TRANSFORMING TRANSFORMING TRANSFORMING SUSTAINABILITY REPORT FY 2023 COMMUNITIES THE PLANET THE WORKPLACE Climate-related Risk Assessment Internal carbon pricing aids the transition to decarbonisation We carried out an in-depth climate risk assessment and scenario analysis to comprehensively understand At Vedanta, we are using Internal Carbon and analyse the risks and opportunities posed by Price (ICP) to future-proof our business climate change to our business. The findings of these against potential ad hoc cost escalations. By studies helped to make a roadmap to achieve Net embedding climate risks into our investment Zero target by 2050. decisions and proactively directing our focus • Physical risk assessment: As part of the physical towards clean energy technologies, risk assessment, acute risks arising out of processes and ecosystems, we are ensuring increasing severity of extreme weather events and that our preparedness extends across our chronic risks resulting from longer-term changes in businesses and countries of operation. ICP, is climate patterns were studied for 55 business a voluntary price that is linked to every unit of locations. We studied the historical trends and CO2 emissions. From FY 2023 onwards, we future projections of various climate hazards such have set the ICP at $15/tCO e. 2 as change in temperature, change in precipitation, The ICP mechanism is applicable across all floods, droughts, and cyclones to understand how our BUs and is used for capex evaluations the changing climate may impact our different that fulfil the following criteria: business locations. Two climate change scenarios RCP 8.5 and RCP 4.5 were used for two time periods • All capital expenditure (excluding admin, 2020 to 2039 and 2040 to 2059 extending over security, IT, digital and pre-operative Vedanta’s short, medium and long-time frames. expenses) > INR 50 million made by • Transition risk assessment: For our transition risk Vedanta and its operating subsidiaries. assessment, we used the Network for Greening the • Any project, with GHG emissions > 500,000 Financial System (NGFS) Scenarios developed in partnership with an academic consortium from the MT, irrespective of the cost • Any exemption from this policy has to be Potsdam Institute for Climate Impact Research (PIK), International Institute for Applied Systems Analysis pre-approved by Group Energy & Carbon Community of Practice Forum (IIASA), University of Maryland (UMD), Climate Analytics (CA) and Eidgenössische Technische For a detailed report on climate related risk Hochschule Zürich (ETH). assessment please refer to our TCFD Report For more information, please refer to our TCFD report 2023. https://www.vedantalimited.com/SiteAssets/Images/ TCFD-Report-FY23.pdf 56