SUSTAINABILITY STATEMENT 44 Al-`Aqar Healthcare REIT | Annual Report 2024 Opportunities Potential Impact Transition Risks MARKET Fluctuating market conditions and customer preferences • Increasing customer preferences for green property assets • Economic shifts, such as recessions, can impact property valuations and rental revenues. A less robust economic climate may lead to elevated vacancy rates, diminished demand, and financial difficulties for the REIT. By effectively communicating and promoting our dedication to sustainability, we can differentiate ourselves and draw in clients who prioritise environmental consciousness. REPUTATION Reputational damage resulting from delayed adoption of low-carbon practices compared to industry peers • Investors and tenants increasingly prioritise sustainable and climateresilient properties. Failing to meet these expectations can result in discontent and reputational harm Opportunity to elevate Al-`Aqar’s reputation by pioneering climateconscious operations. Opportunities Potential Impact Transition Risks ACUTE Occurrence of short-term extreme climate-related events such as heat waves, floods, landslides, etc. • Healthcare facilities may face increased risks from extreme weather events such as hurricanes, or floods, potentially resulting in property damage, operational disruptions, and increased insurance costs. Performing comprehensive risk assessments, developing robust emergency response plans, and investing in resilient infrastructure are crucial steps in mitigating the immediate risks. CHRONIC Long-term impacts, such as extreme weather fluctuations, including prolonged high temperatures and heavy rainfall • Persistent environmental shifts, such as rising temperatures and changes in precipitation patterns, continually challenge infrastructure maintenance, resource availability, operational cost and worker health. Implementing climate-resilient infrastructure and building designs can enhance the REIT’s ability to withstand extreme weather events and alleviate long-term climate-related impacts. Physical Risk ASSESSING OUR MATERIALITY MATTERS
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