The TCFD project has revealed three key climate-related themes for Brambles.

 Brambles’ low-carbon advantage

The immediate and ongoing opportunities related to Brambles’ low-carbon, circular business model outweigh short-term climate-related risks in the decarbonising 1.5°C and 2°C climate scenarios.

In decarbonising economies, efficient use of natural resources will become more important and the low-carbon advantage inherent within Brambles’ circular business model presents a clear opportunity. This is enhanced through Brambles’ transport collaboration solutions and the Zero Waste World (ZWW) programme. Brambles’ forthcoming 2025 sustainability targets will further amplify market opportunities and help customers with their decarbonisation and circularity commitments while remaining prepared for future climate and waste regulation. 

 Brambles’ network resilience

The agility and scale of Brambles’ network and asset pools create an inherent resilience to supply chain shock, enabling greater responsiveness to customers before and after severe climate‑related weather events. 

Adaptability and agility will be increasingly important as exposure to supply chain shocks from physical climate-related weather events increases in all three climate scenarios. Brambles’ network resilience is a market differentiator and a key mitigant, enabling greater agility pre-weather event and reliability during the recovery phase. The objectives of Brambles’ supply chain and asset efficiency workstreams will serve to further strengthen the resilience of our networks.

 Raw material supply security and continuity

Longer-term climate-related risks relating to materials, specifically timber for pallets, is considered in the strategic planning process, including mitigations already underway as part of procurement, supply chain and asset efficiency programmes.

The price and availability of timber supply, as well as the potential impact of pests and disease, were identified as emerging climate-related risks which are expected to evolve over a five-to-ten-year timescale and manifest differently under the three climate scenarios. 

Brambles’ timber supply was identified as an area of risk under each scenario. It could be exposed to transitional risks such as a price on carbon (in the decarbonising 1.5°C and 2°C climate scenarios) or exposed to physical risks such as biome1 shift in the 4°C scenario. Brambles’ sustainable timber sourcing practices and current efficiency workstreams, combined with regeneration commitments including both afforestation and reforestation within the 2025 sustainability targets, represent a resilience building strategy that will both mitigate risks and enhance Brambles’ sustainability reputation. 

1A biome is a major and distinct regional element of the biosphere, typically consisting of several ecosystems and characterised by typical communities of plants and animals.

Brambles’ business model is tested against three scenarios over the short-, medium- and longer- term, with average global temperatures of ‘Rapid decarbonisation (1.5°C)’, ‘Middle of the road (2°C)’ and ‘No climate action (4°C)’. Importantly, each scenario includes a narrative of relevant industry indicators to enable potential insights into possible futures that could be strategically advantageous for Brambles’ business model and/or present business risks with potential financial implications. A summary of the scenarios is provided below.

 Rapid decarbonisation

Ave. temp. range 0.9°C - 2.3°C

The world shifts gradually, but pervasively, towards a sustainable path. This focuses on increasing commitment to achieving United Nations Sustainable Development Goals like improved education, health investments to accelerate demographic transition and reduced inequality.

• Government-led change
• Strong, very fast curtailment of emissions, which peak around 2022
• Energy system is rapidly transitioned to zero emissions via the uptake of renewables
• Carbon taxes rise to US$250/tonne
• Carbon sequestration increases – driven by high carbon price
• High carbon industries are closed
• Less overall consumption of non-essential items such as luxury goods
• The worst physical impacts of climate change are avoided although there are still significant changes to ecosystems

 Middle of the road

Ave. temp. range 1.7°C – 3.2°C

The world follows a path where social, economic and technological trends do not shift considerably from historical patterns, where overall development and incomes continue to proceed unevenly.

• Business-led, supportive government
• Fast reductions in emissions, which peak around 2030
• Market-led transition, with favourable policy environment
• Global trade is high, though resource use is decoupled from growth
• Circular economy focus
• Rapid technology development, with shared R&D
• Decentralised energy system, dominated by renewable energy
• US$100/tonne carbon price
• The frequency and severity of extreme weather increases, and crop growing areas shift

 No climate action

Ave. temp. range 3.2°C – 5.4°C

A nationalist environment concerned about competitiveness and security, that motivates countries to increasingly focus on domestic and regional issues.

• Little leadership
• Some minor reduction in emissions
• Inaction on emissions reductions prevails
• GDP growth continues and then starts to decline in line with ecosystem collapse, which severely impacts local agriculture
• Increasing nationalism and international trade flows reduce
• Characterised by both acute (extreme) and chronic (long-term) physical impacts of climate change, which create devastating cumulative impacts across the environment and, subsequently, economies
• Fossil fuels are maintained at ~50% of the global energy mix
• Resource depletion is high, with companies impacted by food and water scarcity, and resulting global conflict
• High challenges to mitigation and adaptation

The Board and Management are focused on the creation and protection of value, and how Brambles’ current business model and ways of working may need to change, if any, to be resilient in various scenarios.  Risk and opportunity management is a system of work that uses the scenario-based assessments as an input, as well as considering all other risks and opportunities.

As part of Brambles’ integrated approach to risk management, it maintains a Sustainability Risk Profile, which is accompanied by risk appetite statements and mitigation plans to maintain performance and outline a pathway to achieving its risk appetite. All risk profiles are reviewed and approved by executive management, the ARC and the Board to promote an appropriate level of knowledge and resourcing of climate‑related risks and opportunities.

Underpinning this is a process to continually assess, monitor and update Brambles’ climate-related risks and opportunities in order to articulate the issues driving the most relevant potential future scenarios for its business. 

The scenarios were used to identify key risks and opportunities that may eventuate in the various scenario, enabling Brambles to leverage opportunities and increase resilience in response.  The results of the scenario-based risk and opportunity assessment is provided below.

 Risk and opportunity update

1Total Pallet Management – allows CHEP additional storage nodes at customer/supplier facility