10. Climate Risk Management
Our first global climate risk assessment was conducted between October 2019, and March 2020. We applied the TCFD-developed framework to identify climate risks that are material to our business, including those arising from the potential physical effects of climate change, as well as those created by the transition to a low carbon economy and consequent changes in policy and legal contexts, technology and markets.
Climate risks were assessed through the lens of two contrasting scenarios:
- Paris Agreement (or 1.5°C) scenario: in which greenhouse gas emissions are sharply and urgently reduced and global average temperature increases by no more than 1.5°C above pre-industrial levels.
- Business as Usual (BAU or 4°C) scenario: in which emissions continue to rise on the current trajectory, leading to a global average temperature increase of around 4°C above pre-industrial levels by the end of the 21st century.
Consistent with TCFD guidance, we conducted an assessment on a sample of 65 projects across transportation, built environment and water sectors in key geographies including the U.S., Canada, U.K., India and Australia.
Potential risks include project failure, operational and supply chain disruption, being outpaced by competitors, business fragmentation, and the “standing” of key markets or technologies by the low carbon transition. Our opportunity analysis indicates that Jacobs is well placed to take advantage of low/ zero carbon transition and help our clients create the smart, resilient cities and infrastructure that will be required.
The implications of climate change risks and opportunities for our longer-term financial performance have yet to be assessed, but we recognize they could be significant.
In the near- to mid-term, to manage our business risks from climate change, we will:
- Publish annual disclosures of our key climate risks.
- Conduct climate risk assessments with our clients on all projects where greater climate risk exposure is expected.
- Assess the financial implications of our climate risks and opportunities.
- Incorporate climate risks into our new Enterprise Risk Management strategy and process.