60 CapitaLand Ascott Trust Risk Management CLAS’ MATERIAL RISKS AND KEY MITIGATING ACTIONS The annual Group-wide Risk and Control Self-Assessment (RCSA) exercise requires all business units and corporate functions to identify, assess and document key material risks, including new and emerging risks, that CLAS faces. Additionally, it involves outlining the respective mitigating measures and identifying any opportunities that can be leveraged to achieve our strategic objectives. The following measures are taken to mitigate the identified material risks based on the 2024 RCSA exercise. MATERIAL RISKS KEY MITIGATING ACTIONS Business Interruption Exposure to sudden and major disaster events such as 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 may 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 such as current and emerging regulations and expectations from stakeholders. • Conduct a detailed assessment of physical risks, and health and safety related risks in the evaluation of any new acquisitions. • Incorporate shadow internal carbon price in the evaluation of new investment/capital expenditure decisions. • Regularly review CLAS’ mitigation and adaptation efforts, which include future-proofing our portfolio, enhancing the operational efficiency of our properties and establishing targets for carbon emissions reduction and energy, water and waste efficiency. • Implement measures to drive decarbonisation across CLAS’ value chain. • Entrench a sustainable safety culture through deep safety capabilities, disciplined safety practices, and a progressive and pervasive safety mindset that drives key safety performance targets for both CLAS and our supply chain. • Leverage on CLI’s Environmental Management System and Occupational Health and Safety Management System which are externally certified to ISO 14001 and ISO 45001 respectively, in 19 countries. • For more information, please refer to CLAS’ Sustainability Report 2024, to be published in May 2025. Safety, Health and Well-being Increased expectations from stakeholders for our properties to provide a safe and healthy environment that contributes to their well-being. Competition Keen industry competition and/or being able to react aptly to market trends. • Constantly strive to differentiate ourselves from our peers by adapting CLAS’ business and products to the evolving needs of our customers, delivering exceptional products and services, and engaging customer-centric initiatives and loyalty programmes. • Leverage on the extensive network and capabilities of CLAS’ Sponsor and third-party operators such as Accor, IHG and Marriott for our hospitality assets. • Leverage on strong network of property management professionals with deep knowledge in rental housing and student accommodation properties. • Incorporate ESG considerations and align CLAS’ business with recognised industry standards, to reinforce our leading position as a sustainable trust. • Enhance our product offerings through asset enhancement initiatives and refresh of brands.
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