Scenario Modelling and Analysis for a Robust Strategy
We will approach climate-related risks through credible industry tested, science informed models established by the Intergovernmental Panel on Climate Change (IPCC). We will use scenarios that are aligned with the business to test and adjust our strategic approach against science-based climate predicted outcomes, evolving regulatory policies, socio-economic factors, our different business areas and their geographies. Their likelihood, consequence and the magnitude of impact will also be determined.
Scenarios will be selected for a 2-year evaluation cycle (50% Year 1, 50% Year 2). This frequency reflects the optimal balance between currency and practical alignment with business strategy and management planning cycles.
We plan to select scenarios from both Representative Concentration Pathways (RCP) and Shared Socioeconomic Pathways (SSP) that allow us to focus on the business as whole in a 1.5°C world as aligned with the Paris Agreement and our Science Based Target Initiative through to RCP 6.0 (4°C by 2100). We plan to use RCP 6.0 considering we operate in higher risk locations with significant variation in warming rates, variations in impacts, exposure and climate variability.
This scenario logic is based on the Task Force on Climate-related Financial Disclosures (TCFD) and Carbon Disclosure Project (CDP) guidelines. Additional standards and tools have been incorporated to ensure the scenarios are comprehensive and incorporate current and evolving science.
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