AASB S2 Disclosure Example: Mining and Materials

Worked sample disclaimer. Meridian Resources Group Limited is a fictional entity. Names, sites, figures, and disclosures in this document are illustrative only. Any resemblance to a real ASX-listed entity is coincidental.

Foreword

This document is a worked sample of an AASB S2 Climate-related Disclosures report, published by Continuuiti as part of our AASB S2 disclosure resource library. Continuuiti’s typical focus is physical climate risk; this artefact, by exception, covers the entire standard so that buyers (sustainability teams, ESG advisory consultants, climate-disclosure preparers) can read a complete illustrative report end to end. A parallel IFRS S2 mining sector worked sample covers the IFRS S2 framework version of the same disclosure architecture for global (non-AU) reporters.

The sample follows EY’s Quality Holdings Resources Limited (February 2025) as a structural anchor, and addresses two specific gaps that EY chose not to illustrate. EY’s report explicitly omits the disclosures required by AASB S2 Paragraphs 29(c) (the amount and percentage of assets or business activities vulnerable to climate-related physical risks) and 29(d) (the amount and percentage of assets or business activities aligned with climate-related opportunities). KPMG’s AASB S2 First Impressions (March 2026) corroborates the Para 29(c) gap at the cohort level. Across the 30 first-wave reporters reviewed (year ended 31 December 2025), the average number of disclosed potentially material physical risks per entity is 1.1, with many entities disclosing zero. Para 29(c) is the load-bearing physical-risk disclosure under the standard, and this is where this worked sample is intended to add value.

How to read paragraph references. Each disclosure block is followed by an italic paragraph anchor. For example, [S2.10(d)] refers to AASB S2 Paragraph 10(d). S2.[D]<n> refers to Appendix D of AASB S2 (paragraphs incorporated from AASB S1). S2.Aus<n> refers to AU-specific paragraphs in the body. BC<n> references in editorial-note callouts refer to AASB S2 Basis for Conclusions paragraphs.

1. Preface

Paragraphs covered in Section 1

1.1 Climate report

This report represents a complete set of climate-related financial disclosures for Meridian Resources Group Limited (the parent) and its subsidiaries (collectively, the “Group”) for the year ended 31 December 2025. The Group’s climate-related financial disclosures have been prepared in accordance with AASB S2 Climate-related Disclosures, the mandatory Australian Sustainability Reporting Standard issued by the Australian Accounting Standards Board (AASB). For an explainer of the AASB S2 framework, scope, and effective dates, see AASB S2 framework overview. [S2.[D]72]

This report has been prepared for the same consolidated reporting entity and reporting period as the Group’s Consolidated Financial Statements for the year ended 31 December 2025, and incorporates climate-related information of the parent and all of its global subsidiaries. [S2.[D]AusB38.1, S2.Aus20.1]

The report identifies the related financial statements as the Group’s Consolidated Financial Statements for the year ended 31 December 2025. [S2.[D]22]

This is the first reporting period in which the Group has applied AASB S2. The Group has elected not to disclose comparative information for the prior period, as permitted by paragraph C3 of AASB S2 (transitional relief for first-time reporters). [S2.C3]

This report was authorised for issue in accordance with a resolution of the directors on 27 February 2026.

1.2 Directors’ declaration

In accordance with a resolution of the directors of Meridian Resources Group Limited, the directors state that:

In the opinion of the directors:

1. The entity has taken all reasonable steps to ensure that the climate statements and notes of the Company and its subsidiaries (collectively, the Group) are in accordance with the Corporations Act 2001, including:

(a) Giving a true and fair view of the Group’s climate-related financial disclosures as at 31 December 2025 and of its performance for the year ended on that date.

(b) Complying with Australian Accounting Standard AASB S2 Climate-related Disclosures.

On behalf of the Board.

Catherine Walsh
Chair of the Board
27 February 2026

1.3 Corporate information

Headquartered in Australia, Meridian Resources Group Limited is a multinational resources and energy company with operations in Australia, Chile, Brazil, South Africa, Mongolia and Canada. The Group’s portfolio comprises 14 operating sites, 3 sites in development, and 2 sites in care-and-maintenance. The Group’s principal commodities are iron ore, copper, metallurgical coal, lithium and rare earths (critical minerals), petroleum (legacy assets), and renewable energy generated through a joint venture.

The Group employs approximately 12,000 people directly and engages a contractor workforce of approximately 5,000. Asset useful lives across the portfolio range from 8 to 35 years.

Selected operating sites referenced in this report include Pilbara North (Western Australia, iron ore), Mt Coolah (New South Wales, metallurgical coal), Karratha Energy (Western Australia, petroleum legacy), Atacama Norte (Chile, copper), Carajás-East (Brazil, iron ore), Mpumalanga South (South Africa, metallurgical coal), Khan Bogd (Mongolia, copper), and Athabasca-3 (Canada, critical minerals).

1.4 Value chain estimation

The Group has considered its upstream and downstream value chain in identifying and assessing climate-related risks and opportunities, using all reasonable and supportable information available without undue cost or effort.

Where direct measurement is not feasible, the Group estimates value-chain metrics using sector-average emissions factors, supplier-reported data where available, and internal proxies. Scope 3 greenhouse gas emissions for the current period have been estimated using a combination of spend-based and activity-based methods, with category-level disclosures provided in Section 5.1. The Group is committed to improving the accuracy of value-chain estimation over subsequent reporting periods through expanded supplier engagement and data quality programs.

2. Strategy

Paragraphs covered in Section 2

2.1 Business strategy and time horizons

The Group’s business strategy is to manage a long-term portfolio of resources assets that is resilient to the physical and transition impacts of climate change, with a deliberate weighting toward critical minerals and renewable energy over the strategic planning horizon. Capital projects in the resources sector typically involve significant upfront investment and asset useful lives of 8 to 35 years, so strategic decisions made today are sensitive to climate-related conditions over multiple decades.

The Group considers what the impact of climate change might be over the following three time horizons:

These timeframes are aligned to the Group’s strategic planning cycles, the typical capital investment payback periods, and the design lives of the Group’s assets and infrastructure.
[S2.10(d)]

2.2 Climate risks and opportunities

The Group has assessed the climate-related risks and opportunities that could reasonably be expected to affect the Group’s prospects (specifically its cash flows, access to finance, and cost of capital) over the short, medium, and long term. The assessment was conducted using all reasonable and supportable information available at the reporting date.

For each identified risk, the Group has determined whether it is a climate-related physical risk or a climate-related transition risk, and the time horizons over which the effects could reasonably be expected to occur.
[S2.10(a), S2.10(b), S2.10(c)]

2.3 Effects on business model and concentration

For each identified risk and opportunity, the Group has determined the potential effects on its strategy and business model, the geographic and asset concentrations of those effects, and the mitigation or adaptation efforts in place.
[S2.13(a), S2.13(b), S2.14(a)(i), S2.14(a)(ii), S2.14(a)(iii), S2.14(b)]

Risk: Carbon pricing exposure (Transition)

Risk: Customer demand (Transition)

Risk: Flood and cyclone risk to assets (Physical)

Risk: Extreme heat and drought impact (Physical)

Opportunity: Renewable energy capacity expansion

Opportunity: Critical-minerals strategic positioning

2.4 Current and anticipated financial effects

The Group has assessed the current financial effects of climate-related risks on its financial position, financial performance and cash flows for the reporting period, and the anticipated financial effects over the short, medium and long term. [S2.15(a), S2.15(b), S2.16(a), S2.16(b), S2.16(c), S2.16(d), S2.17]

[S2.16(a), S2.16(b), S2.16(c), S2.16(d)]

Notes to the financial-effects disclosure

Note 1: Flood revenue effects. The reduction in revenue at Carajás-East comprises lost commodity sales volumes during the flood and clean-up phase plus liquidated damages payable to a major customer for late delivery. Both are presented in the statement of financial performance for the year. The events were not classified as force majeure under the affected contracts.

Note 2: Insurance proceeds. Insurance proceeds of A$15m received in 2025 partially offset the asset write-offs and business-interruption losses. The Group’s insurance arrangements are reviewed annually; premiums are expected to increase in the short to medium term as flood frequency rises, before stabilising once mitigation investments are complete.

Note 3: Property, plant and equipment. PP&E balances are forecast to increase as the Group invests in early warning systems, replacement of damaged components, and enhanced drainage and cyclone-resilient infrastructure across exposed sites. These investments will result in higher depreciation charges over the medium term.

Note 4: Financing. Financing costs are expected to increase in the short to medium term due to a higher credit spread reflecting the increased risk of business interruption and physical damage. After mitigation investments are complete, financing costs are expected to revert as climate risk premia compress.

Note 5: Provisions. Rehabilitation provisions are expected to increase due to the bringing forward of the end-of-life for Karratha Energy and the additional rehabilitation scope arising from flood damage at Carajás-East.

2.4.1 Scenario-quantified anticipated financial effects (transition risks)

The Group has modelled the anticipated financial effects of transition-risk channels under each of the three scenarios applied in scenario analysis (Section 2.7), at short, medium, and long-term horizons. Modelled effects are presented as ranges to reflect inherent measurement uncertainty per AASB S2 Paragraphs 19 to 21. Outputs are inputs to the strategic-resilience assessment in Section 2.7 and the Climate Transition Action Plan capital allocation in Section 5.3.4.
[S2.16(b), S2.16(c), S2.21(a), S2.21(b)]

Sign convention. Values denote anticipated annual financial effect in the named year (not cumulative). Positive values represent cost increases; negative values represent revenue decreases. Ranges reflect measurement uncertainty per AASB S2 Paragraphs 19 to 21. Time horizons follow Section 2.5 conventions (short = 2030, medium = 2040, long = 2050; 20-year window centred on each per IPCC convention).

[S2.16(b), S2.21(a)]

Methodology note. Modelled financial effects in this table are derived as follows. Carbon pricing exposure: covered Scope 1 emissions (~12.6 MtCO2-e for the Group’s three Australian Safeguard facilities, see Section 5.5) multiplied by scenario-specific carbon price assumptions (current ACCU spot price ~A$30/tCO2-e ramping to A$80-150/tCO2-e by 2050 under SSP1-2.6 and ~A$30-50/tCO2-e under SSP5-8.5, with intermediate trajectories under SSP2-4.5). Customer demand: A$6.0b legacy-segment revenue (petroleum A$2.5b plus met coal A$3.5b, see Section 5.3.1) multiplied by scenario-specific demand-decline pathways calibrated against the IEA Net Zero Emissions scenario (referenced for SSP1-2.6 demand shock), the IEA Announced Pledges scenario (referenced for SSP2-4.5 central pathway), and IEA Current Policies / Stated Policies scenarios (referenced for slower-transition pathways). Diesel cost: ~600 ML/yr Group diesel consumption multiplied by scenario-specific price escalation. Electricity supply: ~3.5 TWh/yr Group grid consumption multiplied by scenario-specific energy-transition cost premium. Insurance: ~A$15m current physical-risk insurance premium multiplied by scenario-specific frequency uplift. All ranges reflect measurement uncertainty per AASB S2 Paragraphs 19 to 21 and the Group’s underlying scenario-model assumptions.

Editorial note. Transition-risk channels (carbon pricing, customer demand, diesel, electricity) are HIGHER under SSP1-2.6 (rapid transition) and LOWER under SSP5-8.5 (slow transition). Insurance and physical-driven costs run the opposite direction. The two sets of channels offset each other across scenarios: under SSP1-2.6 the Group faces approximately A$5-7 billion cumulative transition-risk impact across the disclosure horizon; under SSP5-8.5 approximately A$1.5-2.5 billion cumulative transition-risk impact plus A$3-5 billion cumulative physical-risk impact (Section 5.3.2 vulnerability disclosure quantifies the underlying asset-level exposure). Neither scenario is benign for the Group; the scenario-quantified disclosure shows the strategic-resilience question is which risk channel set the Group is more exposed to under management’s preferred strategy. The Climate Transition Action Plan (Section 2.5) is calibrated to perform across the central SSP2-4.5 scenario while preserving optionality for both the SSP1-2.6 (rapid-transition) and SSP5-8.5 (slow-transition with intensified physical risk) outcomes.

Editorial note. Yancoal Australia’s 2025 Annual Report (pages 169-173) models analogous scenario-specific financial effects for a single-activity coal mining business, covering coal-price-driven revenue decline (up to A$1.3 billion under 1.5°C at 2035), diesel cost escalation, and carbon cost exposure. Meridian’s diversified portfolio (mining, petroleum, critical minerals, and renewables) requires the cross-channel modelling above. The same modelling discipline applies; the channel mix differs by sector positioning. Financial-services-sector reporters preparing AASB S2 disclosures (e.g., for FY26 mandatory reporting) will require a different channel set entirely, anchored to portfolio-financed-emissions exposure rather than direct operational exposure.

2.5 Decarbonisation targets and Climate Transition Plan

Based on the climate-related risks and opportunities identified, and on the potential financial effects, the Board approved the Group’s Climate Transition Action Plan in November 2023 and refreshes it annually. The Climate Transition Action Plan outlines the targets, actions and resources for the Group’s transition toward a lower-carbon portfolio. [S2.14(a)(iv), S2.14(a)(v)]

The plan was developed using the global GHG emissions pathway consistent with IPCC SSP1-2.6 as the forecast pathway for the Group’s strategy, and an analysis of Nationally Determined Contributions in the jurisdictions where the Group operates.

The Climate Transition Action Plan rests on four pillars.

Pillar 1: Electrification. Replacement of diesel mining fleet and equipment with electric and hybrid alternatives across the Australian and Latin American operations. Target: 20% of fleet by 2028, 50% by 2032, 100% by 2040. Required infrastructure includes charging stations, grid upgrades, and renewable energy supply.

Pillar 2: Value chain collaboration. Working with metallurgical coal customers on hydrogen-based steelmaking technologies. Working with petroleum customers on the transition to renewable energy and critical-minerals supply chains. Target: 15% reduction in Scope 3 emissions by 2035 from a 2023 base.

Pillar 3: New technology. Investment in carbon capture and storage at Karratha Energy and Atacama Norte; investment in green ammonia production for shipping; investment in advanced critical-minerals processing.

Pillar 4: Portfolio rebalancing. Phased exit from petroleum (legacy) assets where carbon capture is not viable. Expansion of critical minerals (Athabasca-3, Khan Bogd). Selective divestment of high-emission, late-life metallurgical coal assets.

2.6 Risk integration into strategy and capital allocation

Climate-related risks and opportunities are integrated into the Group’s Enterprise Risk Management Framework (RMF), the strategic planning cycle, and the capital allocation process. The Group operates a risk appetite statement and risk register that incorporate climate-related risks alongside other principal risks. Climate-related risks are reassessed at least annually and on the occurrence of significant events.
[S2.16(c), S2.22(b)(i)(7)]

Capital allocation in response to climate-related risks and opportunities is structured into three funds:

Renewable Energy Development Fund. Approximately A$3.0b of expected capital investment over the next five years for greenfield renewable energy assets and joint ventures. Capital expenditure of A$80m in 2025.

Climate Resilience Fund. Approximately A$145m per annum allocated to asset upgrades and adaptation investments in response to physical climate risks. The 2025 capital expenditure mix is set out below; the allocation directly maps to the physical-risk-vulnerable assets in Section 5.3.2.

[S2.29(e), S2.16(c)]

New Technology Fund. Approximately A$1.5b committed over ten years to seed and scale technologies including hydrogen, green ammonia, electric mining equipment, and carbon capture and storage. Capital expenditure of A$180m in 2025.

2.7 Building resilience through scenario analysis

The Group has used climate-related scenario analysis to assess the resilience of its strategy and business model to climate-related changes, developments and uncertainties.
[S2.22(a)(i), S2.22(a)(ii), S2.22(a)(iii), S2.22(b)]

Meridian’s scenario analysis applies three IPCC scenarios. (See AASB S2 Paragraph 22 verbatim text for the standard text mandating this disclosure.)

Forecast pathway: IPCC SSP1-2.6. Used as the Group’s view of the world for strategic and business planning, and as the 1.5°C-aligned narrative scenario for resilience testing. SSP1-2.6 represents a scenario in which global GHG emissions decline rapidly, warming peaks at approximately 1.8°C by mid-century before declining, and the Paris Agreement targets are largely met (1.5°C with limited overshoot).

Sensitivity scenario: IPCC SSP2-4.5. A central pathway in which current policies and stated commitments are partially implemented; warming reaches approximately 2.7°C by 2100. Used for sensitivity analysis of physical-risk quantification at the asset level (Section 5.3.2).

Stress test, high physical / low transition: IPCC SSP5-8.5. A scenario in which fossil fuel use continues to expand; warming exceeds 2.5°C by mid-century and reaches approximately 4.4°C by 2100. Tests the Group’s strategy against intensified physical risks and reduced transition pressure.

This scenario combination satisfies subsection 296D(2B) of the Corporations Act (SSP1-2.6 as the “limited to 1.5°C” scenario; SSP5-8.5 as the “well exceeds” 1.5°C scenario, with the supplementary EM interpretation of ≥2.5°C). It is informed by AR6 climate science per AASB S2 Paragraph AusB22.1. For an interpretive walk-through of the four practitioner questions hidden in Para 22, see IFRS S2 Paragraph 22 four-question scaffold (AASB S2 Para 22 is identical to IFRS S2 Para 22). The Network for Greening the Financial System (NGFS) Net Zero 2050 was also referenced for transition-pathway calibration.

The risk rating for each identified risk under each scenario at the long-term horizon (2055) is summarised below.

Significant areas of uncertainty

The Group’s scenario analysis is informed by inherently uncertain assumptions including the path of national and supranational climate policy, the rate of low-carbon technology adoption, the trajectory of physical climate impacts including tipping-point dynamics, and the response of commodity markets to demand-side shifts. The long-term horizon (2055) compounds these uncertainties.
[S2.22(a)(ii)]

Capacity to adjust or adapt

Under a low-warming scenario (SSP1-2.6), the Group has the capacity to:
– Accelerate capital allocation to the Renewable Energy Development Fund and the New Technology Fund.
– Accelerate the timing of exit from petroleum (legacy) assets.
– Expand investment in critical minerals.

Under a high-warming scenario (SSP5-8.5), the Group has the capacity to:
– Increase capital allocation to the Climate Resilience Fund for adaptation projects.
– Reduce capital intensity of decarbonisation investments where carbon pricing remains low.
– Reposition the portfolio toward operating sites less exposed to physical climate risks.

[S2.22(a)(iii)]

2.8 Climate resilience summary

The Group’s strategy and business model demonstrate qualified resilience to the climate-related risks and opportunities identified, conditional on the executed delivery of the Climate Transition Action Plan and the Climate Resilience Fund’s adaptation programs.

The principal areas where resilience requires continued attention are: (a) the financial impact of accelerated transition risk on petroleum and metallurgical coal assets, (b) the asset-level concentration of physical risks at Carajás-East, Pilbara North and Karratha Energy, and (c) the speed of low-carbon technology adoption that determines transition cost. Section 5.3.2 (Para 29(c) physical vulnerability) provides the asset-level quantification of physical risk exposure. [S2.22(a)]

3. Governance

Paragraphs covered in Section 3

3.1 Business governance

The Board of Directors of Meridian Resources Group Limited has ultimate responsibility for setting and overseeing the Group’s strategy, business plans and annual budgets, and the risk management approach. Climate-related risks and opportunities are considered by the Board in performing each of these responsibilities. [S2.6(a)(i)]

The Board’s Charter specifies that the Board’s oversight of climate-related risks and opportunities is supported by four standing committees and the Executive Leadership Team. Each committee has its own terms of reference describing the scope of decision-making related to climate matters. The Board receives a quarterly report on key climate-related issues from the Audit and Risk Committee and the ESG Committee, and discusses climate as a recurring agenda item. [S2.6(a)(iii)]

3.2 Roles and responsibilities

Figure 3.2.1: Governance structure for climate-related risks and opportunities. Solid arrows denote line-of-sight reporting; dotted arrows denote climate-specific reporting flows. The Board receives a quarterly climate report from the Audit & Risk Committee and the ESG Committee. [S2.6(a)(iii)]

Board oversight

The Board comprises nine directors and brings experience across resources, finance, climate science, and regulatory affairs. The Board met on six occasions during 2025, with climate-related matters on the agenda at each meeting. The Board approved climate-related capital investments of A$580m in 2025 and approved the refreshed Climate Transition Action Plan in November 2025. [S2.6(a)(iii), S2.6(a)(iv)]

Committees

Audit and Risk Committee. Oversees the Group’s enterprise risk management framework, including climate-related risk integration, internal controls over climate-related data, and risk-based assurance. Meets monthly. The Committee reviews climate-related risk identification, assessment, prioritisation, and monitoring at least annually.

ESG Committee. Oversees the Group’s climate strategy, the Climate Transition Action Plan implementation, climate-related targets, and climate disclosure. Meets quarterly. The Chief Sustainability Officer and Chief Financial Officer attend each meeting.

People and Remuneration Committee. Oversees executive remuneration arrangements including climate-related performance measures (see Section 3.5). Meets at least quarterly.

Nominations Committee. Considers climate-related skills and experience requirements in Board composition and succession planning.

Management responsibilities

The Board delegates day-to-day responsibility for executing strategy, including climate-related matters, to executive management. [S2.6(b)(i)]

Controls and procedures

Management oversight of the Group’s climate-related risks and opportunities is supported by controls and procedures relating to risk identification, transaction approval, GHG emissions measurement, target-setting and target monitoring, and disclosure quality. These controls form part of the Group’s broader enterprise risk management and financial reporting control environments. [S2.6(b)(ii)]

3.3 Governance of climate strategy and targets

The Board sets the Group’s climate strategy, approves the Climate Transition Action Plan, and approves climate-related targets. Targets are monitored by the ESG Committee on a quarterly basis. Updates to targets are made at least annually with Board approval. [S2.6(a)(v)]

The Board has set a policy that requires a climate risk and opportunity assessment to be performed and documented before any investment business case with a value exceeding A$50m or any long-term supply or customer contract with a duration greater than 10 years can be approved. The climate risk assessment is reviewed by the approver of the investment business case and considered as part of the approval decision. [S2.6(a)(iv)]

3.4 Climate-related skills and experience

The Board annually self-assesses individual director skills and experience against a Skills and Experience matrix maintained by the People and Remuneration Committee. Climate-related skills and experience are an explicit category in the matrix.
[S2.6(a)(ii)]

3.5 Remuneration systems

The Group’s remuneration arrangements include short-term incentives (STI) and long-term incentives (LTI) for the Executive Leadership Team, both of which incorporate climate-related performance measures.

In 2025, the STI included a performance gate requiring delivery of the refreshed Climate Transition Action Plan to the Board. The LTI for the period commencing 2025 includes a five-year climate transition component (weighted at 20%) measured against Scope 1 and Scope 2 emissions reduction milestones:

15% of the executive management remuneration recognised in 2025 is linked to climate-related considerations, applying the Key Management Personnel definition in AASB 124 Related Party Disclosures to identify the executive management roles in scope. [S2.29(g)(i), S2.29(g)(ii)]

4. Risk management

Paragraphs covered in Section 4

4.1 Risk management framework integration

The Group’s identification and management of all risks is performed in accordance with the enterprise Risk Management Framework. Climate-related risks are integrated into the broader RMF rather than maintained as a separate process. The identification and assessment of climate-related risk is performed by a cross-functional team led by the Chief Risk Officer and the Chief Sustainability Officer. [S2.25(a), S2.6(b)(ii)]

Climate-related risks are recorded in the Group’s risk register and integrated into business unit and Group-level risk profiles. They are assessed alongside other principal risks (financial, operational, regulatory, technology) using consistent likelihood, impact, and prioritisation criteria. The Group acknowledges that climate-related risks frequently act as drivers of other principal risks rather than standing alone. A flood event is a physical risk that drives financial, operational and reputational risk concurrently, and the RMF is designed to reflect this multi-dimensional propagation.

4.2 Three-line defence

The Group’s RMF operates a three-line defence model that allocates risk-management responsibility across operational management, an Executive Risk Committee and management functions, and Internal Audit.

4.3 Risk processes

The Group’s climate-related risk identification, assessment, prioritisation, and monitoring follow a five-stage cycle.

Figure 4.3.1: Five-stage climate-related risk cycle, integrated with the broader enterprise Risk Management Framework. Climate-related risks are not maintained as a separate process. Asset-level physical-risk inputs flow from the Section 5.3.2 methodology into Stage 1. [S2.25(a), S2.25(c)]

Stage 1: Identification

Potential climate-related risks are identified by gathering and analysing entity-specific evidence (operational data, capital project assumptions, customer and supplier contract terms) and external evidence (peer disclosures, industry-specific outlooks, regulator publications, climate science updates). The Group also draws on physical climate data sources including IPCC AR6 outputs, Bureau of Meteorology (Australia), CSIRO Climate Service, and bias-corrected downscaled climate projections from the NEX-GDDP-CMIP6 collection.
[S2.25(a)(i), S2.25(a)(v)]

The Group uses climate-related scenario analysis to inform identification of climate-related risks. [S2.25(a)(ii)]

Stage 2: Assessment

For each identified climate-related risk, the Group assesses the nature, likelihood and magnitude of the impact on business performance and prospects, using both qualitative and quantitative criteria. Qualitative factors include stakeholder sentiment, regulatory landscape, reputational exposure, and operational complexity. Quantitative factors include projected financial losses, operational downtime, capital expenditure required for mitigation, and projected commodity price impacts.

The risk assessment is calibrated using the Group’s risk evaluation matrix:

[S2.25(a)(iii)]

Stage 3: Prioritisation

Climate-related risks are prioritised relative to other principal risks based on the combined likelihood and magnitude of impact and the Group’s risk appetite. The risk matrix incorporates both probability and severity, allowing resources to be focused on the most pressing threats over multiple time horizons. Risks that exceed the Group’s tolerance thresholds are escalated to the Audit and Risk Committee and, where material, to the Board. [S2.25(a)(iv)]

Stage 4: Monitoring

Climate-related risks added to the Group’s risk register are reviewed quarterly by the Executive Leadership Team. The review considers updates to risk assessments, progress against mitigation actions, and changes in external conditions. A summary of the Executive Leadership Team review is reported to the Board quarterly. [S2.25(a)(v)]

Stage 5: Continuous improvement

The Group has refined its climate-related risk assessment processes over the prior reporting period by integrating quantitative scenario-based assessments alongside qualitative assessments. Training programs equip relevant employees with the knowledge to identify and respond to climate-related risks. Risks are reassessed on the occurrence of significant events, regulatory changes, or material updates to climate science. [S2.25(a)(vi)]

Identification of climate-related opportunities

Climate-related opportunities are identified through the same five-stage cycle, with additional inputs from stakeholder engagement, market analysis of low-carbon products and services, and the Group’s strategic planning cycle. The Group uses scenario analysis to inform identification of climate-related opportunities. [S2.25(b)]

Integration into overall risk management

The processes for identifying, assessing, prioritising and monitoring climate-related risks and opportunities are fully integrated into the Group’s overall enterprise risk management process. Climate-related risks are treated as drivers of, and interactions with, other principal risks rather than as a separate risk category. [S2.25(c)]

5. Metrics and targets

Paragraphs covered in Section 5

5.1 Greenhouse gases: 2025 results

In FY2025, the Group’s total absolute gross greenhouse gas emissions were approximately 120 MtCO2-e, comprising 28 MtCO2-e Scope 1, 10 MtCO2-e Scope 2 (location-based), and 82 MtCO2-e Scope 3.
[S2.29(a)(i), S2.29(a)(v)]

The Group applies an operational-control approach to define its organisational boundary for GHG emissions, consistent with the National Greenhouse and Energy Reporting (NGER) Scheme requirements for the Group’s Australian assets and the Greenhouse Gas Protocol for assets outside Australia. The renewable-energy joint venture is excluded from operational-control emissions because the Group does not have operational control of the joint venture; emissions from the joint venture are included in Scope 3.
[S2.29(a)(ii)]

Approximately 35% of the Group’s Scope 1 and Scope 2 emissions are measured under NGER for the Australian operations. The remaining 65% of Scope 1 and Scope 2 emissions are measured using the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004), with emissions originating from operations in the Americas (~40%), Africa and Mongolia (~25%).

Scope 1 and Scope 2 disaggregation

[S2.29(a)(iv)]

Scope 3 emissions

AASB S2 Paragraph C4, as confirmed in ASIC Regulatory Guide RG 280.107, grants reporting entities transitional relief from the requirement to disclose Scope 3 emissions in the first annual reporting period in which AASB S2 applies. The Group has elected not to invoke this transitional relief; Scope 3 emissions are disclosed below in this first reporting period to support strategic resilience assessment, scenario analysis and value chain decarbonisation planning. [S2.C4]

The Group’s Scope 3 emissions inventory considers all 15 categories established by the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. Categories assessed and disclosed are:

Categories 8, 12, 13 and 14 have been assessed as not relevant to the Group’s value chain.
[S2.29(a)(vi)]

5.2 GHG calculation methodology

The Group applies the GHG Protocol: A Corporate Standard (2004) and the GHG Protocol Corporate Value Chain (Scope 3) Standard (2011) for the calculation of its GHG emissions, except where NGER requirements apply to the Australian operations under the jurisdictional-relief permission in AASB S2.
[S2.29(a)(iii)]

5.3 Cross-industry metrics

5.3.1 Para 29(b): climate-related transition risks

The Group has assessed the assets and business activities that are vulnerable to climate-related transition risks. The principal exposure is to fossil-fuel revenue streams (petroleum legacy, metallurgical coal) and to assets operating in carbon-pricing-exposed jurisdictions.

These metrics indicate the Group’s revenue and asset exposure to declining demand for fossil fuels in a transition scenario. They align with the changing-customer-demand transition risk identified in Section 2.2 and are connected to the financial-effects narrative in Section 2.4.
[S2.29(b)]

5.3.2 Para 29(c): climate-related physical risks

The Group has assessed the proportion of its assets vulnerable to climate-related physical risks at the asset level. (See AASB S2 Paragraph 29(c) verbatim text for the standard text.) The assessment combines hazard exposure projections from named climate-science data layers with the Group’s asset register, scenario projections from IPCC AR6 / NEX-GDDP-CMIP6, and depth-damage functions where available. Vulnerability is assessed at acute and chronic hazards across short, medium, and long-term horizons, against the materiality thresholds set out in Section 4.3. For the interpretive framework that walks through the four definitional questions hidden in Para 29(c), see IFRS S2 Paragraph 29(c) four definitional questions (AASB S2 Para 29(c) is identical to IFRS S2 Para 29(c)).

The Group’s total asset base at 31 December 2025 is approximately A$48.0 billion across 19 sites: 14 operating, 3 in development, and 2 in care-and-maintenance. Six sites that account for the majority of physical-risk surface (A$26.0 billion of asset value, 54% of the portfolio) are assessed individually below. The remaining 13 sites (A$22.0 billion, 46% of the portfolio, predominantly Khan Bogd in Mongolia, Athabasca-3 in Canada, and a portfolio of mid-scale operating sites in lower-physical-risk geographies) are assessed at portfolio level.

The Group connects this disclosure to the financial-effects narrative in Section 2.4 and to the capital deployment in Section 5.3.4 (Para 29(e)), as required by AASB S2 connected-information principles. [S2.29(c)]

Methodology

For each asset, the Group has identified the principal climate-related hazards from the 12-hazard taxonomy (Heat Wave, Cold Stress, Temperature Change, Drought, Extreme Rainfall, Precipitation Change, Wildfire, Landslide, Severe Storm, River Flood, Sea Level Rise, Water Stress) and applied the named data sources, scenarios, and quantification methods set out below. For background on the 12-hazard taxonomy and underlying climate-data layer, see Continuuiti climate risk methodology. [S2.29(c)]

[S2.29(c)]

Hazard-specific narratives (six named assets)

Pilbara North (WA, iron ore, A$7.5b). Cyclone is the dominant acute physical hazard, with the WA north-west coast on the IBTrACS-recorded tropical cyclone track at the long-term horizon. The Group has applied Knutson et al. intensity scaling (+5% per °C) to historical IBTrACS frequencies under SSP5-8.5 to 2050. Heat exposure uplift is quantified via NEX-GDDP-CMIP6 heat-wave days per year at 5km scale. No wind damage curve exists in HAZUS or JRC Huizinga; the cyclone vulnerable amount is estimated using infrastructure replacement-cost proxies and is flagged medium-high uncertainty.
[S2.29(c)]

Mt Coolah (NSW, metallurgical coal, A$2.8b). Riverine flood depth is sourced from JRC GloFAS v2.1 (baseline, 90m resolution) and WRI Aqueduct V2 (projections at 1km resolution) at return periods RP10, RP50, RP100, RP500, applied at the asset footprint via FABDEM terrain at 30m. Damage is calculated using HAZUS COM4 (industrial) curve at the site occupancy mix. Wildfire exposure is captured as fire-weather-day count under NEX-GDDP-CMIP6 (a hot-windy proxy in the absence of full Fire Weather Index variables); no monetary damage is quantified for wildfire.
[S2.29(c)]

Karratha Energy (WA, petroleum legacy, A$6.2b). Sea-level rise quantification uses IPCC AR6 Table 9.9 hardcoded values (SSP1-2.6: 0.25m by 2050; SSP2-4.5: 0.30m by 2050; SSP5-8.5: 0.40m by 2050). Coastal flood depth from WRI Aqueduct V2 inuncoast at RP10, RP50, RP100, RP500. The Group flags this asset as high uncertainty: the SRTM bias issue (see honest gap below) is most severe in coastal sites with onshore processing. The vulnerable amount of A$3.1b (50% of replacement value) reflects both the high coastal exposure and the Group’s planned acceleration of end-of-life from 2038 to 2032 (see Section 2.3); the disclosure is therefore weighted toward near-term physical effects rather than long-term residual exposure.
[S2.29(c)]

Atacama Norte (Chile, copper, A$5.4b). Water stress and drought are the dominant hazards; both are exposure-only in the methodology (no damage curves). Water-stress quantification uses WRI Aqueduct Baseline Water Stress (BWS) score at the basin level (0–5 scale, projected uplift under SSP2-4.5 and SSP5-8.5). Drought exposure uses NEX-GDDP-CMIP6 standardised precipitation index (SPI) proxy as months per year. The vulnerable amount of A$0.5b (9% of replacement value) is a partial estimate: it captures the productivity-loss effect of heat exposure on workforce and equipment but does not monetise water-supply constraints or drought-driven tailings stability risks.
[S2.29(c)]

Carajás-East (Brazil, iron ore, A$3.3b). Riverine flood is the dominant hazard, captured via JRC GloFAS (baseline) and WRI Aqueduct (projections). Damage at the asset footprint is calculated using JRC Huizinga industrial-sector curve for the Latin America continental grouping. The 2025 flood event at Carajás-East (financial effect A$45m, see Section 2.4) is consistent with the high baseline exposure projection; the long-term horizon under SSP5-8.5 indicates intensification. Extreme rainfall (P99 daily precipitation with Clausius-Clapeyron 2× amplification) increases the projected return-period rainfall depth.
[S2.29(c)]

Mpumalanga South (South Africa, metallurgical coal, A$0.8b). Riverine flood and heat exposure are the dominant hazards. Flood depth from JRC GloFAS / WRI Aqueduct, applied via JRC Huizinga industrial curve for the Africa continental grouping. Africa-region damage curves have thinner coverage than North America or Europe in JRC Huizinga, contributing to medium-high uncertainty in the vulnerable amount.
[S2.29(c)]

Materiality threshold and connection to Section 4.3

Asset-level vulnerability is “material” for Para 29(c) purposes when projected damage at the relevant scenario and horizon exceeds the High threshold in the Section 4.3 risk evaluation matrix (financial impact greater than A$100m), or when the vulnerable amount exceeds 20% of asset replacement value. This threshold is set by the Board’s risk appetite statement and is reviewed annually. Five of the six named assets exceed the threshold under SSP5-8.5 at the 2050 horizon (the exception is Atacama Norte, where the partial estimate at 9% reflects the absence of damage curves for water stress and drought). [S2.29(c)]

Numerical disclosure

Under SSP5-8.5 at the 2050 horizon (20-year window 2040–2059), approximately 18% of the Group’s total asset value (A$8.6 billion of A$48.0 billion) is vulnerable to material physical climate risk. Vulnerable amounts comprise: Karratha Energy A$3.1b (coastal storm surge plus sea-level rise); Pilbara North A$2.4b (cyclone plus extreme heat); Carajás-East A$1.6b (riverine flood); Mt Coolah A$0.7b (riverine flood plus bushfire exposure); Atacama Norte A$0.5b (water stress plus extreme heat, partial estimate); Mpumalanga South A$0.3b (riverine flood plus heat). Under SSP2-4.5 at the same horizon, the vulnerable amount is approximately 11% (A$5.3 billion). The portfolio remainder (13 sites totalling A$22.0 billion) does not contribute material exposure at the asset level under either scenario.

[S2.29(c)]

Honest gaps

Methodology notes

5.3.3 Para 29(d): climate-related opportunities

The Group’s vulnerable asset base for climate-related opportunities (renewable energy and critical-minerals positioning) is summarised below.

[S2.29(d)]

5.3.4 Para 29(e): capital deployment

The Group’s capital deployment toward climate-related risks and opportunities in 2025 is set out below. (See AASB S2 Paragraph 29(e) verbatim text for the standard text.) The split between physical-risk-resilience capex and transition-risk capex provides the connection between this disclosure and the risk identification in Section 2.2.

The total capital deployed toward climate-related risks and opportunities (A$680m) represents approximately 24% of total Group capital expenditure for 2025. The physical-risk resilience component (A$145m, 21% of climate-related capex) maps directly to the asset-level vulnerability disclosure in Section 5.3.2, with each coverage area connected to specific assets identified at the named sites. [S2.29(e)]

5.3.5 Para 29(f): internal carbon prices

The Group has applied an internal carbon price since 2022. The internal carbon price is applied to investment decisions where the project capital cost exceeds A$10m and to the Group’s scenario analysis, with different price levels assumed under each scenario.

The internal carbon price as at 31 December 2025 is A$45 per tonne of CO2-equivalent. The price is reviewed annually with reference to forecast carbon prices in the analyst consensus and the policy outlook in the jurisdictions where the Group operates. The internal carbon price is approved by the Board.

The internal carbon price is integrated into scenario analysis (Section 2.7), with different carbon-price assumptions tested under each scenario.
[S2.29(f)(i), S2.29(f)(ii)]

5.3.6 Para 29(g): remuneration linkage

15% of the executive management remuneration recognised in 2025 is linked to climate-related considerations. The composition of climate-linked remuneration includes the short-term incentive performance gate (delivery of the Climate Transition Action Plan) and the long-term incentive climate-transition component (vesting against Scope 1 and Scope 2 emissions reduction milestones).

Refer to Section 3.5 for the executive-management roles in scope and the application of the AASB 124 Key Management Personnel and compensation definitions.
[S2.29(g)(i), S2.29(g)(ii)]

5.4 Climate-related targets

The Group has set quantitative and qualitative climate-related targets. For each target, the disclosure below sets out the metric, objective, scope, period, base period, milestones, target type, alignment, validation, review process, monitoring metrics, revision history, and progress to date.
[S2.33, S2.34, S2.35, S2.36]

Target 1: Net-zero Scope 1 and Scope 2 emissions by 2050

Target 2: Transition mining fleet to electric by 2032

5.5 Mandatory targets under the Safeguard Mechanism

In addition to the Group’s voluntary climate-related targets disclosed in Section 5.4, the Group’s Australian operating facilities are subject to mandatory net Scope 1 emissions intensity targets under the Australian Government’s Safeguard Mechanism. The Safeguard Mechanism is a regulatory scheme administered by the Clean Energy Regulator that applies to facilities whose covered annual Scope 1 emissions exceed the default threshold of 100,000 tCO2-e per Australian fiscal year. The Group reports against Safeguard targets at the facility level.
[S2.33, S2.AusB67.1]

The reformed Safeguard Mechanism, which commenced on 1 July 2023, applies a decline rate to facilities’ baselines so that they are reduced progressively over time on a trajectory consistent with achieving Australia’s emission reduction targets. Facility baselines are production-adjusted and approved by the Clean Energy Regulator. Existing facilities apply a transition from facility-specific to industry-specific emissions intensity values, with a 50:50 weighting reached by 2030. Each Safeguard facility’s compliance position is calculated annually following submission of the Section 19 NGER report; facilities exceeding their baseline must surrender Australian Carbon Credit Units (ACCUs) or Safeguard Mechanism Credits (SMCs) by 1 April of the following year.

Facility-level Safeguard position (FY25)

Note on facility baseline methodology. Facility-specific values were calculated by the Clean Energy Regulator using historic emissions intensity data; for existing facilities, the middle three of five years over the period FY18 to FY22. Pilbara North and Mt Coolah baselines reflect this historic methodology. The trajectory to industry-specific values applies the reformed-Mechanism decline rate from 2024 onwards.

Carbon Credit Policy

The Group operates a Carbon Credit Policy that governs the assessment and acquisition of ACCUs and SMCs for compliance purposes. Each ACCU/SMC transaction is assessed for suitability with consideration given to location (preference for ACCUs from carbon-intensive landscapes proximal to AU operating sites), method type (preference for engineered-removal methods over avoidance methods), and project-level integrity (preference for projects with verified above-baseline carbon outcomes and credible methodology audit trails). The Carbon Credit Policy is approved by the Board and reviewed annually.
[S2.36(c)]

Para 33 to 36 supporting information

[S2.33, S2.34, S2.35, S2.36, S2.AusB67.1]

6. AASB S2 paragraph cross-walk index

The table below maps every paragraph of AASB S2 (body, Aus-prefixed paragraphs, Appendix B selected, Appendix C, Appendix D incorporated paragraphs) to the section of this report where the paragraph is satisfied or, where a paragraph is not illustrated, to the corresponding entry in Section 7.

7. Disclosure requirements not illustrated

This worked sample illustrates the structural framework of the AASB S2 disclosure. The following requirements are not substantively illustrated. Where the requirement is structurally present but awaits substantive content in a future iteration, the row notes “future iteration”.

8. Glossary

Abbreviations

Defined terms

This worked sample is illustrative and based on a fictional entity. It is not a complete set of climate-related financial disclosures for any actual entity. References to AASB S2 paragraphs are verified against the September 2024 issuance of the standard; subsequent amendments (notably the December 2025 GHG-amendment compilation) do not affect the physical-risk paragraphs cited.