Company disclosures (5)
Anticipated Financial Effects
For capital expenditure considerations at an asset level, adaptation and mitigation measures are aligned with asset lifecycle triggers such as major equipment upgrades or asset development and other capital expenditure requirements. Development planning incorporates long-term climate modelling to assess foreseeable risks, while acquisitions undergo due diligence to understand key risks and opportunities.
Operating costs are also directly affected. Renewable electricity procurement under long-term contracts seek to mitigate GPT from volatility in wholesale energy markets by providing a stable base for operating expenses.
Offsets have been purchased at an effective carbon price of approximately $30 per tonne through to 2027, with the associated costs budgeted as a recurring property operating expense for properties under management.
Inputs and Assumptions
The costs and savings associated with our climate response activities are included within GPT's financial statements and asset valuations, where relevant. While some costs are flagged as delivering climate-related benefits, they are not tracked in isolation, as they can also deliver wider operational advantages such as improved durability, quality, efficiency and safety.
Climate-related variables and scenario outcomes are incorporated into our existing analysis and form part of our asset management practices.
Anticipated financial effects
Short-term claims volatility is expected to continue to be influenced by natural variability in weather and catastrophe activity, in addition to the effects of climate change. In the short term, the potential impacts of physical risks are incorporated into the Group's business planning process.
Scenario analysis indicates that under the RCP4.5 pathway, over the long term, the financial effects of physical climate risks could become more pronounced, with implications for strategy and business model.
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.
Anticipated financial effects
Capital expenditure projections
Decarbonisation capital guidance: Our updated capital expenditure forecast is now $1-2 billion to 2030, a reduction from the previously issued range of $5–6 billion. This includes $0.6 billion in the period 2025-2027. Our current pipeline indicates that <10% of our required abatement to 2030 will require capital expenditure.
Group capital allocation: In the medium term, we will invest up to $10 billion (in real terms) annually in sustaining, replacement and growth capital to ensure the continued supply of materials, including those that are essential to the energy transition.
Partnership commitments: Our strategy leverages partnerships with energy developers through long-term PPAs. These commitments are expected to underwrite up to $8.5 billion in competitive greenfield energy projects, subject to final approvals and successful delivery.
Growth ambitions and organic expansion
Our ambition is to grow total production by ~3% per year on a copper equivalent basis (from 2024 to 2030F), while targeting a 50% reduction in our net Scope 1 and 2 emissions by 2030. Delivering reductions in absolute emissions requires additional abatement to cover organic growth from production growth and increasing work indexes, representing around 1.5 Mt CO2e against our baseline.
Technology development uncertainty
Major capital investment initially expected by 2030 for ELYSIS™, alumina process heat electrification, and self-generated renewable diesel expansion initiatives will be considered post-2030 when technology is available and can be commercially deployed. The refined approach reflects the slower pace of commercially viable technology development in the hard-to-abate sector.
Key assumptions and dependencies
Pacific Aluminium Operations: Any delay in concluding discussions or delivering repowering projects may impact our ability to meet our 2030 target within this decade. The schedule is contingent on finalising full competitive solutions for the smelters, with discussions with state and federal governments and energy contracting partners ongoing.
Revenue potential: The commodities we produce are essential to the global energy transition, with the energy transition expected to drive significant demand for critical minerals, representing growth opportunities for our commodities.
Nature-based solutions pathway: By 2050, small sources of hard-to-abate emissions may remain, and we will therefore rely on some carbon removals to achieve net zero. This may be through natural or technological removals and storage.
Risk factors affecting projections
Delays may arise from engineering and construction challenges, the pace of technology development, and the need to balance decarbonisation with community and stakeholder expectations as well as disciplined capital allocation. Uncertainty in assumptions and projections inevitably increases further into the future, particularly for breakthrough technologies that may not all turn out to be scalable and competitively deployable.
Anticipated financial effects
Over the short, medium and long-term time horizons assessed, the financial effects are anticipated to be mitigated through strategies, with any residual effects considered not material for risks, and considered not material for opportunities.
There is considerable uncertainty in estimating the potential financial impacts of climate-related physical events, policy and regulatory changes, stakeholder expectations, enhancing engagement with customers and communities and supporting business partners' transition to a low-carbon economy. This uncertainty arises from the difficulty in determining the frequency, severity, timing and scope of such events and opportunities on the Group's business across the short, medium and long-term time horizons.
Climate-related risks - Anticipated financial impacts
Physical risks (Rainfall, hailstorms, flooding and Bushfire)
Insurance coverage assumptions Insurance policies are relied upon to assist in mitigating the potential financial impacts from rainfall, hailstorms, flooding events and bushfire. Existing insurance policies provide varying levels of protection against significant property damage, business interruption (including loss of revenue) and liability claims arising from personal injury or third-party property damage. This extends to risks including, but not limited to, bushfire, flood, hailstorms, water ingress and wind. The cost of insurance specifically relating to rainfall, hailstorms, flooding and bushfire cannot be separately identified.
It is assumed that existing insurance coverage will be maintained across the short and medium time horizons. There is no indication that insurance will become unavailable based on current information and dialogue with insurance brokers. The Group is not in a position to make assumptions about the cost of insurance premiums in the medium to long term; however it could be reasonably expected that insurance premiums could increase.
Mitigation costs Current mitigation measures are expected to continue over the short and medium term. The cost of these measures is not material. While current mitigation measures are expected to continue over the long term, additional actions may be required at the most vulnerable destinations. The scale of additional measures and associated costs will depend on future climate conditions, which are inherently uncertain at this time.
Community refuge impacts Westfield destinations have the capacity to act as places of refuge for the community during extreme weather events. There is no expectation that acting as a place of refuge will have a significant impact based on historical weather events. Should the severity and frequency of extreme weather events increase, the likelihood and regularity of Westfield destinations becoming places of refuge could increase. This has the potential to increase community access and operating expenses may increase due to higher demand for destination resources.
Supply chain impacts Increases in the severity of weather events could impact supply chain costs, including construction materials, which may affect development and operating capital costs.
Transition risks
Policy and regulatory change Current policy settings in Australia and New Zealand do not indicate any regulatory changes affecting gas infrastructure within the built retail environment over the short to medium term. This may evolve over the long term.
Building and development activities are governed by the National Construction Code (NCC) in Australia and the NZ Building Code in New Zealand. For Australia the Group has considered the draft 2025 NCC as the basis for the Group's assessment. These draft codes do not currently impose increased energy efficiency or sustainable material requirements applicable to the Group's current operations.
The codes are expected to be updated in 2028. If the historical trend of increasing sustainability requirements continues, future updates could result in higher building costs in the medium to long term.
Australian and New Zealand governments have set national ambitions to achieve net zero emissions by 2050. While Australia has the Safeguard Mechanism and New Zealand has the Emissions Trading Scheme, the Group is not currently impacted under either scheme.
There is no indication that a carbon pricing scheme will be introduced in the short to medium term based on current policy settings. Should policy evolve to introduce a scheme over the long term, it could result in higher energy and building material costs.
The Australian National Waste Policy Action Plan 2024 established a national target to reduce organic waste by 50% by 2030. New South Wales was the first state to introduce minimum collection requirements for organic waste, with compliance required by July 2026. Engagement with business partners about implementation is underway. Other states may introduce mandates before 2030 to align with the national target, although details and timelines remain uncertain.
Current mitigation measures are expected to continue over the short and medium term. The cost of these measures is not material. While current mitigation measures are expected to continue over the long term, additional actions may be required.
Stakeholder expectations Ongoing engagement from investors, lenders and joint venture partners seeking information about climate‑related initiatives and progress against the net zero (scope 1 and 2) emissions target for wholly-owned destinations is expected over the short to medium term.
It is anticipated that joint venture partners will continue to request environmental data to support their reporting obligations.
Current mitigation measures are expected to continue over all time horizons.
Climate-related opportunities - Anticipated financial impacts
Enhance engagement with customers and communities
The EV trial assesses customer engagement and operational requirements without committing large‑scale capital expenditure. It also provides valuable insights into the long-term financial potential of EV infrastructure at Westfield destinations.
The rate of EV adoption across Australia and New Zealand could influence financial opportunities over the long term, impacting charging revenue, customer dwell times and business partnerships within the EV ecosystem.
Support business partners' transition to a low-carbon economy
The financial impact of this opportunity is subject to a high degree of uncertainty and may be influenced by the following factors:
- the level of government action and incentives aimed at encouraging business partners to reduce emissions in line with net zero ambitions
- the strategy and ambition of business partners to reduce emissions
- the extent of future business partners participating in these initiatives.
Supporting business partners' transition to a low-carbon economy is assessed as a medium to long term opportunity. The timing and scope of government assistance (such as legislation, subsidies, incentives) and business partner appetite for such measures in the future remains uncertain.
Quantitative disclosure limitations
Quantitative estimates have not been disclosed due to the high level of measurement uncertainty. For opportunities, some information is commercially sensitive.
Inputs and assumptions used
Inputs and assumptions include:
- Current policy settings in Australia and New Zealand
- Historical trends in building code requirements
- Insurance market conditions and broker dialogue
- Technology evolution rates
- Government incentive programs
- Business partner engagement levels
- Market conditions and counterparty risk assessments
- Regulatory requirements and approval processes
Anticipated financial effects over short, medium and long term
Short-term compliance costs (to 2030)
For the purposes of scenario analysis we projected the future emissions profile at the refinery based on assumed feedstock volume and quality, over a five year period. We also considered other variables, including the potential impact of direct abatement investment, the future application of TEBA and a range of forecast ACCU prices.
Low warming scenario: Assuming maximum direct abatement reduction of emissions at the refinery, and considering a range potential ACCU prices and TEBA eligibility outcomes, the associated short‑term compliance costs to the Group are estimated to range from $57.4 million to $105.2 million cumulatively to 2030.
High warming scenario: Assuming no further direct abatement is achieved at the refinery and applying the same range of potential ACCU prices and TEBA eligibility outcomes, the associated short‑term compliance costs are estimated to range from $63.1 million to $112.8 million cumulatively to 2030.
Inputs and assumptions used
The cost of compliance is highly uncertain, given the variability and interdependency of measurement inputs, such as but not limited to:
- Emissions forecasts
- The future application of unknown policy or policy changes
- Forecast ACCU prices
- TEBA eligibility outcomes
- Feedstock volume and quality assumptions
- Direct abatement investment impacts
Qualitative information where quantitative not available
Medium to long term transition risk: While there remains a level of measurement uncertainty involved in quantifying the financial impacts of this risk in the medium to long term, our analysis suggests that these trends will have a material impact on the Group's revenue from hydrocarbon fuel sales, future product mix, infrastructure investment, and asset planning decisions over the medium to long term.
Regulatory expansion: The Federal Government is scheduled to review the SGM in FY2026–27, creating uncertainty regarding potential changes to the scheme. The financial implications of the future SGM and how these compliance costs will impact the Group's income statement, balance sheet and cash flows in the future is currently unknown.
Low-carbon liquid fuels opportunity: At this stage, we are unable to reliably estimate capital expenditure for anticipated investments in supply chains or LCLF manufacturing. These investments require a viable business case, which depends on clear, demonstrated customer demand and, in some cases, potential government funding where a commercially positive return is not otherwise achievable. Given the current uncertainty in market uptake, policy settings, and funding pathways, capital requirements cannot yet be quantified with reasonable accuracy.
Physical climate risks: The financial impact of future weather events at the Geelong Refinery is difficult to estimate due to uncertainty in climate projections beyond 2030 and the variability of key factors such as prevailing refining margins, lost throughput during shutdowns, and the duration and timing of the interruption.
Reasons for inability to provide quantitative information
The level of measurement uncertainty involved in estimating the effects of regulatory factors on our cost of SGM compliance is so high that the resulting quantitative information would not be useful. In addition, the cost to the Group of any future climate policy is unknown, and therefore currently unable to be quantified.
As a result of uncertainties and the interdependencies between fuel demand and broader economic drivers, it is not currently possible to quantify a range that reliably supports the anticipated financial impacts of the transition risk related to demand destruction.