Airbus - 2022 Universal Registration Document

Risk Factors / 4 Environment, Human Rights, Health & Safety Risks

4. Environment, Human Rights, Health & Safety Risks

Climate-Related Risks

In accordance with the Task Force on Climate-related Financial Disclosures (“ TCFD ”) recommendations, the Company is strengthening its enterprise risk management (“ ERM ”) risk identification process for climate-related risks and opportunities, incorporating climate scenario analysis. The Company categorises its climate-related risks and opportunities according to the TCFD classification ( e.g. physical, transitional and the corresponding subcategories). The scope of analysis is the Company – including its Divisions – and includes the upstream and downstream value chain. The ERM system aims for early identification of short-term (“ ST ”, around 2025), medium-term (“ MT ”, around 2035) and long-term (“ LT ”, around 2050) climate related risks and opportunities.

To identify the climate-related risks and opportunities, the Company used three temperature climate scenarios (1.5°C, 2°C and 3°C), five driving forces ( e.g. environment, technology, social, political and economic) and three time horizons. Based on a qualitative analysis, the Company estimated the probability of risk or opportunity materialisation; the results are displayed in tables next to the corresponding risk. The assessment of risks and opportunities identified by the Company is subject to revision, as the methodology and process further mature.

Aggressive mitigation - Limiting warming to 1.5°C This is an ambitious scenario that limits global warming to 1.5°C by the end of the century (50% chance) through stringent climate policies, laws and high levels of innovation reaching net-zero CO 2 emissions around 2050 with some countries ( e.g. , EU) reaching net-zero GHG by this point. In this scenario it is assumed that policies to decarbonise are introduced immediately (2020s). Such policies and laws could diverge across sectors, regions and pace or could be introduced smoothly and harmoniously. Progress towards sustainable development goals is fast. Mitigation strategies implemented worldwide and across sectors include: (i) transitioning from fossil-based energy to very low or zero-carbon energy sources (renewable energy). Carbon Capture and Storage (“CCS”) is used in targeted remaining fossil-based facilities; (ii) improving energy efficiency; (iii) deploying both nature and technology based Carbon Dioxide Removals (“CDR”) to neutralise residual GHG emissions; and (iv) implementation of measures that could restrict demand. CDR is used to accelerate decarbonisation but kept to the minimum possible (residual emissions) and broadly in line with sustainable levels of renewable energy production. Technologies could reduce the emissions of the transport sector in developed countries and limit emissions growth in developing countries. Demand-focused policies could reduce demand for transport services and support the shift to more energy efficient and low carbon intensive products and transport modes. While efficiency improvements can provide some mitigation potential, additional mitigation technologies for aviation are required. Renewable and low-carbon fuels, such as hydrogen, high density biofuels and synthetic fuels can provide a viable substitute for aviation when Strong mitigation – Warming limited to 2°C This scenario assumes a more gradual approach in the introduction of climate mitigation actions limiting global warming to 2°C by the end of the century (~65% chance). Net-zero emissions are achieved after 2070. In this scenario, countries‘ ambitions of emissions reductions are different around the world and consequently, climate policies and laws are divergently introduced. Progress towards achieving sustainable development goals is slow. Development and growth proceed unevenly depending on the country and region. The environment experiences degradation despite measures that are less resource- and energy-intensive. Mitigation strategies implemented worldwide and across sectors include: (i) transitioning from fossil fuels to low carbon and renewable energy sources, CCS is used for fossil-based facilities; (ii) the deployment of CDR is slow and mostly focused in nature based solutions; (iii) improving energy efficiency and; (iv) implementation of demand measures. Complementary investment will be needed in new grid management and storage solutions to ensure continued reliability. Carbon neutral fuels like (renewable) hydrogen, biofuels and synthetic fuels can provide a viable substitute when electrification is not possible. Generally, physical risks are higher than in 1.5°C and transition risks are lower compared to a 1.5°C scenario. Disorderly mitigation – Warming exceeding 3°C The world’s nations have failed to control climate change. Global agreements to limit GHG emissions have not been successful and global warming is over 3°C. This scenario results from “business as usual” behaviour. Unilateral decisions from some countries to protect their own population or resources have resulted in conflicts, creating humanitarian crises and mass movement of populations. In this scenario, GHG emissions have resulted in a complete change of the global climate, to an extent that is near impossible to predict today. Tipping points have been passed and triggered irreversible changes to the global ecosystem. Degraded environmental conditions have rendered the dryer areas of the world inhabitable, inducing further climate related migrations. In these conditions, the population has regrouped in giant urban areas and the global growth has stopped. Access to food, water and medicine is difficult for the majority, leading to significantly degraded living conditions and life expectancy. Generally, transition risks are lower than physical risks. electrification is not possible, and contribute to renewable energy storage. Generally, physical risks are relatively low but transition risks are high.

1.5°C

2°C

3°C

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Airbus / Universal Registration Document 2022