Woolworths Group Limited
GovernanceGovernance
Governance body oversight and management's role
Board and committees (pp. 53–54). The Board retains ultimate responsibility for oversight of climate-related risks and opportunities (CRROs) and approves the sustainability strategy, climate emissions reduction targets and sustainability disclosures. The Sustainability Committee oversees the strategy, monitors progress toward climate targets and oversees policies to manage CRROs. The Risk Committee oversees integration of climate into risk management. The Audit and Finance Committee oversees the quantification of CRROs and related assurance. The People Committee considers whether and how climate metrics are included in remuneration policies. The Sustainability and Audit and Finance Committee charters were revised in July 2025, and the two held three joint meetings in F26. The Nomination Committee reviews Board skills, including climate expertise, annually, and three committees receive briefings from management or external experts.
Management (pp. 54–55). The CEO is accountable for implementing strategies to address CRROs, supported by the CSO, CFO, CRO and CLO. Management reports progress on the sustainability strategy and net zero transition to the Sustainability Committee at each meeting. In F26 management considered several climate trade-off decisions. No specific percentage of executive remuneration was directly linked to climate-related metrics, but the CSO's performance objectives included delivery of the Scope 1, 2 and 3 emission reduction targets (p. 55).
StrategyStrategy
Climate-related risks and opportunities
The Group discloses four climate-related risks and two opportunities (pp. 58–65). Only risks rated high or very high under its risk rating table were considered relevant for disclosure (p. 56).
Physical risks (p. 58)
- Disruption and damage to operations (stores, distribution centers and transport routes) (p. 61)
- Chronic and acute weather events impacting food production (p. 62)
Transition risks (p. 59)
- Impact of the economic cost of carbon through policy mechanisms on the business model and value chain (p. 63)
- Increased climate regulation, litigation and reputation impacts (p. 64)
Opportunities (p. 65): resource efficiency (optimizing resource use) and products and services (developing innovative low-carbon products and services). Neither is expected to have a material financial impact across the Group's identified time horizons.
Time horizons (p. 56). Short term is 0–3 years, aligned to business planning cycles. Medium term is 4–10 years, supporting decisions on near-term climate targets and delivery programs. Long term is 11–25 years, reflecting the longer-term nature of climate impacts and net zero targets. The first three risks carry an anticipated effect rating for each horizon under 1.5°C and >3°C scenarios (pp. 61–63); the fourth is described for the short to medium term (p. 64).
Business model and value chain
Value chain (pp. 50–51). The Group describes itself as Australia and New Zealand's largest retailer, with value linked to climate resilience across its value chain. Upstream: product sourcing, agricultural food production and manufacturing from over 14,500 direct suppliers, contributing to Scope 3 emissions. Own operations: 1,311 supermarkets and 24 distribution centers across Australia and New Zealand. Downstream: customer product use and household waste from an average of 26.1 million customer transactions each week, also contributing to Scope 3 emissions.
Effects on the business model and value chain (p. 51). Scenario modeling indicates a low financial impact from physical events such as flooding and cyclone on direct assets and major transport routes, attributed to the geographically diverse footprint and site-level resilience investment. The sourcing network and product range are described as a natural hedge against supply chain physical risk. Transition risks, such as policy-driven carbon costs on direct and supply chain emissions, present more material financial risks.
Where risks are concentrated. The majority of climate-related risks arise in the supply chain (p. 60). Scope 3 is 97% of end-to-end supply chain emissions, the largest sources being agriculture, energy and transport (p. 68). 6% of sites meet the threshold for exposure to a high-impact flood event, which could rise to 8% (approximately 150 sites) by 2050 under a >3°C scenario (p. 66).
Strategy and decision-making
Net zero transition (pp. 68–69). The Group is working toward net zero emissions by 2050, aligned to Science Based Targets Initiative (SBTi) validated targets for Scope 1, 2 and 3. Delivery programs manage material transition risks and climate-related opportunities.
Direct mitigation (pp. 70–71). Scope 1 and 2: 100% renewable electricity (achieved 31 December 2025), low-emissions refrigerants with reduced leak rates, and EVs for the last-mile home delivery fleet. In F26: 25 stores added to transcritical CO₂ refrigeration and 178 electric home delivery trucks on the road, up 103 since F25.
Indirect mitigation (pp. 69, 73). Scope 3 actions: collaborate, innovate and invest, advocate and educate. The fourth annual value chain emissions program had 75 suppliers.
Resourcing (p. 74). $111 million invested in F26 on initiatives driving the overall strategy and progress toward Scope 1 and 2 targets. Annual investment of $100 million to $120 million (capex and opex) is required for F27 to F30, funded from operational cash flows and debt facilities.
Assumptions and dependencies (pp. 68, 70, 76). Scope 3 targets rely on cross-sector collaboration and progress by suppliers, industry and government, and are based on assumptions about supplier commitments, behavior and performance, government policy and regulation, and technology availability and costs. A full home delivery fleet transition relies on regional infrastructure investment and EV availability.
Financial position, financial performance and cash flows
Current effects. In F26, acute weather events caused 104 days of disruption to operations and damage to stores, with an identified earnings impact of $9 million (three-year average $21 million) (p. 61). Disruption to food production was limited and not financially material (p. 62). There is no material financial impact from the economic cost of carbon (p. 63), and the cost of compliance with AASB and other climate regulations is not material (p. 64).
Anticipated effects (pp. 60–63). Shown as ranges of impact on annual sales in basis points (bps): Low <20 bps, Moderate 20–150 bps, High >150 bps. For F26, one basis point (0.01% of annual sales) is approximately $7 million. Reference years are 2030, 2040 and 2050. No cost pass-through assumptions are applied.
| Risk | Scenario | Short | Medium | Long |
|---|---|---|---|---|
| Physical: operations | 1.5°C / >3°C | Low / Low | Low / Low | Low / Low |
| Physical: food production | 1.5°C / >3°C | Low / Low | Low / Moderate | Low / Moderate |
| Transition: cost of carbon | 1.5°C / >3°C | Moderate / Low | High / Low | High / Moderate |
The regulation risk and both opportunities are not expected to have a material financial impact (pp. 64–65).
Investment and funding (p. 74). $111 million invested in F26 on initiatives driving the overall strategy and progress toward Scope 1 and 2 targets; $100 million to $120 million a year (capex and opex) from F27 to F30, funded from operational cash flows and debt facilities.
Climate resilience and scenario analysis
Assessment. Scenario modeling indicates a low financial impact from physical events on direct assets and major transport routes, while transition risks present more material financial risks (p. 51). Physical risk effects are assessed as low to moderate (p. 58). Scenario analysis tests the resilience of the business model and supply chain across temperature pathways (p. 56). Adaptive capacity: resilience programs informed by climate modeling, capital to upgrade physical defenses at vulnerable sites, and flexible financial resources and funding (pp. 66, 74). Uncertainty: scenarios are not forecasts (p. 52); the operations assessment excludes sea level rise, drought and heatwaves and does not consider tipping points or compounding risks (p. 61).
Scenario analysis (pp. 52, 57, 60, 79). Carried out in F26 with two scenarios: Net Zero (1.5°C, SSP1-1.9), consistent with the global temperature goal in the Paris Agreement, and Climate Distress (>3°C, SSP3-7.0), used to assess resilience against physical impacts. Reference years are 2030 (short term), 2040 (medium) and 2050 (long). Scope: Australian Food, New Zealand Food and BIG W (about 90% of consolidated revenue), about 1,500 locations, five major transport routes and 10 food commodities. Assumptions: identical population growth, and constant disposable income, market share and product mix, across both scenarios; assumed carbon costs; policy, energy and technology narratives (pp. 60, 63, 79).
Risk ManagementRisk Management
Processes for identifying, assessing and managing climate-related risks
Process (p. 56). The Group uses its established risk management framework (RMF) and strategy planning processes to identify, monitor and report on material CRROs, evaluated alongside other material enterprise risks. Climate is treated as a macro risk factor. Inputs include climate scenario analysis, external research and expert climate modeling, existing and emerging risks, and business feedback. The top-down identification covered Australian Food, New Zealand Food and BIG W and the broader supply chain, covering 92% of revenue.
Assessment and prioritization (p. 56). CRROs are assessed using the RMF risk matrix on likelihood and consequence against financial and non-financial criteria. Only risks rated high or very high were considered relevant for disclosure, and a subset expected to exceed the financial materiality threshold was modeled. CRROs are prioritized by risk rating like other risks, not differently.
Opportunities and monitoring (pp. 56–57). Scenario analysis informs identification of physical and transition risks and of opportunities, which are assessed and prioritized on their potential to deliver commercial value and climate benefits. Management monitors risks through quantitative and qualitative methods and reports material changes in trajectory to the Sustainability Committee at least annually. There were no material changes to the risk management processes in the reporting period.
Metrics & TargetsMetrics and Targets
Climate-related metrics
Emissions (pp. 77–78). Absolute gross emissions, calculated under the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004) with an operational control approach. The boundary aligns with the consolidated reporting entity and excludes associates and joint ventures.
| Million tonnes CO₂e | F26 | YoY change (voluntary) | Confidence |
|---|---|---|---|
| Scope 1 | 0.457 | 3.4% | High |
| Scope 2 (market-based) | 0.610 | -42.2% | High |
| Total Scope 1 and Scope 2 (market-based) | 1.068 | -28.7% | |
| Scope 2 (location-based) | 1.238 | -0.4% | High |
| Total Scope 1 and Scope 2 (location-based) | 1.696 | 0.6% |
| Scope 3, million tonnes CO₂e | F26 | Proportion | Confidence |
|---|---|---|---|
| 1 Purchased goods and services | 28.6 | 81.7 | Medium |
| 2 Capital goods | 0.4 | 1.1 | Medium |
| 3 Fuel and energy-related activities | 0.1 | 0.4 | High |
| 4 Upstream transportation and distribution | 1.2 | 3.5 | Medium |
| 5 Waste generated in operations | 0.1 | 0.3 | High |
| 6 Business travel | <0.01 | <0.0 | High |
| 7 Employee commuting | 0.3 | 0.8 | Low |
| 8 Upstream leased assets | 0.2 | 0.7 | Medium |
| 9, 11, 12, 14, 15 Downstream | 4.0 | 11.4 | Low |
| Total | 35.0 | 100 |
Other metrics. $111 million invested in F26 on initiatives driving the overall strategy and Scope 1 and 2 progress; no internal shadow carbon price adopted (p. 74). No specific percentage of executive remuneration directly linked to climate-related metrics (p. 55).
Climate-related targets
The targets apply to the Group in its entirety, with the Scope 3 target covering 80% of total supply chain emissions. All use an F23 base year and aim to reduce absolute emissions. They were validated by the Science Based Targets Initiative (SBTi) in F24, with no revisions since. The Group continues a long-standing commitment to contribute to a 1.5°C pathway (p. 75).
| Target | Timeframe |
|---|---|
| Scope 1 and 2 GHG emissions: reduce by 80% by F30 | 2030 |
| Scope 1 and 2 GHG emissions: reduce by 90% by F45 | 2045 |
| Scope 3 energy and industrial (non-FLAG): reduce by 55% by F33 | 2033 |
| Scope 3 energy and industrial (non-FLAG): reduce by 90% by F50 | 2050 |
| Scope 3 FLAG: reduce by 40% by F33 | 2033 |
| Scope 3 FLAG: reduce by 72% by F50 | 2050 |
Metrics: Scope 1 and 2 emissions from operations; Scope 3 emissions from supply chain (tCO₂e). The FLAG target includes FLAG emissions and removals. The Group aims for net zero emissions across its supply chain by 2050 and may use high-quality carbon removal credits for residual emissions from 2050; Australian Carbon Credit Units are not part of near-term plans (p. 76). Targets are reviewed annually and the outcome is shared with the Sustainability Committee (p. 76). Scope 1 and 2 emissions show a 45% reduction compared to the F23 base year (p. 77). Scope 3 emissions have risen in line with business growth (p. 72); in F26 reported emissions changed due to business growth, product mix and updated emission factors (p. 76).