We believe UCL Energy Group is positioned for stable performance in a Paris aligned global environment. This refers to a future where global progress follows a path that aligns with the Paris goals.

We reviewed our strategy under several climate related scenarios, including scenarios aligned with 1.5°C. The assessment is similar to our 2023 work. It analyzes the possible impact on each business area under different transition conditions by 2030. More detail appears in pages 42 to 55 of the UCL Energy Group Annual Report 2024.

The analysis helps us identify any business areas where downside scenarios may create risks to our strategic resilience. We assess resilience through three points. Our ability to maintain a stronger balance sheet with improved credit metrics within the A grade range. Our ability to provide steady dividends and share excess cash with shareholders. Our ability to allocate investment within our capital plan in a disciplined way. If any area shows material exposure, we test the period from 2026 to 2030.

This assessment does not define resilience outside of this review. It relies on the assumption that, aside from the scenario effects being tested, UCL Energy Group will continue to meet its strategic and financial priorities to 2030. It also assumes that we will take normal mitigation steps, such as managing capital and costs, as needed.

Key insights from our scenario analysis and resilience test

As reported in our Annual Report 2023, oil price remains the biggest source of transition risk for UCL Energy Group through 2030. Even under the lowest oil price ranges in the 1.5°C, well-below 2°C, and BAU scenarios from the WBCSD Scenario Catalogue, sustained from 2025 to 2030, our analysis shows that we can still meet our three resilience measures. These measures are improved balance sheet strength, stable shareholder returns, and disciplined capital allocation.

These results need careful interpretation. Each scenario depends on many assumptions and has limits. Even so, the analysis supports our confidence in the strength of our strategy across a wide set of transition paths. This includes scenarios that limit temperature rise to 1.5°C. It also strengthens our confidence in our ability to handle oil price risk, which remains our largest transition exposure, through 2030.