Wesfarmers Ltd

During the year, Wesfarmers and its divisions engaged with the Australian and state governments, industry associations and member organisations on policies and actions to support climate action and ensure Australia remains competitive in the transition to a low-emissions economy. Examples of the Group's engagement on climate policy include: − **Mandatory climate-related** **financial disclosures** Wesfarmers engaged in consultations in support of Australia's proposed mandatory climate-related financial disclosures. As part of the consultations, we provided input into the opportunities and challenges associated with the standardisation of sustainability reporting. − **New vehicle efficiency standard** Bunnings, through industry associations, provided insights on critical issues affecting the retail sector, while supporting Australia's New Vehicle Efficiency Standard to accelerate transport decarbonisation. − **Carbon leakage review** WesCEF supported the assessment of measures to address carbon leakage risks, including scope to introduce a Carbon Border Adjustment Mechanism to ensure Australian emissions intensive businesses remain internationally competitive as they decarbonise. − **Low-emissions ammonia** **(green and blue)** Decarbonising ammonia production will be essential to WesCEF's net zero roadmap. While low-emissions ammonia produced from electrolysis processes with renewable energy is technically feasible, renewable electricity supply and costs are substantial barriers to deployment at scale. Low-emissions ammonia produced with natural gas and CCUS is expected to play a critical role in WesCEF's net zero roadmap, with policy reforms required to advance CCUS and access to natural gas during the transition. During the year, in submissions to the Australian and Western Australian Governments, WesCEF highlighted the challenges and opportunities with low-emissions ammonia production.

The Wesfarmers Board has responsibility for managing the Group's response to climate change. Climate change risk management is a permanent item on the Wesfarmers Operating Framework and is discussed by the Board and its Audit and Risk Committee. The Board approves the Group's climate change strategy including the Group Climate Change Policy, targets, strategic climate change-related decisions and climate-related disclosures. The Board also receives regular reporting and oversees climate change risk management. A consolidated Group Risk Report is provided to the Audit and Risk Committee and the Board for review and approval. The Corporate Plan is subject to a similar process and includes emissions forecasts. The Remuneration Committee makes recommendations to the Board regarding executive performance goals linked to performance against the Climate Change Policy and achievement of divisional emissions reduction targets and aspirations. [...] The Wesfarmers Leadership Team reviews emerging risks and opportunities, leads stakeholder engagement and facilitates the sharing of best practice throughout the Group. Each divisional board and divisional management team is responsible for identifying and managing any material risks and opportunities and business performance, including against the climate change strategy, in accordance with the Group's Risk Management Framework. Divisional audit and risk and compliance committees also oversee climate change-related risks relevant to the division.

The Wesfarmers Board has responsibility for managing the Group's sustainability performance and ultimate oversight of Wesfarmers' Sustainable Finance Framework. Sustainability is a permanent item of the Wesfarmers Operating framework and is discussed by the Board and the Wesfarmers Audit and Risk Committee. The Board approves the Group's climate change strategy including the Group's Climate Change Policy and Ethical Sourcing and Modern Slavery Policy and sustainability-related disclosures. The Board also receives regular reporting and oversees environmental and social risk management. The Remuneration Committee makes recommendations to the Board regarding executive performance goals linked to performance against the Climate Change Policy and achievement of divisional emissions reduction targets and aspirations. [...] Responsibilities for complying with any relevant Wesfarmers policy lies with divisional management and is overseen by the Wesfarmers Board and Leadership Team.