Governance and risk
Key risks – Opportunities and threats 1
Up Down Neutral
Threat
Trend Change in threat within FY24
Example management responses
Changes in government policies or regulatory interpretations A change in government policy or expectations could impact on the ability to deliver the business strategy.
Engagement with Governments and partners on toll reviews.
• Engagement on Toll Review and road user charging • Contributions to policy discussions through submissions to government inquiries and draft strategies • Engagement with at all levels of government to better understand policy positions and their potential implications • Monitoring potential changes to stakeholder and government policies, including alignment to ESG recommendations and transition to net zero • Continuous monitoring of Transurban’s regulatory and compliance requirements through the established compliance management system, including automatic notification and escalation of compliance actions and regulatory changes • Compliance working group continues to oversee and report to Board on compliance activities • Stress testing and scenario analysis reflecting future outlook and economic uncertainties and other potential disruption events • Strategic and emerging risks and mitigations identified and managed as part of the Enterprise Risk Management Framework • Ongoing regional and asset traffic analysis supplemented by third party data and/or peer review • Continued review and management of cost base • Continuous financial model review and evaluation • Consideration of extreme and future weather events or land use changes • Due diligence throughout procurement and tender processes • Project Steering groups, Internal Audit Program and Program reviews • Consistent risk reviews performed to identify and manage risks throughout the project lifecycle • Ongoing proactive focus on relationship with current and potential contractors and suppliers including senior executive engagement with major contractors • Consideration of alternative contracting frameworks and commercial engagement models • Australian Road Research Board assessment of the Australian network to determine International/Australian Road/Assessment Program (iRAP) safety ratings • Monash University Accident Research Centre analysis of serious injury crashes on Australian roads • Road Safety Action Plans and related Community of Practice • Engagement across government agencies, transport, enforcement and road safety • Representation on Australasian college of road safety and US Department of Transportation committees • Road safety analytics platform, which integrates Transurban and third-party data (e.g., near miss data, weather and iRAP) • Development of road safety initiatives, such as Burnley Tunnel pacemaker lights and Express Lane access • Continued focus on emergency response capabilities and delivery of emergency management exercises • Transurban Road Safety Centre at NeuRA research program • Scenario analysis of weather events and their impact on road safety
Continued focus due to current economic conditions.
Unfavourable changes in the business environment or operating conditions Key assumptions relating to the operating environment (including potential disruption events) and/or budget forecasts may prove to be incorrect.
Challenges have been experienced as a result of current economic conditions and risk exposure for the construction industry.
Delivering our major projects to meet agreed outcomes Contractor performance or behaviour, combined with ineffective contractor management, could lead to a failure to deliver projects on time and within budget, impacting our reputational standing and impact future growth opportunities. Customer and road safety Failure to effectively manage road infrastructure and response to incidents could impact customer and road safety. Customer safety could also be impacted by an inability to consider the consequence of significant weather events and consequences of climate change.
Challenges continue to be experienced in driver behaviour across the broader national road networks in Australia and North America. These behaviours are also impacting on Transurban asset performance.
1 Transurban’s exposure to financial risks and the policies we have in place for managing that risk can be found in the Derivatives and Financial Risk Management notes – see Note B14. This section discusses our hedging policies, credit risk, interest rate risk and liquidity and funding policies. Transurban considers the impacts of climate change as a potential contributing factor to many of our threats and opportunities. For more information on our climate change management strategies and our consideration of transition and physical risks refer to climate change risk management on pages 38–47 of this report
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