Climate Change Related Disclosure Report

NZX RELEASE

15 NOVEMBER 2022

Napier Port publishes second Climate Change Related Disclosure
Report

Napier Port (NZX.NPH) today publishes its second annual Climate Change Related Disclosure Report,
which seeks to provide stakeholders with an understanding of the potential financial implications of
climate change on its business. The report has been prepared in accordance with the
recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD).

The main focus of the second report is to highlight the progress that has been made to establish
Napier Port’s key climate related metrics and emission reduction targets. The 2022 financial year
saw our emissions inventory being audited for the first time by Toitū Envirocare. The certification
means Napier Port has measured and managed the operational emissions of our organisation in
accordance with ISO 14064-1:2018 and the GHG Protocol.

Our emissions audit certification can be found on our website at:
www.napierport.co.nz/environment/environmental-monitoring/

Our Sustainability Strategy and Climate Change Related Disclosure Reports are available at:
www.napierport.co.nz/investor-centre/

ENDS


For more information:

Investors Media
Kristen Lie Jo-Ann Young
Chief Financial Officer Corporate Affairs Manager
DDI: +64 6 833 4405 DDI: +64 6 833 4521
E: kristenl@napierport.co.nz E: jo-anny@napierport.co.nz


About Napier Port
Napier Port is New Zealand’s fourth largest port by container volume. We are the gateway for
Hawke’s Bay and lower North Island’s exports and operate a long-term regional infrastructure asset
that supports the regional economy. Our strategic purpose is to collaborate with the people and
organisations that have a stake in helping our region grow. View Napier Port’s investor centre:
www.napierport.co.nz/investorcentre/

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CLIMATE
CHANGE RELATED
DISCLOSURE REPORT
NOVEMBER 2022

CONTENTS
GOVERNANCE 2
RISK MANAGEMENT 4
STRATEGY 6
METRICS AND TARGETS 12
THIS REPORT IS PREPARED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE TASKFORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES (TCFD). NAPIER PORT IS ALSO AWARE
OF THE FUTURE REQUIREMENTS OF THE AOTEAROA NEW ZEALAND
CLIMATE STANDARDS WHICH ARE EXPECTED TO BE ISSUED BY
THE NEW ZEALAND EXTERNAL REPORTING BOARD IN DECEMBER
2022. THESE NEW MANDATORY CLIMATE STANDARDS ARE BASED
ON THE TCFD FRAMEWORK.

INTRODUCTION
This is the second report produced by Napier Port Holdings Limited
(Napier Port) which seeks to provide stakeholders an understanding
of the potential financial implications of climate change on its business.
The main focus of the second report is to highlight the progress that has
been made to establish our key climate related metrics and emission reduction
targets. The 2022 financial year (FY22) saw our emissions inventory being
audited for the first time by Toitū Envirocare. This external certification has
helped to establish a baseline from which we can now set emissions reduction
targets and measure progress against.
Napier Port’s sustainability journey is one of continuous improvement and
the people of Napier Port are committed to improving its environmental,
social and economic performance by identifying and managing risks and
finding opportunities to use our resources more efficiently.
Napier Port expects to further develop and improve its climate change related
disclosures as we gather more information and knowledge, and continue to
deliver our sustainability goals and strategy. In particular, we have prioritised
the development of emissions measurement.
TABLE OF CONTENTS
1. GOVERNANCE
2. RISK MANAGEMENT
3. STRATEGY
4. METRICS AND TARGETS
DISCLAIMER: Quantifications in this report of financial impacts of climate
change are estimates only and are not intended to constitute earnings
guidance. No representation is made as to their accuracy, completeness or
reliability. These risks and opportunities may not eventuate and if they do the
actual impact may differ materially from these estimates. Other material risks
and opportunities may exist or eventuate that are not included within this report.
CLIMATE CHANGE RELATED DISCLOSURE REPORT • NOVEMBER 2022 / 1

1. GOVERNANCE
TCFD REQUIREMENTS:
• DESCRIBE THE BOARD’S OVERSIGHT OF CLIMATE-RELATED
RISKS AND OPPORTUNITIES
• DESCRIBE MANAGEMENT’S ROLE IN ASSESSING AND MANAGING
CLIMATE-RELATED RISKS AND OPPORTUNITIES
The Napier Port Board of Directors is ultimately responsible for identifying
the principal risks faced by Napier Port and taking reasonable steps to ensure
that appropriate internal controls and monitoring systems are in place to
manage and, to the extent reasonably possible, reduce the impact of these
risks, including material climate-related risks. The Board reviews Napier Port’s
Risk Management Policy annually.
The Audit and Risk Management Committee supports the Board in this function
by ensuring that management is implementing Napier Port’s overall risk
management framework and policy and monitoring corporate risk assessments
and internal controls implemented. The Audit and Risk Management Committee
reviews Napier Port’s overall risk management framework on a six-monthly basis
and the committee proceedings are reported back to the Board.
The Sustainability Committee reviews a separate climate-related risk register
specifically for the management of climate-related risks. This is part of
the Sustainability Committee’s wider role to identify and consider relevant
environmental, social and governance (ESG) matters to provide strategic
guidance and feedback to the Board and management on Napier Port’s ESG
related strategies, policies, frameworks, initiatives, performance and reporting.
The Sustainability Committee meets at least three times per year to review
progress on the implementation of Napier Port’s sustainability strategy, including
the assessment of climate-related risks and actions, and the committee
proceedings are reported back to the Board.
The Chief Executive and senior management team are responsible for ensuring
that risks to the business, including climate-related risks, are identified and
evaluated, effective responses and control activities developed, and appropriate
monitoring and timely re-evaluation conducted, in accordance with Napier
Port’s Risk Management Policy. The General Manager Assets and Infrastructure
has overall responsibility for the development and implementation of the
sustainability strategy, including assessment of climate-related risks, and
reports on progress to the Sustainability Committee.
The different levels of responsibilities and the supporting Risk Management
Policy that governs the management of climate-related risks at Napier Port
are illustrated in Figure 1.
2 / NAPIER PORT – TE HERENGA WAKA O AHURIRI

FIGURE 1. GOVERNANCE OF CLIMATE-RELATED RISKS AT NAPIER PORT
RISK MANAGEMENT POLICY
• Provides the overarching framework for identifying,
assessing, managing and monitoring risk at Napier Port,
including climate-related risks.
• Objectives of the policy include ensuring that Napier Port
operates in a sustainable manner and protects the Port
environment in accordance with its sustainability strategy.
BOARD OF DIRECTORS
• The Board is ultimately responsible for identifying
the principal risks faced by Napier Port and taking
reasonable steps designed to ensure that appropriate
internal controls and monitoring systems are in place to
manage and, to the extent possible, reduce the impact
of these risks, including material climate-related risks.
• The Board receives reports and recommendations from,
and has access to management reports provided to, the
Audit and Risk Management Committee, in relation to
Napier Port’s overall risk management framework, and
reviews the Risk Management Policy annually.
• The Board is also responsible for setting the strategic
direction of Napier Port. This includes ensuring that the
environmental, social and governance (ESG) risks and
opportunities in Napier Port’s sustainability strategy,
including climate-related risks and opportunities, are
integrated into the Group’s long-term strategy and
investment decision-making.
• The Board receives reports and recommendations from,
and has access to management reports provided to, the
Sustainability Committee, and reviews the Sustainability
Committee Charter annually.
AUDIT AND RISK MANAGEMENT COMMITTEE
• Ensures that management is implementing Napier
Port’s overall risk management framework and policy.
• Monitors corporate risk assessments and internal
controls implemented.
• Reports to the Board whether Napier Port’s
overall risk management framework and processes
are sufficient.
CHIEF EXECUTIVE AND SENIOR MANAGEMENT TEAM
• The Chief Executive and senior management team
are responsible for ensuring that risks to the business,
including climate-related risks, are identified and
evaluated, effective responses and control activities
developed, and appropriate monitoring and timely
re-evaluation conducted, in accordance with
Napier Port’s Risk Management Policy.
• The Chief Financial Officer, working with senior
management, updates Napier Port’s overall risk
management framework and reports to the Audit and
Risk Management Committee on a six-monthly basis.
• The General Manager Assets and Infrastructure
has overall responsibility for the development and
implementation of the sustainability strategy, including
assessment of climate-related risks, and reports on
progress to the Sustainability Committee.
KEY STAFF TASKED WITH RISK MANAGEMENT ACTIVITIES (from Infrastructure, Finance and Operations teams)
• Provide support with identifying, monitoring and
assessing climate change risks and ensuring appropriate
management actions are taken in relation to them.
• Responsible for maintaining the safety, performance and
capability of Napier Port’s infrastructure assets and plant
and equipment over their projected economic lives.
• Maintain a 50-year property asset management plan.
SUSTAINABILITY COMMITTEE
• Makes recommendations and reports to the Board on
material ESG matters requiring governance decisions.
• Ensures the integration of ESG considerations into
business planning and strategy, risk management,
key policies, processes and culture.
• Oversees the development of Napier Port’s ESG
sustainability strategy and workplan.
• Monitors progress against the goals and actions
included in Napier Port’s sustainability strategy,
including climate-related goals and actions.
• Ensures an appropriate framework is maintained for
the management of ESG risks, including climate-
related risks and opportunities. Reviews and monitors
ESG-related risk assessments and the effectiveness
of the related risk management processes.
• Oversees and reviews ESG reporting processes,
including relevant internal controls and external review
and audit processes.
CLIMATE CHANGE RELATED DISCLOSURE REPORT • NOVEMBER 2022 / 3

2. RISK MANAGEMENT
TCFD REQUIREMENTS:
• DESCRIBE THE ORGANISATION’S PROCESSES FOR IDENTIFYING AND ASSESSING
CLIMATE-RELATED RISKS
• DESCRIBE THE ORGANISATION’S PROCESSES FOR MANAGING
CLIMATE-RELATED RISKS
• DESCRIBE HOW PROCESSES FOR IDENTIFYING, ASSESSING AND MANAGING
CLIMATE-RELATED RISKS ARE INTEGRATED INTO THE ORGANISATION’S OVERALL
RISK MANAGEMENT
Napier Port’s Risk Management Policy provides
the overarching framework for identifying, assessing,
managing and monitoring risk at Napier Port, including
climate-related risks. Each Napier Port business unit
is responsible for establishing and maintaining risk
documentation to monitor and report risks that threaten
achievement of business objectives. The Chief Executive
and senior management team are responsible for ensuring
that risks to the business are identified and evaluated, that
effective responses and control activities are developed,
and appropriate monitoring and timely re-evaluation is
conducted. The Chief Financial Officer, working with
senior management, updates the Napier Port enterprise
risk register, drawing on business units’ documentation,
and reports this register to the Audit and Risk Management
Committee at least on a six-monthly basis.
In addition to this process, for climate-related risks
Napier Port has benchmarked against recommendations
of the Taskforce on Climate-related Financial Disclosures
(TCFD) for identifying and assessing climate-related risks.
The Napier Port infrastructure team, supported by others
as required, are tasked with staying up-to-date with the
latest climate-related research, conducting regular risk
assessments and performing detailed climate change
analysis. The Board and Management are also continually
monitoring developments to existing and emerging
regulatory requirements related to climate change
as part of their risk assessment processes.
Envirolink, Gisborne District Council and Hawke’s Bay
Regional Council commissioned National Institute of
Water and Atmospheric Research (NIWA) to undertake
a review of climate change projections and impacts
for the Tairāwhiti (Gisborne) and Hawke’s Bay regions.
Napier Port has relied on the resulting report
1
for
projected changes in sea levels, wind, temperature
and extreme events, which have been used as inputs
for our risk assessments. The outputs allow us to analyse
a range of potential future scenarios and explore the
implications for Napier Port’s assets, operations, financial
plans and business model.
This report notes that future climate projections strongly
depend on estimates for future greenhouse gas
concentrations. In turn, those concentrations depend
on global greenhouse gas emissions that are driven
by factors such as economic activity, population changes,
technological advances and policies for mitigation and
sustainable resource use. This range of uncertainty was
dealt with by the Intergovernmental Panel on Climate
Change (IPCC) through consideration of ‘scenarios’
that describe concentrations of greenhouse gases in the
atmosphere. These scenarios were called Representative
Concentrations Pathways (RCPs)
2
.
4 / NAPIER PORT – TE HERENGA WAKA O AHURIRI

Our climate-related risk assessment process considers
the RCP4.5 (1.8 degrees Celsius mean increase in
global temperatures to 2100) and RCP8.5 (3.7 degrees
Celsius mean increase in global temperatures to 2100)
scenarios included in this report over a 30-year time
horizon to 2050 – and 95-year time horizon to 2100.
RCP4.5 is a ‘stabilisation’ pathway (where greenhouse
gas concentrations stabilise by 2100) and RCP8.5
represents continuing high global emissions without
effective mitigation, which will lead to high greenhouse gas
emissions (a high-end pathway). The reason for choosing
these two scenarios was to present a ‘high-end’ scenario
if atmospheric greenhouse gas concentrations continue
to rise at high rates (RCP8.5) and a scenario which could
be realistic if moderate global action is taken towards
mitigating greenhouse gas emissions (RCP4.5).
Our climate-related risk management spans 50 years,
aligning with asset management and scenario-based
likelihood of risk occurring.
For climate-related risk management, we believe a 50-year
horizon is appropriate as it is aligned with the economic
lives of our infrastructure assets and Napier Port’s asset
management plan, and we have used the following
timeframes to assess the likelihood of climate-related risks
occurring under each scenario: Short-term 0-20 years;
Medium-term 20-50 years; and Long-term 50 plus years.
We regularly monitor whether climate science requires us
to reassess this approach.
In accordance with Napier Port’s Risk Management Policy,
we assess the significance of each identified climate-
related risk using a likelihood and consequence matrix.
The climate-related risk register assesses the likelihood
of risks occurring during the short-term, medium-term and
long-term timeframes outlined above, to recognise the
longer-term nature of climate-related risks. This varies from
the overall risk management framework which assesses
the likelihood of a risk occurring based on whether it is
probable to occur within the next 12 months. For both,
the consequence of the identified risk is assessed based
on the potential level of impact on our people, assets/
infrastructure, operations and systems, environment,
reputation and financial planning. Based on the likelihood
and consequence, levels of risk are categorised as either
very high, high, medium or low. This allows us to determine
the appropriate response for each issue identified.
Climate-related risks are reviewed at least annually to
ensure they reflect material changes in our knowledge,
business strategy, and operating environment.
During the 2021 financial year (FY21), using the
process described above, we completed a ‘Whole
of Port’ Climate Change Risk Assessment – looking
at infrastructure resilience, trade forecasting, land levels,
weather conditions, emergency preparedness and habitat
modification. We identified 53 climate-related risks and
opportunities and these were reviewed again during
FY22. An overview of the top physical and transition
impacts is contained in our strategy section.
CLIMATE CHANGE RELATED DISCLOSURE REPORT • NOVEMBER 2022 / 5

3. STRATEGY
TCFD REQUIREMENTS:
• DESCRIBE THE CLIMATE-RELATED RISKS AND OPPORTUNITIES THE ORGANISATION HAS IDENTIFIED
OVER THE SHORT, MEDIUM AND LONG-TERM
• DESCRIBE THE IMPACT OF CLIMATE-RELATED RISKS AND OPPORTUNITIES ON THE ORGANISATION’S
BUSINESSES, STRATEGY AND FINANCIAL PLANNING
• DESCRIBE THE RESILIENCE OF THE ORGANISATION’S STRATEGY, TAKING INTO CONSIDERATION
DIFFERENT CLIMATE-RELATED SCENARIOS, INCLUDING A 2 DEGREE OR LOWER SCENARIO
Napier Port’s purpose is very clear: together we build
a thriving region by connecting our customers, people and
community to the world. This drives everything we do and
sets the scene for our business strategy, which provides
a robust and comprehensive direction for the future.
Our strategic goals are Customer Connection, Harnessing
Data and Technology, Networked Infrastructure and
Collaborative Partnerships, all underpinned by our Culture
of Care foundation. Sustainability is now embedded in
our foundation also and aligned with our goals to ensure
sustainable progress occurs throughout our whole
business, operations and supply chain.
Our business is exposed to climate-related risks outside
our port gate, including transport links and the impact
of climate change on our community and customers.
We intend to work collaboratively with relevant territorial
authorities and community groups, sharing information and
developing solutions, to deliver a more resilient business
and region. During FY22 Napier Port has been actively
sharing climate-related information with Hawke’s Bay
Regional Council’s Climate Action Hub.
For Napier Port, a warmer world in 2100 consistent with
the RCP8.5 scenario would result in potential physical
impacts on our infrastructure, create uncertainties as to
how our region would be affected and be required to adapt,
and affect what our business may look like as a result.
The transition impacts of climate change caused by
strong climate action policy will also create a mix of risks
and opportunities for our business. We have identified
and assessed these risks and opportunities, undertaking
analysis of the potential impacts for our business.
Our analysis of how climate change impacts us is undertaken
out to 2100, as this time horizon aligns with the economic
lives of our core infrastructure assets. As described in the
risk management section, we have assessed the likelihood
of risks occurring over the following timeframes:
short-term (0-20 years), medium-term (20-50 years)
and long-term (50 plus years). We have utilised two
scenarios to explore the strategic and operational
implications of climate change for our business,
RCP4.5 and RCP8.5, over a 30-year time horizon
to 2050 and 95-year time horizon to 2100.
The physical and transition risks included below are
from Napier Port’s ‘Whole of Port’ Climate Change Risk
Assessment and are rated very high, in accordance with
the risk management policy and specific climate-related
timeframes noted above. This assessment is based on
the likelihood of the risk occurring (likely or almost certain)
and consequence (greater than $5 million), in at least the
RCP8.5 scenario in the medium to long-term. Under the
RCP4.5 (2 degrees or lower scenario), these risks are
also present, although they would manifest themselves
at a later date.
From the analysis undertaken, at this stage, we do not
consider that the effects of climate change materially
change our overall strategy. Sustainability will be
embedded into our ways of working as we continue
to collaborate to look after people, planet and place,
including completing the actions contained in our
sustainability strategy. The more financially material
infrastructure improvement actions are required over
the medium to long-term to ensure that we continue
to have a resilient and agile infrastructure network.
Planning to address this will be embedded within our
asset management plans and infrastructure masterplan.
In the short-term we will continue to complete more
detailed investigations of climate-related effects and
ensure these are considered in Napier Port’s Master
Planning process. We will also include climate-change
effects and policy within Napier Port’s procurement
processes. Work in these two respective areas is ongoing.
6 / NAPIER PORT – TE HERENGA WAKA O AHURIRI

PHYSICAL RISKS
Climate change related effects result in a number
of risks to Napier Port infrastructure, in particular due
to its coastal location and susceptibility to sea-level rise.
Our assets are susceptible to physical risks today,
including from acute weather and natural disaster
events. Climate change modelling indicates that higher
temperatures will increase the likelihood of extreme
weather events that may affect operations and damage
infrastructure and there will be the ongoing impacts
of sea-level rise which may cause erosion and flooding.
The physical impacts of climate change considered
most material to Napier Port are described below:
INCREASE IN SEA LEVEL
One of the major and most certain consequences of
increasing concentrations of atmospheric greenhouse
gases and associated warming is the rising sea level.
The NIWA report includes projections of the approximate
years when specific sea-level rise (SLR) increments will
be met. A 0.5m SLR increment is projected to be reached
by 2075 under RCP8.5 and by 2090 under RCP4.5.
A 1.0m SLR increment is projected to be reached by
2100 under RCP8.5
3
.
Based on research, inundation of certain areas of the Port
is a remote possibility today when there is the combination
of high tides, storm surge and swell events (extreme
sea levels), coupled with high rainfall. Climate change
effects, predominantly the sea-level rise described above,
is projected to increase the frequency of inundation that
may cause damage or operational issues for the Port. As
an example, an extreme sea level event of 2.42m changes
from a 1/500 annual recurrence interval (ARI) to a 1/10
ARI under RCP4.5 in the short to medium-term (2040)
4
.
Potential inundation of the Port due to extreme sea levels
has been modelled under future scenarios. This modelling
shows potential areas of inundation based on extreme
sea levels and projected sea-level rise under RCP4.5 and
RCP8.5 to 2040 and 2090.
A significant portion of the Port is of a sufficient elevation
and not expected to be effected by SLR-induced
inundation under extreme sea levels, in particular the
container terminal, wharves and adjacent infrastructure.
There are areas of the northern log yard which have
the potential for some minor inundation even today
across the eastern side due to extreme sea-level events.
This is expected to get worse under both RCPs, minor
inundation can be reasonably expected every 5 years
in the short to medium-term (2040) under RCP4.5.
In the longer term (2090) under RCP4.5, and both the
short and long-term under RCP8.5, the level of inundation
is much more extensive across this area.
Inundation of the road to the northern log yard and several
nearby sheds are shown to be inundated due to extreme
sea levels at relatively lower ARIs in the longer-term
(2090). In the long-term the pavement in the northern log
yards will need to be raised to prevent regular flooding
with an estimated cost of $10-$15 million.
The western reclamation area is subject to inundation from
extreme sea levels even today, but this area has not been
fully developed and will be developed to design levels
sufficient to exceed future extreme sea levels arising from
climate change.
EXTREME RAINFALL EVENTS
Climate change is expected to result in an increase
in the frequency and intensity of extreme rainfall events.
The NIWA report notes that short duration rainfall events
have the largest relative increases compared with longer
duration rainfall events. Rainfall depths for 1-in-50-year
and 1-in-100-year events are projected to increase across
the greenhouse gas concentration scenarios and future
time periods
5
.
The Port has seen minor issues with stormwater
management in recent years due to extreme rainfall events
that the systems were not designed for. The stormwater
system will be further compromised by sea-level rise with
more outlets likely to be below sea level which impacts the
system’s ability to discharge effectively resulting in backing
up of stormwater. This is likely to result in inundation if the
extreme rainfall coincides with extreme sea levels. Detailed
modelling is to be completed to better understand the
system capacity both currently and under future scenarios
so appropriate plans can be put in place. Likely options
include additional drainage networks or pumping stations.
CLIMATE CHANGE RELATED DISCLOSURE REPORT • NOVEMBER 2022 / 7

EROSION
The East Beach area of Napier Port has a history of
significant movement of shingle to the north and south
during swell events depending on swell direction. Erosion
has been managed using ad-hoc shore protection where
key infrastructure is situated, such as the Plant Services
workshop. Climate-related risks are expected to increase
erosion in this area. In the long-term a hard structure may
be required to provide long-term protection in this area
with a preliminary estimated cost of $10–$15 million.
DROUGHT
Drought has been highlighted as one of the key risks
for Hawke’s Bay, with some of the largest increases
to the annual number of days of soil moisture deficit
compared to other parts of the country
6
. The largest
impact is expected to be in the meat industry with
increased drought frequency resulting in changes
to pasture composition. Increased droughts coupled
with occasional heavy rainfall could have major adverse
effects on soil stability.
The meat industry is a significant exporter through
Napier Port and drought therefore poses a risk to
revenue in the medium term and almost certainly
in the long term under both Representative
Concentrations Pathways (RCPs). Other industries
such as apples and timber are in a better position to
manage the risk of drought through various practices,
although horticulture will have an increased reliance
on water security.
TRANSITION IMPACTS
The transition impacts of climate change caused by
strong climate action policy are also a mix of risks and
opportunities for our business.
Government regulation to encourage shift to low
carbon economy (like the recently released Aotearoa
New Zealand Emission Reduction Plan) may result in:
• increased fuel costs particularly for Napier Port’s mobile
plant;
• requirements to invest in new technologies, equipment
and supporting infrastructure to move away from diesel-
powered plant; and
• policies to increase the use of rail which may require
additional infrastructure investment and changes to
Napier Port’s operating model.
Opportunities may include additional revenue streams from
requirements for ships to use shore power while in Port and
opportunities to partner in the supply chain to provide low
carbon or zero emission solutions for customers.
The transition impacts considered most material
to Napier Port are:
GOVERNMENT REGULATION TO ENCOURAGE
SHIFT TO LOW CARBON ECONOMY RESULTING
IN HIGHER FUEL COSTS
Government policy may increase emissions taxes on fuel
by greater amounts to encourage the significant reduction
in emissions required to achieve net zero emissions by
2050. This will likely significantly increase diesel fuel costs
and operating costs for Napier Port, which is currently
reliant on diesel fuel to power tugs, mobile harbour cranes,
and container handling equipment.
The higher fuel costs may encourage the shift to
alternative fuels throughout the region which may
ultimately reduce the fuel imported through Napier Port
and the revenue that this generates.
GOVERNMENT REGULATION TO ENCOURAGE
SHIFT TO ALTERNATIVE FUELS
Combined with the above there will almost certainly
be government regulation to ban or limit the procurement
of, and reduce the use of, diesel-powered machines and
encourage the shift to machines powered by alternative
fuels (e.g. electricity, hydrogen). It is expected that import
bans will precede the outright ban of diesel equipment,
which will provide some time to adapt.
8 / NAPIER PORT – TE HERENGA WAKA O AHURIRI

Napier Port is expected to transition in a planned orderly
way with emission reduction pathways under development
as part of the wider sustainability strategy. The transition
triggers are likely to be a mix of fuel and other price
pressures, investment cycles, and equipment and
alternative energy availability and reliability.
The development of the required infrastructure is expected
to occur over a longer period and require additional
capital investment.
Napier Port currently has an Electrical Master Plan
under development which shows that electrical
capacity at the Port will likely need to more than double
to meet all the future anticipated electrical demands.
The Electrical Master Plan will provide an effective
pathway to meet future electrical demand. There are,
however, numerous policy risks which may affect the
electrification programme:
• A ban on the importation of diesel equipment within
a short timeframe may result in the need to accelerate
infrastructure investment, uneconomically extending
the lifetime of plant or affecting expansion aspirations;
• An early ban in the importation of diesel equipment may
result in effective and reliable alternative low emission
options not being readily available;
• Policy that results in dramatic increase in fuel price may
result in earlier than expected move to an electric fleet.
If electrical infrastructure is not ready this may result
in higher than desired operating costs.
The decision-making process for investing in low emission
versus diesel technology poses a risk when considering
the lifespan of equipment, in particular key plant with
relatively longer lifespans such as tugs and mobile harbour
cranes. Decisions today are relatively simple due to costs
and available technology and will likely be in 20 years’
time when low emissions technology will be established
and cost effective. In the intervening period the decision-
making process is more complex and where policy risk
could have a significant effect. Higher fuel costs may result
in an earlier than expected move to alternative technologies
that could result in existing equipment becoming redundant
before the end of its expected useful life.
This is not an issue where equipment can be retro-fitted
such as mobile harbour cranes or for equipment that has
a relatively low lifespan (< 10 years), but may pose an issue
for the tugs with a long remaining useful life, limited ability
to retro-fit and an established (although immature) move
to alternative technology.
Actions Napier Port are taking to mitigate these risks are
considering future fuel cost risk in equipment purchasing
and investment decisions, considering whether equipment
can be retro-fitted in investment decisions and regularly
assessing the remaining life and residual value of key
equipment as a result of climate change pressures.
SHIPPING
Global shipping is one of the largest contributors
to global emissions. Although there are proven emerging
technologies, these are generally limited to use in
environmentally sensitive areas and there is nothing
on the horizon that would indicate any significant change
away from current technologies. It is expected that the focus
will be on an incremental reduction in fuel consumption.
Ship to shore power, particularly for cruise ships and
where connected to a ‘green’ grid, may become expected
by government or the operators themselves. This would
require significant additional electrical capacity, with
the standard for cruise ships being 20 MW, more than
double the Port’s current capacity. This provides a risk if
driven by government policy, and pricing to support the
investment is not able to be achieved, but also provides
an opportunity to provide a service to customers who
demand it as part of their own sustainability goals.
Larger ships not only provide a lower cost per TEU for
their operators, they naturally have lower emissions per
TEU. Higher fuel prices or a drive to lower emissions
will likely continue to drive larger ship sizes as well as
encourage slow steaming and schedule optimisation.
Napier Port is well placed to handle future ship sizes with
the current Master Plan and the newly operational Te Whiti
(6 Wharf), but should continue to monitor the influence
of climate change on ship sizes.
RAIL
Notwithstanding New Zealand’s topography and lack
of rail infrastructure compared to other countries,
currently rail has significantly lower emissions per tonne
compared to road freight, and also provides other
benefits, in particular reducing the number of trucks
on New Zealand’s roads. In the short-term, a lack of
national and regional rail infrastructure is and will remain
a major hindrance to a significant step change in the
use of rail. In the medium term, it is likely that road
transport will reduce their emissions as technologies
become available.
In the long-term (50+ years), under both RCPs,
it is expected that New Zealand’s rail network will
be effectively emission free, running on alternative fuels
such as hydrogen for long haul routes or potentially a fully
electrified network, which will likely result in a significant
uptake of rail. A significant increase in cargo transported
by rail would require changes in Napier Port’s operational
layout and associated infrastructure investment.
CLIMATE CHANGE RELATED DISCLOSURE REPORT • NOVEMBER 2022 / 9

TOP PHYSICAL RISKS
RISK DRIVERS
INCREASE
IN SEA LEVEL
EXTREME
RAINFALL EVENTS
EROSIONDROUGHT
SCALEHigh to Very HighHighHigh to Very HighHigh to Very High
LIKELIHOODAlmost certainAlmost certainAlmost certainAlmost certain
TIMEFRAME
Medium to
Long-term
Long-term
Medium to
Long-term
Medium to
Long-term
FINANCIAL
IMPLICATIONS
$10-$15 million
Still being
determined
$10-$15 million$5 million
METHODOLOGY
• Potential financial
impact is estimated
capital expenditure
required, based
on current civil
construction costs
in today’s money.
• Potential financial
impact is estimated
capital expenditure
required, based
on current civil
construction costs
for shore protection
in today’s money.
• Potential financial
impact is an
estimate of the
annualised impact
on trade volume
in today’s dollars.
RISK MITIGATION
• Northern log yards
will need to be
re-developed
to raise the level
of pavement.
• Ensure the western
reclamation area
is developed
to levels to meet
future extreme
sea levels due
to climate change.
• Modelling of the
stormwater system
capacity under
future scenarios.
• Assess capacity
of the outer
breakwater drain
under future
scenarios and
frequency of
drain cleaning.
• Detailed
investigation and
potential design
of hard structure
to provide long-
term protection
in the East
Beach area.
• Napier Port has
limited direct
control in managing
this risk. Napier Port
will keep an active
interest on potential
impacts and how
that might change
export volumes,
shipping patterns
and changes in
exports through
the regular master
planning process.
10 / NAPIER PORT – TE HERENGA WAKA O AHURIRI

TOP TRANSITION IMPACTS
RISK DRIVERS
GOVERNMENT
REGULATION
TO ENCOURAGE SHIFT
TO LOW CARBON
ECONOMY RESULTING
IN
HIGHER FUEL COSTS
GOVERNMENT
REGULATION
TO ENCOURAGE SHIFT
TO ALTERNATIVE FUELS
GOVERNMENT
REGULATION
TO ENCOURAGE
INCREASED
USE OF RAIL
SCALE
High to Very HighHigh to Very HighHigh to Very High
LIKELIHOOD
Moderate risk in short term.
Almost certain in medium
to long-term
Almost certainAlmost certain
TIMEFRAMEShort to Medium-termMedium to Long-termLong-term
FINANCIAL
IMPLICATIONS
To be determined
Still being determined as
options continue to be
assessed
Greater than
$10 million
METHODOLOGY
• Potential financial impact
is high-level estimate
of capital expenditure
required, in today’s money.
RISK MITIGATION
• Ensure fuel price escalation
risk is considered in
forecasting.
• Consider flexibility in
electrical infrastructure
development as part of the
Electrical Master Plan.
• Consider future fuel cost risk
in equipment purchasing and
investment business cases.
• Consider equipment that can
be retro-fitted in investment
decision-making process.
• Regularly assess the
remaining life and residual
value of key equipment
as a result of climate
change pressures.
• Changes to Napier Port’s
operational layout in line
with existing provisions
in the Master Plan to
increase our on-Port rail
infrastructure.
• Further consideration
of climate change related
effects will be included
in Napier Port’s Master
Planning process.
$
CLIMATE CHANGE RELATED DISCLOSURE REPORT • NOVEMBER 2022 / 11

4. METRICS AND TARGETS
TCFD REQUIREMENTS:
• DISCLOSE THE METRICS USED BY THE ORGANISATION TO ASSESS CLIMATE-RELATED RISKS
AND OPPORTUNITIES IN LINE WITH ITS STRATEGY AND RISK MANAGEMENT PROCESS
• DISCLOSE SCOPE 1, SCOPE 2, AND, IF APPROPRIATE, SCOPE 3 GREENHOUSE GAS (GHG) EMISSIONS,
AND THE RELATED RISKS
• DESCRIBE THE TARGETS USED BY THE ORGANISATION TO MANAGE CLIMATE-RELATED RISKS
AND OPPORTUNITIES AND PERFORMANCE AGAINST TARGETS
During FY21, we focused on defining our GHG inventory
to enable a better understanding of our emissions
profile. During FY22, we have taken this expanded
GHG inventory and collected the associated data
to create a base year for emissions reporting.
GREENHOUSE GAS (GHG) EMISSIONS
Napier Port has been measuring their Scope 1, 2 and
limited Scope 3 emissions for a number of years which
have been reported in the Annual Report and on the
Napier Port website. Historical emissions that were
reported up until the year ended 30 September 2021
are reported on the same basis. However, reported
emissions for FY22 include a wider range of Scope 3
emissions and been externally certified by Toitū Envirocare.
The additional Scope 3 emissions now include freight and
employee commuting. This is a significant milestone in
our emissions reduction journey and the audit certification
can be found on our website at: www.napierport.co.nz/
environment/environmental-monitoring/.
The certification means we’ve measured and managed the
operational emissions of our organisation in accordance
with ISO 14064-1:2018 and the GHG Protocol.
DEFINING OUR (GHG) EMISSIONS
INVENTORY
Last year, we worked with an external consultant,
BraveGen, to define our GHG inventory scope to
reflect best practice including identifying a wider range
of Scope 3 emissions. This expanded definition of our
GHG inventory is being used to determine and report
Napier Port’s emissions from FY22. This provides a better
understanding of Napier Port’s emissions profile,
identifies where opportunities for reductions are, enables
setting of GHG targets and measures, and reporting
overall progress. The GHG emissions sources included
in this inventory were identified with reference to the
methodology in the GHG Protocol and ISO 14064-
1:2018 standards. We are also now using BraveGen’s
GHG emissions inventory software to record and report
these emissions.
Under the GHG Protocol, these emissions are classified
under the following categories:
Scope 1 – Direct GHG emissions occurring from sources
that are owned or controlled by the company.
Scope 2 – Indirect GHG emissions occurring from
the generation of purchased electricity, heat and steam
consumed by the company.
Scope 3 – emissions that occur as a consequence of
the company’s activities, but from sources not owned
or controlled by the company. These have been further
categorised using the Scope 3 standard categories:
• Purchased goods and services (category 1);
• Business travel (category 3);
• Employee commuting (category 3);
• Capital goods (category 4);
• Fuel and energy-related activities not included in
Scope 1 or 2 (category 4);
• Waste generated in operations (category 4);
• Upstream transportation and distribution - electricity
(category 4);
Additional Scope 3 categories are not reported where they
are not relevant to our business. The excluded Scope 3
categories include:
• Upstream leased assets (category 4);
• Downstream transportation and distribution (category 3);
• Processing of sold goods (category 5);
12 / NAPIER PORT – TE HERENGA WAKA O AHURIRI

• Use of sold products (category 5);
• End-of-life treatment of sold products (category 5) and
• Franchises (category 5).
Using the BraveGen software we have defined how
emissions for Scope 1, 2 and 3 will be sourced, and
documented any emission sources that will be excluded
from the inventory.
GHG EMISSIONS REPORTING
In FY22, our total carbon emissions were 9,744.4 tonnes
which was down from 10,284.3 tonnes in FY21.
This is shown in Figure 1 below.
The decrease in total emissions correlates with a decrease
in annual cargo volumes during FY22. This has seen a
decrease in Scope 1 emissions to 7,154.8 tonnes from
8,627.3 tonnes in FY21. The lower volumes resulted in
a decrease in fuel usage for cranes, tugs, the pilot boat
and diesel generators.
Partially offsetting this decrease is an increase in Scope
2 and 3 emissions.
Our purchased electricity (Scope 2) emissions increased
to 1,758.7 tonnes from 1,430.0 tonnes in FY21.
Contributing to this was the Ministry for the Environment
materially increasing the Scope 2 electricity emissions
factor for FY22 (an 18% increase).
Scope 3 emissions were expected to increase given the
scope was widened for FY22 to capture emissions relating
to freight and employee commuting. As a result, Scope 3
emissions increased from 227.0 (FY21 adjusted) tonnes
to 830.9 tonnes when compared to the prior year.
However, our tCO2e per tonne metric increased from
0.00173 to 0.00181 in FY22 as shown in the chart below
(Figure 2). This is attributable to the impact of the two new
Scope 3 emissions categories in FY22.
On a like for like basis, with these two new Scope 3
emission sources excluded, our carbon emissions per tonne
decreased by 0.7%.
0.002
0.0015
0.001
0.0005
-
FIGURE 1: TOTAL CARBON EMISSIONS tCO2e
12,000
10,000
8,000
6,000
4,000
2,000
-
FIGURE 2: CARBON EMISSIONS tCO2e PER TONNE
* FY21 Scope 3 emissions relating to waste – landfill with gas recovery has been increased by 63.
Scope 1
Scope 2
Scope 3 (historical)
Scope 3 (new additions)
FY2017
FY2018FY2019
FY2020
FY2021*
FY2022
(certified)
FY2017
FY2018FY2019
FY2020
FY2021*
FY2022
(certified)
CLIMATE CHANGE RELATED DISCLOSURE REPORT • NOVEMBER 2022 / 13

Key insights into our carbon footprint and our FY22 emissions baseline are represented by the graphs below:
Figure 3: Total emissions broken down by scope
Figure 4: Scope 1 emissions broken down
by top emitters
73% of Napier Port’s total FY22 emissions related
to Scope 1 emissions. This is due to its large fleet
of mobile plant and marine assets. These machines
are all diesel consumers and are utilised across day
and night shifts throughout the financial year.
Scope 2 emissions broke down by top emitters
18% of Napier Port’s total FY22 emissions related to
Scope 2 emissions. The top emitters within the category
are powering refrigerated (‘reefer’) containers, operational
wharf and street lightning towers, and tug shore power
and related infrastructure.
Scope 1 ...............7,154.8
Scope 2 ...............1,758.7
Scope 3 ...............830.9
tCO2e
SCOPE 1 (tCO2e)
Forklift ................2,945.6
Marine Fleet ...... 1,537.6
Crane .................1,412.2
Stationary
Energy .................763.1
Light Vehicle ..... 496.3
14 / NAPIER PORT – TE HERENGA WAKA O AHURIRI

Figure 5: Scope 3 emissions broken down
by top emitters
9% of Napier Port’s total FY22 emissions related
to Scope 3 emissions. Breaking down the Scope 3
emissions data further, 59% of total Scope 3 emissions
are attributable to the two new scope categories:
freight (diesel trains operating between Napier Port
and Manawatū Inland Port) (33%) and employee
commuting (26%).
Waste – landfill with gas recovery ......................122.7
TEU Rail Freight – diesel tkm* (new) ................2 7 7. 6
Electricity T&D* losses kWh ................................162.4
Employee commuting (new) ................................216.7
Other, including air travel/water supply m
3
......51.5
SCOPE 3 (tCO2e)
SETTING TARGETS – DE-CARBONISING NAPIER PORT
We expect infrastructure improvements over time combined
with new technology to enable us to contain emissions
as trade volumes increase.
Napier Port has a number of de-carbonisation initiatives
currently underway, aligning with the goal of reducing
our carbon footprint:
• 3 electric vehicles and 2 hybrid vehicles introduced;
• 2 new Eco Reachstackers have been ordered;
• 14 LED floodlight towers now installed (up from
9 in FY21);
• At least 50% air travel reduction, offsetting emissions
for domestic air travel;
• Investigating electrification/alternative fuels
of Napier Port’s tugs, cranes and forklifts;
• Investigating options for hydrogen usage and generation.
Our sustainability strategy includes an action for Napier Port
to develop and adopt an emissions reduction strategy to
support Napier Port’s goal of net zero emissions by 2050.
During FY22 an initial emissions reduction strategy has
been developed. This is intended to provide the necessary
framework for those charged with governance to collectively
agree the most effective emissions reduction pathway for
Napier Port. At a high level the strategy aims to:
• Focus on the reduction of diesel consumption given
it’s the primary source of our current emissions
• Align investment in low emissions technology with
- Our asset renewal programme
- Any future Napier Port container terminal
transformation programme
- The availability of emerging technology
• Grow our electrical infrastructure through potential
electrical capacity upgrades. These upgrades would
be designed and constructed to facilitate out of season
electrical power for mobile harbour cranes
• Establish a decision-making framework that:
- Requires mandatory consideration of low emissions
technologies for any investment or business case
- Explores the possibility of establishing an internal price
of carbon (shadow price) to be used in investment
or business development decisions, including the
procurement of electricity
This strategy framework will continue to be further
developed in the near future and will involve further
investigations into the viability of alternative fuel sources
and the array of new low emissions technology.
Napier Port’s Sustainability Strategy and Action Plan
is available on our website at:
napierport.co.nz/wp-content/uploads/2021/08/Napier-
Port-Sustainability-Strategy-and-Action-Plan.pdf
*tkm = tonnes per kilometre
*T&D = transmission and distribution
CLIMATE CHANGE RELATED DISCLOSURE REPORT • NOVEMBER 2022 / 15

REFERENCES:
1. Climate change projections and impacts for Tairāwhiti and Hawke’s Bay
– Prepared for Envirolink, Gisborne District Council and Hawke’s Bay
Regional Council – November 2020.
2. 2013 IPCC Fifth Assessment Report.
3. Climate change projections and impacts for Tairāwhiti and Hawke’s Bay
– Prepared for Envirolink, Gisborne District Council and Hawke’s Bay
Regional Council – November 2020 (page 35).
4. Climate change projections and impacts for Tairāwhiti and Hawke’s Bay
– Prepared for Envirolink, Gisborne District Council and Hawke’s Bay
Regional Council – November 2020 (page 16).
5. Climate change projections and impacts for Tairāwhiti and Hawke’s Bay
– Prepared for Envirolink, Gisborne District Council and Hawke’s Bay
Regional Council – November 2020 (page 14).
6. Climate change projections and impacts for Tairāwhiti and Hawke’s Bay
– Prepared for Envirolink, Gisborne District Council and Hawke’s Bay
Regional Council – November 2020 (page 15).
16 / NAPIER PORT – TE HERENGA WAKA O AHURIRI

CLIMATE CHANGE RELATED DISCLOSURE REPORT • NOVEMBER 2022 / 17

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