CSL Limited Annual Report 2021/22 44 With involvement from CSL staff across our key geographies, we identified and prioritised physical and transition climate risks and opportunities referencing CSL’s risk framework to 2030, with climate scenario analysis informing long-term changes and potential impacts in climate policy and climate hazards relevant to our operations. Primarily focussing on a 2030 timeframe, in line with our strategy, the materiality of these risks as is predicted today is currently of low to moderate impact, and we will continue to regularly monitor and reassess these risks as the effects of climate change further unfold, with our approach to management of these risks now embedded in our Enterprise Risk Management Framework. The resiliency of our operations is aided by having a geographically diverse but integrated network of manufacturing facilities; a reliance on plasma collections via an expanding network of more than 300 centres across the US, and also in China, Germany and Hungary; a supply chain that is actively monitored and risk-managed, particularly for critical and sole source suppliers involved in the manufacture of our products; a roadmap for reducing emissions by 2030; and an emerging need to investigate how climate change affects supply chain routes that are dependent on cold-chain transportation. These efforts ensure we can contribute to limiting global warming, while continuing to improve the lives of our patients and protect public health. We also continue working towards including the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) into future disclosures, giving consideration to the rapidly evolving standards and impending release of the International Sustainability Standards Board’s Climate-related Disclosures (Climate Exposure Draft) which builds upon the recommendations of the TCFD and incorporates industry-based disclosure requirements derived from the Sustainability Accounting Standards Board (SASB) standards. 8 Environment Scenarios utilised for analysis Using scenario analysis Scenario analysis is an established method of informing strategic planning and is a useful tool for understanding the strategic implications of climate-related risks and opportunities. CSL uses scenario analysis and resilience testing to understand the potential impacts that a range of physical and transition risks associated with climate change may have on CSL’s operations. While scenario planning is an important planning tool for CSL, there are limitations with scenario analysis and it is difficult to predict which, if any, of the scenarios might eventuate. Scenario analysis is not an indication of probable outcomes and the assumptions relied upon for the purpose of this analysis may or may not prove to be correct or eventuate. However, CSL uses scenario assessment to help us understand potential business outcomes in different scenarios to support with our planning. Physical The global warming futures are evaluated using scenarios collectively known as the Shared Socioeconomic Pathways (SSPs) that offer different narratives regarding socioeconomic trends that could shape the future over time and associated with distinct global warming trends. The SSPs are from the IPCC Sixth Assessment Report (IPCC AR6). The SSPs build upon the Representative Concentration Pathways (RCPs) from the IPCC Fifth Assessment Report (IPCC AR5). We use the RCP scenarios (that are aligned to the SSP scenarios) from the IPCC AR5 for metrics that have not yet been constructed within the IPCC AR6 models. The frequency and intensity of chronic and extreme temperature and precipitation patterns and the occurrence of storm surge events and hurricanes was assessed under two IPCC AR5/AR6 scenarios, namely a moderate emissions RCP4.5/SSP2-4.5 ‘Current Policies’ pathway (the world meets current climate targets and pledges, but does not quite meet the Paris Agreement target), and a high emission ‘Limited Action’ RCP8.5/SSP5-8.5 global inaction pathway. We assessed multiple time horizons from now to 2050. We used multiple climate datasets and models to inform future implications across CSL operations and geographies. Scenarios explored the change in extreme weather events, chronic and extreme heat, flood and extreme rain and water scarcity over the applicable time horizons. Transition We conducted scenario analysis on CSL manufacturing sites across the US, Europe and Asia Pacific. We used two scenarios from the Network for Greening the Financial System (NGFS) for 2030, 2040 and 2050. These were a low emission 1.5°C-aligned ‘Net Zero 2050’ pathway that limits global warming to 1.5°C through stringent climate policies and innovation, reaching net zero CO₂ emissions around 2050, and a moderate emission 3-4°C ‘Current Policies’ pathway that assumes that only currently implemented policies are preserved, leading to high physical risks. These scenarios have been selected to capture the spread (diversity) of potential future combination edge-cases. The potential financial exposure of CSL’s emissions have been projected using the trends of carbon and energy prices inherent to the decarbonisation scenarios. These were quantified by exploring alternate combinations of CSL’s decarbonisation actions and the decarbonisation actions on a global scale. We used metrics and information including carbon and energy prices, fuel mix, existing policies and regulations, targets and commitments, and regionally-significant sectoral emissions.
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