REA Group is a leading digital property-centric business with more than 3,300 employees, helping people at every stage of their property journey. REA's platforms have more listings than anywhere else, along with the richest content, data and insights, property valuation estimates and home financing solutions. REA's operations include Australia's number one residential property website, realestate.com.au, which is visited by more than 10 million people each month.
Committed to supporting positive outcomes for the community and the environment, REA Group is working to reduce its emissions each year and has been certified carbon neutral by the Australian Government's Climate Active program since 2020.
Progressing on its climate journey, REA Group engaged South Pole's experts to conduct a climate scenario analysis in line with the recommendations of the Task Force on Climate–Related Financial Disclosures (TCFD). Taking a stepwise approach, this first assessment focused on REA's core brands.
"This was REA's first experience working with South Pole, and we've been very impressed. Their global team of climate experts not only has in-depth knowledge and experience but has the ability to simplify complex technical information into tangible and actionable insights for our business. This has helped educate our internal stakeholders on climate risk. The climate risk assessment work completed by South Pole has progressed REA's climate risk agenda and enabled our TCFD disclosures aligned to the strategy and risk management pillar. It also supports our preparation for the pending ISSB disclosures. We appreciate South Pole's transparent and collaborative approach and we've really enjoyed working with them so far."
Charisse Soutar, General Manager, Sustainability, REA Group
To begin, South Pole experts identified an exhaustive list of REA Group's climate risks and opportunities, developing a record of their likelihood of occurring and potential business impact. Working closely with REA Group through a survey and workshop, we identified a short list of the risks and opportunities that may have the greatest impact on the organisation's future. South Pole then conducted a qualitative assessment of these physical and transition risks and opportunities using climate scenario analysis, with a view to increasing REA Group's understanding of its key climate risks and opportunities.
Our experts did this in line with the recommendations of the TCFD. The TCFD has rapidly become the 'gold standard' for companies wanting to develop and disclose their climate change governance, strategy, risk management and metrics and targets, and informed the requirements under the International Sustainability Standards Board's (ISSB) Disclosure Standards.
South Pole assessed the relevance and materiality of acute and chronic physical risks on REA Group's owned and leased assets, employees and the broader property market. These risks were assessed over the short (2025), medium (2030) and long (2050) term. The assessment used historical environmental data and possible future scenarios built on the Intergovernmental Panel on Climate Change's (IPCC) climate scenarios that project warming of +2.5°C and +4°C by the end of the century.
Our analysis indicated that physical hazards such as bushfires and extreme temperatures may impact REA Group's employees and data centres. Climate hazards affecting consumers are expected to increase in likelihood and magnitude in the long term for most hazards that were assessed.
South Pole also looked into REA Group's transition risks and opportunities, using scenarios developed by the International Energy Agency (IEA) that project warming of +1.5°C and +2.3-2.8°C by the end of the century. Our analysis identified broader industry-related risks and opportunities linked to consumer preferences, sustainability policies for properties and net-zero building technologies. Direct risks to REA Group related to carbon prices. For REA Group, the exposure to a carbon price may be lower due to a comparatively small carbon footprint compared to larger emitters. However, carbon prices may also be passed through in energy and the cost of purchased goods and services.
Through the collaborative approach taken in this project, South Pole supported REA Group in developing their knowledge of climate scenario analysis and ensuring that their stakeholders were informed and engaged throughout the process. The insights from the qualitative scenario analysis provided REA Group with an overview of how the identified physical and transition risks and opportunities may impact their business. These can inform REA Group's sustainability report and the group's broader sustainability journey, considering both disclosures and strategic decision making for the future. Our work also included recommendations for initial actions to define opportunities for the low-carbon transition.
The next phase of REA Group's journey will be a deep-dive into some of the most material risks and opportunities identified to better quantify their potential business impacts.
"Our work is most impactful when clients truly care about climate action rather than viewing it as a pure tick-box compliance exercise. REA is one such client. It was a pleasure to work with the REA team who were engaged and asked thought provoking questions. For us, the work itself was interesting as it considered indirect climate risks and opportunities and its potential impact on REA. We look forward to continuing to support REA on the next steps of their journey."
Nancy Xie, Senior Managing Consultant, APAC Lead - Climate Risks and Opportunities, South Pole
