Responsible Capital Allocation Community Contributions Good Governance & Shareholder Alignment Diversity, Inclusion & Well-Being Climate Action Transparency & Guiding Principles Appendices 64 Reputational Risks Potential Financial Impact for: Description of Reputational Risks Our Operators Our Company Summary Changing public perceptions of an operator’s climate-related activities and their May affect access to equity capital or the ability to raise new debt or refinance • Potential delay (deferral) of Revenues if operator’s inability to raise capital or finance contributions to or detractions from the transition to a low-carbon economy. existing debt, which may lead to projects changing hands or being temporarily debt results in operations changing hands or permanently abandoned. • Potential impact to valuation of Assets on balance sheet (e.g. impairment or write-off of assets) By Commodity Stigmatization of sector: Commodities at highest risk: All commodities Growing scrutiny of the climate impacts of different sectors has created the Stigmatisation of sectors could lead to reduced demand and lower prices for • Potential reduction of Revenues if demand for carbon-intensive commodities perception that some industries are inherently ‘dirty’ and ‘polluting’, creating products and services. Of particular risk of stigmatization will be ‘heavy industry’ or assets are reduced due to stigmatization of sectors a stigma around certain activities. commodity producers, including energy producers. This risk can be mitigated by • Potential impact to valuation of Assets on balance sheet (e.g. impairment or operators and industries deploying energy efficient and low-carbon technologies write-off of assets) if decrease in demand and/or lower prices causes uneconomic in the production process and the lower carbon emitting producers, even within a assets to become stranded stigmatised industry, will be rewarded while there is still demand for their products. Shifts in consumer preferences: Commodities at highest risk: Energy (oil, gas, NGLs) and gold Climate change could lead to a moral shift in customer preferences, with Energy operators are most vulnerable to this risk as customers are likely to receive • Potential reduction of Revenues if demand for carbon-intensive commodities stakeholders becoming increasingly aware of their own carbon footprint incentives to reduce use of these commodities due to their climate impacts. Gold or assets are reduced due to shift in preferences and new regulations and policies incentivising lower-carbon lifestyles. and other commodities that are not considered to be essential to industry or the • Potential impact to valuation of Assets on balance sheet (e.g. impairment or energy transition may come under greater scrutiny, potentially resulting in write-off of assets) if decrease in demand and/or lower prices causes uneconomic reduced demand. assets to become stranded Increased stakeholder concern: Commodities at highest risk: Energy (oil, gas, NGLs) With stakeholders having growing access to information about company Operators producing commodities that are not critical to the energy transition • Potential reduction of Revenues if demand for carbon-intensive commodities performance, those companies perceived to be causing environmental and and/or typically have high-carbon intensity will be most vulnerable to this risk, or assets are reduced due to negative feedback or concern social harms could encounter increased scrutiny over their impacts. This could with energy producers being particularly exposed. This may impact operator’s • Potential impact to valuation of Assets on balance sheet (e.g. impairment pose a significant threat to a company’s social license to operate and require access to capital and asset valuations significantly impacted if negative stakeholder or write-off of assets) if erosion of social license causes uneconomic assets proactive mitigation. concern erodes operators’ social license to operate. to become stranded