Task Force on Climate-related Financial Disclosure (TCFD)

Ferrovial applies the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) in the process of identifying, analyzing and managing risks and opportunities related to climate change. Ferrovial periodically carries out an assessment and quantification of risks and opportunities in all its business units and geographies in different time horizons.

The methodology for climate risks is based on Ferrovial’s Risk Management methodology. This approach evaluates the likelihood of occurrence of the risk, the impact on the business and its frequency.

This methodology considers transition scenarios, based on the degree of implementation of climate change policies, presented annually by the International Energy Agency in the World Energy Outlook, together with physical scenarios that include various cases of greenhouse gas emission concentrations and their physical impacts on the climate, analyzed by experts from the Intergovernmental Panel on Climate Change (IPCC).

ADAPTARE: development of sustainable and resilient infrastructures

An internal tool called ADAPTARE has been developed to assess physical climate risks, which allows a preliminary assessment of climate risks associated with different scenarios, time horizons and a variety of infrastructures. ADAPTARE follows the methodology of the framework proposed by the IPCC, taking into account three variables: climate hazards, vulnerability (sensitivity and adaptive capacity of the asset) and exposure (characterization and valuation of assets) of human and natural systems.

Ferrovial shows two examples of its climate risk analysis: a transitional climate risk and a physical climate risk:

• Physical risk (acute physical): Flood (coastal, fluvial, pluvial, groundwater)
  
  The set of extreme weather events that can cause flooding can impact the operating performance of the toll roads managed by the Ferrovial. These events can cause physical damages on assets and infrastructure, leading to their closure either because they must be repaired or because they cannot operate. Therefore, the primary potential financial impact is the increase in capital expenditures. As an example, we present the results of one of our toll roads with a concession period from 50 years. On this infrastructure, flooding has been identified as one of the material risks. The damage sustained during such extreme climate events in this road could cause material damages, resulting in serious traffic disruption and loss of revenues.
  
  The estimated financial implications of the risk before taking action translates in 321,350 € time horizon of this risk is long-term (27 years). The estimated costs of the actions to respond to the risk (a set of preventive measures defined for Ferrovial toll road management infrastructures since 2019) are 190,347 €. Through the measures that are put in place to respond to the risk, the risk is fully mitigated.

• Transition risk (risk driven by changes in regulation)
  
  As countries transition to low-emissions economies, they are increasingly focusing in the implementation and developing new regulations, this may result in a greater obligation to report on climate aspects, which can lead to a range of penalties for failing to report or not reporting correctly the information required by legislation.
  
  The estimated financial implications of the risk before taking action translates in 5,500,000 € time horizon of this risk is medium-term (7 years). The estimated costs of the actions to respond to the risk (personnel and new tools or improvements to existing ones) are 1,283,900 €. Through the measures that are put in place to respond to the risk, the risk is fully mitigated.

As an example of opportunity, Ferrovial Construction seeks to improve the energy efficiency of the buildings that it constructs and rehabilitates both in the design phases, as well as the construction ones. Bioclimatic design criteria are applied, as well as innovative techniques and materials to offer innovative and different solutions to its customers. Aspects such as the location, orientation and ventilation of the building; acclimatization, use of recycled materials, sanitation networks, vegetable plantations with low-water demand; electric cars recharge points, or the use of LEED lights and low-consumption bulbs. The different measures implemented allow for reaching economic savings of approximately 43%. In 2023, Ferrovial worked on the construction of 19 buildings with LEED and BREEAM certifications. In this regard, Ferrovial is well positioned to access to a market quota of the 5,8 billion euros announced for financing rehabilitations of buildings (part of the NextGenerationEU funds).

The estimated financial positive implications of this opportunity translates in 185,600,000 € time horizon of this risk is medium-term (7 years). The estimated current annual costs associated with developing this opportunity are 183,810 €.