CapitaLand Integrated Commercial Trust - Annual Report 2021

CICT conducts an annual Trust-wide Risk and Control Self-Assessment (RCSA) exercise that requires business units and corporate functions to identify, assess and document material risk which includes ESG relevant risks, along with their key controls and mitigating measures. Material risks and their associated controls are consolidated and reviewed at the CICTmanagment level before they are presented to the Manager’s Audit Committee and the Board. This exercise is based on CLI’s annual Group-wide RCSA exercise, review of the Risk Appetite Statement and Key Risk Indicator on Climate Change and Environmental Risk. Such climate-related risks and opportunities are identified and mitigated through CapitaLand’s ERM framework, and its externally certified ISO 14001 Environmental Management System (EMS). CICT’s risk management process to address its key risks and uncertainties, including climate change, is discussed further in its Annual Report, Risk Management section. • Through the implementation of the Group’s Sustainable Building Guidelines (SBG), the aim is to identifyandaddress therisksandopportunities of climate change right from the design stage. The local context of each project will be studied in detail, and appropriate measures will be taken into consideration with regards to adaptation of climate change. SBG also sets guidelines for buildings to be more energy efficient, e.g. setting green rating targets, specifying minimum equipment efficiency, and requiring the use of onsite renewable energy whenever possible. • At the operational asset level, the CLI Group’s Environment, Health and Safety Management System (EHSMS), which is audited by a third- party accredited certification body to ISO 14001 standard, serves to monitor transition risks relating to climate regulations via EHS legal registers updates and regular stakeholder engagement. Operational issues pertaining to climate change, energy and water are also identified and managed through the EHSMS to strengthen the climate resilience of its portfolio. • The CLI Group’s 2030 Sustainability Master Plan further outlines the targets and pathways for transition to a low-carbon business that is aligned with climate science. Energy use and carbon reduction targets, as well as green certification targets are set for its operational assets. Initiatives are put in place to improve the environmental performance, resilience and durability of its assets through system upgrades, system optimization, effective maintenance and changes to user behaviour. The continued achievement of high green building ratings as well as energy and water efficiency measures put in place to achieve the reduction targets would help to mitigate the impact of changing weather conditions. As part of the 2030 Sustainability Master Plan formulation, the Trust generally considers medium term time frames to be until 2030, and long term beyond 2030 in relation to the identification of climate-related risks and opportunities. A few of CICT’s assets along with sample global assets are part of various physical risk platforms including flooding scenario piloted by CLI, to prepare for its group-wide scenario analysis study. CLI and its REITs, including CICT, aim to conduct its climate scenario analysis in 2022 for its global portfolio. This analysis would consider scenarios based on the latest global and scientific developments, and likely cover a spectrum of scenarios from 1.5˚C to 4˚C scenarios for current to long-term time frames, to draw conclusions on the financially material physical and transition risks, and validate its current strategy. It will then review its mitigation and adaptation plans, identify opportunities, in alignment with CapitaLand’s 2030 Sustainability Master Plan, which is designed to build resilience throughout its operations and future-proof CLI Group’s real estate portfolio to guard against climate change risks and to avoid premature obsolescence and adopt available opportunities. Risk Management Annual Report 2021 53 TCFD