Telstra Group Limited
GovernanceGovernance
Governance body oversight and management's role
Index (p. 215): Governance, p. 204.
Oversight (pp. 204–205). The Board approves public climate and sustainability targets and disclosures and oversees the approach to climate and nature-related risks and opportunities. The Risk and Sustainability Committee (RSC) reviews climate and nature-related risks, opportunities, plans and disclosures and monitors the effectiveness of governance, management systems and controls on climate-related matters. The People and Remuneration Committee reviews and makes recommendations to the Board on CEO and Senior Management remuneration, including performance against climate-related metrics and targets; in FY26 and FY27, 5 percent of the Telstra Group short term incentive (STI) scorecard is linked to the emissions reduction targets (p. 203). The RSC Charter requires members to have between them sufficient risk, compliance and ESG knowledge, and the Board uses a skills matrix.
Information (p. 205). Environment risk updates are typically provided to the RSC biannually. The papers are the primary mechanism for giving the RSC management's key judgments and recommendations and raising awareness of any trade-offs.
Management (p. 204). The Corporate Affairs, Risk and Legal (CARL) Group Executive is accountable for material risks relating to CARL, including climate adaptation, and is the key conduit to the RSC. The Sustainability Executive chairs the Environment Executives Group and is accountable for sustainability reporting.
StrategyStrategy
Climate-related risks and opportunities
Index (p. 215): Climate-related risks and opportunities, p. 190.
Risks (pp. 186, 190–193). Four climate-related risks are identified and classified in the risk tables: service disruption during acute climate events (physical risk; currently experienced and expected to increase over the medium to long term); a rapid and disorderly transition of the electricity network (transition risk; currently experienced, continuing in the medium term to 2030 and potentially beyond, 2030–2040); changing policy, regulatory and stakeholder expectations (transition risk; medium to long term); and reduced revenue from climate-exposed sectors (transition and physical risk; heightened in the long term).
Opportunities (pp. 187, 194–195). Three categories: optimize the network for current and future climate resilience; enable the climate transition through connectivity products and services; and knowledge sharing, engagement and advocacy on climate-related matters. Each has a stated time horizon.
Time horizons (p. 190). Short term is FY26; medium term is FY27–30, aligned with the Connected Future 30 strategy; long term is FY31–50, to support the planning and delivery of the net-zero commitment.
Significance (p. 187). At this stage Telstra does not consider any of its climate-related risks to be financially significant.
Business model and value chain
Index (p. 215): Climate strategy, p. 186 (no separate business model line).
Dependency (p. 188). All of the climate-related risks and opportunities have a relationship with and dependency on the value chain. Connectivity services depend on the reliable operation of Telstra's infrastructure and that of its value chain, including above ground assets such as fixed network sites and mobile towers and more than 250,000km of buried fiber optic cable, which are predominantly reliant on the mains electricity network. A diagram (pp. 188–189) maps risk drivers and impacts across the value chain.
Concentration (pp. 184–185, 190). Climate-related risk exposure is concentrated in the electricity distribution network; three of the risks are influenced by the electricity sector. Analysis suggests that between 21–27 percent (5,036–6,511) of Australian above ground assets will be exposed to one or more physical climate hazards (excluding storms) over the short to medium term (now to 2030), and 28–32 percent (6,666–7,582) could be exposed over the long term (2030–2050), depending on the scenario. There were around 28 mass disruption events triggered by acute climate events in FY26.
Other exposures (p. 196). Digicel Pacific (three percent of Telstra Group revenue in FY26), Telstra International (138 locations across 18 countries) and the device and network equipment supply chain are noted for information and not considered financially significant to Telstra Group.
Strategy and decision-making
Index (p. 215): Climate strategy, p. 186; Climate transition plan, p. 200.
Strategy (pp. 186, 199). Sustainability, including climate, is an integral part of the Connected Future 30 strategy. No significant changes to strategy or business model are anticipated in the short to medium term in response to climate-related risks or opportunities (p. 199).
Transition plan (pp. 200–201). Telstra used over 1,000GWh of electricity in Australia in FY26, so its transition depends on grid decarbonization. Three primary activities: absolute emissions reduction of its own operations; enabling decarbonization of the electricity network; supporting suppliers to decarbonize. It commits to net-zero across scope 1, 2 and 3 by 2050, with interim 2030 reductions of 70 percent (scope 1+2) and 50 percent (scope 3) from an FY19 baseline. Assumptions and dependencies: growth; grid decarbonization, assuming Australia meets the 82 percent national renewable energy target by 2030 (otherwise more reduction activity or renewable energy certificates); energy efficiency and decommissioning; scope 3 based on key suppliers' commitments.
Resourcing and adaptation (pp. 190, 200). Nearly $22 million was invested in FY26 in dedicated energy efficiency and decommissioning, and since 2017 Power Purchase Agreements have supported renewable energy projects worth $1.6 billion. Adaptation includes seasonal preparedness, lifecycle battery replacement and automatic transfer units.
Financial position, financial performance and cash flows
Index (p. 215): Financial position, financial performance and cash flows, p. 198.
Climate-related financial impacts (p. 198), $m, Telstra Group including Digicel Pacific
| Item | FY25 actual | FY26 actual | FY27–30 est. avg p.a. | FY31–50 est. avg p.a. |
|---|---|---|---|---|
| Service disruption during acute climate events | (46) | (19) | (32) | (42–46) |
| Changing policy, regulatory and stakeholder expectations | (23) | (23) | (25) | (29) |
| Optimise our network for current and future climate resilience | (0) | (1) | Not quantified | Not quantified |
| Total costs | (69) | (43) | (57) | (71–75) |
| Rapid and disorderly transition of the electricity network | Not quantified | 18 | 1 | Not quantified |
| Net financial impact | (69) | (25) | (56) | (71–75) |
FY25 is restated (footnote 11). The medium term uses a three-year rolling average and a 'climate uplift' factor (p. 197). Climate-linked spend is budgeted in financial plans, and additional spend is managed through reprioritization within existing budgets. The impacts are not significant to the FY26 financial statements and are not projected to be significant in the medium term; long-term cash flow impacts may exceed $75m on average per annum, but overall financial statement impacts are not projected to become significant. Climate is not considered an impairment indicator at this stage (Note 3.1).
Climate resilience and scenario analysis
Index (p. 215): Climate resilience, p. 199; Scenario analysis methodology and assumptions, p. 205.
Assessment (p. 199). Based on its risk assessment, scenario analysis and assessment of financial impacts, Telstra considers it has an appropriate level of resilience to physical and transition impacts over the short, medium and long term. The most material physical impacts arise from electricity grid disruption rather than damage to network assets. Uncertainties noted: measurement uncertainty in climate data, no assessment of increasing temperature, an assumption of no material change in assets, and acute events whose number and location cannot be predicted.
Scenarios (p. 206). Physical: <2°C (RCP 2.6), 2–3°C (RCP 4.5) and >4°C (RCP 8.5), for 2030 and 2050, using Coupled Model Intercomparison Project Phase 5 temperature data downscaled by CSIRO. Transition: a 1.5°C scenario (RCP 1.9) to 2030; key sources include the Australian Energy Market Operator Integrated System Plan 2024 'Step Change' and the Network for Greening the Financial System Net Zero 2050 Scenario. Assumptions include the 82% renewable electricity target by 2030 and expansion of the Safeguard Mechanism to capture Telstra. The transition assessment was last updated in FY24 and the physical assessment in FY26.
Scope (p. 207). Australian operations in detail; Digicel Pacific, Telstra International (80% of locations) and the global supply chain by desktop assessment under RCP 8.5.
Risk ManagementRisk Management
Processes for identifying, assessing and managing climate-related risks
Index (p. 215): Risk management, p. 205.
Identification (p. 205). New and emerging risks, including climate risks, are identified through horizon scanning, review of historic incidents and impacts, operational management actions, anecdotal evidence, desktop assessments and advice from internal and external subject matter experts. Climate and nature considerations are embedded in the M&A screening process, an eco-design tool and the screening approach for new suppliers. Scenario analysis informs identification (physical hazards to 2050, transition over the medium term).
Assessment (p. 205). Risks are rated for consequence (seven categories, rated 1–5) and likelihood (rated A to E) to give an inherent rating; tested controls and leading and lagging indicators determine a residual rating, compared with a risk appetite set by the Board. Climate is core to the FY26 Material Risks of Climate adaptation and Energy resilience and a consideration in others.
Monitoring (p. 205). Risk owners give regular updates to the CEO Leadership Team, the Risk and Sustainability Committee and the Board; control owners meet more frequently with working groups and risk managers. There were no adjustments to the approach in the period.
Integration and opportunities. Climate-related risks are managed via the Telstra Group risk management framework (p. 187). In FY26 a likelihood and consequence rating scale for opportunities was developed using the same impact categories (p. 205).
Metrics & TargetsMetrics and Targets
Climate-related metrics
Index (p. 215): Climate-related metrics – Greenhouse Gas emissions, p. 203.
FY26 emissions (p. 203), Telstra Group including Digicel Pacific
| Scope | tCO2e |
|---|---|
| Scope 1 total | 52,177 |
| Scope 2 total | 675,638 |
| Scope 3 total | 1,400,816 |
| Total emissions | 2,128,631 |
| Scope 3 category | tCO2e | Category | tCO2e | Category | tCO2e |
|---|---|---|---|---|---|
| Cat 1 | 693,138 | Cat 6 | 7,325 | Cat 11 | 99,500 |
| Cat 2 | 285,698 | Cat 7 | 58,199 | Cat 12 | 983 |
| Cat 3 | 75,548 | Cat 8 | 46,108 | Cat 13 | 51,050 |
| Cat 4 | 27,414 | Cat 9 | 13,934 | Cat 14 | 0 |
| Cat 5 | 8,576 | Cat 10 | 0 | Cat 15 | 33,342 |
Australian scope 1+2 use the NGER determination, with scope 2 location-based; scope 3 and international scope 1 and 2 use the GHG Protocol; operational control is the consolidation approach.
Other metrics. Physical risk: 21–27 percent (5,036–6,511) of Australian above ground assets exposed to physical hazards (excluding storms) to 2030 (p. 190). Two transition risks and three opportunities are each said to affect or apply to 100 percent of business activities (pp. 191–195). Nearly $22 million invested in energy efficiency and decommissioning (p. 200). Modeling does not include an internal carbon price; a $40–$50 per tCO2e shadow price was piloted in FY22-FY23 (p. 199). In FY26 and FY27, 5 percent of the Telstra Group short term incentive (STI) scorecard is linked to the emissions targets (p. 203).
Climate-related targets
Index (p. 215): Climate-related targets, p. 202.
| Target | Status and progress (p. 202) |
|---|---|
| Reduce absolute scope 1+2 emissions by at least 70% by 2030, from a FY19 baseline | Progress made: combined scope 1+2 emissions reduced by 48% |
| Reduce absolute scope 3 emissions by at least 50% by 2030, from a FY19 baseline | On track for delivery: scope 3 emissions reduced by 49% |
| Net-zero greenhouse gas (GHG) emissions by 2050 | On track for delivery: combined scope 1, 2 and 3 emissions reduced by 48% from FY19 |
| Enable renewable energy generation equivalent to 100% of consumption by 2025 | Completed in December 2025: 121 percent of electricity consumption |
The 2030 targets exclude Digicel Pacific, which is included in the 2050 net-zero commitment. Both 2030 targets and the 2050 commitment require absolute emissions reduction and are validated by the Science Based Targets Initiative (SBTi) as aligned with limiting global temperature increase to 1.5°C; they use SBTi's absolute contraction approach, not a sectoral decarbonization approach, and exceed the trajectory of Australia's Nationally Determined Contribution to the Paris Agreement. In FY24 the scope 1+2 target rose to 70% from 50% (p. 192). Net zero under SBTi requires minimum reductions from FY19 of 95% (scope 1+2) and 90% (scope 3), and any residual emissions may be offset using appropriate carbon credits; none are planned for 2030, and their use for 2050 may be revisited (pp. 201–202).