RISK MANAGEMENT Climate Change The Group recognises that climate change poses business risks. A focal issue of the Paris Agreement and Singapore Green Plan 2030, climate change is one of the longterm key global risks that can potentially impact the Group’s assets, revenue, operations, supply chain, product design, stakeholder engagement, and investor communication. Aside from physical risks arising from climate change, regulatory transition risks can result in stricter emission standards, increased carbon tax and water pricing, and stricter building design requirements. The Group prioritises ESG communication and reporting to proactively manage rising stakeholder capitalism, investor and consumer activism. Climateproofing its buildings for a low-carbon future is key to the Group’s growth strategy. We manage this risk by: a) Pledging net zero whole life carbon for CDL’s new developments and major renovations over which we have direct operational and management control in Singapore by 2030, in accordance with World Green Building Council’s Net Zero Carbon Buildings Commitment. b) Implementing robust climate mitigation and adaptation strategies to accelerate efforts towards a low-carbon business model, such as setting carbon emissions reduction targets validated by the Science Based Targets initiative (SBTi) for a 1.5°C warmer scenario. c) Pushing the envelope in innovative green building technologies to enhance the resilience of its assets against physical and transition risks posed by climate change. d) Measuring and disclosing CDL’s management of climate-related risks using internationally recognised frameworks/ assessments, such as the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, Climate Disclosure Standards Board (CDSB) and CDP. e) Conducting climate change scenario analyses as a means of testing the Group’s strategic resilience against different plausible and sciencebased climate scenarios. The analysis also covered climate-related risks from the COVID-19 pandemic as well as emerging net-zero regulatory landscapes across five key CDL markets. f) Monitoring supply chain risks to better prepare for the increasing physical and social challenges impacting the Group’s supplies of materials and workers. g) Raising the bar on proactive, transparent and prompt ESG communication and reporting via digital platforms. We identify opportunities and improvements by: • Continuing to strengthen our market position by embedding sustainability into real estate and hospitality operations. • Driving sustainability innovation in our supply chain with the goal of reaching near and long-term net-zero targets. Regulatory Changes The Group operates in many jurisdictions and is exposed to various levels of political and policy risks such as political uncertainties, introduction or change in public policies, statutory and regulatory requirements. We manage this risk by: a) Actively engaging with regulatory bodies and professional firms to stay informed on updates to laws and regulations. We identify opportunities and improvements by: • Continuous monitoring and assessment of impact arising from regulatory changes, observing market reactions, and formulating our strategies accordingly. CORPORATE GOVERNANCE CITY DEVELOPMENTS LIMITED 38
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