk: Physical climate variables and local weather patterns Downscaled regional climate projections derived from XDI Climate Risk Engines, based on Group asset locations, with spatial resolution from 0.5 meters to 111 km depending on variable.
1 The Net Zero 2050 scenario is aligned with the Paris Agreement objectives of limiting global warming to 1.5 o C above pre-industrial levels 2 The Group also considered SSP1-1.9 as a 1.5°C aligned pathway. However, due to the limited availability of downscaled data, SSP1-2.6 has been adopted as the low warming scenario for assessing physical climate-related risks. The RCP 2.6 / SSP1-2.6 scenario may modestly overstate hazard intensity relative to a 1.5°C pathway. Accordingly, the results can be considered conservative when interpreted against a 1.5°C benchmark. SSP1-1.9 represents a more favourable emissions trajectory and would not be expected to result in greater physical climate risk impacts than those modelled under SSP1-2.6
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