As a CLI-sponsored REIT, CICT’s identified ESG issues are aligned and adapted from CLI’s list. The selected ESG issues have been deemed to be material and applicable to CICT’s business and operations and will be guided by CLI and CICT’s regular review, assessment and feedback process in relation to ESG topics moving forward. Since 2016, climate change and emissions reduction are key ESG material issues identified as relevant and critical for CICT and CLI. Climate change risk has been identified as a key risk as part of the ERM Framework and includes both physical and transition risks. For more information on CICT's strategy to identify and address climate-related risks and opportunities, please refer toManaging Climate Change in this report. Risk Management Strategy 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 CICT management level before they are presented to the Manager’s Audit Committee and the Board. This exercise is based on CLI’s annual Groupwide RCSA exercise, review of the Risk Appetite Statement and Key Risk Indicator on Climate Change and Environmental Risk. Such climaterelated risks and opportunities are identified andmitigated through CLI'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 Annual Report 2022, Risk Management section. Climate-related risks and opportunities are identified and mitigated through CLI’s ERM Framework. The Trust prioritises material ESG issues based on the likelihood and potential impact of the issues affectingbusiness continuity and development. Notably, CICT is cognizant of the risk posed by existing and emerging regulatory requirements with relation to climate change as it is outlined in CapitaLand’s ERM Framework as a transitional climate change risk. Some of these risks include: • Regulatory or compliance risk, prompted by certain regulations in the countries of operation. These include, but are not limited to, the Environmental Risk Management Guidelines introduced by the Monetary Authority of Singapore (MAS) in 2020 requiring financial institutions and asset managers to place greater emphasis on both physical and transition environmental risks; and the Singapore Exchange mandate introduced in December 2021 that all issuers must provide climate reporting that is aligned to the recommendations of the TCFD in their sustainability reports from financial year commencing 2024 for the materials and buildings industry. For now, this requirement is on a ‘comply or explain’ basis for CLI and CICT. Another development to keep in view is the International Sustainability Standards Board (ISSB), which aims to form a comprehensive global baseline of sustainability disclosures and a harmonised set of standards for reporting on sustainability performance. • Market risks, including shifts in carbon and electricity prices, or customer expectations, prompted by the conclusions of COP27 in November 2022, where it was recognised that urgent action is needed to combat global warming, and this can only be done through global action from governments and businesses. Other developments, such as Singapore’s Green Plan 2030 that charts ambitious and concrete targets that will strengthen Singapore’s commitments under the United Nation’s 2030 Sustainable Development Agenda and Paris Agreement, and position Singapore to achieve its longterm net zero emissions aspiration by 2050, are also monitored by CICT as they affect the day-to-day operations and practices of the Trust. Integrated Sustainability Report 2022 69
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