Australian Ports Integrated Risk Analysis (Artesian)

Summary

• Over the past 14 months, Artesian has engaged with Australia's four largest ports, with a focus on climate impact risks and implications for bond issuer pricing.p.1
• Global mean sea level has risen approximately 21–24 cm since 1880, with the rate of rise accelerating in recent decades.p.1
• Current forecasts estimate a further rise of 29 cm to 1.1 meters by 2100.p.1
• Over 80% of global trade by volume is transported by sea.p.1
• Oxford University research finds that 86% of all ports are exposed to more than three types of climatic and geophysical hazards.p.2
• Extreme conditions at sea are expected to cause operational disruptions to around 40% of ports globally.p.2

Key insights

1. Sea level rise poses significant long-term risks to coastal infrastructure, particularly ports, which are inherently exposed.p.1
2. Ports also contribute to climate pressures through greenhouse gas emissions from shipping, port machinery and land transport.p.1
3. All four Australian ports acknowledge potential climate-induced shifts in trade flows and revenue losses from decarbonization.p.2
4. The Port of Brisbane has undertaken the most comprehensive analysis to date, using scenario analysis.p.2
5. Current impacts from sea level rise and severe weather events remain limited, with no material financial consequences to date.p.3
6. The market does not appear to fully price in climate risks to ports.p.3
7. The disconnect is partly attributed to limited awareness, a lack of detailed disclosure by ports and the strength of port cash flows.p.3