4 Taking reference from the SASB Standards for Real Estate and Real Estate Services, which identify sustainability factors that are material to short, medium, and long-term enterprise value for the industry. 5 For more information on CLAS’ Enterprise Risk Management and Group-wide Risk and Control Self-Assessment exercise, please refer to pages 87 to 92 of this report. MATERIALITY CLAS identifies and prioritises the management of material ESG issues that are most relevant and significant to the trust and its stakeholders. CLAS adopts a double materiality approach, considering issues which are material from either the impact perspective or financial perspective4 or both. Potentially material ESG issues arising from activities across CLAS’ value chain (including potential risks and opportunities in the immediate and longer term) are primarily identified via ongoing engagement with its stakeholders and reviews of sources including investor questionnaires, as well as ESG surveys, benchmarks and frameworks such as GRESB. In addition, CLAS has a regular review, assessment and feedback process in relation to ESG topics. Identified material issues are reported in our corporate risk register through the annual Group-wide Risk and Control SelfAssessment (RCSA) exercise5, which identifies, assesses and documents material risks and the corresponding internal controls to manage those risks. These material risks include fraud and corruption, environmental (e.g. climate change), health and safety, and human capital risks which are ESG-relevant. Identified material ESG issues are then prioritised based on the likelihood and potential impact of issues affecting the business continuity of CLAS. For external stakeholders, priority is given to issues important to the community and applicable to CLAS. In FY 2023, the material ESG topics that were identified were approved by the SSC and endorsed by CLAS’ Boards. For more information on stakeholder engagement and our sustainability strategy, please refer to the CLAS Sustainability Report 2023 and CLI Global Sustainability Report 2023, which will be published by 31 May 2024. Environment CRITICAL MODERATE AND EMERGING Social Governance • Climate change and carbon emissions reduction • Energy efficiency • Water management • Waste management • Biodiversity • Occupational health and safety • Human capital • Stakeholder engagementi • Products and servicesii • Supply chain management • Diversity (Boards and staff) • Human rightsiv • Risk managementiii • Business ethics i This includes green leases and tenant engagement on ESG matters. ii This includes products and services promoting customer health and safety, and green certified buildings. iii This includes consideration of compliance, economic performance and cybersecurity. iv This relates to CLAS' zero tolerance stance towards child/forced labour. PRIORITISATION OF MATERIAL ESG ISSUES ANNUAL REPORT 2023 83 Overview Leadership Portfolio & Performance Sustainability & Governance Financial Statements and Other Information
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