CSL Limited Annual Report 2022/23 51 Last year, CSL announced its intention to engage suppliers who contribute 67% of its Scope 3 emissions to set science-based targets aligned Scope 1 and 2 reductions by 2030. In support of achieving this target, CSL has developed a dedicated supplier engagement program to firstly identify suppliers who have set or are planning to set science-based targets and secondly, to educate and partner with suppliers who have not set targets to support them on their emissions reduction journey. In late 2022, CSL initiated the first wave of communication targeting a small number of suppliers. All suppliers targeted in this first wave, representing 8% of CSL’s total Scope 3 emissions (as at 30 June 2022) have set or plan to set science-based targets, by 2024. We have already initiated wave two of supplier engagement, targeting 72 suppliers. We anticipate communicating with more than 400 suppliers by the end of financial year 2024. Each year CSL aims to recalculate our Scope 3 baseline to understand our total Scope 3 emissions profile and adjust our supplier engagement strategy to target strategic, ongoing suppliers. Furthermore, we aim to validate supplier data sets utilising the SBTi dashboard and CDP’s annual climate change questionnaire. For more than 10 years CSL has participated in annual CDP climate change and water submissions and aims to encourage suppliers to do the same via CDP Supply Chain. Supplier engagement on CSL’s Scope 3 emissions Apart from industrial manufacturing processes and the use of office buildings, employee mobility also generates greenhouse gas emissions, either through business travel or commuting. Internal data at CSL Vifor suggested that, over the last years, the emissions caused by business travel and commuting by employees from our manufacturing operations and associated offices was roughly equivalent to the total emissions generated by the manufacturing facility alone. In response to these findings, CSL Vifor took a targeted approach to better manage its business travels and introduced a range of measures to reduce the number of work-related flights. This includes continuous investments in video conferencing technology, stricter flight approval rules, streamlining the internal flight management system and the use of climate-focused analytical tools. Additionally, to encourage employees to rethink how they are coming to work every day, St Gallen, Switzerland, introduced several initiatives geared towards environment-friendly transportation and commuting solutions. These include an app-based car sharing platform (Comovee), an annual Bike-to-Work month, a shuttle service from the site to the train station, or e-bike discounts to employees. In 2022, all St Gallen-based employees were offered a two-week trial subscription for public transportation to reassess their commuting habits. More than 50 employees participated in this initiative. A follow-up program is already planned. These measures are a step in the right direction towards supporting achievement of CSL’s environmental objectives. CSL Vifor incentivising employee mobility to reduce emissions Climate change and resilience Climate change affects all aspects of businesses and communities, both directly and indirectly, with the severity varying significantly by region. A warming planet increases the risk of wildfires, rising sea levels, extreme heat, severe weather and droughts. These hazards can have a direct effect on population health and further stress healthcare infrastructure, including the network of global manufacturing facilities and warehouses used by CSL in the production of life-saving medicines and therapies. CSL has taken actions to proactively mitigate and adapt to climate change. Recent efforts include undertaking an enterprise-wide climate risk and opportunity assessment in 2022 using the IPCC Sixth Assessment Report (IPCC AR6) across our most critical infrastructure: our manufacturing facilities and warehouses. The assessment focused on a near-term time horizon of 2030, in line with CSL’s 2030 Strategy. CSL has assessed the impact of climate risk on its financial reporting. The impact assessment principally focuses on key judgement areas, being the valuation and useful lives of intangible and tangible assets and the identification and valuation of provisions and contingent liabilities. No material accounting impacts or changes to judgements or other required disclosures have resulted from the assessment. While the assessment did not have a material impact for the year ended 30 June 2023, this may change in future periods as CSL regularly updates its assessment of the impact of the lower carbon economy.
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