Metcash Limited

Time horizons (p. 56). Short-term is 0–5 years, medium-term 6–10 years and long-term 11–25 years. The short-term horizon aligns with the five-year financial planning cycle, the Business Resilience Framework (BRF) short-term horizon and the 2030 Scope 1 and 2 net emissions targets; the long-term horizon aligns with the BRF long-term horizon and the 2040 Scope 1 and 2 net-zero target.

Risks and opportunities (pp. 62–65). Only those that could reasonably be expected to affect cash flows, access to finance or cost of capital are disclosed (p. 60).

Operations and value chain (pp. 56–57). Australia's leading wholesaler and service provider to independent businesses nation-wide, with Food, Liquor, and Hardware and Tools segments. Upstream: more than 5,500 suppliers and a network of third-party logistics providers. Own operations: approximately 290 operationally controlled sites. Downstream: approximately 105,000 customers and 6,300 bannered stores.

Effects and concentration (pp. 62–64).

• Damage to facilities and equipment: could cause damage and destruction of property, plant and equipment, product shortages and delays, the inability to service customers and injury to staff; exposure is higher in locations more susceptible to natural hazards, with flooding a key risk. No material effect in the current year; not expected to change materially in the short to medium-term, though it may increase over the longer-term.
• Outbound supply chain: concentrated in transport routes passing through, and facilities located in, flood-prone areas; may cause delays in servicing retailers and Metcash's own stores, temporary store closures and increased operational costs and complexity.
• Energy and fuel costs: may increase operating costs across operations and the broader value chain (electricity and refrigerant in distribution centers, warehouses and stores; transport fuel) and affect margins where costs cannot be fully passed through.
• Climate resilience opportunity: present upstream, in own operations and downstream.

Targets and how they are to be met (p. 61). Metcash is committed to net-zero Scope 1 and 2 GHG emissions by 2040, with interim targets of reducing Scope 1 and 2 net emissions by 42% from a 2024 baseline by 2030 and sourcing 100% renewable electricity by 2025 for all operationally controlled sites in Australia (excluding Superior Foods). To meet them, Metcash implements energy efficiency initiatives and purchases Renewable Energy Certificates (REC) through Power Purchase Agreements and Large Generation Certificates (LGCs).

Direct mitigation and adaptation (pp. 63–64). Physical risk: diversified suppliers and logistic routes, contingency plans for alternate freight modes, inventory buffers, insurance coverage, and Mega DCs generally located where bushfire or extreme flooding is of lower risk. Energy and fuel costs: energy efficiency improvements, logistics network optimization, fleet transition to hybrid and electric vehicles, cost pass-through, and refrigerant plant upgrades aligned with business-as-usual asset replacement cycles.

Indirect efforts and resourcing (pp. 61, 65). Implementation strategies for the opportunity include proactive communication with the supplier network, supporting suppliers with inbound freight and prioritizing capital investment in distribution centers and logistics infrastructure. Costs of mitigation and adaptation measures represent normal business operations and are not material.

Current effects (pp. 62–65). Extreme weather events in FY26 did not have a material impact on financial position, financial performance or cash flows; flooding from significant rainfall in Queensland caused some operational disruptions and stock losses, not considered material. Higher electricity and fuel costs contributed to marginally higher operating expenses, not considered material. No material financial effects from the resilience opportunity were identified.

Anticipated effects (pp. 62–65). Physical risks: the assessment considered inventory values, owned property, plant and equipment, and reduced sales from delayed delivery and unfulfilled orders, and indicates no material impact in the short, medium and long-term; only supply route disruption in and around Mega DCs was assessed (p. 63). Energy and fuel costs: Metcash has determined that a quantitative disclosure is too uncertain to estimate; qualitatively, sustained increases could adversely affect revenue where mitigation and pass-through do not fully offset them. Opportunity: quantitative information has not been disclosed because of measurement uncertainty; a material impact would increase revenues, cash flows and net profit.

Other (pp. 65, 67). None of the climate-related risks or opportunities is expected to present a significant risk of material misstatement in the next reporting period. The funding required for additional mitigation or adaptation is not expected to be material.

How the analysis was done (pp. 65–66). Metcash undertook a climate scenario analysis in the current reporting period to determine its resilience to physical climate-related risks under two scenarios, covering its own operations and value chain. Scenarios were chosen to satisfy section 296D(2) of the Corporations Act 2001: the IPCC's SSP1-1.9 (1.5°C, aligned to the Paris Agreement, associated with transition risks) and SSP5-8.5 (3.3°C–5.7°C, associated with physical risks). A table gives assumptions for each scenario on climate-related policies, macroeconomic trends, national or regional level variables, energy usage and mix, and technology. Horizons are 0–5, 6–10 and 11–25 years. The analysis will be reviewed periodically, with a detailed analysis at least every five years.

Resilience assessment (pp. 66–67). The low emissions narrative covers carbon pricing, regulatory requirements and higher energy costs; the high emissions narrative covers more frequent and severe extreme weather, particularly in Queensland and Western Australia. Metcash assessed that climate-related risks and opportunities are not expected to have a material impact on its strategy and business model over the short, medium or long-term. Its capacity to respond is supported by funding for additional measures not expected to be material, predominantly leased sites, and inventory that can be redeployed across a diversified distribution network.