Risk Type Primary Risk Driver Potential Impacts CLAS’ Risk Level in 3 scenarios (2030) Mitigation Measures 1.5°C 2°C 3°C Transition Risk Electricity price shifts Growing adoption of renewable energy could drive changes in electricity costs - Increase in capital investment in renewable energy - Fluctuations in operating costs from electricity price variability • CLAS has a renewable energy target, and CLI’s carbon emissions target is validated by the SBTi. • CLI has embarked on group procurement of green power purchase agreements for key markets. • CLAS continues to implement energy efficiency improvement initiatives at its properties, where feasible. Opportunity Primary Driver Potential Impacts Approach Use of new technologies including proptech (property technology) Investment in technologies for improving energy and water efficiency Reduced exposure to regulations, carbon price, electricity price and water price increases Reduction in operating costs CLI continues to pilot new technologies in existing buildings and deploy sustainability innovations at its properties, with support from the CapitaLand Innovation Fund. Increased demand for green products and services Shift in consumer preferences and development of low emissions goods and services Increase in revenue by tapping on the green rental premium created by increased demand for sustainable buildings Increase in asset value for low carbon buildings Ongoing discussions with tenants to identify opportunities to support their carbon reduction commitments. Continuous assessment of the green building certification for CLAS’ properties and adopting the necessary asset enhancements to align with the relevant / latest certification levels. As an ongoing process, CLI and CLAS will review and update, if appropriate, the processes associated with risk management in order to account for the material environmental and climate-related risks identified. RISK MANAGEMENT Our Risk Management Process CLAS undertakes and performs an annual Group-wide Risk and Control Self-Assessment (RCSA) to identify, assess and document material risks, which include ESG-relevant risks, along with their key controls and mitigating measures. Material risks and their associated controls are consolidated and reviewed at the Trust level before they are presented to CLAS’ Audit and Risk Committee and Boards. CLAS’ risk management process to address its key risks and uncertainties, including climate change, is discussed further in its Annual Report under the Risk Management section on pages 87 to 92. Climate-related risks and opportunities are identified and mitigated through CLAS’ ERM Framework and its externally certified ISO 14001 EMS. CLAS prioritises material ESG issues based on the likelihood and potential impact of the issues affecting business continuity and development. SUSTAINABILITY REPORT 2023 24
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