Wesfarmers Limited

Identified CRROs (pp. 62–73). Using scenario analysis and quantitative and qualitative factors, the Group identified four climate-related risks and one opportunity that could reasonably be expected to affect its prospects. Physical risks: extreme heat; extreme precipitation and flooding; storm surge and cyclones. Transition risk: carbon pricing. Opportunity: the Group's 50% interest in the Covalent Lithium joint venture. Time horizons stated in each CRRO table: short-, medium- and long-term, except carbon pricing (medium- and long-term).

Time horizons (p. 60). Short-term is one year (the 2027 financial year); medium-term is two to five years (2030 assessment year), aligned with the five-year Corporate Plan period; long-term is six to 25 years (2050 assessment year), aligned with divisional net zero targets.

Other risks (p. 62). Bushfire and drought, and reputational risk and greenwashing, were also identified but were not assessed as reasonably expected to affect the Group's prospects over the short, medium or long term.

Assessment (pp. 56, 60, 62). CRROs were identified using all reasonable and supportable information available. None of the identified CRROs was assessed as having a material financial effect in the reporting period for the purpose of quantitative disclosure. Risks are reassessed annually; scenario analysis is used at least every three years to identify changes in inherent exposure.

Where CRROs are concentrated (pp. 60, 79). In energy-intensive managed operations and industrial processes and in assets exposed to chronic and acute weather events, extending upstream and downstream; value chain physical exposure sits in raw materials and logistics nodes in exposed regions.

By risk (pp. 64–73).

• Extreme heat: retail store and distribution center network and WesCEF's industrial operations; heat already affects some raw-material sourcing across Asia.
• Flooding: retail stores, distribution centers and logistics infrastructure; suppliers in flood-prone regions of Asia.
• Storm surge and cyclones: coastal assets and upstream ports and logistics, including the Kwinana port.
• Carbon pricing: WesCEF's CSBP facility (82.2% of Group Scope 1 emissions); indirect exposure through suppliers in Asia, mainly for Bunnings Group and Kmart Group.
• Covalent Lithium: within WesCEF, in the battery materials supply chain.

Current effects. No material effects were identified for the four risks in the reporting period. A storm-related partial roof collapse at Target's Richlands distribution center in October 2025 stopped operations, constraining distribution capacity in the Christmas peak, with lost revenue and rerouting costs; not material at Group level (p. 68). Anticipated (pp. 65–73). Heat and flooding exposure continues; storm surge, cyclone and indirect carbon pricing exposure rises over the medium to long term.

Capital allocation (pp. 74–75). An internal carbon price has been applied since 2014 in capital expenditure assessments, mergers and acquisitions analysis and corporate planning: $48.10 per metric tonne of CO2e in 2026, rising to $144.60 (2026, real) by 2050. In July 2026 the Mt Holland expansion was approved (Wesfarmers' share of capital expenditure about $645 million to $715 million, nominal, excluding capitalized interest).

Mitigation and adaptation (pp. 65–78). Each division has emissions reduction and net zero targets and a transition pathway. Group Scope 1 and 2 (market-based): 1,622 ktCO2e (sum of divisional baselines), 802 in 2026 and 700 residual in 2030 (down 57%), via industrial process abatement, grid decarbonization, fuel switching and fleet electrification, and renewable electricity. WesCEF is rolling out tertiary nitrous oxide abatement (about 115,000 tCO2e a year) and replacing a sodium cyanide incinerator. Physical risk measures include business continuity plans, flood and drainage controls, backup generators, supplier diversification and insurance.

Resourcing (p. 75). Climate expenditure is generally within divisional operating budgets and capital programs, not tracked separately.

Dependencies (pp. 78–79). WesCEF's 2050 net zero target depends on low-emissions technologies including CCS, supportive policy and government funding. Scope 3 follows a managed momentum approach with five priority areas.

Approach (pp. 62–63, 65–73). The Group assessed current and anticipated effects of CRROs on its financial position, performance and cash flows, screening at divisional level against a threshold of approximately 5% of Group profit before tax. It has not identified any significant risk of a material adjustment within the next annual reporting period to carrying amounts of assets and liabilities arising from CRROs. Each CRRO table names the income statement, balance sheet and cash flow statement lines that may be affected.

Combined effects (p. 63). Where combined quantitative information is not given, the Group determined combined effects are not separately identifiable or too uncertain to be useful.

Scenarios (pp. 60–61). The 2026 analysis uses Intergovernmental Panel on Climate Change pathways applied through the Network for Greening the Financial System: SSP1-2.6 (Net Zero 2050, +1.3°C to +2.4°C very likely range by 2100), SSP2-4.5 (Delayed Transition, +2.1°C to +3.5°C) and SSP5-8.5 (Current Policies, +3.3°C to +5.7°C), over three time horizons. SSP5-8.5 replaced SSP3-7.0 in 2026 because it better captures extreme physical hazard outcomes. The Group considers SSP1-2.6 referable to the 1.5°C temperature goal in section 3(a)(i) of the Climate Change Act 2022 (Cth) and Delayed Transition the most plausible short- to medium-term pathway.

Resilience (p. 74). The diversified portfolio and value chain is expected to remain resilient across the three scenarios and over all horizons. Under Current Policies, long-term physical risk rises materially; beyond 2030, abrupt policy responses and escalating physical effects may require accelerated adaptation investment and potential changes to asset configuration, supply chain and product mix.

Uncertainty and capacity (p. 74). Uncertainties, which increase materially beyond 2030, include local acute hazards, policy responses, carbon pricing and CCS viability. Financial flexibility comes from an investment-grade credit rating, diversified earnings and balance sheet capacity; retail formats have short refurbishment cycles and WesCEF's long-lived assets are addressed through staged abatement investment.