3 minute read 27 Jan 2022
ey-worker-in-a-mining-factory

How a heavy manufacturing powerhouse made the transition to net zero foundational to its strategy

By Blair Comley PSM

EY Net Zero Centre Leader and Partner, EY Port Jackson Partners

Where government meets markets. I have helped design and negotiate the biggest policy changes in Australia and the world. Golf tragic. Chef (or maybe cook).

3 minute read 27 Jan 2022

EY Port Jackson Partners deployed scenario planning to challenge conventional views and uncover new commercial opportunities for this international manufacturing heavyweight.

Overview

With a diverse portfolio of businesses in heavy manufacturing, client already had a long history of innovation, a deep commitment to sustainability and world-leading products.

However, while they considered themselves a sustainability leader in their industry, the EY Client recognised the long-term strategic risks of operating in an emissions-intensive, ‘hard-to-abate’ manufacturing sector. It routinely made capital-allocation decisions to survive the passage of several decades.

After elevating the importance of climate action and scenario planning in its corporate strategy, our client asked EY Port Jackson Partners to develop a set of strategic scenarios that included climate outcomes and were suitable for disclosure in climate reporting.

Actions

After gathering feedback from a broad range of stakeholders, we developed five diverse and relevant climate scenarios – from a future where global cooperation and green technology drive down emissions, through to the worst-case implications of global inaction.

We developed a dynamic model to test and quantify the impact of each scenario on our client’s portfolio of manufacturing assets and business operations and identified a set of strategic implications for each.

Outcomes

Our client now has a strong decision-making foundation where they can adjust and adapt the company strategy, and long-term capital allocation, with the benefit of rigorous scenario analysis.

Armed with the right information – and with several high-level adjacent growth opportunities now on the table – our client is empowered to make the right decisions and stride confidently on the road to net zero.

Summary

Elevating the importance of climate action and scenario planning in its corporate strategy was a fundamental step in our clients transformational journey. EY Port Jackson Partners developed and tested diverse and relevant climate scenarios that have empowered our client to confidently manage their strategy and long term capital allocation.