2050 Future Scenarios for TCFD

In 2018 Lendlease became a supporter of the Task Force for Climate-related Financial Disclosures recommendations. As part of this process, Lendlease has committed to disclosing our climate-related risks and opportunities under the TCFD framework.

TCFD suggests the development of at least three distinct and plausible climate change scenarios, including one adhering to the Paris Agreement, to test the resiliency of the organisation in different climate change futures.

Lendlease has adopted scenario planning as a means of holistically testing strategic resilience across environmental and social sustainability outcomes, in line with our Sustainability Framework. To test resiliency we have created our 2050 Future Scenarios, using a range of environmental, social, technological, economic and policy indicators.

Our scenarios are based on peer reviewed scientific and academic research, tested with a broad range of stakeholders and designed to be plausible but challenging.

Resignation (more than 4 Degrees) scenario represents the worse of climate change of the four scenarios and will be used to test the physical risks across our operations and supply chain.

Our greater than 4ºC Resignation Scenario, represents a Representative Concentration Pathway RCP8.5, which we use for worst case physical risk assessments. We have refined and piloted our physical risk impact assessment process on several assets and development projects across the world. This process will continue to be refined in FY21 and will form the starting point for physical risk assessment for financial disclosure.

Polarisation (3-4 Degrees) scenario represents a constant but incremental approach to climate change mitigation and will be used to test the longer term societal risks of climate change impacts.

Our business has many attributes for strategic resilience in a Polarisation Scenario. Existing public sector partnerships position us well for likely increased climate adaptation work for the public sector. Our sustainability leadership positions us well, where decarbonisation and climate resilience and adaptation are valued, such as at Barangaroo.

The most frequently identified risks across the business, for this scenario, came from the impact of climate change on the way we work and on our assets, particularly for our Investments business. Conversely, the impact of climate change on cities has a high frequency of opportunities related to adaptation.

Paris Alignment (2-3 Degrees) scenario considers delayed action on climate change, resulting in a late uncontrolled rapid decarbonisation pathway and will be used to test transitional risks of uncontrolled decarbonisation.

Our sustainability leadership creates strategic resilience in a Paris Aligned Scenario. We are well positioned to build on our global track record of delivering commercially successful green and carbon neutral solutions needed for a decarbonised world.

The most frequently identified risks came from the increased demand and need for decarbonisation of construction supply chains, creating a potential increase in the cost of materials, as well as likely scarcity of products and materials. Conversely, opportunities were identified if we aligned early or even exceeded regulation. An increase in carbon cost was identified as both a risk and opportunity, particularly for Development.

Transformation (well below 2 Degrees) scenario represents a societal driven controlled and early rapid decarbonisation pathway where global emissions peak in 2020 and are close to zero in 2040.

Our track record in social sustainability leadership, combined with our leadership in green real estate, would help position us well for societally driven decarbonisation. Our integrated business model, with a focus on digital, will allow us to respond quickly to the speed of change in this future scenario.

It was anticipated that a shift in social licence to operate would occur in a societally driven decarbonisation scenario and that this shift would present risks across all aspects of business. The speed of decarbonisation in our Transformation Scenarios was highlighted as presenting both transitional opportunities and risks.

Scenario references

Indicators of Change