The board’s or management’s involvement in setting strategies and monitoring climate-related issues.

1. Data Availability and Quality

• Companies often lack reliable, consistent data to measure climate-related risks and opportunities.

2. Scenario Analysis Difficulties

• Developing and applying different climate change scenarios (e.g., 1.5°C, 2°C pathways) is technically complex and uncertain.

3. Lack of Standardization

• TCFD provides principles but not strict templates, so disclosures vary widely between companies, making comparisons hard.

4. Resource and Expertise Constraints

• Smaller companies may not have the financial or technical resources to implement TCFD recommendations properly.

5. Integration into Existing Risk Management

• Incorporating climate risks into mainstream business risk frameworks is still new and challenging.

6. Evolving Regulatory Environment

• Climate reporting requirements keep changing, and companies struggle to keep up with emerging laws and standards.

7. Uncertainty of Long-Term Impact

• Predicting how climate change will affect businesses over long timeframes (decades) involves significant uncertainty.

8. Investor and Stakeholder Pressure

• Companies feel increasing pressure to deliver high-quality disclosures, even if they are not fully ready.

2. Sustainability Committee (SUSCO)

3. Management's Role

4. Strategic Integration.

The Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024

National Greenhouse and Energy Reporting Act 2007 (Cth)

Attached is Commonwealth Bank of Australia (CBA) sustainability performance metric for 2024. Pages 48 to 55 of this report tackles CBA’s emissions, energy consumption, renewable energy usage and green finance lending.

These disclosures align with both IFRS 1 and 2.

Operational Emissions:

Scope 1 and 2 Emissions: The bank has set a 65% reduction target in its Scope 1 and Scope 2 operational emissions by 2030 compared to 2020 levels.

• Scope 1: Direct emissions from the bank’s owned or controlled operations.

• Scope 2: Indirect emissions from the generation of purchased electricity consumed by the bank.

Scope 3 Emissions: The bank is working towards better understanding and reporting its Scope 3 emissions (indirect emissions in the value chain) but has not yet fully quantified all of these sources.

Sustainability Funding and Investments:

• Sustainability-Linked Financing: The bank has committed to raising a substantial amount through green, social, and sustainability-linked bonds. In 2024, CBA issued AUD 3.2 billion in sustainability-linked loans and bonds.

• Green Bonds: CBA plans to grow its issuance of green bonds, with specific targets for funding renewable energy projects, energy efficiency, and green infrastructure.

The idea is to treat climate risks like any other business risk: you monitor them, evaluate their likelihood and impact, prioritise them, and manage them through your normal risk processes.

Examples of Climate-Related Risks:

1. Physical Risks (direct damage from climate change)
   

   • Acute physical risks:
     

     • Extreme weather events like floods, hurricanes, or wildfires that damage your facilities.

       
       

     • Example: A manufacturing company assesses the flood risk for its factories and relocates or adds flood defenses.

       
       

   • Chronic physical risks:
     

     • Long-term changes like rising sea levels or increasing average temperatures.

     • Example: A real estate firm evaluates how rising sea levels could affect the value of coastal properties.

       
       

   
   

2. Transition Risks (risks from shifting to a low-carbon economy)
   

   • Policy and Legal Risk:
     

     • New carbon taxes or stricter emissions regulations could make operations more expensive.

     • Example: An energy company models the cost impact of a future carbon price on its oil and gas projects.

   • Technology Risk:
     

     • New green technologies could make your products obsolete.

     • Example: An automaker assesses how electric vehicles could impact demand for its gasoline cars.

   
   

   How a Company Might Manage These Risks:

   • Physical Risks: Build flood-resistant buildings, diversify supply chains geographically, buy insurance.

   • Transition Risks: Invest in low-carbon technologies, shift the business model (e.g., oil to renewable energy), advocate for fair climate regulations.

   
   

   The three core elements are:

   1. Identification of Climate-Related Risks

   • How the organization spots climate-related risks across its operations, supply chain, markets, or assets.

   • It includes both physical risks (storms, floods) and transition risks (policy changes, technology shifts).

   2. Assessment of Climate-Related Risks

   • How the organization evaluates the impact, likelihood, and time horizon (short, medium, long term) of those risks.

   • Often involves prioritizing risks based on their financial impact or strategic significance.

   3. Management of Climate-Related Risks

   • How the organization makes decisions to mitigate, transfer, accept, or control the identified risks.

   • Includes setting controls, action plans, and integrating climate risks into the broader enterprise risk management (ERM) system.

   • 
     

   
   

Emissions Reporting:

• Scope 1 (Direct Emissions): In 2023, Amazon's direct emissions increased by 7%, primarily due to growth in its logistics operations and data centers.​Reuters

• Scope 2 (Indirect Emissions from Energy): Amazon achieved its goal of matching 100% of its global electricity consumption with renewable energy sources in 2023, seven years ahead of its 2030 target. ​Amazon News

• Scope 3 (Other Indirect Emissions): These emissions, encompassing Amazon's supply chain and third-party logistics, account for approximately 75% of the company's carbon footprint. To address this, Amazon now requires key suppliers to provide decarbonization plans. ​ESG Today+1Reuters+1

Frameworks and Standards:

Amazon aligns its sustainability reporting with several recognized frameworks, including:​

• Task Force on Climate-related Financial Disclosures (TCFD)​

• Sustainability Accounting Standards Board (SASB)​Home - Amazon Sustainability+3This Rock ESG+3MarketScreener UK+3

• United Nations Sustainable Development Goals (SDGs)​Home - Amazon Sustainability+3MarketScreener+3MarketScreener UK+3

• United Nations Guiding Principles Reporting Framework (UNGPRF) ​Home - Amazon Sustainability+2MarketScreener UK+2MarketScreener+2

🔍 Climate Scenario Analysis

Amazon conducts climate scenario analyses as part of its TCFD-aligned reporting. These analyses help the company assess potential business impacts under various climate futures, informing its strategies to mitigate risks and capitalize on opportunities related to climate change. ​

📈 Emissions Performance

In 2023, Amazon's total carbon emissions decreased by 3% to 68.82 million metric tons of CO₂ equivalent, down from 70.74 million the previous year. This reduction was achieved despite a 7% increase in direct emissions, highlighting the company's efforts in renewable energy adoption and efficiency improvements. ​

🚚 Transportation and Logistics

Amazon has made significant investments to decarbonize its transportation and delivery fleet, deploying over 24,000 electric vehicles globally. However, emissions from air freight have increased, with Amazon Air's emissions rising by 67%, posing challenges to the company's climate goals

1) Largest listed and unlisted entities

2) Financial institution

3) Private companies

disclosed:

1) Climate related metrics

2) Governance and risk management

3) Sustainability report

4) Climate related financial risks

https://treasury.gov.au/sites/default/files/2024-01/c2024-466491-policy-state.pdf

V.K.L group

Overall: reasonably structured, but could improve ambition and transparency—especially in Scope 3.

But it’s not perfectclimate shouldnot be only one committee job

so to improve they should

involve all departments

link management pay to climate goals

make reporting more clear

Limitation: It relies on assumptions, covers only a few scenarios, and cannot predict the exact future—so some risks may still be missed.

• Usefulness: It helps EcoTech understand how different climate futures (e.g., stricter regulations or extreme weather) could impact operations, costs, and demand. This supports better long-term planning, investment decisions, and resilience building.

• Benefits:

• Identifies risks and opportunities early

• Improves strategic flexibility

• Helps align business strategy with climate trends

• Limitations:

• Scenarios rely on assumptions, so outcomes may be uncertain

• May not capture all real-world complexities

• If too few or unrealistic scenarios are used, insights can be limited.

A valuable tool for long-term planning, but its effectiveness depends on the quality and range of scenarios used.

However, effectiveness depends on data quality and depth of disclosure, where EcoTech faces clear weaknesses:

-              Scope 3 data collection challenges may affect accuracy and completeness.

-              Targets could be more granular, with detailed breakdowns of interim milestones to track progress.

-              Public disclosure could be enhanced with clearer context on emission reduction strategies.

How scenario analysis helps EcoTech

Firstly, it helps EcoTech identify risks and opportunities. For example, extreme weather can damage solar panels and wind turbines (physical risk), while new government rules or carbon taxes can increase costs (transition risk).

Secondly, it supports better decision-making. EcoTech can decide where to invest, which markets to enter, and how to design more climate-resilient projects.

Thirdly, it improves long-term planning. By preparing for different future scenarios (like 1.5°C or 2°C warming), the company becomes more flexible and ready for changes.

Finally, it gives EcoTech a competitive advantage because it can adapt earlier than competitors and align with global climate goals.

Limitations of scenario analysis

However, there are some limitations.

One major issue is uncertainty. The scenarios are based on assumptions about future policies and technology, which may not be accurate.

Secondly, scenarios may lack detail, especially at the regional level, even though EcoTech operates globally.

Thirdly, the process is complex and costly, requiring advanced tools and expertise.

Lastly, scenarios may not fully consider extreme events or sudden changes, such as unexpected climate disasters or rapid policy shifts.

Overall, scenario analysis is a useful tool for EcoTech as it improves strategic planning and helps manage climate risks. However, to be more effective, EcoTech should regularly update its scenarios and use them more deeply in decision-making.

1. Improve the data collection

   use better collection

   . Use digital tools or software to collect data

   .EcoTech could require key suppliers to provide standardized emissions data and include climate reporting obligations in supplier contracts. This would improve both transparency and supply chain management.

2. EcoTech should improve the quality of its scenario analysis. It can do this by using multiple climate scenarios, including more severe and less favourable outcomes,

3. Use technology and innovation

   Use AI, data systems, and tracking tools

   Monitor emissions and risks in real timeSet clearer targets

   Add short-term targets (not only 2030 goal)

   Reduce emissions, not only depend on offsets