2024 Climate-related Disclosures Report

Climate-related Disclosures Report

FY2024

Of the adoption provisions provided within the standards (CS2), the Board of Directors has chosen to apply the following exemptions:

• Adoption provisions 1 and 2: Current and anticipated financial impacts. Port of Tauranga is in the process of quantifying the current and anticipated financial impacts of climate-related risks and opportunities. Port of Tauranga intends to report its current and anticipated impacts from FY2025.
• Adoption provision 3: Transition planning. The Port is in the process of considering the climate-

related risks identified and is developing its Transition Plan.

• Adoption provision 4: Scope 3 greenhouse gas emissions: The full scope of its Scope 3 emissions and comparatives. While Port of Tauranga has been measuring some Scope 3 emissions since 2018 (e.g. the emissions relating to chartered freight trains), the Port will not be reporting Scope 3 emissions in this report. The Port is seeking to define appropriate and sensible Scope
  3 boundaries and is working with other New Zealand ports to agree sector level boundaries for consistency. Port of Tauranga intends to report its Scope 3 emissions in FY2025.
• Adoption provisions 5 and 6: Comparatives. Port of Tauranga has not disclosed comparatives for Scope 3 greenhouse gas emissions or for other metrics in the current year.
• Adoption provision 7: Analysis of trends. Port of Tauranga has not disclosed an analysis of trends for metrics reported in the current year. FY2023 will be set as Port of Tauranga's base year for metrics.

Approved on behalf of the Board of Directors on 27 September 2024.

This report sets out Port of Tauranga Limited's inaugural mandatory Climate-related Disclosures (CRD) for the financial year ending 30 June 2024, in accordance with the Aotearoa New Zealand Climate Standards (also referred to as NZ CS1, CS2 and CS3).

Pursuant to the requirements of NZ CS1-3, this report includes a range of forward-looking statements (including but not limited to climate-related scenarios, assumptions, and projections, forecasts, estimates and judgements regarding climate- related risks, opportunities, impacts and related matters, as well as statements of the Port's future intentions, and metrics and targets). These statements are often based on early and evolving assessments of current and future data, which may be incomplete and estimated, particularly in areas such as climate change projections and socio-economic anticipated outcomes/forecasts. These are inherently uncertain as they are driven by numerous dynamic factors, many of which are interconnected, complex, non-linear and unpredictable especially over the medium to long-term. Accordingly, all forward- looking statements set out in this CRD report (whether they relate to climate-related risks and opportunities or otherwise):

• Are not facts, nor are they intended to constitute capital growth, earnings guidance, and/or any other type of advice or guidance (legal, financial, tax or otherwise)
• Pertain to outcomes that may arise under stipulated climate change scenarios set out within, which, as noted in NZ CS1, "...are not intended to be probabilistic or predictive, or to identify the "most likely" outcome(s) of climate change. They are intended to provide an opportunity for entities to develop their internal capacity to better understand and prepare for the uncertain future impacts of climate change"
• Are inherently uncertain and subject to limitations, particularly as to inputs, available data and information (including that which the Port has derived from relevant sector climate change scenarios), all of which are likely to change and evolve
• May not eventuate (in full or in part), and where they do eventuate, may be materially more or less significant than is anticipated or otherwise indicated in this report
• May have omitted to identify and include (in full or in part) material climate-related risks, opportunities and impacts that do eventuate.

Owing to the above, all climate-relatedforward-looking statements in this CRD report may be less reliable than statements contained in the Port's non-climate-related annual reporting.

Notwithstanding the above, this CRD report represents the Port's best estimate and current understanding of future climate-related eventualities at the date of publication. Subject to the various practical challenges and limitations, the Port has used all reasonable endeavours to ensure the accuracy and completeness of this report (subject to specified omissions in reliance of the adoption provision in NZ CS2), but strongly cautions against undue reliance being placed on representations within.

To the maximum extent permitted by law, the Port and its directors, officers, employees and contractors shall not be liable for any loss or damage arising in any way from or in connection with any information provided or omitted as part of this report.

Governance

Port of Tauranga is listed on the New Zealand Stock Exchange (NZX) and adheres to the NZX Main Board Listing Rules and guidance, including the NZX Corporate Governance Code.

Committees of the Board that report to full Board

Support the Board by providing input and detail on specific matters, including sourcing specialist advice.

Audit

Committee

People and

Remuneration

Committee

Nomination Committee

Board Health

and Safety

Committee

Board

Ensures the Port has a fit-for-purposeclimate-related risk and opportunity framework and resourcing (i.e. processes and methods, as well as the expertise and resources required to implement them).

Senior

Management

Team

Reports to

the Board at least monthly on strategy implementation and risk management.

Extended

Leadership

Team

Each member

of the extended leadership team reports directly to a senior manager, including these key roles in relation to climate change response.

Port of Tauranga's Board of Directors ensures the company adheres to NZX governance requirements and maintains high ethical standards in serving the interests of Port of Tauranga stakeholders, including shareholders, employees, customers and the wider community.

The Board approves the company's strategic direction and oversees management of long-term value drivers such as

asset investment, employee engagement, iwi and community engagement, customer satisfaction, enhanced environmental performance and reputation protection. Key Port strategies are formally reviewed at least once per year.

All risks, including climate-related risks, are also reviewed annually by the Board, with "deep dives" into specific risks on a quarterly basis.

The Board has overall responsibility for the Port's climate change response.

The Audit Committee is specifically responsible for ensuring the Port complies with climate-related reporting requirements. Other committees of the Board have specific responsibilities related to risk management, outlined below. All committees report to the full Board.

Audit Committee

Assists the Board with the financial reporting process, internal controls and management of financial risks, and the audit process (including assurance on regulatory requirements such as Climate-related Disclosures).

The committee holds at least three meetings annually to review all climate change risk and opportunity-related work and approves the publication of the company's Climate-related Disclosures.

People and Remuneration Committee

Oversees remuneration policies and practices, including executive packages that include performance targets for sustainability-related measures such as greenhouse gas emissions, health and safety, and employee and community engagement.

The committee has incorporated specific climate- related metrics into executive remuneration.

Board Health and Safety Committee

Assesses health and safety risks and controls relating to the impacts of climate change.

Nomination Committee

Reviews the Board's composition, performance and succession planning to ensure it has skills in sustainability, as well as regulatory compliance, risk management, stakeholder liaison and other competencies.

The committee, of which all Directors are members, meets at least twice per year.

Board skills and competence

The Board requires Directors to have competencies across a range of disciplines, including sustainability and risk management, to operate effectively and meet its responsibilities. Directors' skills are self-assessed annually, moderated by the Board as a whole, and provided to shareholders in a matrix published annually in the Corporate Governance Statement. The statement and other governance-related documents, including the charters of the Board and its committees, are available on the Port's website1.

Monitoring progress

The Board approves and monitors progress against the metrics and targets used to measure the Port's climate-related risks and opportunities. For example, management reports to the Board annually on greenhouse gas emissions and progress in relation to achieving the Board's long-term objective of net zero emissions by 2050, and its short-term goal of a reduction in carbon intensity annually (t CO2e per cargo tonne). Additional metrics and targets will be developed in alignment with the Port's climate Transition Plan in FY2025 (which will be approved and monitored by

the Board). Specific decarbonisation projects requiring capital expenditure are also reported to the Board for approval as required by delegation of authority policies.

The Board considers the identification, understanding, control and monitoring of core risks (including climate-related risks and opportunities) to be a whole-of-Board function.

All members of the senior management team have responsibilities related to the company's strategy and risk management. They ensure that risks to the business, including climate-related risks, are identified and evaluated, and that effective and practicable responses and control activities are developed.

The senior management team reports monthly to the Board and attends all Board meetings. The Chief Executive and Chief Financial Officer attend the Audit Committee meetings. The Chief Executive and General Manager Corporate Services attend the People and Remuneration Committee meetings, and the Chief Executive and General Manager Health and Safety attend the Board Health and Safety Committee meetings.

Sustainability measures are incorporated into the remuneration of members of the senior management team as well as their relevant direct reports.

The individual responsibilities laid out in this table have been agreed over time through consultation, job descriptions, strategic planning processes and directives of the Board. Performance

is monitored by the Chief Executive and incentivised through remuneration policies, including a short-term incentive component measured through mutually agreed Key Performance Indicators (KPIs) and approved by the Board's People and Remuneration Committee. The Board is responsible for the performance of the Chief Executive.

Day-to-day risk management is undertaken by an empowered and coordinated extended leadership team, with centralised oversight by the senior management team. The senior management team is required to establish formal and/or informal processes with their teams to demonstrate a positive risk culture by actively monitoring and discussing risk.

All teams have some responsibility to identify, assess and monitor critical risks, including those related to climate change, relevant to their areas of the business.

Members of the extended leadership team report directly to a senior management team member. Those with specific climate-related responsibilities include:

Risks to Port of Tauranga's ability to create value are regularly discussed in-depth by the senior management team, which meets at least weekly. The team identifies risks and their materiality, evaluates mitigation options and ensures they are feasible.

Previously, specific climate-related risk KPIs have only been applicable to the at-risk,short-term incentive component of the remuneration of the Chief Executive and General Manager Property and Infrastructure. In FY2025, all of the senior management team have a specific climate-related KPI, requiring the development

of a Transition Plan and associated metrics and targets. 5% of the managers' short-term incentive will be allocated to this KPI.

• Environmental Manager
• Financial Controller
• Terminal Development Manager
• Engineering Manager
• Risk Specialist
• Marine Operations Manager.

Port of Tauranga operates in a complex environment with a wide range of strategic, operational, commercial and safety risks that must be effectively managed to protect the company's employees, the environment, company assets and reputation.

Risk management approach

Our risk policy and risk management framework guides our approach to managing all business risk, including climate change, and our framework is aligned to the Australian/New Zealand Risk Management Standard AS/NZS ISO 31000:18 Risk management - Principles and Guidelines.

Known risks are identified and recorded in Port of Tauranga's risk register and any material risks are incorporated into our enterprise risk management system. Risks are assessed on their likelihood and impact and are rated pre- and post-mitigation.

Port of Tauranga's comprehensive risk management programme is overseen and reviewed annually by the senior management team and Board to establish an integrated and forward-looking perspective of the company's risk landscape including the internal and external environment, changes in likelihood and consequence ratings, and the business unit risk profiles. Both specific risks and any broader linkages are considered.

Following a thorough review of Port of Tauranga's Risk Management Policy and Framework in FY2024, a Risk Specialist role has been created. The Risk Specialist is responsible for preparing quarterly enterprise risk reports for the senior management team and Board, detailing:

• Risks outside the acceptable tolerance levels (the "risk appetite" set by the Board)
• Details of any escalating or emerging risks
• Any significant project risks
• The status of top strategic risks, and any emerging strategic risks.

During FY2024, Port of Tauranga enlisted specialist consultants Onepointfive and Tonkin + Taylor to assist with the identification and assessment of climate-related risks and opportunities.

Identification and assessment of climate-related risks and opportunities

Figure 1:

Over the past year, Port of Tauranga has carefully considered how its climate-related risks and opportunities are best identified, assessed, managed and reported within the context

of the new reporting framework, as well as the Port's existing risk management framework to ensure integration.

Port of Tauranga has adopted a five stage approach, summarised at Figure 1 and based on international risk management practices and standards. The steps and methods employed at each of the five stages are based on the Port's existing risk management systems, although several specific adjustments take into account both the unique nature of climate-related risks and the need for compliance, including:

• Objectives and settings - ensuring the process and scope were tailored to suit the Port's climate context
• Stakeholders and data - briefing, engaging and upskilling stakeholders.

In identifying current and anticipated climate- related risks and opportunities, the Port:

• Used traditional assessment methods to identify past, current and potential anticipated climate-related risks and opportunities in a comprehensive and detailed way
• Identified sector scenarios relevant to the Port's business model (e.g. Aotearoa Circle transport, agriculture and energy scenarios)
• Defined parameters including global references, emission trajectories, temperature outcomes and other assumptions.

A long list of drivers was assessed and ranked by influence and uncertainty. Various methods were used to unpack, rationalise and map how each driver might play out under each scenario, including understanding interactions

Asse s s m e n t

Assess and prioritise

each climate-related risk and opportunity that the Port is exposed to

50% complete - financial impact assessment deferred to 2025

3

the business

Deferred in full to

4 2025 (see page 10

road-map)

We have based these adjustments on a number of existing international and New Zealand climate change-related standards and guidelines.

XRB guidance

and dependencies between one or several drivers. The scenarios were then used to identify anticipated climate-related risk and opportunities not already identified, followed by a qualitative assessment of the Port's exposure and vulnerability to each.

Port of Tauranga's

five stage approach

We have also ensured the XRB's "Staff Guidance, Entity Level Scenario Development" requirements were integrated into the Port's five stage process, including:

• Project setup
• Climate context assessment - identifying and mapping value chains, identifying climate hazards and transition drivers

Identification

A comprehensive assessment of potential indirect climate risks and opportunities was carried out across key value chains - dairy, logs and other forestry, kiwifruit, liquid fuel and stock feed.

A detailed assessment of current and anticipated knock-on impacts of each potential risk and opportunity was carried out to establish materiality.

Containerised goods, lower volume commodities and break bulk imports and exports were also addressed. However, because of the practical limitations, this entailed a much higher-level assessment of upstream (supply chain) and downstream (market access and demand) risks and opportunities.

Key operations and material assets such as buildings, infrastructure, plant and equipment were also assessed for exposure to physical and transition risks. This was carried out at the individual asset level for all building and infrastructure assets, as well as for key operations.

Update and refresh the Port's identified climate-related risks and opportunities across the value chain based on:

• Any material changes to the Port's strategy, risk management framework or external climate context
• New insights gained from sector peers and commodity customers
• New or updated standard sector scenarios (e.g. energy sector).