Company disclosures (6)
Climate Resilience and Scenario Analysis
Assessment of Climate Resilience
GPT uses scenario analysis as a tool to understand potential climate risks and opportunities under different circumstances. We conduct portfolio and asset-level climate risk reviews, supported by adaptation plans, to identify and manage both transition and physical risks.
Scenarios Used
The following scenarios have been considered:
Low-emissions scenario: RCP 2.6 (aligned to SSP1-2.6): this presents an increased transition risk scenario.
High-emissions scenario: RCP 8.5 (aligned to SSP5–8.5): this presents an increased physical risk scenario with limited global mitigation.
Key Assumptions
Our climate risk assessment draws on climate modelling data, overlaid with policies across relevant government jurisdictions and property-sector technology developments. This analysis provides insight into potential financial implications for GPT, which can include insights into future operating costs, insurance premiums, tenant demand and capital expenditure needs.
Time Horizons Applied
GPT evaluates climate-related risks and opportunities across defined time horizons that align with the major redevelopment and refurbishment cycles of commercial buildings:
- Short-term (0-10 years): Current business strategy and lease cycles
- Medium-term (10-20 years): Major capital equipment lifecycle works
- Long-term (20+ years): Potential major redevelopments
Resilience Assessment Results
Low-emissions (RCP 2.6 / SSP1-2.6): Transitional impacts are the key challenges primarily: policy, market expectations and technology. Strategy remains resilient due to:
- Asset investment locations in and around major cities
- A current limited exposure to carbon-intensive tenants due to the nature of our portfolio and tenant mix
- Established decarbonisation approach supporting anticipated demand and including demand-flex and smart energy programs
High-emissions (RCP 8.5 / SSP5-8.5): Physical risks intensify. Modelling underpins climate vulnerability assessments and indicates:
- Less than 3.5% of portfolio value identified as moderate Value-At-Risk (VAR); no assets assessed as high VAR
- Insurability remains adequate
- Staged adaptation costs in line with developments and lifecycle upgrades
Implications for Strategy and Business Model
Based on current analysis, including scenario modelling over the next 0–20 years, we expect climate-related risks can be managed within our existing business model and strategy in both a low-emissions or high-emissions scenario.
Future acquisitions are expected to carry a similar risk profile to today's portfolio with asset-specific risks considered as part of future acquisitions, and the main uncertainties relate to the pace of technological change, shifts in market and regulatory expectations, and the severity of extreme weather events.
Methodology and Timing
Asset level climate and nature risk and opportunity reviews and climate adaptation plans are undertaken referencing climate scenario modelling, on-the-ground surveys, expert studies (such as stormwater, ecology, heritage) and internal operational data. Adaptation planning processes are aligned with ISO 14090:2019, ISO 14091:2021 and AS 5334-2013.
To manage unknowns, GPT revisits risk assessments on a scheduled basis, updates resource allocation and incorporates new science and data into planning.
Climate resilience and scenario analysis
Scenario analysis of the Group's property exposures indicates that under the RCP4.5 pathway:
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The increase in the Group's catastrophe AAL before reinsurance due to climate change across key peril regions is not currently expected to be significant by 2030. This increase is not expected to result in claims costs that materially exceed the Group's catastrophe allowance on an annualised basis and is considered to be within the range of variability already reflected in the Group's pricing, underwriting and reinsurance strategies. This projection does not incorporate the potential effects of planned mitigation activities or changes in business mix, including those arising from portfolio optimisation strategies and growth initiatives which may evolve with market conditions.
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Over the long term, the financial effects of physical climate risks could become more pronounced, with implications for strategy and business model.
Climate resilience and scenario analysis
Scenario analysis approach
We use scenario analysis to identify and assess material risks and opportunities, including those related to climate change, that may affect our Group in the medium and long term. All material Group operations are included in our analysis.
Scenarios used
Transition risk scenarios: Transition risks and opportunities are assessed using short-term market analysis and our Group Conviction, Resilience and Aspirational Leadership scenarios for the medium and long term. These scenarios are macroeconomic in nature and reflect an integrated assessment of climate change, geopolitics, policy developments and broader economic conditions.
Physical risk scenarios: Physical climate risks are assessed separately using bottom-up, asset-level analysis aligned to discrete climate model-based emissions scenarios, including intermediate and high-emissions pathways.
Temperature alignment: The temperature outcomes of these scenarios are informed by detailed economic modelling, combining internal and external sector-focused insights. We determine the approximate temperature outcomes by comparing the emissions pathways to 2100 in each of our scenarios with the Shared Socio-economic Pathways (SSP) set out in the Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report.
Time horizons applied
Medium-term timeframe: Aligns with extended planning horizons for our growth and emissions abatement projects
Long-term timeframe: Considers the full lifespan of our mining assets and infrastructure, as well as the continued impact climate risks and opportunities are expected to have on the business
Application: Scenarios are used primarily over the medium and long term to identify and evaluate transition risks that can affect our business model, financial performance and market positioning, assess opportunities such as low-carbon technologies and the transition to renewable energy, and inform strategic planning and investment decisions.
Key assumptions
Integrated assessment: As climate change, geopolitics, policy developments and broader economic conditions are closely interrelated, we assess transition impacts through our Group scenarios rather than through discrete climate models.
Temperature outcomes: We consider the carbon budgets associated with different temperature outcomes which are inevitably uncertain. In 2024, we updated the scenario framework used to assess the resilience of our business under different transition-related scenarios.
Physical climate modelling: We do not undertake climate modelling ourselves, but rather rely on established climate model outputs. Climate projections are available for all assets, including non-managed sites, covering over 60 variables and multiple emissions scenarios. Flood risk modelling has been completed for 100% of assets across present-day, medium, and long-term horizons.
Implications for strategy and business model
The scenario analysis informs our understanding that:
- Our portfolio of transition materials positions us well for energy transition demand growth
- Physical and transition risks require proactive management and adaptation
- Technology development uncertainty affects timing of hard-to-abate sector solutions
- Policy frameworks and government support are critical enablers for decarbonisation
Assessment methodology
Our process for identifying material transition risks considers whether climate-related factors, such as regulatory and policy changes, technology developments, community expectations, and physical climate impacts, could have a material impact on our business model, strategy, or financial statements.
Resilience assessment timing
This scenario analysis approach is integrated into our regular strategic planning and risk management processes. The Conviction scenario was rerun in 2025 to reflect updated assumptions and temperature outcomes, while the Resilience and Aspirational scenarios were not rerun as no material changes were made to their underlying assumptions.
Climate resilience and scenario analysis
Assessment of climate resilience using climate-related scenario analysis
The Group used scenario analyses to assess the anticipated effects of CRROs and to test the resilience of the Group's strategy and business model.
The analysis used a low and high emissions scenario developed by the United Nations climate science body, the Intergovernmental Panel on Climate Change (IPCC). The impacts under each scenario were considered over short, medium and long‑term time horizons.
The analysis considered the Group's capacity to adapt its strategy and operations and found that the strategy and business model is likely to remain resilient under both a low and a high emissions scenario, while recognising the limitations and uncertainties in scenario modelling.
The scenarios used
The Group used three climate scenarios developed by the Intergovernmental Panel on Climate Change (IPCC), the United Nations climate science body. These scenarios, which reference Shared Socioeconomic Pathways (SSPs) and different potential future climate outcomes, informed the Group's assessment of CRROs.
Climate resilience scenarios:
1.5°C - Low emissions scenario
- SSP1-1.9 – "Taking the Green Road", assumes ambitious climate policies and rapid decarbonisation limit warming to approximately 1.5°C by 2100 compared to pre-industrial levels.
2.1°C to 3.5°C - Middle of the road scenario
- SSP2-4.5 – "Middle of the road", assumes a pathway in which countries take some steps to reduce emissions but fall short of meeting global climate targets. Under this pathway, global temperatures are projected to rise by approximately 2.1°C to 3.5°C by 2100.
3.3°C to 5.7°C - High emissions scenario
- SSP5-8.5 – "Fossil-fuelled development", assumes a resource-intensive world that prioritises economic growth over sustainability. Global warming is expected to increase between approximately 3.3°C to 5.7°C by 2100 compared to pre-industrial levels.
Scenario application
Anticipated CRROs The "Middle of the Road" scenario was used as a guide to identify and evaluate the anticipated effects of CRROs.
Climate resilience To further test the climate resilience of the Group's strategy and business model, the six CRROs were assessed under both the low and high-emissions scenarios.
Time horizons applied
The time horizons are aligned to the Group's strategic planning framework and the life cycle of its Westfield destinations:
- Short: 0–2 years (2026–2027) - Business planning and financial budget cycle
- Medium: >2–5 years (2028–2030) - Forward capital expenditure, maintenance plans and strategic asset planning
- Long: >5–25 years (2031–2050) - The life cycle of Westfield destinations are greater than 5 years
Key assumptions
Climate-related physical risks
In assessing climate-related physical risks, the Group selected the "Middle of the Road" scenario as it is most aligned to current global climate policies and national emissions pledges. Assessments from the United Nations Environment Programme, a global authority on the environment, indicates that global pledged emissions reductions will result in global warming projections that are broadly consistent with the SSP2-4.5 pathway.
Climate-related transition risks
While the Group considered the "Middle of the Road" scenario, available global information alone was insufficient for assessing transition impacts on the Group's specific business model. Additional analysis incorporated relevant Australian and New Zealand legislation, the National Construction Code, publicly available regulatory and policy information, stakeholder feedback and consumer behaviour trends supported by spend data.
Climate-related opportunities
In addition to considering themes from the "Middle of the Road" scenario, climate-related opportunities were assessed for alignment with the Group's strategy and focused on initiatives that have the potential to enhance customer experience, financial performance and progress more sustainable practices with business partners.
Implications for strategy and business model
Climate-related transition risks and opportunities are more likely to have a greater impact under the "Taking the Green Road" scenario.
Climate-related physical risks are more likely to have a greater impact under the "Fossil-fuelled development" scenario.
A qualitative description of the impacts has been provided. Quantitative information has not been provided due to the high level of measurement uncertainty.
When and how the resilience assessment was conducted
The resilience assessment was conducted during 2025 as part of the Group's implementation of AASB S2. The assessment built upon existing climate risk assessments and scenario analysis work.
Limitations and uncertainty
Scenario analysis is subject to inherent limitations and uncertainties and is not intended to indicate likely outcomes. The scenarios are illustrative only, do not represent probabilities, and are based on assumptions and uncertainties. The analysis does not indicate whether any scenario will eventuate. Outcomes may also be influenced by additional factors.
Key areas of uncertainty in assessing climate resilience include: • Frequency and intensity of weather events and their impact on Westfield destinations • Regulations to achieve emission reductions • Stakeholder expectations shaped by diverse and evolving factors
Climate resilience assessment using scenario analysis
Scenarios used
Our scenario analysis incorporates scenarios based on the projections of various external data sources:
Low Warming Scenario: Ambitious scenarios that limit global warming to 1.5ºC above pre-industrial levels. Consistent with Australia's Climate Change Act (2022). Uses Shared Socioeconomic Pathway (SSP) 1-2.6, a low emissions scenario that is likely to keep global warming below 2ºC relative to pre-industrial levels.
High Warming Scenario: Scenarios most aligned with current global progress in emissions reduction, assuming no changes to current policy settings. Associated with a projected temperature increase of more than 2.5ºC. Uses SSP5-8.5, a high emissions scenario, assuming no additional climate policy under which emissions almost double by 2050.
Data sources
Transitional risks and opportunities were assessed relying on the scenarios of the International Energy Agency (IEA) and data from the Australian Energy Market Operator (AEMO) to provide Australian specific information for the gas and electricity sectors. Physical climate risks were assessed based on scenarios from the Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report on Climate Change (2021).
Time horizons applied
Short term = Beyond 2025 and up to 2030
Medium Term = Beyond 2030 and up to 2040
Long Term = Beyond 2040 and up to 2050
Key assumptions
Policy assumptions: Assessment includes consideration of the Safeguard Mechanism, New Vehicle Efficiency Standard (NVES), and various potential future climate policies.
Technology assumptions: Consideration of electrification uptake, improvements in vehicle fuel efficiency, growth in large internal combustion engine vehicle sales, and LCLF technology development.
Macroeconomic assumptions: Analysis considers broader macro-economic conditions including the strength of commercial and industrial activity that influence demand for liquid fuels.
Implications for strategy and business model
Under all pathways, we continue to see that the Group has a role in both:
- Security of supply: ensuring fuel and energy supply remains safe, reliable and efficient, and is secure as the energy transition progresses
- Energy transition: to develop, commercialise and deliver low carbon liquid fuels and alternatives, to support our customers through the energy transition.
When and how conducted
We initially conducted a climate risk and opportunity scenario assessment in 2024, evaluating results across three timeframes. During 2025 we reviewed this modelling and resilience assessment to ensure it remained relevant and aligned with the latest insights on climate-related impacts across the Group's operations, business model, and strategy.
Resilience findings
Short term: Our analysis indicates that the Group's operations demonstrate resilience under both scenarios. Increased demand for LCLFs offsets the risk of declining demand for hydrocarbon fuel products under both low and high warming scenarios.
Medium and Long term: Our analysis suggests that the Group's operations demonstrate medium-term resilience under both scenarios. However, this exposure is expected to increase over time, driven by anticipated regulatory expansion, technological developments and changes in consumer preferences.
Our Climate Scenario Analysis aligns with the latest international agreement on climate change, covering both 1.5°C and 2°C warming scenarios directly required by AASB S2 and reflecting the temperature goals of the Paris Agreement.
The Climate Scenario Analysis was undertaken during the 2023–2024 period.
During the year, we enhanced our understanding of CRROs in line with AASB S2. This included progressing our phased Climate Scenario Analysis program, supported by external experts, to help assess the potential impacts of both physical and transition-related risks across a range of hypothetical future scenarios.
Physical risks, including increased frequency and severity of extreme rainfall, storms, flooding and drought, remain relevant for some operations and are being monitored through our Climate Scenario Analysis work.