Halliburton follows the guidance from the Task Force on Climate-Related Financial Disclosures (TCFD) to perform qualitative climate-scenario analysis. As such, we identify opportunities and categorize impacts as Transition Risks (Policy, Reputation, Market, and Technology) and Physical Risks (Acute and Chronic).
The result of the climate scenario analysis has reinforced our goals of collaborating with customers to help them achieve their decarbonization targets; continued investment in electric fracturing to reduce emissions in our core business; servicing growth markets such as carbon capture, utilization, and storage (CCUS) and geothermal energy through our Low Carbon Solutions business; and continued work with start-ups through Halliburton Labs to uncover gaps in the broader energy value chains, which also allows us to learn how we can add value to this broader space.”
Priority risks include the following:
Across Transition Risks, we look at the short-term (0-2 years) and medium-term (2-10 years) to determine potential financial impact to our business and prioritize strategy and capital decisions accordingly. The aforementioned opportunities are aligned with our intent to mitigate identified transition risks.
Basis: International Energy Agency (IEA) Stated Policies Scenario (STEPS) and Sustainable Development Scenario (SDS)
We consider Physical Risks in the short-term (baseline), medium-term (2040) and long-term (2050) to identify which of our facilities and operations may be exposed, if any, and determine concrete mitigation plans. Out of all the sites analyzed, weather-related potential risk areas include Texas and Louisiana sites at risk of events, such as hurricanes and flooding. Water stress and drought-related potential risk areas include multiple desert sites in the United States and Middle East, and possible extreme heat and rainfall projection risks at our Singapore manufacturing sites.
Over the years our locations have experienced weather events such as hurricanes, tornadoes, hailstorms, flooding, and winter snow/ice storms. Weather impacts typically result in temporary delays with no long-term sustained impact. We closely monitor each acute weather event and weather trends to assess our response plans and reduce the possible business impact of these physical risks. Our diverse manufacturing base and supply chain also minimize the risk of local impacts.
Basis: Intergovernmental Panel on Climate Change (IPCC) Climate Scenario SSP3-RCP7.