Governance Corporate Governance RISK MANAGEMENT The Board of CICTML is responsible for the governance of risk, ensuring that the management upholds a sound risk management system and internal controls to safeguard the interests of CICT and its stakeholders. Assisted by the Audit and Risk Committee, the Board approves CICT’s risk appetite (risk tolerance), determining the nature and extent of material risks CICT is willing to take to achieve its strategic objectives. The Board also regularly reviews CICT’s risk profile, material risks and mitigation strategies. This oversight ensures the adequacy and effectiveness of the risk management framework and policies and includes monitoring of risk exposure through key indicators. Annually, a group-wide RCSA exercise is conducted to identify, assess and document material risks, along with their key controls and mitigating measures. One of the key material risks identified was climate-related risks, encompassing both physical and transition risks. CICT prioritises material ESG issues based on their likelihood and potential impact on business continuity and development. CICT is cognisant of emerging and evolving regulatory and compliance risks across its operating markets. Some of these physical and transition risks include: • Heightened Disclosure Requirements in Singapore – all listed issuers in Singapore have to align their climaterelated disclosures to ISSB standards from FY 2025, Scope 3 disclosures will be mandatory from FY 2026 and external limited assurance on Scope 1 and 2 emissions will be required from FY 20271. • Evolving Market Risks and Accelerating Climate Action – including shifts in carbon and electricity prices, and customer expectations driven by global and national climate initiatives. Singapore announced that the carbon tax was raised to $25/tCO2e from 2024, and will be raised further to $45/tCO2e in 2026 and 2027, with a view to reaching $50-80/tCO2e by 2030, signalling businesses and individuals to reduce their carbon footprint in line with national climate goals2. Singapore, Australia and Germany have announced their commitment to Net Zero by 20503. • Flood Risk and Preparedness – Most of CICT’s Singapore properties are equipped with flood prevention system and measures, such as flood barriers, sensors, water level pumps and flood emergency response plans. Please see our feature Safeguarding our Properties and Communities with Flood Prevention Measures on CICT’s website. For more information on the CICT’s risk management, please refer to the Risk Management section of CICT’s AR 2024. 1 Source: Singapore Exchange Regulation, as at 17 February 2025. 2 Source: National Climate Change Secretariat, Carbon Tax, as at 17 February 2025. 3 Sources: Department of Climate Change, Energy, the Environment and Water (Australia) and German Federal Ministry for Economic Affairs and Climate Action (Germany), as at 17 February 2025. 58 CapitaLand Integrated Commercial Trust
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