Lendlease Annual Report 2022

52 Lendlease Annual Report 2022 Climate-related strategic resilience Lendlease supports the recommendations of the Task Force on Climate- Related Financial Disclosure (TCFD), having committed to producing annual disclosures that consider these recommendations in 2018. We have a phased approach to integrating the recommendations of TCFD over time. Our disclosure continues to evolve as we enhance management of climate-related risks and as advancements are made in climate- related financial disclosures. Building strategic resilience In FY19 we disclosed our three climate scenarios that we would use to build business strategic resilience. The scenarios were Polarisation (>3 degrees), Paris Alignment (2-3 degrees) and Transformation (well below 2 degrees). In FY20 the business identified risks and opportunities that might arise over the next 30 years for each of our climate scenarios and which of these were likely should the scenario manifest in the next 10 years. These risks and opportunities were then synthesised into ten Climate-Related Impacts (CRIs) per scenario and disclosed in our FY20 Annual Report. In FY21 and FY22 we further enhanced the climate-related strategic resilience of our business by engaging with more than 100 of our senior leaders globally in a series of TCFD Business Impact workshops. The FY21 workshops used the five CRIs identified as most likely to appear in the next 10 years from each scenario (should the scenario manifest) as the basis of review. The remaining five were examined in FY22. Participants were asked to identify their business unit’s positive and negative sensitivities, by reference to impact to revenue, for each CRI relative to our baseline strategy. Participants identified mitigating actions to reduce the sensitivity, if the scenario happened, through building business strategic resilience to either absorb, adapt, or transform to the CRIs. An assessment of the remaining residual sensitivities was subsequently undertaken. Every effort was taken to engage in a robust scenario analysis process with input from experienced senior leaders in each business around the globe. However, scenario planning is, by its nature, subjective and may be subject to change as key considerations evolve. The following disclosures are subject to these factors. The assessment of our strategic resilience is against a baseline which assumes our Mission Zero strategy. Top: Sydney: Barangaroo Headland.