Risk Management (Cont'd) Metrics & Targets At the Group level, CLI has tracked and reduced the carbon emissions of its managed and owned operational properties, including those of CICT, via its cloud-based Environmental Tracking System. All related metrics have been regularly disclosed in CICT’s sustainability reporting in its annual reports and CLI’s annual Global Sustainability Report. Since 2010, CapitaLand has been disclosing scope 1, 2 and 3 GHG emissions of its global portfolio and the data has been externally assured. CICT relies on CLI’s external assurance which includes the Trust’s assets. Furthermore, in 2022, the Group had their carbon emissions reduction targets approved by the Science Based Targets initiative (SBTi) for a 1.5 ̊C scenario1. This target is in linewith the goals of the Paris Agreement to keep global temperature rise to 1.5 ̊C in this century. CLI has also committed to Net Zero by 2050 for its scope 1 and 2 emissions, which includes the Trust’s assets. Please refer to the CLI Global Sustainability Report 2022 which will be published by May 2023. At the Trust level, for the year 2022, the carbon related performance and targets can be found in the Operational Efficiency section of this report. To calculate its carbon emissions, CICT takes guidance from the operational control approach as defined by the GHG Protocol Corporate Standard, in line with the Group. Aligned with CLI, CICT has set sustainability and climate-relatedperformancemetricsandtargets that are linked to the remuneration policies for members of senior management. The Balance Scorecard (BSC) framework for FY 2022 included both quantitative and qualitative targets relating to climate change. Examples of climate change targets include attaining green ratings for a high percentage of the portfolio, achieving agreed savings for energy intensity from base year and piloting a certain number of initiatives from the annual CapitaLand Sustainability X Challenge. CLI has implemented a shadow internal carbon price since 2021 to quantify climate-related risks and opportunities for its new investments. This was applied as part of the EHS Impact Assessment conducted during CICT’s respective due diligence of its three investments in Sydney, Australia. CLI will continue to explore new metrics to measure climate-related risks and opportunities which CICT will assess and adopt where relevant for its portfolio. • Physical risks are observed through the regular monitoring of incidents across the portfolio, for example cases of floods. In 2020, CICT, through its Property Managers under CLI had conducted a global portfolio baseline study to better understand its portfolio’s physical climate risk in relation to floods. This included insights into whether properties were located in low lying plains, encountered flooding in previous years, had equipment located in the basement, and had exposure to other flood risks. Most of CICT's Singapore properties already have flood control features/measures in place, such as flood barriers, sensors, water level pumps and flood emergency response plans. Through CICT's ERM Framework and implementation of EHS Impact Assessment for all new investments, certain physical risks are prioritised, e.g. floods are highlighted in the due diligence reports and plans to integrate climate changeresilienceandadaptationconsiderations into the design, development and management of its properties. To further strengthen climate resilience to flood risk, CICT, through CLI regularly engages its operation teams to ensure flood emergency response plans are implemented across its portfolio. 1 To operationalise its SBTi-approved carbon emissions reduction target for scope 1 and 2 emissions, CLI is reviewing its carbon emissions intensity reduction targets and other environment targets, including changing reference to 2019 as the baseline year instead of 2008. The targets are being reviewed as part of the scheduled review of CapitaLand’s 2030 SMP in 2022 and will be published before end May 2023. CapitaLand Integrated Commercial Trust 70 TCFD
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