Valeura sustainability oil tanker ship

Sustainability

Supporting Data / Climate-Related Risks and Opportunities

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
Physical Drivers		IFRS S2 Driver Category	Current	Future	Implications for Valeura Energy
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 efficient extraction and processing technologies and upgrading existing equipment and infrastructure	Resource Efficiency Opportunity			Increased operational and environmental efficiency Cost savings resulting in decreased OPEX