Climate change poses a threat to the economy, our health, our communities and our future. Downer is committed to reducing our greenhouse gas emissions to net zero by 2050 to minimise its impact.

Downer is focused on developing solutions to reduce our energy consumption and greenhouse gas emissions, while increasing our cost competitiveness. We are also committed to developing strategies that will improve the resilience of our assets and portfolio to the impacts of climate change. To fulfil our climate change commitments, we are actively developing solutions to reduce our energy consumption and greenhouse gas (GHG) emissions associated with our operations and activities.

Downer considers climate change to be one of its significant material risks and opportunities and has responded to the recommendations of the taskforce on climate-related financial disclosures (TCFD) since 2018, which demonstrates where these risks and opportunities lie and their extent.  

Our most recent response is found within our standalone Climate Change Report.

Targets

We have been measuring our GHG emissions since 2009 and have established Science-Based Targets to reduce our GHG emissions reductions and decarbonise our organisation. Our ambitious Scope 1 and 2 GHG emissions reduction targets are in line with the Science-Based Target Initiative’s Net Zero Standard (1.5°C pathway), as well as a Scope 3 emissions reduction target aligned to a well below 2°C trajectory. As of FY23, our targets are:

  • 50 per cent emissions reduction by 2032 across Scope 1 and 2 emissions, against a 2020 baseline
  • 30 per cent emissions reduction by 2032 across Scope 3 emissions against a 2020 baseline
  • Net zero by 2050 across Scope 1, 2 and 3 emissions

To monitor and measure our performance against these GHG emissions reduction targets, we use a Key Performance Indicator (KPI), set for FY21 and with stretch targets through to FY26, which focuses on GHG emissions reduction efforts for Scope 1 and Scope 2 greenhouse gas emissions intensity (Tonnes CO2-e/AU$m). These KPIs are linked to Downer’s $1.4 billion Sustainability Linked Loan. In addition, we monitor Downer’s absolute Scope 1 and 2 emissions on a monthly basis to monitor and track our performance against these targets.

To achieve our GHG emission reduction and decarbonisation targets, our actions include:

  • Implementing vehicle and emissions reduction initiatives
  • Linking our emissions reduction KPIs to our Short-Term Incentive Executive remuneration scheme.
  • Engaging in sustainable finance to incentivise reductions in line with our Science-Based Aligned Target.
  • Engaging with our suppliers and value chain partners to minimise emissions that occur throughout our value chain.

Downer understands that this transition is not without broader sustainability risks, largely within its customers and supply chains. These include:

  • Workers and local communities negatively affected by job losses related to the closure of emissions-intensive industries
  • Displacement of Indigenous peoples and communities caused by large scale development for renewable energy generation
  • Worsening labour exploitation (including supply chain forced labour and child labour) from the demand for minerals that are critical to the energy transition and renewable energy components. 

Action on climate change will create employment and economic opportunities for communities Downer works in. However, the transition to a lower carbon economy has potential impacts on workers and local communities reliant on carbon intensive industries, some of which Downer provides products and services to. Downer is committed to collaborating with our customers and communities to support decent work opportunities and livelihoods as industries change and the economy shifts to address climate change. 

Climate change oversight

The Board Zero Harm (ZH) Committee has oversight of climate-related risks and opportunities.

The Committee assists the Downer Board in its oversight of Downer’s compliance with its health, safety, environment, climate change and sustainability commitments. The committee oversees the development and implementation of relevant management systems, and monitoring of climate change and sustainability performance.

Briefing papers and performance reports are provided to the ZH Committee each quarter. Meetings are attended by Chief Sustainability Officer, and Group GM of Environment, Sustainability and Reporting to discuss sustainability and climate-related information, strategy, greenhouse gas emissions performance and management response. Decision-making and endorsements provided by the ZH Committee and Board include:

  • Review and sign off of the annual Sustainability Report and Climate Report which includes Downer's sustainability performance data (including climate change disclosures, information on Downer’s emissions reduction targets and progress towards decarbonisation)
  • Participation in, and validation of Downer’s materiality assessment results which inform our sustainability strategy, response to material sustainability risks and opportunities, and upcoming reporting and disclosures
  • Approval of Group-wide targets and commitments (including greenhouse gas emissions targets or establishment of the Decarbonisation Fund)

The Board takes an integrated approach to managing climate risks and opportunities with oversight of climate-related issues through Downer’s governance structure and mechanisms, including:

  • Inclusion of climate change risks (physical and transition) and opportunities within the annual Board strategy session.
  • Inclusion of climate-related risk and opportunity questions in the annual Financial and Corporate Governance Self-Assessment.
  • Attendance at investor meetings by the CEO, CFO and Board Chair to discuss Downer's climate strategy, management approach and climate-related risks and opportunities.
  • Monthly review of papers and performance reports provided by management, which include reporting on Downer’s emissions intensity.
  • Involvement through the Tender Review Evaluation Committee (TREC) established to assist the Board in the assessment of bids in line with Downer’s risk appetite. Climate-related risks and opportunities are one consideration, among others.
  • Directly engaging the Board through Downer’s sustainability materiality assessment process as key internal stakeholders. Board members participate in the materiality survey and interviews, which are conducted by independent experts.
  • Review and endorsement of the Annual Report and Sustainability Report which discloses Downer’s material ESG issues, including climate change, along with Downer’s TCFD disclosure, Downer’s science-based GHG emissions reduction targets and progress towards decarbonisation.

Downer’s Board of Directors and members of the Executive Leadership Team regularly act to enhance their climate change competencies through:

  • Briefings from internal subject matter experts
  • Presentations from external subject experts on emerging risks and issues
  • Integration of climate risk and opportunities into Board and Business Unit strategy sessions
  • Participation in external forums such as the Climate Leaders Coalition.