LONG-TERM (to 2050) SHORT-TERM (to 2025) This aligns with Banpu’s short-term business and financial planning, ensuring that immediate goals incorporate climate-related considerations. Aligned with Banpu’s group business strategy, this timeframe allows for mid-term target setting and adjustments to support “The Banpu Symphonics” strategy, meeting Banpu’s sustainability and emissions reduction goals. Using scenario analysis, Banpu explores a range of uncertainties surrounding the energy transition, assessing the resilience of its strategy over the next 25 years. MEDIUM-TERM (to 2030) CO2 For risk/opportunity identification, each business unit and supporting unit is responsible for the ongoing identification of climate-related risks and opportunities. Climate-related risks and opportunities are identified across various categories, including physical and transitional risks & opportunities. This process utilizes multiple methodologies, including: • Workshops with relevant stakeholders to facilitate in-depth discussions on potential climate risks and opportunities. • Expert consultations with subject matter specialists in environmental, policy, and industry trends. • Risk assessment tools and financial model evaluations to identify implication specific to operations. • External monitoring of policy changes, such as global climate agreements (e.g., COP29) and local regulatory shifts. The Climate-related risks and opportunities are categorized into two categories: • Transitional Risks and Opportunities: These include policy and legal risks, market shifts, reputational impacts, and technological advancements. Banpu’s risk management process systematically assesses each of these categories to anticipate regulatory changes, align with market demand for low-carbon solutions, safeguard Banpu’s reputation, and identify technological investments essential for the energy transition. • Physical Risks and Opportunities: Climate-related physical risks are further classified into acute risks (e.g., extreme weather events) and chronic risks (e.g., long-term shifts in climate patterns). These risks are evaluated to understand their potential impact on Banpu’s operations, particularly for assets in regions vulnerable to climate change. Climate-related risks and opportunities are assessed within Banpu’s enterprise risk management (ERM) framework. This assessment includes evaluating both the likelihood and impact of each risk and opportunity, considering criteria as quantitative (financial impact) and qualitative aspects (strategic, health and safety, environmental, regulatory, reputational, human resources, relationship and service delivery impacts). This quantitative assessment provides stakeholders with a clear understanding of the criteria and significance assigned to each risk or opportunity. Banpu uses a 1-5 rating scale to assess both the impact and likelihood of each climate-related risk and opportunity. This scale is applied across Banpu, supporting a standardized evaluation that enables comparison and prioritization. To align risk management with strategic goals, the Board of Directors, relevant committees, and the management team consider climate-related risks and opportunities across three key time horizons: The scoring of likelihood criteria is defined as follows: For financial impact thresholds, Banpu defines significant financial impact as any risk or opportunity that could affect more than 15% of net profit. Risks and opportunities with a financial impact above this threshold are classified as high impact and prioritized for immediate attention and mitigation planning. For each identified risk, Banpu assigns a risk management plan, which is regularly monitored and adjusted as necessary. High-priority risks receive focused attention, with specific action plans and resources allocated tomanage their potential likelihood and impact. Risk mitigation plans may include both operational improvement and strategic shifts. As part of Banpu’s annual & strategic planning and risk review process, the management team and Board of Directors evaluate the company’s principal climate-related risks and uncertainties. This review considers both internal developments and external factors, allowing Banpu to adjust its risk management approach as necessary to adapt to new challenges in the energy transition. Rare: 0% - 20% probability; not likely to occur. 1 1 Possible: 41% - 60% probability; likely to occur and has happened in the past. 3 3 Unlikely: 21% - 40% probability; may occur but has not happened in the past. 2 2 Likely: 61% - 80% probability; expected to occur in most circumstances. 4 4 Almost Certain: 81% - 100% probability; a common occurrence or recurring risk. 5 5 Negligible Impact, unlikely to disrupt operations or financial performance. Significant Impact that may require adjustments to operational processes or financial planning. Low Impact on operations or financial performance, manageable within existing resources. Severe Impact with potential to disrupt operations, requiring dedicated resources and strategic adjustments. Catastrophic Impact that could substantially affect Banpu’s financial performance or operational stability, requiring urgent and substantial response. The scoring of impact criteria is defined as follows: Coal Loading Activity, Australia Climate Change Report 2024 Climate Change Report 2024 30 31 Introduction Governance Strategy Risk Management Metrics & Targets Looking Ahead
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