Carbon Disclosure Project

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2 Carbon Disclosure Project CDP 2013 Investor CDP 2013 Information Request Sims Metal Management Module: Introduction Page: Introduction 0.1 Introduction Please give a general description and introduction to your organization Sims Metal Management (SimsMM) is the leading and largest recycling company in the world operating in North America, Australasia, South Africa, Middle East (Dubai), Europe and India, supplemented by trading offices in Asia and the only recycling Company to be selected as one of the 100 Most Sustainable Companies in the World, by the World Economic Forum, a nomination that this year was given for the 5th year running with a world ranking of no. 15. Sims Metal Management operates predominantly in the secondary metal, plastics and electronics recycling industry. Its core businesses include 1. Secondary ferrous metal recycling, which comprises the collection, mechanical processing and trading of iron and steel secondary raw materials. 2. Secondary non-ferrous metals recycling, which comprises the collection, processing and trading of other metal alloys and residues, principally aluminium, copper, brass, stainless steel and nickel bearing materials. 3. Sims Recycling Solutions (SRS), which comprise the provision of environmentally responsible solutions for re-use and disposal of post-consumer electronic and electrical products. 4. Secondary processing, which comprises 2 relatively small value-added processing facilities for the melting, refining and ingoting of secondary aluminium and precious metals; the reclamation and reprocessing of plastics; and landfill gas renewable energy. Landfill Management Services (LMS) is 50% owned by SimsMM and is a Australian based green energy provider, as well as a supplier of more than 1.2 million Government authorised Renewable Energy Certificates (RECs) and NSW Greenhouse Abatement Certificates. By converting methane from external clients landfill sites to renewable energy, close to 1.9 million tonnes of CO2 was abated in fiscal 2012, generating more than 330,000 MWh enough to provide renewable power to an average of 63,500 homes. 0.2 Reporting Year Please state the start and end date of the year for which you are reporting data. The current reporting year is the latest/most recent 12-month period for which data is reported. Enter the dates of this year first. We request data for more than one reporting period for some emission accounting questions. Please provide data for the three years prior to the current reporting year if you have not provided this information before, or if this is the first time you have answered a CDP information request. (This does not apply if you have been offered and selected the option of answering the shorter questionnaire). If you are going to provide additional years of data, please give the dates of those reporting periods here. Work backwards from the most recent reporting year.

3 Please enter dates in following format: day(dd)/month(mm)/year(yyyy) (i.e. 31/01/2001). Enter Periods that will be disclosed Thu 01 Jul Thu 30 Jun 2011 Fri 01 Jul Sat 30 Jun Country list configuration Please select the countries for which you will be supplying data. This selection will be carried forward to assist you in completing your response Select country Australia New Zealand Papua New Guinea United Kingdom Sweden Netherlands Germany Belgium United States of America Canada 0.4 Currency selection

4 Please select the currency in which you would like to submit your response. All financial information contained in the response should be in this currency. AUD ($) 0.6 Modules As part of the request for information on behalf of investors, electric utilities, companies with electric utility activities or assets, companies in the automobile or auto component manufacture sectors, companies in the oil and gas industry and companies in the information technology and telecommunications sectors should complete supplementary questions in addition to the main questionnaire. If you are in these sectors (according to the Global Industry Classification Standard (GICS)), the corresponding sector modules will not appear below but will automatically appear in the navigation bar when you save this page. If you want to query your classification, please If you have not been presented with a sector module that you consider would be appropriate for your company to answer, please select the module below. If you wish to view the questions first, please see Further Information The 2011 fiscal year figures have been recalculated and restated. The reason for this is that a major contributor to the CO2 emissions in North America was the SAR Division. This division is a JV and not under the operational control of SimsMM. It has therefore been decided to delete the contributing energy and carbon profile from the previous Fiscal year 2012 statements submitted to CDP. The numbers that appear in the Sims MM Annual Report for 2012 do not include the SAR division. Attachments CDP 2013/Shared Documents/Attachments/InvestorCDP2013/Introduction/2012 Annual Report Final.pdf CDP 2013/Shared Documents/Attachments/InvestorCDP2013/Introduction/Annual_Report_2011_FINAL.pdf Module: Management [Investor] Page: 1. Governance 1.1 Where is the highest level of direct responsibility for climate change within your company? Individual/Sub-set of the Board or other committee appointed by the Board

5 1.1a Please identify the position of the individual or name of the committee with this responsibility SHEC (Safety, Health, Environment, Community) Committee of the Sims Metal Management Board of Directors The SHEC Committee is chaired by Jim Thompson - an independent non Executive Director and consists of Dan Dienst - CEO and 2 other independent non-executive directors ( Chris Renwick & Heather Ridout) and 1 non-independent non-executive director Tom Sato. The SHEC Committee of the Board is supported by three Regional SHEC Committees (North America, APAC and Europe) as well as the Global Director, Sustainability, Peter Netchaef who reports directly to the CEO, Dan Dienst. 1.2 Do you provide incentives for the management of climate change issues, including the attainment of targets? Yes 1.2a Please complete the table Who is entitled to benefit from these incentives? The type of incentives Incentivized performance indicator Other: Environment/sustainability managers Energy managers Monetary reward Monetary reward Development and meeting of energy reduction targets Development and implementation of energy reduction initiatives Business unit managers Monetary reward Meeting of energy target reductions Facility managers Monetary reward Meeting of energy reduction targets Page: 2. Strategy

6 2.1 Please select the option that best describes your risk management procedures with regard to climate change risks and opportunities Integrated into multi-disciplinary company wide risk management processes 2.1a Please provide further details The three operating regions of North America, Europe (including UK) and Asia Pacific have formal energy teams in place, each of which meets and reports as a minimum quarterly to the Regional SHEC Committee. The primary role of these energy teams is to continually evaluate and assess operational programs, projects or new technologies that has the potential to reduce energy consumption and therefore operating cost as well as carbon emission reductions and work with the operational teams to ensure maximum operational efficiency. With energy and carbon reduction initiatives now legislated in two of the main operating regions (Australia and the UK/Europe), the teams are also tasked with evaluating the ongoing financial impacts of such legislation and ensuring compliance. Furthermore, energy/carbon legislation and the debate that surrounds it is of considerable interest to many of the company s clients who are keen to work with a sustainable service provider, so it is further a remit of the energy teams to work closely with the company s commercial teams. When the Company originally decided to integrate sustainability into its operational profile, the Australian EEO Act model, which captures the operations that constitute 80% of the regions energy profile was adopted globally, but today the entire energy profile of each region is examined for energy and carbon reduction opportunities. With metal shredders and transport being the majority energy consumers in the Company, efforts have tended to centred on these operational activities, but lesser consuming activities are considered also, such as energy efficient lighting and the use of wind turbines and solar energy. The Global Director, Sustainability has overall global management and control of the direction of the teams with regular reporting to the Board SHEC Committee. Ranking of projects and initiatives is done according to their cost effectiveness using a common investment appraisal procedure based on discounted cash flow valuation which considers life cycle costs, benefits and emissions reduction potential. In evaluating the portfolio of possible emissions-reduction projects and its implementation schedule, energy and greenhouse gas abatement cost curves are plotted at a range of selected time horizons. While all projects are subject to normal capital evaluation processes, it is the Company s publicly articulated policy that projects with a 3 year of less payback will be approved 2.2 Is climate change integrated into your business strategy? Yes 2.2a

7 Please describe the process and outcomes Driving Customer Behaviour: Generally speaking the international business and regulatory response to some aspects of climate change is driving an increasing supply of recycled raw materials for SimsMM and also for the sale and use of recycled materials. Over the last decade the increase in the requirements for recycling of E waste has driven producers to increase their responsibility and monitoring of their end of life or outdated electronic products that would otherwise end up in landfill. Even though some countries such as the UK and Europe have strong regulations, other countries have little or no legislation. Producer brands recognise this inconsistent in country legislation as a risk to their reputations and so are increasingly moving to behave in a consistent way - regardless of the regulatory requirements Accordingly, SimsMM has significantly expanded- its processing capacity of E waste to meet this increasing demand by creating new facilities in Australia, the UK, Europe, India, North America, South Africa as well as the emerging markets in the Middle East (Dubai). There also continues to be an increase in the demand for most recycled metals including aluminium, as it significantly reduces the amount of energy required when compared to the processing of virgin raw materials. Use of recycled materials is by far the most efficient way of reducing energy consumption in manufacturing. By way of example, the materials recycled by SimsMM in 2012 saved more than 14.3 million MWh of energy and avoided 15.2 million tonnes of CO2 being emitted, when compared with the use of virgin materials. (Imperial College, London data). This is enough to off-set the emissions of around 3.4 million people or roughly equivalent to that absorbed by 15 million trees, over a 100 year lifespan. Increasing Baseline Costs of all Forms of Energy: the current and future trends for significant cost increases of energy in all regions has led to a rigorous capital expenditure analysis process for all new capital expenditure in operational areas and transport that specifically includes the assessment of future energy costs as well as projected assessments of the likely reductions in payback time lines that result from such projected increases. This is seen specifically in the overhauling of the shredder programs in each region, investment in new hybrid technology for site equipment and the tracking and management of transportation contracts including requirements on external third parties to manage their energy consumption. Continuation of Merger and Acquisition Activity: There remain significant gains to be made with the consolidation of the recycling industry globally. Our M & A activity over the last decade has shown that we are focused on acquiring strategic assets that strengthen our access to recycling materials and markets but also allow us to take advantage of increasing the efficiency of income cost/benefit ratios and lower operating costs, including fuel efficiency. Increase in Investor interest: Over the last three years there has been a notable increase in investor interest in SimsMM, partly due to a growing understanding of SimsMM as a leading sustainable company (as reflected in our fifth year continued nomination by the World Economic Forum as one of the world s100 most sustainable companies), but also because of increased investor recognition that SimsMM successfully has integrated the sustainability agenda into its business model, providing a solid risk management approach to business in an ever and fast changing world.. Investors also recognise that we are a growth organisation in an industry that will become even more important as countries, business and individuals adapt to the fundamental issues of a carbon (energy, water and other resources) constrained world. Other Industry Developments: P. Netchaef, SimsMM Global Director, Sustainability remain a member of the Australian Governments committee on the Stockholm Convention on POP s as well as an adviser on several government initiatives on waste reduction and increased resource efficiency. Because of its prominent position as the world s largest recycling company, the company is recognised as an important stakeholder and expert on resource efficiency, waste reduction and energy and carbon savings. SimsMM was honoured to be selected as Carbon Performance Leader as well as Best of Sector (materials) by the CDP among the ASX200 and NZ50 companies as well as an index component in the Dow Jones Global Sustainability Index. 2.2b Please explain why not 2.3

8 Do you engage in activities that could either directly or indirectly influence policy on climate change through any of the following? (tick all that apply) Trade associations Other 2.3a On what issues have you been engaging directly? Focus of legislation Corporate Position Details of engagement Proposed solution 2.3b Are you on the Board of any trade associations or provide funding beyond membership? No 2.3c Please enter the details of those trade associations that are likely to take a position on climate change legislation Is your position on climate change Trade association consistent with theirs? Please explain the trade association's position How have you, or are you attempting to influence the postion? 2.3d Do you publically disclose a list of all the research organizations that you fund? 2.3e

9 Do you fund any research organizations to produce public work on climate change? 2.3f Please describe the work and how it aligns with your own strategy on climate change 2.3g Please provide details of the other engagement activities that you undertake SimsMM engages both directly and indirectly with policy makers through trade organisations, external third parties and NGO s. In particular we pursue development of good legislative policy frameworks that encourage businesses to change behaviour to positively impact climate change risks and adopt energy efficient business practices. For example we continue to work with the UK Government on the continued development of the CRC scheme as well as on resource efficiency and associated energy benefits and how to remove government red tape which hinders efficient recycling. We engage actively with the Australian and US federal and State Governments on the energy efficient measures of recycling as well as renewable energy via our LMS Joint Venture Industry associations: In support of industry efforts, the Company is a member of several relevant industry associations in the regions in which we operate and are constantly assessing the news and updates from these associations on political and industry developments in regard to new schemes for improvements in reporting, subsidies, new taxes and also industry improvements in business practices. Sims Recycling Solutions (UK) the only recycling company to have achieved the Carbon Trust Standard, although we have discontinued our membership, due to the changes implemented by the UK Government to the CRC. Other third party organisations: P. Netchaef, Global Director Sustainability is a member of the Australian Government delegation on the Stockholm Convention and also liaise with a number of senior government officials on matters of sustainable energy and resource efficiency. In all operating jurisdictions, SimsMM has close involvement with a number of key NGO organisations, ranging from smaller local interest groups to larger organisations such as The Bay Keeper (USA) and the Total Environment Centre (Australia). 2.3h What processes do you have in place to ensure that all of your direct and indirect activities that influence policy are consistent with your overall climate change strategy? SimsMM Carbon and Climate Change Strategy is managed by a global Board Committee (Safety Health Environment and Community - SHEC) that ensures strategic alignment and a consistent approach and direction in each of regional teams. The 3 Regional SHEC Directors, conduct monthly update and progress meetings via telephone and meet annually face-to-face to discuss strategic direction and progress on formal action plans under the direction of the Global Director, Sustainability, Mr. Peter Netchaef. 2.3i

10 Please explain why you do not engage with policy makers Page: 3. Targets and Initiatives 3.1 Did you have an emissions reduction target that was active (ongoing or reached completion) in the reporting year? Absolute and intensity targets 3.1a Please provide details of your absolute target ID Scope % of emissions in scope % reduction from base year Base year Base year emissions (metric tonnes CO2e) Target year Comment T- 01 T- 02 T- 03 Scope 1+2 Scope 1 Scope 2 100% 15% % 15% % 15% Absolute emissions reduction - SimsMM originally chose absolute targets, but as the company continues to expand significantly through acquisition, it is increasingly clear that such an absolute target is not a meaningful measure of our global activities. Accordingly, the company is now leaning towards relative targets that measure our energy use and carbon emissions against the operational metric of sales tonnes. We have however chosen to report both numbers in this submission Absolute emissions reduction - SimsMM originally chose absolute targets, but as the company continues to expand significantly through acquisition, it is increasingly clear that such an absolute target is not a meaningful measure of our global activities. Accordingly, the company is now leaning towards relative targets that measure our energy use and carbon emissions against the operational metric of sales tonnes. We have however chosen to report both numbers in this submission Absolute emissions reduction - SimsMM originally chose absolute targets, but as the company continues to expand significantly through acquisition, it is

11 ID Scope % of emissions in scope % reduction from base year Base year Base year emissions (metric tonnes CO2e) Target year Comment increasingly clear that such an absolute target is not a meaningful measure of our global activities. Accordingly, the company is now leaning towards relative targets that measure our energy use and carbon emissions against the operational metric of sales tonnes. We have however chosen to report both numbers in this submission 3.1b Please provide details of your intensity target ID Scope % of emissions in scope % reduction from base year Metric Base year Normalized base year emissions Target year Comment T-04 Scope % 15% T-05 Other: Total Energy consumption 100% 15% Other: Co2 emissions per tonne of product sold Other: Energy intensity target - GJ per tonne of product sold c Please also indicate what change in absolute emissions this intensity target reflects

12 ID Direction of change anticipated in absolute Scope 1+2 emissions at target completion? % change anticipated in absolute Scope 1+2 emissions Direction of change anticipated in absolute Scope 3 emissions at target completion? % change anticipated in absolute Scope 3 emissions Comment T- 04 Decrease 15 No change SimsMM originally chose absolute targets, but as the company continues to expand significantly, it is increasing clear that such an absolute target is not a meaningful measure of our global activities. Accordingly, the company is now leaning towards relative targets that measure our energy use and carbon emissions against the operational metric of sales tonnes. We have however chosen to report both numbers in this submission. 3.1d Please provide details on your progress against this target made in the reporting year ID % complete (time) % complete (emissions) Comment T-01 27% 39% Total scope 1 & 2 emissions decreased by 2% in FY11 from previous year T-02 27% 26% Scope 1 emissions decreased by 4% in FY12 from previous year T-03 27% 50% Scope 2 emissions increased by 2% in FY12 from previous year T-04 27% 100% Intensity Target - Co2 emissions intensity per tonne of product sold in FY12 was 18kg/tonne which was a decrease from previous year of 22 kg/tonnes. T-05 27% 100% Energy intensity GJ per tonne of product sold in FY12 the energy usage intensity was 188GJ/tonne of product sold which was a decrease from the FY11 year of 232 GJ/tonne 3.1e Please explain (i) why not; and (ii) forecast how your emissions will change over the next five years

13 3.2 Does the use of your goods and/or services directly enable GHG emissions to be avoided by a third party? Yes 3.2a Please provide details (see guidance) SimsMM is the largest recycler in the world. The overall impact of recycling is reducing emissions by re-using valuable secondary materials instead of energy intensive primary resources. Using the Imperial College in London model, the recycling of ferrous, non ferrous, plastics, electronics and other materials recycled by the Group contributed a very significant global emissions reduction. While on one hand the company emitted 256,215 tonnes of CO2 equivalent as a result of its operational activities, the use of our secondary products avoided 15.2 million tonnes of CO2 equivalent being released to the atmosphere by the third parties using our products, a ration of 1 in 59. This amply illustrates the very significant benefit to the carbon reduction and the environment in general of recycling. 3.3 Did you have emissions reduction initiatives that were active within the reporting year (this can include those in the planning and implementation phases) Yes 3.3a Please identify the total number of projects at each stage of development, and for those in the implementation stages, the estimated CO2e savings Stage of development Number of projects Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *) Under investigation To be implemented* 1 45 Implementation commenced* 3 782

14 Stage of development Number of projects Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *) Implemented* Not to be implemented 3.3b For those initiatives implemented in the reporting year, please provide details in the table below Activity type Description of activity Estimated annual CO2e savings (metric tonnes CO2e) Annual monetary savings (unit currency - as specified in Q0.4) Investment required (unit currency - as specified in Q0.4) Payback period Energy efficiency: Processes Energy efficiency: Processes Energy efficiency: Processes Commenced but not yet completed years USA: Solar arrays at Brooklyn and Claremont Facilities years UK: Hybrid forklift trucks years 3.3c What methods do you use to drive investment in emissions reduction activities? Method Comment Compliance with regulatory requirements/standards Within Australia there is a requirement under the Energy Efficiency Opportunities Act to implement energy efficiency measures that have a less than 3 year payback period. This period has been adopted as a guideline within our internal energy policy also. The UK encourages energy efficiency through the CRC legislation which requires our businesses in the UK to pay a tax on energy per MWh

15 Method Comment Dedicated budget for energy efficiency Dedicated budget for low carbon product R&D Partnering with governments on technology development Financial optimization calculations During FY12 a total of Aus$30.9 million were spent on energy efficient projects. That said, SimsMM is a publicly listed company. As such management is obliged to ensure the most efficient allocation of capital and energy efficiency is subject to the same evaluation criteria as applies to all investments. That said, it is publicly articulated company policy to approve energy/carbon efficient measures with a payback of 3 years and less As a recycling company, all products that SimsMM produce result in very significant carbon emissions reduction, as they are used in preference to virgin ore, new plastics and by extending life of existing electronic components and products. The total carbon savings from the use of our products in 2012 were a staggering 15.2 million tonnes of CO2, enough to offset the total emissions profile of many smaller countries. It can therefore reasonably be argued that the groups entire operating budget is invested in carbon emissions reduction. The operating cost for FY12 was Aus $1.6bn while the R&D budget was Aus$60 million. In the USA there have been municipal incentive programs to introduce alternate renewable energy sources. The UK is also working with Government on energy efficiency measures, including trialling the UK s first hydrogen powered fork trucks as well as examining hybrid transport and smart metering of energy and water at our facilities. In all regions 3.3d If you do not have any emissions reduction initiatives, please explain why not Page: 4. Communication 4.1 Have you published information about your company s response to climate change and GHG emissions performance for this reporting year in places other than in your CDP response? If so, please attach the publication(s)

16 Publication Page/Section reference Attach the document In mainstream financial reports (complete) In other regulatory filings (complete) In other regulatory filings (complete) In other regulatory filings (complete) Annual Report 2012 pp 8-24 SimsMM Australian Government EEO report - entire doc. SimsMM Australian Government NGER Report - entire doc Sims MM CRC Annual Report UK CDP 2013/Shared Documents/Attachments/Investor-4.1-C3-IdentifytAttachment/2012 Annual Report Final.pdf CDP 2013/Shared Documents/Attachments/Investor-4.1-C3-IdentifytAttachment/EEO Public Report 2012.pdf CDP 2013/Shared Documents/Attachments/Investor-4.1-C3-IdentifytAttachment/FY12 NGER Final - Sims Metal Management Limited - AnnualReport.pdf CDP 2013/Shared Documents/Attachments/Investor-4.1-C3-IdentifytAttachment/CRC Annual Report.pdf Further Information Previously Sims MM was required to report and publish a report for the Victorian Government - EREP. We no longer report under EREP, as it was withdrawn as a regulatory requirement in February 2013 due to duplication with the Australian Federal Governments reporting requirements under NGER and EEO. Module: Risks and Opportunities [Investor] Page: 5. Climate Change Risks 5.1 Have you identified any climate change risks (current or future) that have the potential to generate a substantive change in your business operations, revenue or expenditure? Tick all that apply Risks driven by changes in regulation Risks driven by changes in physical climate parameters Risks driven by changes in other climate-related developments 5.1a

17 Please describe your risks driven by changes in regulation ID Risk driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact GR 01 GR 02 GR 03 Carbon taxes Fuel/energy taxes and regulations Uncertainty surrounding new regulation SimsMM is not an energy intensive user by comparison to most industry sectors and hence the overall impact of carbon taxes on operational cost, while noticeable is relatively low. The company is not directly affected by the Australian Carbon tax legislation, nor the European carbon trading scheme, and at the present time, carbon taxes looks unlikely at a federal US level. The company is captured by the UK CRC legislations, with direct costs in the order of 350,000 (F12). Fuels are a major contributor to our overall CO2 emissions profile. We anticipate that there will be an increase in both the cost of electricity and fuel in all jurisdictions in which we operate. For example: Fuel costs in Australia and Europe have risen by approximately 20% over the last 3 years, a trend we expect to continue. Apart from these direct commercial rises, flow-on costs from the carbon tax in Australia has increased costs in Australia by approximately Aus$1.5 million and is expected to be slightly higher this year at Aus$2 million.. The implications of the UK CRC scheme are well understood and accounted for as part of our operational costs. In the US, the present political climate seems unlikely to give rise to carbon taxes. In Australia, SimsMM is not captured under the current legislation, but it remains to be seen what a likely change of government will do following the federal election in September, The opposition has vowed to abolish the current carbon tax. Increased operational cost Increased operational cost Increased operational cost Current Direct Virtually certain Low Current Direct Very likely Medium 1-5 years Direct Unlikely Low 5.1b Please describe (i) the potential financial implications of the risk before taking action; (ii) the methods you are using to manage this risk and (iii) the costs associated with these actions

18 GR01: (i) The impact of energy or carbon taxes in the UK impacts the company directly and has also increased the cost of energy and therefore operational costs. While the scheme continues to undergo minor adjustments, the direct and flow-on impact is well understood and fully integrated into our operational cost and management models. In Australia the company s operations are not directly captured under the legislation, but flow-on costs from energy providers affect the company s operational cost. Again, this cost is well understood and integrated into our operational business cost. With carbon taxing currently off the USA federal agenda, such effects are not anticipated there in the short term. Overall, the present risks are well understood and our comprehensive energy data allows us to model various what if cost scenario s. In addition, our modelling takes into account anticipated commercial cost increases as energy supplies increase in real terms. We use this modelling to plan for and incorporate budget measures for future operational cost scenarios, investment decisions in new technology and equipment as well as payback. This modelling also allows us to determine at what cost a new technology may become financially viable, if not so under present circumstances. Since SimsMM is not an intensive consumer of energy, the overall impact on operational cost, while rising remains relatively small. (ii) BU Operations Managers and B U Heads are close to their businesses and have an overall strong awareness of legal/regulatory factors affecting them. They are directly assisted by the Regional Energy Teams and the Global Director, Sustainability on matters of energy and carbon, with whom they liaise on a regular basis. All information is shared globally among the group and energy/carbon efficient ideas and initiatives shared. On a more general level, awareness is gained through daily industry contact and through trade journals as well as specific energy and carbon experts retained by the Group. These sources are well balanced and are revised as required,.(iii) Costs associated with these actions are information network and association costs and legal advisors, which are minor. GR02: (i) Fuel accounts for 55% of the total groups total energy profile and hence, the cost implications for direct and indirect cost increase are relatively high for the business when compared to its other energy issues. While a significant part of the SimsMM transportation is outsourced, fuel consumption is a primary part of each contract and is monitored carefully to ensure that the production tonnes transported is efficient per energy use. (ii) Extensive Energy Efficiency programs with capital upgrades and driving trainer programs. Also extensive implementation of transport route optimisation techniques. Monitoring of government commentary and development of industry position papers through industry associations. (iii) The costs associated with the actions for energy efficiency and transport rationalisation and driver training are low as mentioned above, less than 5 million globally per annum. GR03: (i) The risks from the uncertainty in the regulatory environment stem from the inability to properly quantify and develop capital expenditure scenarios. Without regulatory certainty the businesses are making smaller and more cautious changes. There is also a risk that any changed legislation may not allow for sufficient transition arrangements that will require fast action and large expenditure over short periods of time. Indeed, in many cases, political compromises often lead to poor and/or inequitable outcomes in the short term. In the case of California state regulation in the USA, there would be some financial implication if we were required to remove foam prior to recycling domestic appliances, assuming that we could not recover that cost from the suppliers. (ii) Watching briefs, dialogue with politicians and NGO s as well as development of industry position papers. Business case what if scenarios are continually developed and refined for possible/likely scenario s but will not be implemented until legislative certainty emerges and financial paybacks etc can be determined and presented to shareholders. Recent experience on several fronts shows that being an early mover is not necessarily an advantage, that the formulation of legislation does not necessarily ensure its passage into law and even its passage into law may spark several revisions and adjustments in the short term. While the company is not captured under the current Australian legislation, a possible change of government in the forthcoming September, 2013 election may see the entire scheme abolished.(iii) Costs associated with these actions are information network and association costs and legal advisors 5.1c Please describe your risks that are driven by change in physical climate parameters

19 ID Risk driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact PR 01 Uncertainty of physical risks Potential to damage of operational buildings due to extreme weather events, but with a diverse infrastructure overall impact is low as demonstrated during the recent severe floods in Australia and the US. Access and cost of water for shredders in Australia, where water use can be restricted in long periods of drought. However, SimsMM is not a large user of water and hence this is not a major operational exposure. Inability to do business 1-5 years Direct About as likely as not Low PR 02 Change in precipitation extremes and droughts Increased operational cost 1-5 years Direct About as likely as not Low 5.1d Please describe (i) the potential financial implications of the risk before taking action; (ii) the methods you are using to manage this risk; and (iii) the costs associated with these actions PR01: (i) With the recent increases in extreme weather events such as flooding and cyclones in some of the regions in which we operate there is always a possibility that some infrastructure will be adversely affected, as illustrated by the recent floods in Australia and the US. However, Sims MM plants are located in diverse areas and regions. Therefore should an extreme weather event impact a facility, it would only affect that one operation and not the overall capacity of the Company to continue business, Indeed, the recent floods in Australia and the US, demonstrated the company s ability to restructure its service delivery and continue with only minor business impact.(ii) All building stock is insured and flood contingency, evacuation and business continuity plans are in place for all likely affected operations. (iii) Overall there is a trend to increase the sum insured and the cost of insurance premiums. PR02: (i) In Australia water is a scarce resource and from time to time is subject to restrictions on use and increase in pricing. The shredders within our businesses are our primary users of water as an essential part of the shredding process, but not large when compared to general industry usage as described in detail in our CDP Water submission.(ii) Water use is monitored extensively in all regions and capture and re-use is widespread. The continuing upgrades of old shredders and the purchase of new ones ensure that the use of water per tonne of processed metal is minimised. (iii) In Australia alone shredders have been upgraded at the cost of Aus$10million and globally, the Group invested close to Aus$60 million in R&D, all related to increasing resource efficiency and recovery optimisation 5.1e Please describe your risks that are driven by changes in other climate-related developments

20 ID Risk driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact OR 01 Uncertainty in market signals SimsMM relies on market signals that encourage and support other businesses and individuals to recycle material or purchase recycled materials. While uncertainty from government legislation is ever present, the continuing and universal increase in energy cost, continue to drive the use of recycled materials in preference to virgin Reduced demand for goods/services 1-5 years Direct About as likely as not Low 5.1f Please describe (i) the potential financial implications of the risk before taking action; (ii) the methods you are using to manage this risk; (iii) the costs associated with these actions OR 01: (i) Financially if the raw materials that SimsMM relies on are not encouraged into the market supply will be restricted and costs of obtaining materials will remain artificially high. However, the recent floods in Queensland and Victoria (Australia), the USA and the earthquake in New Zealand demonstrated that more than normal scrap are generated as a result of extensive destruction of cities and infrastructure. (ii) We continue to make the point to governments that if they want to increase efficiency in the use of materials at all stages of the value chain, they need to send clear signals to the market as to the types of business behaviour that will deliver that outcome. As already mentioned, the use of recycled material is the most efficient way of preserving energy and reduce carbon emissions as demonstrated by the simple fact that the materials recycled by SimsMM globally alone, prevented 15.2 million tonnes of CO2 being emitted. We take action through industry associations and representations directly and through discussion papers to governments at all levels. (iii) The costs associated with these efforts are subsumed into networks, industry associations and management efforts. 5.1g Please explain why you do not consider your company to be exposed to risks driven by changes in regulation that have the potential to generate a substantive change in your business operations, revenue or expenditure 5.1h

21 Please explain why you do not consider your company to be exposed to risks driven by physical climate parameters that have the potential to generate a substantive change in your business operations, revenue or expenditure 5.1i Please explain why you do not consider your company to be exposed to risks driven by changes in other climate-related developments that have the potential to generate a substantive change in your business operations, revenue or expenditure Page: 6. Climate Change Opportunities 6.1 Have you identified any climate change opportunities (current or future) that have the potential to generate a substantive change in your business operations, revenue or expenditure? Tick all that apply Opportunities driven by changes in other climate-related developments 6.1a Please describe your opportunities that are driven by changes in regulation ID Opportunity driver Description Potential impact Timeframe Direct/Indirect Likelihood Magnitude of impact 6.1b

22 Please describe (i) the potential financial implications of the opportunity; (ii) the methods you are using to manage this opportunity and (iii) the costs associated with these actions 6.1c Please describe the opportunities that are driven by changes in physical climate parameters ID Opportunity driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact 6.1d Please describe (i) the potential financial implications of the opportunity; (ii) the methods you are using to manage this opportunity and (iii) the costs associated with these actions 6.1e Please describe the opportunities that are driven by changes in other climate-related developments ID Opportunity driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact CRD01 Reputation SimsMM as the largest recycler in the world is the recycler of choice for industry and governments in our current jurisdictions of the USA, Asia Pacific and Europe including UK. As the impact of increased energy costs affects primary and secondary manufacturing, the Increased demand for existing products/services Current Direct Very likely Lowmedium

23 ID Opportunity driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact demand for energy efficient secondary raw materials increase. While the continued financial turmoil in the world affects the companys short term performance, there is significant interest and support for SimsMM and its business activities. As Governments continue to legislate in regard to waste management financial institutions will become interested in both the debt and equity aspects of the SimsMM growth strategy. Individuals and businesses are becoming more aware of the need to use the earth's resources in a careful and cost efficient way and are increasing their recycling behaviour without regulatory intervention Globally business will be anticipating ways in which they can use recycled materials. We are looking at product innovation - especially increasing the reclaiming of raw materials from e waste, including increased plastics recovery and value. This is well underway, with recycling recoveries from for example motor vehicles nearing 90%. This compares to historical recoveries 15 years ago of around 75-80%. CRD02 Reputation Increase in capital availability 1-5 years Direct Very likely Medium CRD03 Changing consumer behaviour Increased demand for existing products/services 1-5 years Direct Likely Medium CRD04 New products/business services 1-5 years Indirect (Supply chain) More likely than not Medium 6.1f Please describe (i) the potential financial implications of the opportunity; (ii) the methods you are using to manage this opportunity; (iii) the costs associated with these actions CRD 01 (i) As the largest recycler in the world with a truly global presence, climate change legislation, the associated public awareness combined with the commercial increases in energy cost,, SimsMM is well placed to take advance of the increased demand for recycling products and services as well as the desire by manufacturers to gain competitive advantage by using less energy intensive raw materials. (ii) Sims MM monitors its reputation risk at all levels and continues to speak with existing and potential customers, government representatives, NGO s, investment houses and other stakeholders as to the benefits our products and services and market reach. We have also seen a rapid developing demand from existing and potential customers, who wish to ensure that their supply chain have sound sustainability management in place. Furthermore, we continue to ensure that we have social and environmental licences to operate by carefully fulfilling stakeholder expectations with our business conduct and environmental performance in every region. (iii) The costs associated with these efforts are reflected in costs to the business of managing and monitoring on a daily basis our business performance and environmental reputation with compliance as the baseline. We

24 have two executives globally that spend the majority of their time managing investor information requests and presentations. CRD 02: (i) With a strong green reputation and a well established and managed sustainability agenda investors increasingly see SimsMM as a green and sustainable choice for their investment portfolio s as reflected in our increased sustainability profile and the indices that follow us and recommend our stock. On a more pragmatic level, they also understand that having a fully integrated sustainability and business agenda provides for a superior business risk management strategy as well as allowing our Company to attract high level talent. Overall, this favourably aids our ability to finance debt at favourable rates. (ii) Sims MM monitors its reputation risk at all levels and continues to speak with existing and potential customers, government representatives, NGO s, investment houses and other stakeholders as to the benefits our products and services and market reach. We continue to ensure that we have social and environmental licence to operate by carefully fulfilling stakeholder expectations with our business conduct and environmental performance in every region. (iii) The costs associated with these efforts are reflected in costs to the business of managing and monitoring on a daily basis our business performance and environmental reputation with compliance as the baseline. We have two executives globally that spend the majority of their time managing investor information requests and presentations. CRD03: (i) Increased demand for existing products and services from the business and retail consumer perspective would directly impact the SimsMM revenue stream positively. (ii) We continue to ensure that our reputation is maintained as a recycler that is able to deliver quality product, operating from a sustainable platform in all respects. We also seek to ensure that we have market access to recycled materials through forward planning combined with our extensive global network of direct and indirect suppliers. We lobby governments to keep the message high in the minds of politicians that people need to be educated about the benefits of recycling, not just from a resource perspective, but also for the energy savings, carbon avoidance, water and waste reduction benefits it provides. (iii) The costs associated with these efforts are integral to our business and reflected in costs of managing and monitoring on a daily basis our business performance and environmental reputation with compliance as the baseline and are also subsumed into networks, industry associations and management efforts. CRD 04: (i) SimsMM acknowledges that this is a long term and ongoing opportunity and that it is difficult to quantify the exact nature of this or the extent to which this will impact our revenue stream (as a % of business development) However it should be noted that SimsMM was an early adopter of a business model that invested in e-waste recovery technology and has an established and well recognised sustainability agenda, supported by good management systems and monitoring. Our significant R&D investment in the order of Aus$60 million per annum has been yielding steady returns, particularly on the increased recovery and re-utilisation of post consumer plastics from e-waste as well as increased recovery from general postconsumer waste, for example cars which has increased by more than 15% over the last 15 years. (ii) Scenario development and innovation watching briefs. (iii) The costs associated with these efforts are reflected in costs to the business of managing and monitoring on a daily basis our business performance and environmental reputation with compliance as the baseline as well as the significant R&D investment and ongoing development by our technical teams. External liaison costs are subsumed into networks, industry associations and management efforts. 6.1g Please explain why you do not consider your company to be exposed to opportunities driven by changes in regulation that have the potential to generate a substantive change in your business operations, revenue or expenditure SimsMM is a global commodities producer and trader. As such, we are affected by numerous national and international conventions in respect of general trade as well as specific climate regulations. However, at this stage, it would be fair to ascertain that there is no common international consensus on climate related issues and implementation policies in general and in respect of the secondary raw materials we trade and their potential increased worth in specific. While the energy efficient nature of secondary raw materials is well understood by our customers, this is and have always been factored in to the pricing by customers, so in this respect it is business as usual 6.1h