Halliburton follows the guidance from the Task Force on Climate-Related Financial Disclosures (TCFD) to perform qualitative climate-scenario analysis. As such, we categorize impacts as Transition Risks (Policy, Reputation, Market, and Technology) and Physical Risks (Acute and Chronic).
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.
In addition to outlining risks, our scenario analysis uncovered potential business opportunities in spaces such as carbon capture and storage, geothermal, and methane emissions management.