CLIMATE RISKS & OPPORTUNITIES As part of its ongoing efforts, UEM Edgenta has begun identifying climate-related risks and opportunities in alignment with the TCFD recommendations. This includes actively monitoring physical risks associated with the assets the company owns, such as flooding, extreme heat, and soil movement, all of which present potential threats to operations. Upon identifying such risks, UEM Edgenta takes immediate action to reduce possible losses and implement effective adaptation strategies to protect its assets and operations. In addition to physical risks, the company is evaluating transition risks linked to climate change, including potential impacts from regulatory changes, carbon taxes, and evolving environmental policies, which could influence business operations and financial stability. To support its climate risk management strategy, UEM Edgenta has introduced a carbon budgeting process designed to track and reduce emissions in line with its net-zero goals. This initiative also considers the effects of changing energy prices and other transition-related risks. Furthermore, sustainability and climate risk assessments are conducted for new projects to ensure alignment with responsible business practices and the company’s broader sustainability objectives. In an effort to maintain oversight, the BGRC reviews the company’s risk profile on a quarterly basis, ensuring that sustainability risks, including climate-related challenges, are consistently monitored and addressed. As part of its annual review, UEM Edgenta also conducted a thorough evaluation of its materiality matrix, confirming that climate change, energy, and environmental management remain critical among the company’s 11 material risk matters. Looking ahead, the company will place greater emphasis on health and safety, also prioritise Occupational Health and Safety of its employees and stakeholders. As Malaysia progresses towards a low-carbon economy, UEM Edgenta is exposed to transition risks that could impact business operations. Regulatory changes, including the introduction of a carbon tax in 2026, are expected to influence operating costs, particularly in energy-intensive sectors such as healthcare support, infrastructure maintenance, and property management. Rising energy prices may further add pressure on cost structures. Meanwhile, shifting market demand towards low-carbon and sustainable solutions underscores the need for continuous innovation in energy efficiency, digital solutions such as the Asseto platform, and sustainable infrastructure practices to enhance business resilience and future readiness. While climate change presents various risks, it also creates opportunities that drive our growth strategy. The increasing demand for sustainable asset solutions enables us to expand our energy efficiency and sustainable infrastructure services through OPUS Consultants and our digital asset management platform, Asseto by Edgenta NXT. Our acquisitions of KAIZEN Group and MEEM Facility Management strengthen our presence in the Middle East, better positioning us to offer digital solutions that enhance operational efficiency and climate resilience for new clients. This aligns with the region’s climate ambitions under Saudi Vision 2030 and the Saudi Green Initiative, creating new avenues to grow our business while supporting the transition to a low-carbon economy. Additionally, sustainability-linked loans provide favourable financing terms, enabling us to accelerate investments in lowcarbon projects that advance our long-term sustainability goals. PHYSICAL RISKS IMPACTS CLIMATE-RELATED OPPORTUNITIES Short Term – Medium Term Natural Disasters • Flooding Medium Term – Long Term Global Warming • Rising temperatures in the markets where we operate Natural Disasters • Landslides, storms and soil erosion in our operations • Operational Challenges – Potential infrastructure damage to our assets (e.g. Kamunting Laundry and Incineration Plant, Asphalt Plant, etc.) could disrupt service delivery – Disruption in supply chain – Disruption in energy supply – Safety issues for workforce particularly frontliners – Environmental pollution – Water contamination – Reputational damage • Cost Increase – Cost incurred for repair works and cost to engage subcontractors to continue performing disrupted services – Increase cost from higher insurance premium Products and Services • Infrastructure services offered to clients • Capitalising on our energy efficiency solutions to maximise on energy consumption and leverage on renewable energy sources • Environmental assessment study • Infrastructure maintenance services • Cleaning of water systems • Offering of Energy Audits and advisory on green building certifications 121 ENHANCING VALUE THROUGH SUSTAINABILITY
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