Whitehaven Coal says it will survive lower-carbon future

Company identifies risks and opportunities

WHITEHAVEN Coal, Australia’s largest independent coal producer, expects to survive a range of lower-carbon policy scenarios, according to its inaugural sustainability report.

The findings, in Sustainability Report 2019 represent the culmination of Whitehaven’s efforts to develop and incorporate a response to the Financial Stability Board’s (FSB) Task Force on Climate-Related Financial Disclosures (TCFD) within its broader sustainability reporting framework.

According to The Australian, Whitehaven is the first coal company to make disclosures under the global climate framework of the Financial Stability Board, an international body that monitors and makes recommendations about the global financial system.

Whitehaven “stress-tested” the resilience of its portfolio against the IEA’s most commonly referenced scenarios. Through modelling, the company concluded that it exhibits long-term resilience and value generation in a range of lower-carbon scenarios, including under a 2°C scenario. Furthermore, Whitehaven expects the Australian coal sector to remain robust in the future.

Whitehaven identified risks divided into those related to the transition to a lower-carbon economy and physical risks related to the physical impacts of climate change. Climate-related opportunities were also identified.

Transition risks identified included policy and regulation changes. This includes energy and fuel costs for operations being pushed up by potential regulatory pricing mechanisms and/or trading systems. The company said as a mitigation it identifies and implements energy efficient initiatives.

Whitehaven identified two physical risks. The first was an increase in severe weather which could impact operations resulting in increased costs and supply disruption. As a mitigation the company says it designs infrastructure to better withstand extreme weather conditions and monitors contractual arrangements to ensure that appropriate mitigation measures are in place.