pg. 201 Corporate Governance Report Integrated Annual Report 2025 In line with IFRS S1/S2, risks are classified into physical (flooding, storms, heatwaves, power interruptions, temperature and humidity shifts) and transition risks (regulatory requirements, carbon reporting, low-carbon expectations, and technology changes), alongside opportunities such as energy-efficiency enhancements, solar PV, smart systems, and resilience. Climate considerations are embedded into investment reviews, leasing decisions, preventive maintenance, asset readiness, and insurance pricing. Mitigation measures include flood-resilience works, HVAC efficiency upgrades, water-saving systems, indoor air-quality monitoring, and real-time building performance tracking. The Framework is reviewed annually to incorporate updated climate data, regulatory developments, and operational learnings. Using the above model, the Climate Risk assessment of Al-Salām assets are as follows: Physical Risks – Acute Risk Description Risk Rating Key Mitigation Flooding & Stormwater Intrusion Urban flash flooding affecting basements, car parks, loading bays and access to malls (e.g. JBCC, neighbourhood retail). Drainage upgrades, flood mapping, protection of M&E rooms, emergency response plans, insurance review. Extreme Heat & Heatwaves Increased cooling demand in malls and offices; discomfort affecting footfall and occupier satisfaction. HVAC optimisation, operating-hour controls, preventive maintenance, shading and reflective materials where feasible. Severe Weather Disruption Heavy rainfall and storms disrupting operations, access and tenant business continuity. BCM plans, contractor readiness, tenant communication protocols. Physical Risks – Chronic Risk Description Risk Rating Key Mitigation Rising Temperatures (Cooling Load) Long-term increase in energy consumption and operating costs for common areas. Progressive equipment replacement at end-of-life, energy efficiency embedded in capex planning. Water Stress & Supply Disruptions Higher water demand for cooling and F&B tenants; potential supply interruptions. Water efficiency measures, leak detection, tenant engagement, contingency planning. Asset Obsolescence Older retail and office assets becoming less competitive due to climate performance. Capital planning, selective refurbishments, portfolio optimisation. Transition Risks – Regulatory & Policy Risk Description Risk Rating Key Mitigation Energy & Environmental Regulations Tighter energy efficiency, reporting and compliance requirements under Bursa/ ISSB. Governance framework, REM oversight, audits, strengthened disclosures. Carbon Pricing / Cost Pass-Through Potential future cost increases indirectly affecting operating expenses. Cost monitoring, efficiency measures, conservative decarbonisation targets. STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL
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