Climate-Related Risks and Opportunities

Risk Criteria

Negligible No significant additional action, damages are localised and minimal.
Minor Minor response, damages are localised with short-term implications unlikely to affect day-to-day business that can be addressed by existing controls.
Moderate Limited response (tier 1), damages are of national scale with short-term implications that can be addressed by local management, day-to-day business disrupted in the near-term.
Major National response (tier 2), damages are of national or regional scale, day-to-day business is disrupted in the medium-term.
Massive International response (tier 3), damages are of regional or international scale, day-to-day business is disrupted in the long-term.

Opportunity Scale

Neutral No opportunity.
Negligible There is an opportunity but is not worth the effort and resources, pursuing this opportunity may not result in any growth for the business.
Minor Opportunity There is an opportunity but is not worth the effort and resources, pursuing this opportunity may result in small short-term growth for the business.
Moderate Opportunity There is some opportunity that may be worth the effort and resources, pursuing this opportunity may result in small to moderate long-term growth for the business. However, larger opportunities should be prioritised first.
Significant Opportunity There is a large opportunity that should be prioritised. Pursuing this opportunity can lead to significant long-term growth for the business.

Assessment

Physical Drivers IFRS S2 Driver Category Risk/Opportunity Implications for Valeura Energy
Current Future
R1 Cyclones and Winds Increase in severity of extreme weather events such as cyclones and strong winds   Acute Risk   – Damage to offshore infrastructure and associated costs – Value chain disruptions Loss of land due to permanent inundation  
R2 Extreme Heat Increase in global mean temperatures Chronic Risk   – Reduced capacity and efficiency of equipment resulting in decreased production and revenue
R3 Sea Level Rise Increase in rate of sea level rise Chronic Risk   – Damage to offshore infrastructure and associated costs Loss of land due to permanent inundation
R4 Carbon Price Introduction of a carbon pricing mechanism (e.g. carbon tax) driven by stringent environmental regulations Policy & Legal Risk   – Less demand for fossil fuels in favour of lower emission alternatives resulting in decreased revenue
R5 Exposure to litigation Enforcement and scrutiny on climate-related issues by stakeholders increase the risk of litigation Policy & Legal Risk   – Increased compliance costs Increased CAPEX (e.g. investments in new equipment) to meet requirements
R6 Demand for Fossil Fuels Decrease in demand for fossil fuels, including oil, in favour of alternatives (e.g. renewables) Market Risk   – Decreased demand and associated revenue and profitability loss
R7 Technology Substitution Substitution of existing technologies with alternatives including the electrification of technologies Technology Risk   – Decreased demand and associated revenue and profitability loss
R8 Technology Deployment Unsuccessful or delayed investments in new technologies (e.g. carbon capture storage (CCS) Technology Risk   – Increased future compliance costs
R9 Stakeholder Perception Increased stakeholder concern or negative feedback Reputation Risk   – Reduced revenue from decreased demand for goods – Negative impact on workforce management and planning (e.g. employee attraction and retention) – Increased difficulty in accessing capital
R10 Stranded Assets Stranded assets due to stakeholder Pressure Reputation Risk   – Lower Valuation of assets
O1 New Markets New market opportunities such as CCS in oil reservoirs, increased crude oil demand for production of petrochemical products, increased demand for low carbon products Products/Services Opportunity   – Increased profitability from additional revenue streams
O2 Renewable energy Installation and use of onsite renewable energy and reusing old offshore platforms to produce renewable energy Energy Source Opportunity   – Alternative clean energy source – Improved energy security – Decreased OPEX as renewable energy becomes more cost competitive
O3 Resource Efficiency Improving resource efficiency through technological innovations in the form of adopting more efficiency extraction and processing technologies and upgrading existing equipment and infrastructure Resource Efficiency Opportunity   – Increased operational and environmental efficiency – Cost savings resulting in decreased OPEX
Sustainability Site Map

Our Approach to Sustainability

Environment

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Supporting Data