Vector Ltd

Vector consults actively on policy and regulatory reform to help better govern this transformation in a co-ordinated and strategic manner. [...] The bottom-up identification strategy is led by the Group Risk and Resilience and Group Sustainability teams across each Vector business unit to identify climate-related risks and opportunities against the three-climate scenarios described in the Risk and Opportunity Management section. These risks and opportunities are consolidated and presented to the Executive Climate Change Steering Committee, and the Board Risk and Assurance Committee. The top-down strategy uses insights from the Board, Executive, senior management, and subject matter experts both internally and externally to establish objectives, targets, strategies, and budgets to address climate-related risks and opportunities. [...] Vector's Board approves the company's strategy and metrics/targets to reduce climate-related risk and take advantage of climate-related opportunities. Vector management are responsible for updating the Board on performance against targets via Board reports. Decarbonisation makes up five percent of overall short-term incentive payments to the executive team and their direct reports. [...] The Audit Committee is responsible for oversight of climate-related financial disclosures and reporting which includes financial modelling. The committee meets to comment on key accounting judgments which include TCFD related scenarios, materiality thresholds, consolidated risks and opportunities, as well as greenhouse gas emission quantification and targets. The Audit Committee reviews and recommends the TCFD draft for final Board approval. [...] The Climate Change Steering Committee is chaired by the Chief Public Policy and Regulatory Officer, who holds ownership of climate change related risks. In the 2023 financial year, the Climate Change Steering Committee reported to the CEO monthly via a CEO report. Select contents from the monthly report are then reported to the Board in the monthly CEO report.

Vector Limited's board of directors is the governance body ultimately responsible for overseeing Vector's strategic direction and its climate-related risks and opportunities. Climate-related risks and opportunities are considered as part of Vector's 16 group-level material risks that are monitored with priority. These 16 risks are generally reviewed four times per year at the group material risk review. In FY2024 four of these 16 risks relate to climate change. Refer to the governance report within Vector's annual report for a list of these group material risks [1].

The board's role in relation to climate-related issues is supported by two board committees: the audit committee, and the risk and assurance committee. These committees have delegated responsibility for managing Vector's risks, including its climaterelated risks and opportunities.

The audit committee is responsible for oversight of climaterelated reporting. This committee meets to review key accounting decisions which include those regarding climaterelated scenarios, materiality thresholds, consolidated risks and opportunities, as well as greenhouse gas emissions quantification and target. The audit committee is responsible for reviewing and recommending the climate-related reports, under the Financial Markets Conduct Act (FMCA), for board approval. The audit committee is responsible for ensuring Vector's climate-related disclosures comply with the New Zealand Climate Standards

(NZCS) and is responsible for external reviews and assurance in relation to the climate-related disclosures. The independent reasonable assurance of Vector's greenhouse gas emissions by KPMG is set out in Vector's greenhouse gas inventory report [1].

The risk and assurance committee is responsible for the oversight of climate-related risks and opportunities as part of the committee's oversight of Vector's enterprise risk management framework.

These two committees are accountable to the board and each generally meets at least four times per year. Following each meeting the relevant committee updates the board in relation to matters within its scope that significantly affect Vector, as well as noting decisions of the committee and recommendations to the board. The board notes or approves the findings or recommendations of the committees as appropriate.

All committee papers are available to the full board and all directors have the opportunity to submit questions and/or attend committee meetings.

Members of Vector's management attend the meetings of the committees also, where relevant, to provide a two-way engagement between the board and management. Charters of the board and relevant committees can be found in the governance section of Vector's website [2].

[...] The climate change steering committee is a subcommittee of the executive, consisting of five members, and normally meets monthly to provide executive oversight of climate-related topics including climate change risks and opportunities. The climate change steering committee is chaired by the chief public policy and regulatory officer, who holds overall executive responsibility for climate-related risks and opportunities. The climate change steering committee reports to the chief executive periodically via the chief public policy and regulatory officer.

### 2. Governance

###### Vector's Board of Directors is responsible for oversight and governance of its business objectives and strategies, including
TCFD recommends climate-related risks and opportunities. The Risk and Assurance that organisations: Committee is a sub-committee of the Board which has been
delegated responsibility for ensuring Vector manages its risks

**• Describe the Board's oversight** **and compliance appropriately, including its climate-related risks.**
of climate-related risks and **The Chief Executive Officer is responsible for the day-to-day**
opportunities. **leadership and management of Vector's New Zealand and Australian**

###### businesses to ensure the identification and development of business

**• Describe management's role in**

###### objectives and strategies are delivered.

**Risk Management Policy**
Outlines Vector's risk management intent, objectives, and provides a framework for risk assessment and mitigation

**Sustainability Policy**
Outlines key objectives to lead our group decarbonisation efforts

**Environmental Policy**
Sets out Vector's commitment for managing the environmental aspects of its businesses

[...] Vector Group Risk and Sustainability
teams work in partnership with senior
management and operational business
units to identify, assess and manage our
climate-related risks and opportunities in
line with our enterprise risk management
framework.

For this disclosure, Group Risk and the
Sustainability team led a Vector-wide
programme to identify our climaterelated risks and opportunities. This
process was built upon existing work,
and involved close consultation with
Vector's diverse business units. As a result
of this consultation, we formulated a
consolidated list of risks for reporting
purposes at Vector Group level.

Risks and opportunities with a high
consequence in the short-to-medium
term were prioritised and refined for the
purposes of this disclosure. These were
reviewed at our Climate Change Steering
Committee, and approved by the Board.

The approach we have developed to
identify, assess and manage climaterelated risks and opportunities will allow
our TCFD reporting to continue to mature
over time. The approach is aligned to our
overarching risk management approach
to provide quarterly oversight and review
of climate risk across the Group. New
or amended climate-related risks and
opportunities will be examined by the
Climate Change Steering Committee and
Executive Risk and Assurance Committee,
elevated to the Board as required.

###### The approach we have developed will allow our TCFD reporting to continue to mature over time.

Our Board Risk and Assurance Committee
has responsibility for overseeing
and reviewing our enterprise risk
management framework policies and
processes and material risks to the
Vector Group.

Climate change has been identified on
our Group Risk Profile as a material risk
for a number of years, reinforcing our
ongoing work to understand and respond
to the evolving impact of climate change
on our business, as well as the opportunity
to enable our vision of creating a new
energy future.

To further identify and evaluate climaterelated risks and determine their
applicability to the business, Vector
has modelled scenarios of the impact
of decarbonisation on the electricity
network. Furthermore, Vector has
undertaken two significant studies at
Group level in conjunction with external
specialists. These studies cover (i) an
assessment of physical climate change
impacts on our Auckland electricity
network and (ii) the economic impacts
associated with a transition to a
decarbonised future (see TCFD – Section
1 – Strategy for more detail). More detailed
work is now being conducted into the
direct financial impacts from climaterelated transition risks across Vector's
major business units to help inform and
shape our future direction and strategy.

Vector's Board oversight

Vector's Board of Directors is responsible for the governance of Vector's strategic direction, including recognising and managing climate-related risks and opportunities and their impact on that strategic direction. Vector's Board approves the company's strategy and metrics/targets to reduce climate-related risk and take advantage of climate-related opportunities.

The Audit Committee, and Risk and Assurance Committee are subcommittees of the Board with delegated responsibility for ensuring Vector manages its risks and compliance appropriately, including its climate-related risks. Each meets at least four times per year.

The Audit Committee is responsible for oversight of climate-related financial disclosures and reporting which includes financial modelling. The committee meets to comment on key accounting judgements which include TCFD related scenarios, materiality thresholds, consolidated risks and opportunities, as well as greenhouse gas emission quantification. The Audit Committee reviews and recommends the TCFD draft for final Board approval.

The Risk and Assurance Committee is responsible for the oversight of Vector's Enterprise Risk Management Framework, its maturity, and the effectiveness of the management of the framework. It regularly reviews the risk of adverse impacts, government responses, and unexploited opportunities from climate change as part of the group material risks to the delivery of its Symphony Strategy.

The Board Risk and Assurance Committee, and Audit Committee are accountable to the Board and regularly report decisions and recommendations to it. This includes a requirement to ensure that the Board is made aware of matters within the Committee's scope that significantly affect Vector.

Vector's Executive oversight

The Group Chief Executive is responsible for the day-to-day leadership and management of Vector's New Zealand and Australian businesses to ensure the identification and development of business objectives and strategies are delivered.

The Climate Change Steering Committee is a sub-committee of the Executive, consisting of 6 members, and normally meets monthly to identify and manage all climate change related topics including climate change risk, and decarbonisation. The Climate Change Steering Committee is chaired by the Chief Public Policy and Regulatory Officer, who holds ownership of climate change related risks. The Climate Change Steering Committee reports to the CEO.

Vector's Group oversight

Vector Group Risk and Resilience is responsible for the Vector Group Enterprise Risk Management Framework. Risks, including climate-related risks and opportunities, are identified, assessed, and managed across the Group in line with the framework and the Group Risk Assessment Criteria. This is designed to ensure that there is appropriate and regular Board and management oversight of material risks identified to drive informed decision making. Vector's Group Sustainability consults with Vector's diverse business units to drive Vector's climate change strategy. This includes carbon management, internal decarbonisation programmes (carbon footprint), external decarbonisation support (carbon handprint), climate adaptation strategies, consolidation of climate change related metrics and targets, and strategic oversight of climate change related risks and opportunities. Group Sustainability reports to the Chief Public Policy and Regulatory Officer and sets the agenda for the Climate Change Steering Committee. The risks and opportunities are financially evaluated by Group Finance, with analytics conducted by Group Insights.