(C2.2a) Which risk types are considered in your organization's climate-related risk assessments?
Relevance
&
inclusion
Please explain
Current
regulation
Relevant,
always
included
eBay’s Impact team consults with our Government Relations team to identify any current or future regulation risks, related to issues including carbon pricing, clean energy, the circular
economy, and transportation. Currently, the Government Relations team is not aware of any substantive risk from current regulations, however, we do consider the impact from potential
future regulations to be relevant enough to continuously monitor. For example, due to our online presence in France, we have been monitoring the Anti-Waste Law (Law No. 2020-105
Regarding a Circular Economy and the Fight Against Waste) that was adopted in early 2020. In 2022, this law has expanded making it illegal to destroy unsold electronics, textiles, books,
and other products. This regulation is not anticipated to present direct risks in terms of reduced revenues or increased expenditures at eBay. In fact, this law may present revenue
opportunities for eBay, because we play a role in the circular economy and supports the reselling of unsold or returned items. Through this law, we will continue supporting our sellers,
including communicating the environmental benefits of buying and selling pre-owned goods on our platform. We continue to monitor regulatory frameworks globally to assess if eBay is
impacted by proposed or future regulations.
Emerging
regulation
Relevant,
always
included
The potential for fuel and energy taxes and regulations exposes eBay to risk both in terms of increased costs and decreased revenue. Operationally, energy is an essential input to eBay’s
business. Our platform relies on a data center portfolio that is responsible for 83% of our total energy consumption. Our customer support organization operates facilities 24 hours a day, 7
days per week, and our global staff count on being able to travel between offices and across geographies (during non-pandemic times). Consequently, energy taxes and regulations could
raise energy prices, leading to increased costs to the company. With support from Government Relations, we also advocate for clean energy policy, including clean and low carbon
transportation at the federal level as well as in states where we have a significant operational footprint, including California and Utah. We also continue to implement energy-saving
strategies in the operations of all of our facilities, to mitigate this risk.
Technology Relevant,
sometimes
included
As an e-commerce company, eBay is a recipient and user of energy products and services. eBay regularly assesses the efficiency of our data center infrastructure as well as the seamless
operation of our online consumer platform through our Core Technology team. eBay faces risks of not capitalizing on technological improvements / innovations that support the transition
to a low-carbon, energy efficient economy that could result in higher costs of operation or downtime of our online platform. Additionally, if eBay does not power its Utah data centers with
renewable energy, while other e-commerce companies transition their data centers electricity to renewables, eBay faces reputational risks compared to its competitors.
Legal Relevant,
sometimes
included
This is a lower-likelihood risk for eBay. The company monitors all litigation as part of our Global Compliance and Legal Counsel teams’ active review of correspondence, including any
potential climate-related litigation, and will alert the Impact team if any potential or actual cases come to the Legal department’s attention. eBay could be indirectly exposed to litigation that
imposes costs on our shipping partners, such as the United Parcel Service (UPS), United States Postal Service (USPS), and other carriers due to their fuel use. Similarly, lawsuits that
resulted in extra costs for electricity providers could also affect eBay indirectly, if those energy providers decided to pass on the costs to their customers. These instances have not
occurred, but they pose a potential, albeit unlikely, risk to the company.
Market Relevant,
always
included
The potential of market risks exposes eBay and the company’s to risk both in terms of increased costs and decreased revenue. Our business model relies heavily on shipping and logistics,
a small part of which is done directly by eBay Inc. businesses, but the majority of which occurs downstream of and out of our direct control. Increasing energy prices could quickly translate
into higher shipping and logistics costs. These risks are monitored by our Delivery and Logistics teams and as part of their ongoing cost review and projections. The Impact team interacts
with this team on a regular basis to assess if any risks have been identified specific to transportation and logistics and incorporates this information into our overall risk assessment. This
risk (including those associated with cross-border trade) has also been identified by our ERM function and is noted in our annual 10-K filing. If those costs are passed on in the prices
offered to customers on our commerce sites, this could drive down demand for online shopping, causing overall harm to eBay’s business.
Reputation Relevant,
always
included
In a low-carbon economy, eBay’s stakeholders may become more concerned about climate-related impacts, and there may be a cost for the emissions associated with eBay’s business
model, including an impact on eBay’s reputation. eBay’s Impact team and ESG Council help to monitor these potential risks, which can negatively impact our company’s financial
performance. For example, eBay examines reputational risks among our investors, employees, buyers and sellers, and the media. We consider this type of reputational risk to be well
managed through our current ESG strategy, which includes a renewable electricity target and Science-Based Target goal to reduce Scope 1 and 2 emissions by 90% by 2030, and Scope
3 downstream transportation and delivery emissions by 20% in the same timeframe.
Acute
physical
Relevant,
always
included
Hurricanes, floods, and windstorms could negatively impact shipping and customer demand. For example, Hurricane Ida was the second-most damaging and intense hurricane to make
landfall in Louisiana in 2021. Impacts from the storm resulted in shipment delays from eBay sellers located in the southeast due to shipping network disruptions. India and South Asia also
suffered from several severe weather events, including flooding and cyclones, impacting more than 57 million people according to the International Federation of Red Cross and Red
Crescent Societies. Wildfires could also negatively impact eBay’s operations and our employees, as the company is headquartered in California. Additionally water shortages can impact
our operations, specifically at our more water-intensive data centers. These events commonly result in electricity and telecommunication network disruptions that can impact the ability of
eBay customers, both sellers and buyers, to sell and make purchases online. The impact varies with the magnitude of the events and the concentrations of buyers, sellers, and shipping
activities in the affected locations, but if the frequency and severity of weather events increases as climate change progresses, the risk will climb. Our Workplace Resources team actively
monitors facility weather-related risk and Global Customer Service continually monitors online uptime and activity as part of our overall enterprise and climate risk assessment.
Chronic
physical
Relevant,
always
included
eBay owns and leases various properties in the U.S. and 26 other countries/areas around the world. Some of these locations are more vulnerable than others to potential physical changes
from climate change. For instance, in San Jose, CA, maps of potential sea level rise indicate that a 1-meter increase could submerge one of two major San Jose freeways and restrict
access to the San Jose Airport, affecting the ability of employees and partners to travel to eBay’s headquarters in San Jose. Other risks could include disruption of our operations or
physical damage to our facilities from floods, wildfires, or other extreme weather events and possible sea level rise. Drought and other climate-related decreases in the availability of fresh
water could also pose a risk to our operations. This is most particularly the case for our data center operations. Water is essential for cooling, and prolonged shortages could ultimately
result in service interruptions and costly relocation of data center services; therefore, our Data Center (Core Technology) team actively monitors and assesses the risk of water shortages
as part of its operational risk assessment.
C2.3
(C2.3) Have you identified any inherent climate-related risks with the potential to have a substantive financial or strategic impact on your business?
Yes
C2.3a
(C2.3a) Provide details of risks identified with the potential to have a substantive financial or strategic impact on your business.
Identifier
Risk 1
Where in the value chain does the risk driver occur?
Direct operations
Risk type & Primary climate-related risk driver
Market Uncertainty in market signals
Primary potential financial impact
Increased indirect (operating) costs
Climate risk type mapped to traditional financial services industry risk classification
<Not Applicable>
Company-specific description
The increased cost of energy, water, and related raw materials can directly increase our operating costs at eBay’s physical locations, resulting in a decrease in our
company’s net income. Additionally, increased operating costs at these locations can also impact the potential cost to offset our company’s carbon footprint. For example,