In Budget 2021, the federal government announced that all Crown corporations would be required to demonstrate climate leadership by adopting the Taskforce on Climate-Related Financial Disclosures (TCFD) framework, which includes 11 recommended disclosures across four pillars: governance; strategy; risk management; and metrics and targets. These disclosures include an assessment of climate-related risks and opportunities as well as greenhouse gas (GHG) emissions.
Governance
CATSA recognizes the complex nature of climate change and the importance of considering and integrating Climate-Related Risk and Opportunity management within business strategies. To this end, roles and responsibilities have been assigned as it relates to oversight and management of climate-related risks and opportunities in the Audit Committee’s Terms of Reference, and in the Climate Disclosure Policy.
Board Oversight of Climate-Related Risks and Opportunities
CATSA’s Board of Directors, through the Audit Committee, is accountable for assessing the adherence to climate-related disclosure requirements, including the TCFD, as well as overseeing climate-related risk management activities through the Enterprise Risk Management (ERM) Profile when a climate-related risk surpasses CATSA’s risk appetite. As detailed within the Climate Disclosure Policy, the Board of Directors stays apprised of climate-related issues, including progress towards targets and the adoption of climate-related disclosures, through quarterly and annual reporting from management. Any substantive amendments to the Climate Disclosure Policy must be approved by the Board of Directors.
Management’s Role in Assessing and Managing Climate-Related Risks and Opportunities
The Senior Management Committee (SMC) is the highest-level of management with direct responsibility for climate-related issues. To ensure appropriate management of climate-related issues and execution of CATSA’s climate strategy, SMC reviews the results of the Climate-Related Risk and Opportunity Assessment (CROA) and evaluates how the results fit within CATSA’s business strategies, climate strategy and targets, and supports climate-related disclosures and data collection.
An overview of all climate-related accountabilities relevant to CATSA’s governance structure can be found below.
| Role | Climate-related accountabilities |
|---|---|
| Climate-Related Risk and Opportunity Owners | Responsible for identifying and managing climate-related risks and opportunities within their authority, implementing mitigation plans, and executing assigned climate priorities and targets. |
| Vice-President, Corporate Affairs and Chief Financial Officer | Accountable for interpreting and applying the climate disclosure policy, leading climate-related risk and opportunity assessments, monitoring disclosure practices, providing guidance and tools, and reporting CATSA's climate strategy and progress to SMC and the Board of Directors. |
| Senior Management Committee | Responsible for reviewing climate-related risk and opportunity assessments, embedding climate opportunities and risk mitigation in business strategies, approving CATSA's climate strategy and targets, and supporting climate-related disclosures and data collection. |
| Board of Directors | Accountable, through the Audit Committee, for overseeing CATSA's climate strategy and risk management, ensuring adherence to disclosure requirements, and managing climate-related risks that exceed the company's risk appetite through the ERM Framework. |
Strategy
CATSA developed a climate strategy which serves as a framework of priorities and targets around CATSA’s climate-related risks and opportunities. These risks and opportunities are identified through the CROA, which considers the likelihood and impact criteria from CATSA’s ERM Policy and is conducted every three years. It also considers other criteria unique to climate-related risks such as longevity, as climate-related risks are to be assessed over a future horizon (5-10 years). CATSA’s most recent CROA was conducted in 2023. The CROA provides an understanding of how climate-related risks may impact CATSA’s operations. Any climate-related risk exceeding CATSA’s risk appetite may be managed as part of the ERM process on an ongoing basis.
Identification of Climate-Related Risks and Opportunities
Below are CATSA’s priority climate-related risks and opportunities based on our most recent CROA.
| Risk Type | Risk and Potential Impacts |
|---|---|
| Physical Risks4 | |
| Acute | Supply Chain Disruption Increase in frequency and severity of extreme weather events may result in supply chain disruption or price volatility affecting the procurement of key items (e.g. IT equipment, spare parts for screening equipment, consumables used by screening officers). |
| Chronic | Disruption of Operations Increase in frequency and severity of extreme weather events may compromise CATSA’s ability to deliver on its mandate and present financial liabilities (e.g. restrict airport access to screening officers, interference with preventive maintenance procedures). |
| Acute |
Damage to Equipment |
| Transition Risks5 | |
| Policy and Legal |
More Stringent Climate-Related Disclosure Requirements |
| Reputation | Employee Retention and Recruitment Impact of failure to address climate expectations on the ability to attract or retain employees. |
| Opportunity Type | Opportunity |
|---|---|
| Energy Source | Energy Efficiency Use climate change mitigation as a catalyst to promote energy efficient operations and drive energy consumption (and associated costs) down . |
| Resilience | Corporate Reputation and Relationships Use climate change mitigation as a catalyst to enhance CATSA’s corporate reputation, deepen relationships with key partners, and create potential synergies to deliver on its mandate more efficiently. |
CATSA plans to address these risks and opportunities through the climate strategy, presented below.
Resilience
CATSA conducted a comprehensive scenario analysis to gain insights into how climate-related risks and opportunities identified in the CROA may affect its business under diverse possible futures.
The analysis was carried out across three time-horizons: short (by 2030); medium (by 2050); and long term (by 2090). Further, the analysis took into consideration two climate scenarios: a low global warming scenario (SSP1-RCP 2.6) and a high global warming scenario (SSP5-RCP 8.5)6. In terms of physical risk, the analysis considered seven natural hazards at the location-level for all airports (89) and CATSA operations (head office and test lab). The most recent scenario analysis was conducted in 2023/24 and revealed that the physical and transition impact of the climate scenarios would persist over the short, medium and long term, other than the risk related to disclosure requirements, which should only impact CATSA over the short and medium term. Overall, it was concluded that CATSA’s climate-related risks remain manageable.
Climate Strategy
The climate strategy was developed based on the results obtained from the climate-related risks and opportunities identified in the CROA and scenario analysis, the nature of CATSA’s GHG emissions profile, input of key internal partners and the federal Greening Government Strategy. CATSA’s climate strategy, including updates, are approved by SMC.
CATSA’s climate strategy is built on three pillars, as summarized below:
| Emissions Reduction and Management | Resilience | Communication & Engagement |
|---|---|---|
| Priorities | ||
|
Contribute to the transition to a low carbon economy by:
|
Ensure that CATSA’s operations are resilient to extreme weather events by:
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Enhance climate transparency and advocacy by:
|
CATSA’s climate strategy is intended to contribute to maintaining resilience over time. As such, several of the priorities above translate to metrics and targets that are presented below.
Risk Management
Processes for Identifying and Assessing Climate-Related Risks
CATSA’s CROA consists of two steps:
(i) Risk identification: identify a list of physical and transition risks, recognizing CATSA’s operations, corporate mandate, physical footprint and assumed trends.
(ii) Risk rating and prioritization: validate the list of physical and transition risks with key internal partners and assign a likelihood and impact rating for each risk, using the criteria from CATSA’s ERM Policy. Also considered are additional criteria unique to climate-related risks such as longevity (as climate-related risks are to be assessed over a future horizon).
Based on this assessment, CATSA identifies a short-list of priority risks that are presented in the Strategy section. As climate-related risks and opportunities are dynamic, and CATSA’s exposure to these risks and opportunities may change over time due to both internal and external factors, the CROA is updated every three years, while any climate-related risk that could exceed CATSA’s risk appetite is continuously monitored and managed within the ERM program.
Processes for Integration of Climate-Related Risks into Corporate Risk Management
Short-listed climate-related risks identified through the CROA are assessed as to the appropriateness of existing mitigations and controls and incrementally built on as necessary. Separately, climate-related risk found to exceed CATSA’s risk appetite are monitored as part of the ERM process on an ongoing basis.
The CROA’s higher-rated risks included the potential of disruption to operations, equipment damage, and increased/more stringent climate-related reporting requirements. None of the risks identified in the CROA surpassed CATSA’s risk tolerance and, therefore, in accordance with our Climate Disclosure Policy, did not require tracking as part of CATSA’s ERM Profile.
Metrics and Targets
Metrics Used to Assess Climate-Related Risks and Opportunities
CATSA’s GHG emissions (tCO2e), representative of the baseline year of 2022/23, and aligned with the Greenhouse Gas Protocol’s standards for corporate accounting and reporting, are tracked to measure the progress against the targets set within CATSA’s climate pillars.
GHG Emissions
CATSA’s GHG emissions inventory includes direct emissions (Scope 1)7 and indirect emissions (Scope 2)8. CATSA recognizes that GHG emissions extend beyond CATSA’s direct operations. Accordingly, CATSA has begun engagement with the screening contractors (expected to be the largest portion to CATSA’s Scope 3 emissions) and with other key partners, to map indirect emissions (Scope 3)9 within the value chain and obtain access to credible data. CATSA has a plan to integrate material Scope 3 emissions into the GHG inventory in 2025/26.
| GHG emissions | 2022/23 | 2023/24 | 2024/25 |
|---|---|---|---|
| Scope 1 | 37.1 | 37.1 | 36.4 |
| Scope 2 | 25.7 | 23.5 | 24.9 |
| Total | 62.8 | 60.6 | 61.3 |
Targets for Managing Climate-Related Risks and Opportunities
To bolster the climate pillars that CATSA has established, targets for two of the three pillars have been assigned, respectively, to ensure that progress is intentional and measurable. CATSA’s Scope 1 and 2 emissions reduction climate-related targets have been developed in alignment with reaching net-zero by 2050.
| Climate Pillars | Metric | Target |
|---|---|---|
| Emissions Reduction and Management | Scope 1 and 2 emissions (tCO2e). | Reduce absolute Scope 1 and 2 GHG emissions by 55% by 2033/34 from 2022/23 levels. |
| Communication & Engagement | % of employees who agree that CATSA promotes environmental initiatives in the workplace. | Increase the proportion of employees who agree that CATSA promotes environmental initiatives in the workplace from 54% to 60% in the 2025/26 employee survey. |
| % of employees who participated in sustainability & climate learning session | Deliver sustainability & climate learning session to CATSA employees by 2025/26 (target is 80% attendance). |
In 2024/25, CATSA created an employee-led ‘Green’ Working Group to promote sustainability across the organization and to support continued progress towards meeting its climate strategy priorities and targets.
Looking Ahead
These inaugural TCFD disclosures mark an important milestone in CATSA’s sustainability journey. CATSA is actively working towards deeper partner engagement and advancing its understanding of climate-related risks and opportunities across its supply chain and business operations. Looking ahead, CATSA is committed to its climate strategy, which includes enhancing reporting of CATSA’s GHG inventory by incorporating supply chain based indirect (Scope 3) emissions.
4 Climate change driven events that may cause sea level rise or persistent heat waves, including acute - extreme events, such as hurricanes or floods; and chronic - sustained higher temperatures.
5 Transitioning to a low-carbon economy may entail extensive policy, legal, technology, and market changes to mitigate and adapt to climate-related changes. Depending on the severity of these changes, transition risks may pose varying levels of financial and reputational risk.
6 In this climate scenario analysis, a low global warming scenario is SSP1-RCP 2.6, and a high global warming scenario is SSP5-RCP 8.5, based on the Intergovernmental Panel of Climate Change's (IPCC) Sixth Assessment Report, used to obtain future projections of global surface temperature changes and greenhouse gas emissions.
7 Scope 1 emissions are direct GHG emissions generated from sources that are owned or controlled by CATSA (e.g. natural gas consumption at CATSA’s headquarters and other leased offices).
8 Scope 2 emissions are indirect GHG emissions from consumption of purchased energy (electricity, heat or steam), by CATSA (e.g. energy consumption at CATSA’s headquarters and other leased offices).
9 Scope 3 emissions are indirect emissions not covered in Scope 2 that occur in CATSA’s value chain. They include emissions from the purchase of screening services from screening contractors, maintenance services, screening equipment and consumables, CATSA space at airports, employee business travel and commute, and waste disposal at CATSA’s facilities.