Corporate Report for the year ended 30 June 2022
Introduction and overview
Business performance
Governance and risk
Directors’ report
Remuneration report
Financial statements
Sustainability supplement
Security holder information
—Case study— Preparing for a changing climate To ensure our climate change risk management and resilience activities are effective, we need to understand how current and future climate-related events will impact our infrastructure and our people. In FY22 we ran an exercise to test extreme weather event impacts on one of our roads. To test the efficacy of our newly developed M2 CRAMP, we ran an operational resilience exercise. The exercise was designed to test our proposed integrated response to an extreme heat event. The scenario tested our proposed responses to: • bushfire and electrical storm hazards • significant community impacts • concurrent/related motorway and wider-road-network incidents. The exercise included our NSW Market Incident Management Team (IMT) and our Emergency Strategy Team (EST) and tested how effectively we would respond to the threat scenario. This included
Flood impacted suburban roads in Brisbane, Australia (February 2022). Image via Alex Cimbal/Shutterstock
We have now entered into renewable energy agreements across all Australian markets. Our understanding of physical climate change risks has also evolved as we gained experience through reflecting on flooding events in Queensland and New South Wales in February and March 2022, and conducted a desktop emergency management exercise for Sydney’s M2 Motorway (see case study). This has improved our confidence in the likely success of planned and proposed adaptation measures. Our governance arrangements, climate- related risk procedures and supply chain engagement were enhanced over FY22. Our Climate Change Risk and Adaptation Guideline standardises the approach to preparing asset-specific Climate Risk and Adaptation Management Plans (CRAMPs), ensuring consistency across markets and enhancing efficiency. This is in line with the Enterprise Risk Management (ERM) Framework (see page 82), which is used to manage the threats and opportunities relating to climate change across our business and operations and is an integral part of our decision-making process. We prepared CRAMPs for two Queensland assets as this market has higher overall levels of climate-related risks compared to other markets where we operate. The experience of preparing the CRAMPs has highlighted the importance of understanding the resilience of adjacent road networks and feeders into our assets and has also moved us closer to being able to estimate potential financial impacts. At this stage, we have identified potential climate-related material impacts for the business, and plan to quantify the associated potential financial impacts from FY23.
FY22 saw us survey our major suppliers (top 50 suppliers by spend, excluding major projects) through the CDP supplier engagement process to better understand their progress in transitioning to a low carbon economy and the climate-related risks they face by geographic location. Of our 50 top suppliers, 25 reported having active GHG reduction targets, with most either having, or committed to, setting science-based GHG emission reduction targets. Some appear to understand the key transition and physical risks for their operations. Examples of transition risks cited included carbon pricing (Japan), changes to environmental regulation (Japan and Europe) and enhanced reporting and reputational risk (Europe). Physical risks identified included extreme weather events (most geographies), rising temperatures (Japan), severity and frequency of extreme events (India) and bushfires (Australia). We will continue to work with our supply chain to evolve our appreciation of climate- related risks, their management approaches and impact on our operations and projects. As detailed in our FY22 Climate Change Disclosure , we continue to address all eleven recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The recommendations aim to enhance financial disclosure of climate- related risks and subsequent impacts on business models and operations and cover the themes of governance, strategy, risk management, and metrics and targets. We considered the Intergovernmental Panel on Climate Change’s (IPCC) sixth assessment report and the TCFD’s revised October 2021 guidelines in developing our FY22 Climate Change Disclosure and addressing the TCFD recommendations.
considering and addressing Transurban, customers and
community impacts; prioritising the safety of people; assessing our ability to continue to operate critical services; and protecting our reputation. Exercise outcomes and learnings, and our real-world experiences from the March 2022 Brisbane floods are now being used to: • inform relevant climate change risk and adaptation assessments • enhance our adaptation plan approach • identify opportunities to enhance our asset resilience in each market • identify opportunities to support our local stakeholders as part of broader community responses.
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