2024 McDermott Sustainability Report - Report - Page 30
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
CLIMATE RISK MANAGEMENT
CLIMATE-RELATED RISK AND OPPORTUNITIES IMPACT ON OUR BUSINESS
TCFD Recommendation: Disclose how the organization identi昀椀es, assesses,
and manages climate-related risks.
We anticipate the energy transition projects will form an increasing share of our backlog. Examples in
our current portfolio include high-voltage direct current (HVDC) substations for offshore wind farms,
hydrogen facilities, sustainable aviation fuel (SAF), and carbon capture and storage (CCS) plants.
Identi昀椀cation, assessment, and mitigation of climate-related risks are an integrated part of our enterprise
risk management process. The process employs qualitative assessment of risks, and is guided by
selection of an appropriate scenario for each risk.
In another example of how McDermott’s 100-year expertise in construction and installation can be
leveraged to support energy transition, McDermott has been awarded the transportation and installation
contract of one of the world’s largest offshore Carbon Capture and Storage (CCS) projects in the world
and 昀椀rst CCS project in Asia. McDermott will be performing the transportation and structural installation
of a 138-kilometer (85 miles) pipeline section, a 15,000 metric tonne (MT) CCS platform jacket in
approximately 108m water depth.
We use our risk identi昀椀cation process to identify potential exposure to climate-related risks including
physical risks (for example 昀氀oods, wild昀椀res, windstorms and tropical cyclones and heavy precipitation),
and transition risks (for example, new ESG regulations and policies).
Review of emerging regulation is part of our integrated management system requirements, in line with
ISO standards. McDermott also maintains ISO 140001 and 50001 certi昀椀cations across an expanding share
of our assets, which requires facilities to regularly monitor emerging regulations related to climate
change and ensure any impacts are captured in future planning.
We manage risks to McDermott’s business and stakeholders, including physical and transition climaterelated risks as part of our Enterprise Risk Management (ERM) process, through the following activities on
an annual cycle:
• Identi昀椀cation, shortlisting and assessment of enterprise-level risks and opportunities.
• Assignment of an owner for each risk, who is responsible for developing mitigations and action plans,
and accountable for closing out actions.
• Reviews of material risks by the Board of Directors Risk Committee.
• Audits of the implementation of mitigations by an internal audit team.
At McDermott, we also integrate climate and sustainability considerations into our executive
compensation framework as part of our broader risk management strategy. By linking annual
sustainability targets to leadership incentives, the company ensures that executives remain accountable
for advancing key environmental initiatives. This approach aligns with industry best practices, reinforcing
McDermott’s commitment to long-term resilience and responsible corporate governance.
Mitigations will include detailed action plans which are speci昀椀c, measurable and auditable. They may
also propose updates to business processes or additional controls.
Both physical and transition climate-related risks have the potential to interrupt our operations and
supply chain. We take proactive steps to develop mitigation plans for such events and apply appropriate
provisions within our project delivery plans.
Across our facilities, we are reviewing the impact of increasing temperatures on operations and putting
in place heat mitigation measures. These include mandatory breaks during the day, introduction of
cool rooms, running heat awareness campaigns, and applying additional insulation on our buildings.
Within our Jebel Ali fabrication yard, we have installed solar powered air conditioners for our cranes that
enable crane operators to maintain a comfortable work environment without turning on the main engine,
thereby saving fuel and emissions without compromising worker comfort, safety or productivity.
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