2024 McDermott Sustainability Report - Report - Page 29
Our Path
Our Approach
Environment
Social
Governance
Framework Alignment
Performance Data
2 0 2 4 S u st a i n a b i l i t y Re p o r t
TASK FORCE ON CLIMATE- RELATED FINANCIAL DISCLOSURES (TCFD) INDEX
Our purpose is to deliver innovative solutions that help customers maximize the potential of natural resources. In alignment with our purpose, we review and disclose how
climate-related risks and opportunities can impact our and our customer’s operations in line with the recommendations of the TCFD.
GOVERNANCE
STRATEGY
TCFD Recommendation: Disclose the
organization’s governance around climaterelated issue and opportunities.
TCFD Recommendation: Disclose the actual and potential impacts of climate-related risks and
opportunities on the organization’s businesses, strategy and 昀椀nancial planning where such information
is material.
McDermott has a dedicated sustainability function led by the
Executive Vice President (EVP) of Sustainability and Governance
which manages McDermott’s climate strategy, objectives,
progress and impact. The EVP reports directly to the Board who
have ultimate oversight of our approach to considering climate
related risks and opportunities throughout business operations.
McDermott has identi昀椀ed climate related risks over short (1 year),
medium (5 years) and long term (> 5 years) time horizons and
captured them in the development of McDermott’s business
strategy.
In accordance with its charter, the Board is responsible for
approving McDermott’s annual sustainability report, and individual
committees also meet regularly to review speci昀椀c sustainability
topics. McDermott’s Board of Governance Committee meets
on a quarterly basis to review reports on sustainability progress
and material climate related developments. The Board’s audit
committee meets regularly to review McDermott’s sustainability
reporting processes and public disclosures.
McDermott’s Executive Committee sets the vision and strategic
direction of our business, including aspects related to climate
change. As part of the Enterprise Risk Management (ERM) process,
they are accountable for the effectiveness of mitigations to
enterprise-level risks, including climate-related risks.
Read more about McDermott’s governance structure on page 8 of
this report.
For a description of the speci昀椀c climate-related risks and
opportunities identi昀椀ed in each time horizon refer to the tables
below.
McDermott places a strong focus on health and safety, continuity
of operations, and evolving global energy systems when
evaluating the impact of climate-related risks and opportunities.
These encompass the wellbeing of our workforce and host
communities, activities on our vessels, fabrication yards and
construction sites, and helping our customers responsibly develop,
produce and deliver the energy needed to meet growing demand.
Owners for climate-related risks and opportunities work with
McDermott’s Sustainability & Governance function to understand
the operational impacts, develop mitigations and feed into
昀椀nancial and operational business planning.
McDermott’s climate-related risk assessment is based on the
following NGFS (Network for Greening the Financial System)
scenarios to guide mitigations for a range of credible future
outcomes: the Net Zero 2050 scenario to indicate early technology
adoption, Divergent Net Zero and Delayed Transition scenarios
to provide an extreme for transition risks, and the Current Policies
scenario to provide an extreme for physical climate-related risks.
Climate-related physical and transition risks:
Physical risks:
• Unreliable weather forecasting for construction /installation
campaigns.
• Extreme weather exceeding facility design limits.
Transition risks:
• Non-compliance with ESG regulations.
• Supply chain disruptions.
• Loss of market in target sectors.
Climate-related opportunities:
• Energy ef昀椀ciency: Increased use of ef昀椀cient construction and
installation practices.
• Renewable energy: Increased availability and use of alternate
energy sources.
• Energy transition: Access to new markets.
• Energy transition: Development of alternate/low carbon
solutions.
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