Risk Management 25-26
Processes for managing climate-related risks
AASB S2 paragraphs 25-26
Company disclosures (7)
Monitoring and Management Processes
GPT prioritises climate and nature-related risks based on their residual risk ratings, integrating them into risk registers, with corresponding mitigation actions where required.
Climate Risk Management
For climate, we use a Climate Hazards and Consequences Matrix to evaluate operational and capital expenditure impacts to guide mitigation priorities. Transition risks are generally prioritised at the portfolio and regional levels, while physical risks are evaluated at the asset level. However, if transition risks pose a risk or opportunity at an asset level, they will be assessed and treated, where appropriate, alongside physical risks in climate adaptation workshops.
Nature Risk Management
For nature, GPT considers the environmental resources and conditions that sustain our operations: land, water, biodiversity, and cultural heritage (also known as natural capital assets). We review ecological and heritage assessments and modelling tools, and monitor performance over time, including through water quality, biodiversity, and stakeholder feedback. Actions are incorporated into management practices, both through development delivery as well as operations where required.
Decision-Making Approach
Adaptation planning processes are aligned with ISO 14090:2019, ISO 14091:2021 and AS 5334-2013, and workshops involve cross-functional teams and stakeholders.
For example, GPT constructed a flood barrier system at Riverside Centre and One One One Eagle Street, Brisbane, which protected assets during the 2022 floods; and flood considerations are adopted in some targeted logistics asset designs.
By embedding risk assessment into due diligence and aligning adaptation measures with end of lifecycle upgrades, GPT helps to reduce vulnerabilities while managing costs efficiently.
Risk monitoring and management processes
QBE manages climate risks through several processes:
- Catastrophe modelling and underwriting analysis inform the Group's underwriting and reinsurance strategy, as well as the calibration of the catastrophe allowance within the business plan
- Development of a Climate Transition Plan with strategies across investments, operations and supply chain, and underwriting
- Portfolio optimisation - Following the exit of underperforming property portfolios and recalibration of retained property lines, QBE has experienced catastrophe losses at or below its established allowances in recent years
- Regular monitoring and reporting coordinated by the Group Sustainability function to the relevant governance committees
The Board considered trade-offs relating to feasibility, timing and potential financial impacts, recognising the need to balance climate objectives with commercial, regulatory and operational considerations, whilst continuing to support QBE's customers.
Monitoring and management processes
Climate risk management approach
We have embedded climate risk management across the asset lifecycle, from project initiation to closure planning, ensuring our operations remain robust, adaptive, and responsive to a changing climate. Our climate risk management approach is built around 4 pillars, supported by operational standards, resilience frameworks, and specialised programs:
Pillar 1: Weather/climate analytics and insights
- Short-term and severe weather forecasts inform day-to-day operations
- Climate outlooks guide mine planning, particularly around rainfall and cyclone patterns
- Catastrophe modelling estimates financial impacts of extreme events
- Long-term climate projections support risk assessments and planning
Pillar 2: Physical risk identification and assessment
All sites within our portfolio are exposed to varying degrees of physical climate risk. Our approach covers individual assets (bottom-up) and Group level (top-down). We:
- Identify climate risks and opportunities across varying time horizons and emission scenarios
- Evaluate their potential financial and non-financial consequences and likelihood
- Prioritise these risks by materiality for effective risk management and appropriate resource allocation
Pillar 3: Resilience planning and adaptation
Our resilience planning identifies the most appropriate measures to manage climate risks and adapt to them. We comprehensively evaluate an investment decision before funding is approved, including prioritising projects and engaging key stakeholders.
Pillar 4: Monitoring and evaluation
We actively and regularly monitor risks, with clearly defined roles and responsibilities. We continually evaluate the latest generation of climate change data and emerging technologies to assess the risk profile of our assets and infrastructure over time.
Decision-making processes
Risk escalation: These risks are escalated to the appropriate level of management for oversight and action. Where risks are material to the Group, they are escalated to the Risk Management Committee and, as appropriate, to the Board or its committees.
Investment decisions: Investments to support asset resilience to physical climate risks are considered in both sustaining and development expenditure. When undertaken during initial design phases, these are classified as development capital. Expenditure to preserve original capacity is treated as sustaining capital.
Adaptation measures: Our resilience planning identifies the most appropriate measures to manage climate risks, including infrastructure improvements, operational adaptations, and enhanced contingency planning.
Decarbonisation investment framework
Decarbonisation investment decisions are made under a dedicated evaluation framework which considers:
- Impact on shareholder value
- Asset cost base
- Level of emissions abatement
- Maturity of technology and delivery risk
- Competitiveness against the marginal abatement cost curve (MACC)
- External benchmarks
- Policy context
- Alternative options on the pathway to net zero
- Just transition impacts on employees, local communities and industry
Risk assessment updates
Assessment processes are revisited where we have identified a material change to the economic, social, environmental or physical context of the risk.
Monitoring and management
Processes used to monitor, manage, and prioritise CRROs
CRROs are overseen by the Executive ASRS Steering Committee, the Risk and Sustainability Committee (RSC) and the Board.
The ERMF and CRROs Management Framework will be reviewed at a minimum on an annual basis, with relevant enterprise policies and standards, as they relate to CRROs rated medium or above, to be updated where relevant.
CRROs rated medium or above are subject to regular and ongoing assessment. Of these six relevant CRROs have been identified for disclosure.
Climate-related transition risks and opportunities monitoring
Climate-related transition risks and opportunities are monitored by operational and specialist teams for effective implementation and regular progress reporting to ensure they continue to align with the Group's obligations and strategy.
Climate-related physical risks monitoring
For climate-related physical risks, ongoing management, monitoring and reassessment is conducted as part of the processes and plans outlined below:
| Process/Plan | Description | Portfolio coverage |
|---|---|---|
| Strategic Asset Plans (SAPs) | SAPs are 10-year plans that set out the future direction and opportunities for each destination. They include a review of market share, asset positioning, strategic remixes and future retail and remix developments. SAPs consider physical climate‑related risks, mitigations and adaptation actions identified in the CCAPs. | 42/42 destinations |
| Destination Risk Registers | Destination specific risk registers are updated as risks are identified and include climate-related risks. Risks identified in the CCAPs that have a risk rating of medium and above are captured in destination risk registers for monitoring. | 42/42 destinations |
| Destination Environmental Action Plans (DEAPs) | DEAPs are annual plans that form part of the SAPs. They outline operational priority actions and any material capital works programs for each destination. This includes consideration for any material climate‑related risks identified (reflected in the Group's Destination Risk Registers). | 42/42 destinations |
| Climate Change Adaptation Plans (CCAPs) | Portfolio level climate exposure assessments were conducted to assess physical climate hazards. Destinations were ranked according to their exposure, and the rankings assisted in prioritising CCAP completion across Group destinations. The CCAPs are destination-specific plans that outline current controls and future adaptation measures to improve the destination's climate risk profile and inform long-term investment decisions. Nineteen CCAPs have been completed to date. The remaining destination exposure ratings will be reviewed annually and CCAPs completed where required. | 19/42 destinations |
| Asset capital planning and long-term budget forecasting | These ongoing processes consider future investment needs, capital works and climate risk and opportunity initiatives. They align strategic, operational and financial requirements to support sustainable asset performance and informed long-term decision making. | 42/42 destinations |
Decision-making about risk treatment
Controls and mitigation plans for climate-related risks are integrated in destination Climate Change Adaptation Plans (CCAPs), Destination Environmental Action Plans (DEAPs) and destination risk registers.
Material risks receive oversight from the Executive Risk Management Committee (ERMC), the Risk and Sustainability Committee (RSC) and the Board.
CRROs assessment approach
For further detail on the Group's approach to determining relevant CRROs for disclosure under AASB S2, the Group identified six CRROs that were considered relevant for disclosure, to support primary users' understanding and decision making. In identifying the CRROs that could reasonably be expected to affect the entity's prospects, the Group considered both of the following:
• financial materiality thresholds used in general purpose financial statements • the selection of CRROs relevant to primary users was informed by investor engagement and industry themes.
CRROs are subject to ongoing monitoring and assessment as part of the Group's risk management processes. The CRROs for disclosure will be reassessed on an annual basis.
Processes for monitoring, managing and prioritising climate-related risks and opportunities
Ongoing monitoring and management
Additional oversight of the climate-related risk and opportunity register is facilitated by the CEO, Chief Financial Officer (CFO), and the Chief Strategy Officer.
The Sustainability Committee performs a 6-monthly review of the Company's material climate-related risks and opportunities.
Various internal functions are responsible for the day-to-day management of climate-related risks and opportunities, including customer-facing, operational and strategically focused teams including Strategy, Sustainability, Decarbonisation and Future Fuels, Carbon Solutions, Legal, Finance, Procurement, and Supply and Technical teams.
Decision-making about risk responses
Risk acceptance: We undertake regular monitoring, stakeholder engagement and policy advocacy in relation to potential future climate related policy and regulation.
Risk avoidance and mitigation:
- Investment in emissions reduction projects at Geelong Refinery ($20 million in 2025)
- Development of low-carbon liquid fuels to diversify revenue streams
- EV charging infrastructure development
- Renewable hydrogen refuelling station establishment
- Compliance with Safeguard Mechanism through ACCU surrendering
Risk transfer: We are actively seeking Government grants to maximise our capital investment for energy transition projects.
Active management strategies
For regulatory compliance risk: We review and prioritise decarbonisation initiatives based on their technical and financial viability. We are implementing various measures to reduce our operating emissions at the Geelong Refinery, including establishing electrification projects and improving the energy efficiency of existing equipment and processes.
For demand transition risk: Our New Energies and Future Fuels teams assess emerging technologies and alternative fuel options to continue to develop our product portfolio beyond traditional fuels. We continue to advance and learn from our EV charging offering across our retail network while diversifying our retail model towards convenience.
For low-carbon opportunities: We have established a dedicated Future Fuels Team responsible for monitoring emerging technologies, assessing diversified product offerings, and identifying viable alternatives to ensure we are well positioned to enter and grow in new LCLF markets.
Climate risk monitoring and management processes
Woodside's strategic risks align with several of its material sustainability topics. Risks categorised as "strategic" are reviewed by the Board, its Audit & Risk Committee and the Executive Leadership Team at least twice a year, and the Board confirms its risk appetite in relation to each strategic risk. Management actions that need to be taken in order to address the risks are incorporated into Woodside's internal risk management system.
Asset decarbonisation plans as risk management
Our operated production assets identify opportunities to reduce GHG emissions via asset decarbonisation plans. The main opportunities include energy efficiency and process optimisation measures, flaring and fugitive methane reduction, and electrification such as the use of renewables and batteries. As these opportunities are studied and matured, and if they are safe, technically viable and have an abatement cost of <US$80/t CO2-e they are considered for inclusion into business plans.
Carbon credit portfolio management
After actions to prioritise abatement at facilities, carbon credits offer flexibility to achieve net emissions goals and overcome technical and operational challenges or short-term fluctuations in gross GHG emissions. As at 31 December 2025, Woodside continues to manage a portfolio of more than 20 million carbon credits sourced from projects registered under established carbon crediting schemes.
Our risk management policies and procedures have been designed and implemented to identify, assess and manage any material exposure to risks.
All operations are required to maintain an environment and community risk register. Relevant controls and other mitigation measures are developed and implemented to assist in the management of these risks.
Understanding these risks and opportunities supports strategic decision‑making and capital allocation, including opportunities to improve operational efficiency, deploy new technologies and strengthen resilience across our asset base and supply chain.