Climate Change Data

Environmental Metrics

ESG Focus Areas

• Health and safety
• Leadership and accountability
• Recruitment and retention
• Climate change and energy
• Financial performance and investor confidence
• Selling sustainability as a service
• Communication and stakeholder engagement
• Client relationships and level of service
• Leveraging value through business integration
• Learning and development

Environmental Achievements

• 38% improvement in Lost Time Injury Frequency Rate (LTIFR)
• Successful trial and implementation of biodiesel in vehicle fleet
• Use of recycled asphalt in road maintenance
• Significant GHG emission reduction at Commodore Mine (approx. 20%)

Social Achievements

• Record LTIFR of 1.2 (38% improvement from previous year)
• Various successful OH&S programs implemented
• Establishment of Downer EDI Zero Harm Management System
• Introduction of the STAR self-check system
• Partnership with International SOS for traveller safety
• Numerous awards received for employee training, OH&S programs, and ecologically sustainable design initiatives
• Significant work on Perth SmartRider project recognized with awards

Governance Achievements

• Introduction of a Group-wide Environmental Management Standard
• Establishment of a Downer Climate Change Forum
• Formal training and continuing education sessions on corporate governance
• Initiation of a Professional Conduct program for employees
• Established guidelines for communication with shareholders

Climate Goals & Targets

Environmental Challenges

• One fatality in Mining division
• Two fines for workplace safety incidents
• Climate change impacts (regulatory, physical, financial)
• Increased cost and administrative burdens from NGER Act and proposed ETS
• Potential impacts of extreme weather events
• Recruitment and retention of talented people
• Managing stakeholder expectations

Mitigation Strategies

• Thorough investigation of fatality and communication of details to prevent recurrence
• Preventative measures implemented to prevent recurrence of safety incidents
• Development of Climate Change Strategy
• Risk management processes to identify and manage climate change risks
• Focus on talent acquisition and workforce planning
• Improved employee benefits and recognition schemes
• Development of effective stakeholder engagement processes

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Increased incidences of wet weather impacting mining and road infrastructure operations
• Weather-related impacts on facilities in coastal regions and cyclone-prone areas

Transition Risks

• Domestic and international regulatory frameworks
• Increased cost and administrative burdens from NGER Act and proposed ETS
• Increased commodity costs

Opportunities

• Growing demand for contracts for design, erection, and maintenance of wind turbines, solar and wave energy sources
• Potential to assist clients to upgrade and retrofit existing facilities for cleaner production and lower operating costs

Reporting Standards

Frameworks Used: GRI G3 Sustainability Guidelines

Third-party Assurance: Ernst & Young (limited assurance)

Sustainable Products & Innovation

• EcoPhalt (Warm Asphalt Mix technology)
• Biodiesel

Awards & Recognition

• Numerous awards listed in the report (pages 24-26)

Environmental Metrics

ESG Focus Areas

• Health & Safety
• Greenhouse Gas Emissions
• Resource Efficiency
• Diversity & Inclusion
• Community Engagement
• Environmental Compliance
• Corporate Governance

Environmental Achievements

• Reduced GHG emissions intensity by 10% on expanded business activities.
• Achieved a third-party assured GRI rating of B+.

Social Achievements

• Achieved a record low Lost Time Injury Frequency Rate (LTIFR) of 0.93.
• Achieved an 11.8% reduction in the Total Recordable Injury Frequency Rate (TRIFR) to 7.17.
• Introduced paid parental leave.
• Established the Downer Diversity Committee and implemented a Diversity and Inclusiveness Policy.
• Recruited 82 Indigenous employees (double the target).

Governance Achievements

• Enhanced corporate governance framework with the introduction of two new policies: Standards of Business Conduct Policy and Business Integrity Policy.
• Introduced an independent “Our Voice” hotline service for reporting misconduct.

Climate Goals & Targets

Environmental Challenges

• Two employee fatalities due to reversing vehicles.
• Increased GHG emissions due to business growth.
• Environmental spills (40 spills of over 100 liters or 100 kilograms).
• Environmental fines in New Zealand and Singapore.

Mitigation Strategies

• Comprehensive reviews and initiatives implemented to address hazards involved with reversing vehicles.
• Group-wide GHG emissions (Scope 1 and 2) intensity reduction target of 2% set.
• Improved reporting practices to capture more information about environmental incidents.
• Implementation of risk management strategies to prevent incidents.
• Focus on improving resource efficiency (energy, water, waste).

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Preferential selection of local suppliers and subcontractors.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G3.1 Guidelines

Certifications: AS/NZS ISO 14001:2004

Third-party Assurance: Ernst & Young (limited assurance)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Minister’s Award for Excellence (Port Augusta Rail facility)

Environmental Metrics

ESG Focus Areas

• Health and Safety
• People and Community
• Environment
• Governance

Environmental Achievements

• 32% reduction in Greenhouse Gas (GHG) emissions intensity
• No Level 5 or 6 environmental incidents

Social Achievements

• 13.4% reduction in Total Recordable Injury Frequency Rate (TRIFR)
• Roll-out of a Group-wide on-boarding program
• Introduction of common performance, development, and career review management systems
• Establishment of a diversity plan and program
• Successful renewal of over 70 Enterprise Bargain Agreements with minimal industrial disruption
• Downer Mining was joint winner of the AHRI 2012 Indigenous Employment Award

Governance Achievements

• Three of seven Non-executive Directors are women
• Major review of high level ZHMS documents, including 146 Compliance Guides

Climate Goals & Targets

Environmental Challenges

• Three workplace fatalities
• Higher number of significant environmental spills compared to the previous year (though total volume reduced)
• One fine received in relation to an environmental incident

Mitigation Strategies

• Extensive investigations into workplace fatalities and implementation of initiatives to address hazards
• Improved mitigation controls and effective incident management strategies for environmental spills
• Implementation of the 10 Cardinal Rules to improve safety performance
• Group-wide deployment of the Environmental Data Reporting System
• Expansion of EEO program
• Switch to less carbon-intensive fuels

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G3.1 Guidelines

Certifications: AS/NZS ISO 14001:2004

Third-party Assurance: Ernst & Young (limited assurance)

Sustainable Products & Innovation

• Improved asphalt manufacturing processes using RAP and WAM

Awards & Recognition

• Contractors’ Federation Hirepool Construction Awards 2012 (Cleddau River Flood protection project)
• AHRI 2012 Indigenous Employment Award (Downer Mining)

Environmental Metrics

ESG Focus Areas

• Health and Safety
• People and Community
• Environment
• Governance

Environmental Achievements

• 12.8% reduction in total recordable injury frequency rate (TRIFR)
• Reduced carbon intensity by 38% since 2009-2010
• Zero level 5 or level 6 environmental incidents
• Successful waste reduction projects in NZ, diverting significant waste from landfill

Social Achievements

• 2% increase in women holding senior management or executive roles
• Successful Indigenous recruitment strategy
• Apprenticeship program supporting community skill development
• Graduate and internship programs providing career opportunities

Governance Achievements

• Board endorses ASX Corporate Governance Council’s principles
• Rigorous controls and monitoring of performance
• Active management and review of supplier performance

Climate Goals & Targets

Environmental Challenges

• Workplace fatality in New Zealand
• Three environmental fines during the year
• 97 spills exceeding 100 liters or kilograms
• Climate change related challenges: resource availability, business interruptions due to extreme weather

Mitigation Strategies

• Intensified focus on critical risks and incidents
• Review of critical hazards and implementation of controls
• Improved integrity checks for IBCs and bunding improvements
• Implementation of fatigue management plans
• GHG emission and energy consumption reduction strategies
• Development of business resilience plans

Supply Chain Management

Responsible Procurement

• Supplier rating system for quality, service, and cost performance; Improvement action plans for suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Changes in climate change policy and regulation

Opportunities

• Energy efficiency improvements
• Development of more environmentally sustainable services and products

Reporting Standards

Frameworks Used: GRI G3.1 Guidelines

Certifications: ISO 14001 (implied)

Third-party Assurance: Deloitte Touche Tohmatsu

Sustainable Products & Innovation

• New bituminous surfacing product (Microsurfacing Suspended Fibre Technology)
• Energy efficient asphalt plant using recycled asphalt
• Asphalt product from recycled printer toner cartridges

Awards & Recognition

• Mining Electrical Safety Conference Innovation Award 2013
• People’s Choice Award at QMiHSC Innovations Awards 2012
• Gold Award for Safety from BHP Mitsubishi Alliance
• G6 Procurement Group Adelaide – Contractor of the Year 2012
• Work Health and Safety Award – NECA 2012
• 2013 NZ Green Ribbon Large Business Leadership Award (joint winner)
• 2013 Roading New Zealand Best Practice Award for Environmental Sustainability (Green Vision Recycling)

Environmental Metrics

ESG Focus Areas

• Health and Safety
• Environment
• People and Community
• Governance

Environmental Achievements

• 1.8% reduction in total Scope 1 and Scope 2 GHG emissions
• Zero Level 5 and 6 environmental incidents
• Implementation of a program delivering more than 386TJ of annualised energy savings, equating to a 38,000 tonne CO2e abatement

Social Achievements

• 11% reduction in Total Recordable Injury Frequency Rate (TRIFR), meeting the target of TRIFR <5
• 40% reduction in TRIFR over the past five years
• 15% reduction in Lost Time Injury Frequency Rate (LTIFR) over the past five years
• Maori Leadership Program to increase Maori representation in leadership roles
• Partnership with Jawun to support Indigenous communities

Governance Achievements

• Robust Risk Management Framework
• Compliance with ASX Corporate Governance Principles and Recommendations
• Supplier rating system assessing quality, service, and cost performance
• Bi-annual assessment of Executives, Senior Managers, and Directors on financial and non-financial material risks

Climate Goals & Targets

Environmental Challenges

• Workplace fatality in Western Australia
• Subdued mining-based construction and services markets
• Environmental fines related to spills and vegetation clearing

Mitigation Strategies

• Relentless focus on understanding and managing critical risks
• Cost reduction and productivity improvement measures
• Implementation of mature management systems and culture, providing appropriate training, and intensive focus on identifying and controlling critical risks
• Increased focus on critical environmental risks with the introduction of guidelines, training, and handbooks

Supply Chain Management

Responsible Procurement

• Downer Supplier Code of Practice (covering governance, workplace relations, OHS, ethical business practices, and environmental management)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (flooding, bushfires, drought)

Transition Risks

• Legislative and market-based changes

Opportunities

• Low carbon mining solutions
• Low carbon production of asphalt

Reporting Standards

Frameworks Used: GRI G3.1 Guidelines

Certifications: ISO 14001

Third-party Assurance: Deloitte Touche Tohmatsu

Sustainable Products & Innovation

• Energy-efficient asphalt plants
• Use of recycled materials in asphalt production

Awards & Recognition

• 2013 National Safety Council of Australia Award of Excellence
• 2013 AustStab Award of Excellence
• NECA Excellence Awards NSW State Winner
• NZ Contractors Federation Safety Award
• BHP Billiton 2013 Contractor HSEC Awards
• New Zealand Green Ribbon Caring for Our Water Award

Environmental Metrics

ESG Focus Areas

• Health and Safety
• Environment
• People and Community
• Governance

Environmental Achievements

• 2.3% reduction in energy consumption across the Group (excluding acquisitions, 8.6% reduction); 6% reduction in Scope 1 and Scope 2 GHG emissions (excluding acquisitions); 295 TJ annualised energy savings (equivalent to 29,000 tonnes of CO2-e abatement); 26% reduction in Scope 3 emissions; production of world's first 99% recycled asphalt product

Social Achievements

• 20% reduction in Lost Time Injury Frequency Rate (LTIFR); 22% reduction in Total Recordable Injury Frequency Rate (TRIFR) since 2013-14; increased female managers to 7.1% (exceeding target of 6.5%); increased female Senior Executives to 7.4%; launched Group-wide mentoring program; launched Group-wide Diversity and Inclusiveness survey; Mining division won People Category in Chamber of Minerals and Energy of Western Australia’s 2015 Safety and Health Innovation Awards for Enhancing Workforce Health Program

Governance Achievements

• Review and update of Standards of Business Conduct; implementation of e-learning modules and toolbox talks on workplace behaviour; Downer Board Zero Harm Committee governs and monitors health, safety, environment and sustainability; Downer Board Tender Risk Evaluation Committee oversees high-value tenders; bi-annual assessment of Executives, Senior Managers and Directors on Financial and Corporate Governance Self-Assessment

Climate Goals & Targets

Environmental Challenges

• Increased total Scope 1 and Scope 2 emissions by 2% due to acquisitions; managing carbon-related activities and GHG emissions in carbon-intensive industries; availability of key resources (energy, fuel, water); potential business interruptions due to extreme weather events; disposing of OTR tyres

Mitigation Strategies

• Implementation of five-year GHG reduction and energy efficiency plans; operational changes in carbon-related data management; identification of opportunities for GHG emission reductions and energy efficiency improvements; sourcing alternative energy or fuels; developing business resilience plans; development of a unique modular pyrolysis solution for tyre recycling (Otrecycle)

Supply Chain Management

Responsible Procurement

• Downer Supplier Code of Practice (covering governance, workplace relations, OHS, ethical business practices, environmental management); use of Supply Chain Sustainability School resources

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Availability of key resources

Opportunities

• Clean technology; smarter ways to do things; low carbon contract mining and low carbon asphalt products

Reporting Standards

Frameworks Used: GRI G3.1 Guidelines

Certifications: ISO 14001 (98% of workforce)

Third-party Assurance: KPMG (limited assurance for selected indicators)

Sustainable Products & Innovation

• 99% recycled asphalt; Remote Grease Pressure Release System

Awards & Recognition

• LearnX Gold learning design award; ARI Safety Award; Queensland Mining Industry Health Program Award; Chamber of Minerals and Energy of Western Australia’s 2015 Safety and Health Innovation Awards; NECA Excellence Awards; Canberra Young Professional Engineer award; Hirepool Construction Awards; Australian Construction Achievement Award

Environmental Metrics

ESG Focus Areas

• Health and safety
• Business resilience
• Governance
• Environment
• Customer relationships
• Supplier relationships
• Communities
• People and organisational capability

Environmental Achievements

• 3.5% reduction in total energy consumption
• 3.7% reduction in total Scope 1 and 2 GHG emissions
• Implementation of 40 new projects contributing to 215 TJ annualised energy savings
• Achieved Group-wide target of no Level 5 or Level 6 environmental incidents
• Production of 99% recycled asphalt (demonstration project)

Social Achievements

• 24% reduction in lost time injuries
• 12% improvement in total recordable injuries
• Increased female participation through proactive recruitment and internal advancement strategies
• Draft ‘Reflect’ Reconciliation Action Plan lodged with Reconciliation Australia
• Māori Leadership Program with 13 participants promoted after completion

Governance Achievements

• Robust corporate governance framework endorsed by the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations
• Formal whistleblower policy and procedures
• Anti-bribery and Corruption Policy

Climate Goals & Targets

Environmental Challenges

• Challenging market conditions in many sectors
• Depressed commodity prices in resources industry
• Managing low-likelihood, high-consequence risks
• Effective management of carbon-related activities in carbon-intensive industries
• Managing climate change impacts and risks

Mitigation Strategies

• Driving cost and productivity efficiencies
• Shifting revenue base to more sustainable public infrastructure customers
• Investing in state-of-the-art technology
• Implementing energy efficiency initiatives and energy management programs
• Developing low carbon solutions

Supply Chain Management

Responsible Procurement

• Standards of Business Conduct and Procurement Supplier Requirements

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Changes in resource availability (energy, fuel, water)

Opportunities

• Growth in renewable energy sector

Reporting Standards

Frameworks Used: GRI G4 Core

Certifications: AS/NZS 4801, BS OHSAS 18001, ISO 14001

Third-party Assurance: KPMG (limited assurance)

Sustainable Products & Innovation

• Low-carbon asphalt
• Tonerseal product

Awards & Recognition

• Dow Jones Sustainability Australia Index inclusion
• Australasian Rail Industry (ARI) Safety Award
• Australian Asphalt Pavement Association (AAPA) Safety Initiatives Awards
• Chamber of Minerals and Energy of Western Australia’s Safety and Health Innovation Awards
• National Electrical and Communications Association (NECA) WA Workplace Health and Safety Award
• NSW Minerals Council Health Excellence Award
• LearnX Impact Awards (Gold)
• Australian Institute of Training and Development’s Best Talent Development Program Award

Environmental Metrics

ESG Focus Areas

• Zero Harm (health, safety, and environment)
• Sustainability
• Diversity & Inclusion
• Community Engagement
• Climate Change

Environmental Achievements

• Implemented over 50 new projects delivering 186 terajoules of annualised energy savings, equivalent to over 12 kilotonnes of CO2-e emissions abatement across Scopes 1, 2 and defined Scope 3.
• Zero Level 5 or Level 6 environmental incidents.

Social Achievements

• Launched revised Diversity Framework with six Divisional D&I Steering Committees.
• 8 female employees participated in Downer’s Executive Development program.
• 12 employees completed secondments in Aboriginal and Torres Strait Islander communities as part of the Jawun program.
• Downer New Zealand received the ‘Emerging Diversity & Inclusion Program Award’.

Governance Achievements

• Board comprised of a majority of independent Directors.
• Established a number of Board Committees (Audit and Risk, Zero Harm, Nominations and Corporate Governance, Remuneration, Disclosure, Rail Projects, Tender Risk Evaluation).
• Implemented a formal whistleblower policy and procedures.

Climate Goals & Targets

Environmental Challenges

• Depressed commodity prices impacting Mining and EC&M sectors.
• High volatility in commodity prices.
• Focus on cost reduction by mine owners.
• Climate change presenting a challenge to business, society and the natural environment.
• Potential reduction in revenue from significant telecommunication contracts.

Mitigation Strategies

• Investing in growth, creating new market positions, and driving improvement in existing businesses.
• Focusing on cost reduction and maximising supply chain benefits.
• Developing processes and technology to reduce direct emissions and overall energy consumption.
• Reviewing climate disclosure practices to align with TCFD recommendations.
• Implementing business-specific energy management plans with annual targets for GHG emissions reductions.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and services
• Growth in renewable energy sector

Reporting Standards

Frameworks Used: ASX Corporate Governance Principles and Recommendations

Certifications: AS/NZS 401 or OHSAS 18001, ISO 14001, ISO 9001

Third-party Assurance: KPMG

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Downer New Zealand’s ‘Emerging Diversity & Inclusion Program Award’

Environmental Metrics

ESG Focus Areas

• Health and safety
• Governance and ethics
• Contractor management
• Operational performance
• Financial performance
• Attraction and retention
• Partnerships and stakeholder engagement
• Customer expectations
• Business resilience
• Climate change
• Diverse and inclusive workforce

Environmental Achievements

• Achieved Group-wide target of zero Level 5 or Level 6 environmental incidents
• Awarded a “Leading” Infrastructure Sustainability (IS) Design rating by the Infrastructure Sustainability Council of Australia (ISCA) for the Auckland’s City Rail Link project
• Achieved the first Infrastructure Sustainability (IS) Design rating for a Light Rail Project in New South Wales for the Newcastle Light Rail project
• Downer New Zealand became a signatory to the New Zealand Climate Leaders Coalition
• Expansion of circular economy capability through acquiring 50% of Repurpose It
• Secured $2.5 million in grant funding to build a gully pit recycling system in Queensland
• Produced an Environmental Product Declaration (EPD) for the Sydney Growth Train suburban train sets

Social Achievements

• Improved Lost Time Injury Frequency Rate (LTIFR) to 0.57 from 0.78
• Improved Total Recordable Injury Frequency Rate (TRIFR) to 2.70 from 3.27
• Refreshed and relaunched the Downer Mentoring program, establishing 30 mentoring relationships with 15 high-performing females
• Launched its second Reconciliation Action Plan (RAP) ‘Innovate’
• Spotless is closing out its second RAP ‘Innovate’
• Spotless is consulting with Reconciliation Australia on its ‘Stretch’ RAP

Governance Achievements

• Board comprised of a majority of independent Directors
• Implemented the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD)
• Published a set of climate change frequently asked questions (FAQs) on its website

Climate Goals & Targets

Environmental Challenges

• Nine penalty infringement notices totalling NZD $4,950 in New Zealand Division
• Two penalty infringement notices totalling AUD $19,055 in Transport and Infrastructure Division
• Climate change impacts

Mitigation Strategies

• Contesting one infringement notice
• Addressing breaches of Planning approval
• Completed a scenario analysis to test the resilience of its strategy in relation to climate futures
• Developing a science-based target for GHG emission reduction
• Focusing on decarbonisation strategy with an emphasis on long-term contracts, technology, energy transition, GHG reductions and efficiencies, and opportunities to offset emissions

Climate-Related Risks & Opportunities

Physical Risks

• extreme weather

Transition Risks

• Thermal coal transition
• Changing carbon/energy policy

Opportunities

• Energy transition
• Opportunities to offset emissions

Reporting Standards

Frameworks Used: GRI

Certifications: AS/NZS 4801 or OHSAS 18001, ISO 14001, ISO 9001

Sustainable Products & Innovation

• Produced an Environmental Product Declaration (EPD) for the Sydney Growth Train suburban train sets

Awards & Recognition

• Bronze Award for Downer’s 2018 Sustainability Report
• “Leading” Infrastructure Sustainability (IS) Design rating for the Auckland’s City Rail Link project
• ‘Excellent Design’ rating for the Newcastle Light Rail project

Environmental Metrics

ESG Focus Areas

• Health, safety and wellbeing
• Governance and ethics
• Contractor management
• Operational performance
• Financial performance
• Attraction and retention of skilled people
• Partnerships and stakeholder engagement
• Customer expectations and adding value
• Business resilience
• Climate change
• Diverse and inclusive workforce

Environmental Achievements

• Achieved the Group-wide target of zero Level 5 or Level 6 environmental incidents. There were no significant environmental incidents (≥ Level 4) during financial year 2020.
• Improved Carbon Disclosure Project (CDP) score to a B
• Awarded an “Excellent” Infrastructure Sustainability (IS) “As Built” rating by the Infrastructure Sustainability Council of Australia (ISCA) for the Newcastle Light Rail Project.
• Achieved the first Infrastructure Sustainability (IS) Operations rating for a road maintenance contract for the Northwest Tasmanian Road Maintenance contract which achieved a “Commended Operations” rating by ISCA.
• Downer’s road surfacing material, Reconophalt, which incorporates recycled soft plastics, has been approved for use by the NSW Environment Protection Authority (EPA) under a resource recovery order and exemption.

Social Achievements

• Progress on Downer’s Innovate Reconciliation Action Plan (RAP) endorsed by Reconciliation Australia
• Spotless is currently consulting with Reconciliation Australia on its Stretch RAP
• Downer has exceeded RAP commitments by establishing relationships with labour hire companies, employment agencies and other Indigenous organisations.
• An Indigenous Cultural Awareness Training module for Australian employees was developed and rolled-out
• Evolved the Maori Leadership program, Te Ara Whanake, into a program specifically designed for non-Maori leaders, with 63 leaders from across Downer NZ completing Te Ara Maramatanga

Governance Achievements

• The Downer Board, through its oversight functions has verified that Downer appropriately considers Environmental Social and Governance (ESG) risks including those related to climate change.
• Downer identifies, manages and discloses material climate-related risks as part of Downer’s standard business practices
• Downer’s Zero Harm Management System Framework sets the Company’s Zero Harm and sustainability governance requirements.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impact on operations, particularly in New Zealand and Spotless’ Hospitality business.
• Contract losses in the EC&M service line.
• Underpayment of employee entitlements.
• Climate change risks.
• Significant environmental incidents (although none occurred in FY20).

Mitigation Strategies

• Implemented robust Business Continuity Plans and Business Resumption Plans in response to COVID-19.
• Restructured the Group to focus on core Urban Services businesses.
• Right-sizing the cost base and operating model.
• Exploring options to sell non-core businesses (Mining, Laundries, Hospitality).
• Undertaking a capital raising to strengthen the balance sheet.
• Focus on areas where it has a competitive differentiation in construction.
• Implementing updated Group-wide consistent policies, procedures and supporting documents.
• Developing a single management system known as The Downer Standard.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards

Certifications: AS/NZS 4801 or OHSAS 18001, ISO 14001, ISO 9001

Third-party Assurance: KPMG

Sustainable Products & Innovation

• Reconophalt

Awards & Recognition

• Bronze Award for Downer’s 2019 Annual Report and Sustainability Report from the Australasian Reporting Awards
• Infrastructure Sustainability (IS) ratings

Environmental Metrics

ESG Focus Areas

• Health and safety
• Governance and ethical conduct
• Economic performance
• Customer relationships
• Contractor management
• Climate change
• Cybersecurity
• Business resilience
• Employee development and engagement
• Diversity and inclusion
• Community engagement, impact and development
• Human rights (including modern slavery)
• Supply chain management

Environmental Achievements

• Emissions intensity reduction of 6%
• Reconophalt 15.7% recycled materials
• 0 Category 5 and 6 environmental incidents
• Successfully completed a new $1.4 billion Sustainability Linked Loan (SLL) facility.
• Achieved third-party certification to the International Standards, and ISO 14001 (Environment), ISO 9001 (Quality), and ISO 45001 (Safety).

Social Achievements

• Launched a pilot of its first Group-wide female empowerment and capability building program, THRIVE, in FY21.
• Partnered with Beyond Blue to support the mental health of our communities across Australia. Downer doubled all donations given to Beyond Blue through the campaign up to a total of $250,000.
• Launched a Group-wide women’s empowerment and capability building program in March.

Governance Achievements

• Zero breaches of disclosures relating to market-sensitive information
• Zero breaches of anti-bribery and corruption policy
• Zero breaches of securities trading policy
• Zero instances of anti-competitive behaviour
• Published Downer’s first Modern Slavery Statement

Climate Goals & Targets

Environmental Challenges

• Effective management of carbon-related activities and the implementation of strategies to reduce GHG emissions.
• Ensuring that modern slavery is not taking place in Downer’s workforce, which includes our supply chain beyond our direct suppliers.
• Collecting data from subcontractors for Scope 3 emissions.
• COVID-19 impacts on workforce and operations.
• Cybersecurity threats.

Mitigation Strategies

• Divestment of capital and carbon intensive Laundries and Mining businesses.
• Risk-based approach to modern slavery management, including engaging with direct suppliers.
• Estimation methodology for subcontractor emissions where actual data unavailable.
• Business Resilience Plan and Business Continuity Plan, COVID-19 Standard and Pandemic Playbook.
• Accelerated cyber risk mitigation programs, including revised security strategy and roadmap, matured security capabilities, enhanced operational resilience, and ISO 27001 compliance.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Group-wide Procurement Framework Policy and Standards of Business Conduct; Procurement induction and training module; Supplier and subcontractor prequalification; International Supply Standard; Standard precedent terms and conditions for all supply agreements and subcontracts; FCGSA Directors’ questionnaire; Downer’s risk assessment process; social procurement targets (e.g., MRAMS contract).

Climate-Related Risks & Opportunities

Physical Risks

• Adverse weather events

Transition Risks

• Changes in energy landscape, low-emission technology developments.

Opportunities

• Development of energy-efficient products and services; renewable energy projects; hydrogen technology.

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: ISO 45001, ISO 9001, ISO 14001

Third-party Assurance: KPMG

UN Sustainable Development Goals

• Goal 3: Good health and well-being
• Goal 7: Affordable and clean energy
• Goal 8: Decent work and economic growth
• Goal 9: Industry, innovation and infrastructure
• Goal 10: Reduced inequalities
• Goal 11: Sustainable cities and communities
• Goal 12: Responsible consumption and production
• Goal 13: Climate action
• Goal 17: Partnerships for the goals

Downer's services, responsible operations, capability and thought leadership, and social responsibility activities contribute to these goals.

Sustainable Products & Innovation

• Reconophalt

Awards & Recognition

• Australian Syndicated Loan Deal of the Year; Syndicated Green/Sustainable Deal of 2020; inclusion in S&P Global’s 2021 Sustainability Yearbook; Industry Mover status from S&P Global.

Environmental Metrics

ESG Focus Areas

• Health, safety and wellbeing
• Governance and ethical conduct
• Economic performance
• Customer relationships
• Contractor management
• Climate change
• Cybersecurity
• Business resilience
• Employee development and engagement
• Diversity and inclusion
• Community engagement, impact and development
• Human rights (including modern slavery)
• Supply chain management

Environmental Achievements

• Reduced Scope 1 and 2 GHG emissions intensity from 41.37 tCO2-e in FY21 to 31.11 tCO2-e in FY22
• 97 per cent landfill diversion rate
• 15.32% recycled content in asphalt products

Social Achievements

• Launched Downer’s first Group-wide Inclusion and Belonging Strategy
• Launched Downer’s first workplace giving program
• Established new charitable partnerships with two Indigenous organisations, The Stars Foundation and NRL Cowboys House

Governance Achievements

• Achieved 100 per cent completion rate among senior management for Financial and Corporate Governance Self-Assessment surveys
• Zero breaches of continuous disclosure
• Strengthened governance of business integrity through whistleblower management training

Climate Goals & Targets

Environmental Challenges

• Ongoing effects of COVID-19
• Severe weather events
• Supply chain disruptions
• Labour shortages
• Workplace fatality in New Zealand
• Cybersecurity risks
• Managing public aggression

Mitigation Strategies

• Implemented a range of initiatives to improve the employee experience
• Refined Downer’s Business Continuity Plans
• Investing in employee training and welfare support programs
• Building resilience in our supply chain
• Accelerated Cybersecurity Risk Mitigation programs
• Established a Community of Practice to address violence and aggression in the workplace

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sustainable procurement initiatives
• Modern slavery risk framework
• Supplier sustainability requirements

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Flooding
• Bushfires

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products and services
• Growth in renewable energy market

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: ISO 45001, ISO 9001, ISO 14001

Third-party Assurance: KPMG

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 11 (Sustainable cities and communities)
• Goal 13 (Climate action)

Downer's services and products, responsible business operations, capability and thought leadership, and social responsibility activities contribute to these goals.

Sustainable Products & Innovation

• ReconophaltTM
• Clean Hydrogen services

Awards & Recognition

• 2022 ISC Outstanding Achievement for Infrastructure Sustainability Operations Award
• National Water Industry Safety Excellence Award

Environmental Metrics

ESG Focus Areas

• Governance
• Environmental
• Social

Environmental Achievements

• Achieved 42.4% reduction in whole of life carbon emissions on BBVJV HS2 project (against a target of 50%).
• 99.5% replacement of potable water with non-potable water at Western Sydney Airport.
• Removed 70 truck movements from the road per day on HS2 using a 3km long conveyor system.
• Removed 672,000 HGV journeys, avoiding 24,000 tonnes of CO2 on Tideway by transporting materials by river.
• Achieved 98% diesel free across SCS Railways sites.
• 79% cement replacement mix for use in permanent piling works on HS2, potential to deliver carbon savings of 45% CO2e.

Social Achievements

• Tideway’s social impact assessment demonstrated that £1 invested produced £1.72 of social value.
• SCS Railways developed a SHE apprenticeship programme.
• Spark North East Link Design & Construct Joint Venture (Spark) delivered a Sustainability Culture Changemakers Programme, increasing sustainability awareness by 10%.

Governance Achievements

• HS2 Limited set bold targets for carbon emission reduction (initially 50%, later including more detailed targets).
• SCS Railways established a Sustainability Steering Group (SSG) made up of senior leaders.
• Environmental and sustainability aspects included in executive performance scorecards on BBVJV HS2 project.
• Tideway implemented a sustainable finance framework aligned with the Sustainability Linked Loan Principles.

Climate Goals & Targets

Environmental Challenges

• Sustainability data management.
• Shortage of skilled professionals.
• Cost of low/zero emission plant and equipment.
• Limited availability of GGBS in the UK and New Zealand.
• Workload associated with implementing a sustainable procurement framework.

Mitigation Strategies

• Dedicated resource for data management (e.g., data analyst).
• SHE apprenticeship programme.
• Client held innovation funds to support trials of new technologies.
• Exploring alternative SCMs (e.g., limestone filler, calcined clay).
• Sustainability supply chain manager embedded in procurement team.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sustainable procurement framework
• Supply chain training programmes
• Performance assessment framework for top suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: BREAAM, ISC

Certifications: GECA

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Low carbon concrete
• Recycled materials

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environment
• Safety
• Diversity & Inclusion
• Mental Health

Environmental Achievements

• Not disclosed

Social Achievements

• Indigenous Cultural Awareness Training, Te Ara Whanake & Te Ara Maramatanga Training
• Mental Health First Aid Training

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Data limitations in Scope 3 emissions (Categories 9 and 11)
• Resource constraints limiting quantitative disclosure of financial impacts and transition planning

Mitigation Strategies

• Improved data collection and estimation processes for Scope 1 and 2 emissions
• Work to uplift processes for quantitative disclosure in future years

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards, Aotearoa New Zealand Climate Standards (NZ CS 1-3)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Safety
• Sustainability
• Climate Change
• Decarbonisation

Environmental Achievements

• Near-term Scope 1 and 2 GHG emissions commitments aligned with a 1.5°C pathway and support the transition to net zero emissions by 2050; 50% reduction by 2032 across absolute Scope 1 and 2 emissions against a 2020 baseline; Net zero by 2050 across Scope 1, 2 emissions against a 2020 baseline (Scope 3 target under review).

Social Achievements

• Launched new Purpose, ‘Enabling communities to thrive’; Launched new aspirational culture framework, ‘The Downer Difference’; Improved Lost Time Injury Frequency Rate (LTIFR) to 0.88 from 0.90, and Total Recordable Injury Frequency Rate (TRIFR) to 2.54 from 2.68 per million hours worked; Initiatives for inclusion and belonging, employee health and wellbeing, professional growth and development; Own Different (Inclusion and Belonging), Own Respect (Workplace Behaviours), THRIVE (Diversity and Equity) and Indigenous inclusion and awareness programs.

Governance Achievements

• Simplified operating model; Enhanced risk management and governance framework; Renewed Group’s leadership team; Improved capital allocation and investment approval disciplines and governance processes; Established a Board Project Governance Committee; Redefined People and Culture Committee; Implemented a new vendor management system, Felix, to enhance prequalification and onboarding controls; Implemented tailored ethics training.

Climate Goals & Targets

Environmental Challenges

• Three workplace fatalities in FY24; Labour shortages; Persistent cost pressures; Macroeconomic uncertainty; Cost escalation and inflationary pressures; Reliance on a limited number of specialist suppliers or subcontractors; Climate-related physical risks (extreme weather events); Climate-related transition risks (regulatory changes, market shifts); Cybersecurity risks; Regulatory compliance challenges.

Mitigation Strategies

• Group-wide ‘Safety reset’; Focus on critical control effectiveness; Prioritising strong customer relationships; Rigorous bid governance processes; Strong emphasis on cost control, supply chain management and project oversight; Enhanced risk framework; Strengthened tendering and risk governance processes; Disciplined application of enhanced risk appetite guardrails; Prioritising bidding opportunities that aim for higher margins; Strategies to improve project delivery capabilities; Streamlined operating model for efficiency; Portfolio simplification; Development of alternative sourcing strategies; Technology and Cyber Risk management practices; ISO 27001 certified Information Security Management System; Investment in and maintenance of key controls in threat and vulnerability management; Dedicated Legal and Compliance personnel; Compliance frameworks, operational compliance plans and assurance programs; Whistleblower policy; Enterprise-wide transformation program; Enhanced leadership capability and performance culture; Improved tendering, risk management, and project delivery; Diversified bonding facilities; Insurance policies to cover potential liabilities; Talent attraction and retention strategies; Initiatives to foster a positive workplace; Decarbonisation pathway; Continuous monitoring of developments to enable timely pivots in response to market and technological changes; Environmental Product Declaration process for road surfacing products; Insurance against losses from some extreme weather and climate-related events; Assessment of contractual arrangements and commercial terms with respect to physical impacts of climate change.

Supply Chain Management

Responsible Procurement

• Standardised Procurement Framework aligned to ISO 20400 – Sustainable Procurement; New vendor management system, Felix

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (cyclones, droughts, floods, fires), sea level rise

Transition Risks

• Carbon pricing legislation, direct price increases of equipment and fuel usage

Opportunities

• Development of energy-efficient products and services; Energy transition opportunities

Reporting Standards

Frameworks Used: Aotearoa New Zealand Climate Standards (NZ CS)

Certifications: ISO 45001 (Safety), ISO 9001 (Quality), ISO 14001 (Environment), ISO 27001 (Information Security)

Third-party Assurance: PricewaterhouseCoopers

Sustainable Products & Innovation

• Bitumen-based products and asphalt products using recycled products and environmentally sustainable methods; Low emissions materials incorporated into products