Project: Climate risk assessment and sustainability report development
Date: November 2020
Southern Cross Station (SCS) is a large, multi-modal transport precinct in Melbourne and Victoria’s busiest public transport interchange. The facility features a train interchange, bus interchange, car park and over 50 retail tenancies. Prior to COVID-19, SCS had over 75 million visors annually.
An IFM Investors Pty Ltd asset managed by Southern Cross Station Pty Ltd (SCSPL), SCS operates as a Public Private Partnership concession from the Department of Transport on behalf of the State of Victoria.
SCSPL is committed to best practice in sustainability across the three core reporting elements: environmental, social and governance (ESG), and aims to align its ESG initiatives to the United Nations Sustainable Development Goals (SDGs). In keeping with the guidance of the Taskforce on Climate-related Financial Disclosures (TCFD) and the 2017 Australian Council of Superannuation Investors (ACSI) guide, they also seek to identify, manage and report their climate-related financial risks: the physical risks that can arise with the changing climate, and the transitional risks associated with a decarbonising economy.
In 2020, Energetics provided advice to SCSPL in the assessment of their physical climate risks. Following that work, we supported the development of their second sustainability report covering their performance over the reporting period to 30 June 2020, a range of new initiatives and the findings of their physical risk assessment.
To understand the potential consequences of a changing climate, Energetics advised SCSPL through a physical climate risk assessment using downscaled climate data available from CSIRO. The work considered the possible risks to SCS, its patrons and stakeholders from now to 2060.
Three areas of relatively low risk were found, all relating to the possibility of increased severe weather events in the future as a result of climate change. The first was from severe storm and rainfall events that could potentially damage infrastructure, cause temporary service interruptions, commuter injury, public liability claims and increased insurance premiums. Secondly, more frequent periods of extreme heat can lead to electricity blackouts, put strain on energy systems, cause transportation breakdowns and increase the risk of heat stress for employees and patrons. Finally extreme rainfall events and rising sea levels could cause flooding. Whilst SCS is not in a projected flood zone, any flooding of the connected transport networks could cause service disruptions and commuter stranding.
In conducting the assessment, SCSPL has mitigation measures and controls in place and after consideration of these controls, the risk ratings were considered low. They plan to review their identified risks and extend the assessment to include transitional risks in FY21.
In developing the second sustainability report, Energetics worked closely with SCSPL to collate relevant ESG data, ensure the findings were presented according to the requirements of the Global Reporting Initiative (GRI), and review the content for completeness. In the report, SCS was able to outline a range of achievements: monitoring and reporting of greenhouse gas emissions, an updated climate change risk assessment, energy efficiency opportunities, community engagement, social value creation, and a high level of flexibility and adaptability in the delivery of their services with the onset of COVID-19.
Our scope of work also involved designing a report that communicated the findings and the sustainability aims of SCSPL in a highly visually appealing way.
The report explained how SCS was responding to the ESG challenges and opportunities ahead, referencing their greenhouse gas emission monitoring and climate change risk assessment. After its release, SCSPL informed Energetics that the report was well-received, both internally and externally.
Energetics congratulates SCSPL on their ongoing commitment to sustainability, monitoring of emissions and climate risks and their increased focus on social value aspects.
“Our experience with Energetics over 2-3 years across a range of ESG projects such as energy audit, science based modelling for emissions monitoring, materiality assessments, climate change risk assessments and sustainability reports has been positive, with key attributes being subject matter expertise and a helpful, flexible and cooperative approach to projects.” - Ashley Reed, National Quality Risk and Compliance Manager