2025 McDermott Sustainability Report - Report - Page 28
OUR PATH
OUR APPROACH
ENVIRONMENT
performance through changes in operating costs, vessel utilization,
insurance premiums, and revenue mix as customer demand evolves.
McDermott’s strategy prioritizes energy ef昀椀ciency and emissions
reductions across fabrication yards and the marine 昀氀eet. In 2025, this
included expanding ISO 50001 (energy management) certi昀椀cation,
strengthening energy performance management through improved
data capture and analysis, and implementing targeted ef昀椀ciency
measures such as equipment upgrades and asset utilization
technology. Renewable energy sourcing remains integral to onshore
operations, including expansion of solar generation capacity and
increased use of grid-sourced renewable electricity.
We are positioned to support customer demand for lower carbon
infrastructure and energy transition solutions, including offshore wind
grid connection infrastructure, sustainable aviation fuels, hydrogen
enabled industrial decarbonization, and modularized fabrication
delivery that reduces project emissions. Regulatory developments and
climate related reporting are monitored, and their impacts reported to
the Governance committee bi-annually. In 2025, this report included
progress on preparations for the EU CSRD and Australia’s AASB,
applicable from FY 2027.
Scenario analysis
McDermott’s climate-related risk assessment is informed by NGFS
(Network for Greening the Financial System), including the Net Zero
2050 scenario re昀氀ecting early technology adoption; Divergent Net Zero
and Delayed Transition scenarios re昀氀ecting more adverse transition
pathways; and the Current Policies scenario re昀氀ecting heightened
physical risk outcomes.
RISK MANAGEMENT
Processes for identifying, assessing and
managing climate-related risks
Sustainability Data and Reporting team ensures that climate-related
SOCIAL
GOVERNANCE
FRAMEWORK ALIGNMENT
PERFORMANCE DATA
risks identi昀椀ed, and aligned to our material topics, are incorporated into
the enterprise risk management (ERM) framework, covering physical
and transition risks.
Risks are assessed using a qualitative methodology, with impact and
probability scoring used to determine severity. As part of the annual
ERM cycle, climate related risks follow the standard risk management
process, which includes:
APPENDIX
2025 SUSTAINABILITY REPORT
The ERM Executive Steering Committee monitors risks and reviews
ratings, assigns Risk Managers and oversees mitigation plans;
The ERM Program Team maintains the risk register, calibrates
severity ratings, and supports analysis and reporting;
Risk Managers implement mitigation actions and report progress;
Internal Audit reviews mitigation implementation and provides
Identifying risks;
feedback into the ERM process; and
Assessing risks using impact and probability scoring to
determine severity;
Climate related risks follow the same governance, escalation, and
Assigning ownership to a designated Risk Manager responsible
for mitigation planning and action closure;
Developing and implementing mitigation measures to manage
risk exposure;
Monitoring and reporting progress through ERM governance
channels; and
Internal Audit reviews of mitigation implementation
Monitoring of emerging regulation is embedded within management
system requirements. ISO 14001 and ISO 50001 certi昀椀cations require
facilities to track relevant regulatory developments and incorporate
impacts into planning.
review processes as other enterprise risks
METRICS & TARGETS
McDermott uses de昀椀ned metrics to assess and manage climaterelated risks and opportunities. In 2025, these included:
Scope 1 and Scope 2 GHG emissions;
Energy consumption indicators across relevant operations and
assets; and
Electricity consumed from renewable sources in own operations
McDermott uses a marginal abatement cost curve (MACC) to prioritize
Integration of climate-related risks into overall
risk management
emission-reduction opportunities based on operational relevance,
stakeholder expectations and cost-bene昀椀t considerations.
We remain committed to decarbonization of our operations. To align
Climate-related impacts, risks and opportunities from our DMA have
been integrated into our enterprise risk management review. These
risks were subsequently reviewed as part of our annual Executive
Leadership Team risk assessment, resulting in agreed updates to our
climate-related risk pro昀椀le.
with our changing context, we have extended our near-term emissions
Under this framework:
operations to ensure we invest in the suitable technologies at the
The Board and its Risk Committee oversee the ERM program and
review material risks;
reduction target from 2030 to 2035 recognizing that the commercial
scale and availability of low carbon technologies and fuels to support
marine operations remains a challenge. We continue to monitor
the progress and maturity of cleaner technologies to support our
right pace.
See page 30 for a quanti昀椀ed summary of GHG emissions in 2025.
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