The aim of the project was to enhance Landcom’s strategy and processes, as well as fulfill our obligation for Directors to give due consideration to climate-related transition risks and to publicly disclose those risks in our Annual Sustainability Report.
A preliminary list of transition risks has been identified as being most likely to influence Landcom’s operations from a business, strategy or financial perspective. These risks were identified based on key market trends and risk drivers, with the financial implications and early responses being established through work between Landcom, and our consulting partners, AECOM and Energetics. These preliminary risks were modelled against three climate scenarios, based on those identified by the Intergovernmental Panel on Climate Change’s latest 6th Assessment Report. The scenarios are:
Scenario 1: Proactive Policy (SSP1-2.6)
SSP1-2.6 follows a path where economic growth shifts toward a broader emphasis on human wellbeing, consumption is oriented toward lower resource and energy intensity, and there is a greater emphasis on development that respects perceived environmental boundaries. Potential risks for Landcom include an increased demand for offsets that could increase prices, more stringent requirements and interest in carbon neutrality and greener buildings, and consideration of climate impacts in pricing of Landcom’s products and services.
Scenario 2: Slow Progress (SSP2-4.5)
SSP2-4.5 follows a path where social, economic and technological trends do not shift markedly from historical patterns, with slow progress towards achieving sustainable development goals by institutions. Income inequality persists, environmental systems experience degradation, however overall intensity of resource and energy use declines. Potential risks for Landcom include continued demand for affordable housing, uncertainty for land owners to secure loans due to income fluctuations, and increased insurance cost due to a changing climate.
Scenario 3: Carbon Intensive Economy (SSP5-8.5)
SSP5-8.5 centres around the rapid growth of the global economy, with the push for economic and social development being coupled with the exploitation of fossil fuel resources and resource and energy intensive lifestyles resulting in warming of greater than four degrees Celsius. Potential risks for Landcom include more stringent rules around very hot days, an increase in the number of very hot days, and heightened climate risks for Landcom communities.
