STRATEGIC RISK Material Risks Key Mitigations and Controls Market and Competition Muted demand and pricing pressure adversely impact sales and occupancy in core markets. • Monitor macroeconomic trends and economic shifts to develop proactive, preemptive strategies. • Use market analytics and project expertise to deliver high-quality, innovative solutions. • Strengthen corporate and product branding through operational efficiency, product differentiation, and expanded revenue platforms and partnerships. • Scale investments in core markets with robust economic fundamentals and geographical diversity. • Enhance lodging products and services through seamless technology, including loyalty programmes, direct booking channels and platforms. Brand and Reputation Erosion of stakeholder confidence and brand equity can potentially disrupt business operations and impact demand, partnerships, and long-term financial performance. • Proactive monitoring of media platforms, responding to and managing undesirable situations. • Raise brand profile through marketing campaigns and strategic partnerships and enhancing brand equity. • Monitor customer satisfaction through feedback, surveys, inspections and other forms of engagement. • Maintain product consistency across the portfolio while preserving each property's unique personality. • Strive to avoid situations and/or actions that could negatively impact the Group’s reputation and brand. Climate Change Exposure to physical asset disruptions and significant carbon tax liabilities, coupled with escalating compliance costs and a loss of investor confidence due to ESG transparency gaps. • Pledged net zero whole life carbon for CDL’s new developments and major renovations over which the Group has direct operational and management control in Singapore by 2030, in accordance with World Green Building Council’s Net Zero Carbon Buildings Commitment. • Measure and disclose CDL’s management of climate-related risks using internationally recognised frameworks/ assessments, such as Task Force on Climate-related Financial Disclosures (TCFD) and Taskforce on Nature-related Financial Disclosures (TNFD). • Conduct double materiality assessment for progressive full alignment with the IFRS S1 and S2. • Monitor supply chain risks to better prepare for the increasing physical and social challenges impacting the supply of materials and workers to the Group's projects. • Raise the bar on proactive, transparent and prompt ESG communication and reporting via digital platforms. For more information on climate change, please refer to the Group’s Strategic Management of Material ESG Issues. Regulatory Changes Fines, penalties, litigation, or disruption from policy changes across jurisdictions. • Actively monitor and engage with regulatory bodies and professional firms on updates to laws and regulations. MATERIAL RISKS AND MANAGEMENT APPROACH Material risks are assessed through an integrated top‑down and bottom‑up process, supported by key risk and performance indicators. The summary below highlights principal risks most relevant to the Group’s strategy and performance, together with corresponding key mitigation actions. ANNUAL REPORT 2025 | 65
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