CLAS’ MATERIAL RISKS AND KEY MITIGATING ACTIONS The Group-wide Risk and Control Self-Assessment (RCSA) is conducted annually to identify key material risks (which include new and emerging risks) that CLAS faces in delivering our strategic objectives, the mitigating measures and any opportunities that we can leverage on. In identifying CLAS’ key material risks, the likelihood and impact of each risk are assessed. Sensitivity analysis and stress testing are carried out for both financial and non-financial risks where applicable. Material risks and their associated controls are consolidated and reviewed by the Managers before they are presented to the ARC and the Boards. Based on the 2023 RCSA results, CLAS’ key material risks and measures that we have taken to mitigate the risks are set out below: MATERIAL RISKS KEY MITIGATING ACTIONS Business Interruption Exposure to sudden and major disaster events such as pandemics, terrorist attacks, fires, prolonged power outages or other major infrastructure or equipment failures which can cause business interruption and significantly disrupt operations at the properties › Put in place business continuity plans and standard operating procedures for crisis management at each property to respond to any disruption. › Ensure business interruption insurance coverage is adequately purchased. Climate Related Physical risks which are a result of climate change and can be acute or chronic in climate patterns, such as rising sea levels, violent storms, long intense heat waves, flash floods and freshwater depletion Transition risks which result from a transition to a lowercarbon economy, and could entail potentially more stringent regulations and increased expectations from customers and stakeholders › Assessment of physical risks of the existing portfolio and new acquisitions, which could have potential impact such as: increased capital expenditure to construct infrastructure (e.g. for coastal defence, flood control), increased operating costs (e.g. repair costs, business interruption costs). › Incorporate shadow internal carbon price in the evaluation of new investment/capital expenditure decisions. This helps to factor in climate-related costs and opportunities, support low-carbon investments, prepare for stringent climate legislation, and avoid stranded assets. › Regularly review CLAS’ mitigation and adaptation efforts, which include • future-proofing our portfolio against changing climatic conditions from the design stage and • improving the operational efficiency of our properties, setting targets for carbon emissions, water, energy and waste efficiency. › CLI has a well-established Group environmental management system which is externally certified to ISO 14001 in 19 countries. › Take actions to influence decarbonisation, which include engagement with our supply chain (main contractors, vendors, suppliers, creditors) and customers (guests, tenants). › For more information, please refer to CLAS’ Sustainability Report 2023, which will be published by 31 May 2024. ANNUAL REPORT 2023 89 Overview Leadership Portfolio & Performance Sustainability & Governance Financial Statements and Other Information
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