Beach Energy Limited
GovernanceGovernance
Governance body oversight and management's role
Board (pages 38–39). The Board has ultimate responsibility for approving strategy and overseeing its execution, and ensures climate-related risks and opportunities are considered in strategy, business plans and risk management. Under the Board Charter it oversees the Risk Management Framework and reviews policies and performance on climate change and sustainability. Oversight covers strategy reviews; approval of business plans, major capital expenditure and annual budgets (including emissions, carbon costs and climate-related investments); and approval and monitoring of climate-related targets, including short term incentive and longer-term emissions reduction targets. Biannual reviews of material risks and half-yearly Sustainability Update papers inform the Board.
Committees and management (page 39). The Audit and Risk Committee oversees the Risk Management Framework, including an annual deep-dive review of climate-related risks and opportunities. The Remuneration and Nomination Committee recommends climate-related STI targets for Board approval. The Technical Committee considers asset emissions profiles and alignment with climate-related targets in investment decisions. Day-to-day responsibility is delegated to the Managing Director and Chief Executive Officer, supported by the Executive Team. Management is supported by the Sustainability Steering Committee and the Climate Advisory Committee, whose responsibilities are reflected in approved terms of reference.
StrategyStrategy
Climate-related risks and opportunities
Beach presents one physical risk, five transition risks and one transition opportunity (pages 44–53). It reviewed its previously identified climate-related risks in FY26 (page 43). The timeframe bar on each risk page highlights the horizons shown below.
| Risk or opportunity | Timeframe highlighted | Page |
|---|---|---|
| Physical Risk 1: Extreme weather events and long-term changes in climate patterns | Long | 44 |
| Transition Risk 1: Increasing cost of carbon | Medium, Long | 46 |
| Transition Risk 2: Reduced demand for fossil fuels and/or faster substitution | Long | 48 |
| Transition Risk 3: Returns on emission abatement initiatives | Medium, Long | 49 |
| Transition Risk 4: Exposure to activism leading to climate-related litigation | Medium, Long | 50 |
| Transition Risk 5: Unfavourable climate-related energy regulation and policy | Medium, Long | 51 |
| Transition Opportunity 1: Carbon Capture and Storage (CCS) | Long | 53 |
Time horizons (Table 2, page 40): short-term is 0 to 1 year (annual business planning and budgeting cycle), medium-term is 1 to 5 years (rolling five-year outlook) and long-term is beyond 5 years (the forecast life of assets currently recognized on the balance sheet). Climate-related risks impact operated and non-operated upstream assets, in particular the core producing assets in the Cooper Basin (SA), Perth Basin (WA) and Otway Basin (VIC) (page 43).
Business model and value chain
Business model (page 41). Beach's operating segments are its South Australian, Western Australian, Victorian and New Zealand interests, based on geographic regions and the similarity of assets within them. The segments are used to assess physical climate-related risks. Transition risk is considered across the portfolio, including for different products and markets, and the impacts of climate scenarios on commodity pricing are considered within the scenario analysis.
Value chain (page 41). Key relationships are purchased goods and services such as engaging a rig (all operating segments); marine and aviation transport to support rigs and platforms (VIC and NZ); processing of sold products, transportation and distribution of sold products, and customer demand for products (all operating segments).
Where effects are concentrated (page 43). Beach operated and non-operated upstream assets, in particular the core producing assets in the Cooper Basin (SA), Perth Basin (WA) and Otway Basin (VIC). Effects are described risk by risk (pages 44–53). For example, Beach's assets are resilient to physical risks associated with severe weather (page 44); the increase in cost of carbon impacts all assets and facilities under Australia's Safeguard Mechanism (page 46); and reduced demand could result in stranded assets or reduced reserves (page 48).
Strategy and decision-making
Transition plan (page 55). Beach does not maintain a stand-alone climate-related transition plan. Committed targets, actions and resources to enable the transition to a lower-carbon economy are described in the Sustainability Report. Beach states it is on track to achieve both 2030 targets, primarily through its investment in Moomba CCS.
Effects on strategy and decision making.
- Physical Risk 1 (page 44): no effect in the short or medium term. Until indications of a sustained increase in the frequency or severity of weather events are observed, no resources will be deployed on mitigation or adaption efforts.
- Transition Risk 1 (page 46): the approach to carbon management will be reviewed annually from FY26, and investment decisions consider the cost of carbon.
- Transition Risk 2 (page 48): no changes to strategy or decision making are expected beyond what is considered in climate resilience testing.
- Transition Risks 3 and 4 (pages 49–50): not currently affecting strategy or decision making.
- Transition Risk 5 (page 51): Safeguard Mechanism uncertainty is captured in investment decisions where sensitivities on carbon liabilities are considered. Opportunity 1 (page 53): where appropriate, CCS is considered in well and facility designs.
Resourcing (page 43). Deploying additional capital or dedicated resources for mitigation or adaption is conditional on changes in risk profiles and supported by project economics and capital allocation processes.
Financial position, financial performance and cash flows
FY26 effects. Physical Risk 1 (page 45): Cooper Basin flooding resulted in $17.1 million of increased tariffs, tolls and other operating costs (cost of sales) and $12.5 million of additional capital expenditure (Petroleum assets), with an initial $11.4 million of insurance recoveries (other income). Offshore weather delays added $17.2 million of restoration expenditure (restoration provision), $22.6 million of capital expenditure (Petroleum assets) and $9.7 million of exploration expenditure (other expenses). Transition Risks 1 to 3 (pages 46–49): no material financial effects; Transition Risk 1 notes $1.6 million of carbon liabilities settled under the NZ ETS. Transition Risks 4 and 5 and Opportunity 1 (pages 50–53): no financial effects.
Anticipated, long term. Physical Risk 1 (STEPS as reference scenario): if extreme weather events become more frequent or severe and longer-term sustained changes in climate patterns are evident, the overall anticipated impact, assuming both capital and operating cost increases, is in the range of $14 million to $55 million per annum increased cashflow, noting significant uncertainty (page 45). Transition Risk 1: assuming the current Safeguard Mechanism threshold, baseline and decline rate, an increase in carbon price could increase operating cost by $4 million to $11 million per annum (page 47). Unless stated otherwise, there is no significant risk of material adjustment due to climate-related risks in FY27 (page 43).
Climate resilience and scenario analysis
Scenarios (pages 41–42). Three IEA scenarios from the World Energy Outlook 2025 are used for both physical and transition risks: Net Zero Emissions by 2050 (NZE, 1.5°C, RCP 2.6), Stated Policies (STEPS, 2.5°C, RCP 4.5) and Current Policies (CPS, 3.0°C, RCP 8.5). The analysis was conducted in the second quarter of FY26 within the business planning cycle. No likelihood is assigned to any scenario, and the analysis is described as illustrative, not forecasts (pages 38, 41).
Resilience (page 54). Beach's business model and corporate strategy are assessed as resilient across the short, medium and long term. Free cash flow position (Table 4): positive in all three horizons under STEPS and CPS; under NZE, positive in the short term and Adjust / Adapt in the medium and long term. Under NZE the business model and strategy is likely to require some adjustment or adaption efforts to remain free cash flow positive in the medium and long term. The NZE test should be considered an unmitigated, extreme outcome, and useful quantitative information on combined financial effects is not possible because of uncertainty. As at 30 June 2026 Beach had $983 million of liquidity, made up of $213 million cash and $770 million undrawn debt. Underground gas storage, gas-powered generation and CCS are viable pathways to repurpose or deploy assets and infrastructure at the end of, or late in, asset life.
Risk ManagementRisk Management
Processes for identifying, assessing and managing climate-related risks
Framework (page 40). Climate-related risks and opportunities are integrated into Beach's Risk Management Framework, which is aligned with the principles of ISO 31000 and uses a single risk matrix and a centralized digital risk management platform. Climate-related risks are assessed with the risk matrix, which considers likelihood and consequence, including impacts on financial performance, people, environment, reputation and legal or regulatory compliance.
Risks (pages 37, 40). Risks are identified through internal stakeholder engagement (at least annually, across the value chain and time horizons), asset and functional risk assessments, and climate-related scenario analysis. They are reported to the Executive team, the Audit and Risk Committee and the Board, escalated outside the regular cycle where required, reviewed at least annually and reassessed after a significant risk event, regulatory change or material change in operating context.
Opportunities (page 52). Identified through internal stakeholder engagement and scenario analysis and reviewed at least annually. Opportunities requiring capital investment are assessed through the Capital Assurance Framework, with carbon price sensitivities where relevant. High-graded opportunities are reported in the monthly Capital Project Update, and the opportunity register is a standing agenda item for the Technical Committee of the Board.
Metrics & TargetsMetrics and Targets
Climate-related metrics
Emissions, equity share (Table 5, page 56). Operated-asset data are in Table 6.
| Scope 1 & 2 emissions data | Unit | FY26 |
|---|---|---|
| Net equity Scope 1 and 2 emissions intensity | tCO2e /TJ production | 8.4 |
| Gross equity Scope 1 and 2 emissions intensity | tCO2e /TJ production | 9.2 |
| Australia Scope 1 emissions | tCO2e | 979,716 |
| Australia Scope 2 emissions (location based) | tCO2e | 17,408 |
| New Zealand Scope 1 emissions | tCO2e | 38,300 |
| New Zealand Scope 2 emissions (location based) | tCO2e | 2,891 |
Scope 3 is disclosed voluntarily for limited categories (Table 7): upstream (categories 1-8) 561 ktCO2e, downstream (9, 10, 15) 245 ktCO2e, use of sold products (11) 5,850 ktCO2e, total 6,656 ktCO2e.
Vulnerability (pages 45–52). As a percentage of total assets: physical risk $3,892 million or 72%; transition risk $3,892 million or 72% (Risks 1 to 3), $394 million or 7% (Risk 4) and $4,286 million or 79% (Risk 5). CCS opportunity: current asset alignment is considered to be zero (page 53).
Carbon prices used in FY26 (page 58). Australia A$38/tCO2e for FY27 rising to A$77/tCO2e by FY32 and A$109/tCO2e post 2040; New Zealand NZ$42/tCO2e from FY27 rising to NZ$95/tCO2e by FY32 and NZ$127/tCO2e post 2040.
Remuneration (page 58). 2.5% of the FY26 company scorecard relates to climate performance. Therefore up to 3.25% of the MD & CEO's STI and up to 1.2% of the Executive team's STI is directly related to climate objectives.
Climate-related targets
Targets (page 55). Both are Scope 1 and 2 equity emissions intensity targets for Beach as a whole, by equity share in operated and non-operated assets.
| Net target | Gross target | |
|---|---|---|
| Reduction by 2030 (2018 base year) | 35% | 30% |
| Offsets | May use abatements and offsets | May only use abatements |
| Achieved in FY26 | 18% | 10% |
Beach states it is on track to meet both. The targets are consistent with the ambition of the Paris Agreement and the Australian government's emissions reduction target for 2030, as described in the Climate Change Act 2022. There are no milestones or interim targets. Beach's 2050 net zero Scope 1 and 2 emissions ambition is aligned with the intent of the Paris Agreement (page 40).
Method (page 37). Both were Board approved. The net target was disclosed in the FY22 Sustainability Report and has not been revised; the gross target is disclosed for the first time in this report. Neither target, nor the methodology for setting them, has been verified by a third party, and neither was derived using a sectoral decarbonization approach.
Offsets (page 55). 65% of the net reduction came through abatement (Moomba CCS and smaller-scale initiatives) and the remainder is offset, with NZUs in New Zealand and a mix of SMCs and ACCUs in Australia. ACCUs generated by Moomba CCS are technological and sufficient to meet Beach's needs through to FY30; additional purchased offsets are not currently required to meet the net target.