Case Study 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 CSL’s most critical infrastructure: the manufacturing facilities and warehouses. The assessment looked at three scenarios and focused on a near-term time horizon of 2030, in line with CSL’s 2030 Strategy. This year CSL extended this climate risk assessment to include CSL Vifor’s St Gallen site, Switzerland, as the earlier assessment was undertaken prior to CSL’s acquisition of Vifor. CSL assessed the physical climate-related risks of the CSL Vifor manufacturing facility at St Gallen using the worst‑case climate change scenario to 2030 across three climate change hazards of chronic and extreme heat, flood associated with extreme rain and water scarcity. Utilising CSL’s Enterprise Risk Management Framework, the results of the assessment indicated that all risk identified had a low to moderate impact on operations. 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 2024, this may change in future periods as CSL regularly updates its assessment of the impact of the lower carbon economy. Any identified moderate or significant site-based physical risks are integrated into existing operational risk management practices in accordance with the Enterprise Risk Management Framework, so that the facilities can monitor and manage risks as applicable to their location and operations. For transitional risks, rather than managing these at the local level, CSL has taken an enterprise view as these risks generally span the network of facilities directly owned by CSL. You can find more information on the approach, including scenario analysis undertaken, on CSL.com (Sustainability > Environment). AGL’s Macarthur Wind Farm Transition to renewable electricity A key lever in CSL’s Scope 1 and 2 emission reduction target is transitioning facilities to renewable forms of electricity. In FY23 CSL achieved 100% renewable electricity supply across CSL’s European Manufacturing Facilities. In FY24 CSL undertook an extensive review of the Victorian renewable electricity market and subsequently signed a Renewable-Linked Power Purchase Agreement (PPA) with Australian energy provider, AGL. The agreement will significantly advance CSL’s commitment to reducing Scope 1 & 2 emissions with all electricity used by CSL’s Australian manufacturing sites matched by renewable electricity certificates, which in turn reduces CSL’s Scope 2 emissions. The PPA includes a provision that gives preference to generators located in Victoria to drive investment in local renewable electricity generation in CSL’s home state. With the addition of this agreement, beginning in January 2025, CSL expects to reduce its global combined Scope 1 and 2 emissions (where CSL has committed to a 40% reduction by 2030) by approximately 23% from CSL’s emissions baseline (FY19 to FY21). The seven-year agreement is a long-term commitment to procure from AGL electricity that is 100% matched by renewable electricity certificates (which are created in respect of each quantity of renewable electricity generated by an eligible power station under the renewable electricity scheme). Initially, AGL will provide Large Scale Generation certificates, which are expected to be generated from the Macarthur Wind Farm located in Victoria. CSL will continue to transition global facilities to renewable forms of electricity in FY25, with current efforts focused on reviewing the US renewable electricity market. 53
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