UEM EDGENTA BERHAD Integrated Annual Report 2025 116 Climate-related Risks and Opportunities Climate-related risks and opportunities are treated as dynamic exposures that require continuous monitoring rather than periodic review. This includes active monitoring of physical risks affecting owned and managed assets, such as flooding, extreme heat and soil movement, which may disrupt operations or affect asset integrity. Where such risks are identified, mitigation actions and adaptation measures are implemented to reduce potential losses and strengthen protection of assets and service continuity. Both physical and transition climate-related risks are assessed across business activities, including risks linked to regulatory change, carbon pricing and energy cost volatility. Climate considerations are incorporated into strategic and operational planning so that business decisions reflect evolving climate-related risks and regulatory expectations. Operational resilience is enhanced through assessments of exposure to extreme weather events and the adoption of measures such as infrastructure strengthening, business continuity planning and supply chain preparedness. Carbon emissions reduction and resource efficiency are advanced through the use of energy-efficient technologies, asset optimisation and sustainability initiatives that lower environmental impact. Capability building also plays a key role, supported by internal briefings, training and knowledge-sharing to ensure climate risks are addressed consistently across business units. Regulatory and market developments related to climate transition are monitored to support timely responses to emerging policies and sustainability standards. In FY2025, the Group strengthened its climate risk management tools and achieved deeper integration of climate considerations into financial and operational decision-making. Climate risk identification and monitoring continued for both existing operations and new projects, covering physical risks such as flooding, extreme heat and soil movement, as well as transition risks related to regulation, carbon pricing and energy markets. To support more robust transition risk assessment and decarbonisation planning, the Group implemented enhanced carbon management tools, to guide investment and operational decisions. This included the introduction of an internal carbon price at RM15 per tonne of CO₂ to place a price on carbon and assess its implications for our operations and projects. Refer to Climate Change and Energy section on pages 143 to 144, for more information on Carbon Management Tools. The Risk, Integrity and Compliance Department (RICD) maintains oversight of climate-related risks across operations and new projects throughout the year. This approach is guided by the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), for which the Group has established an implementation roadmap. In line with evolving regulatory expectations, the Group is progressively transitioning its climate-related governance and disclosures towards the National Sustainability Reporting Framework (NSRF) and the IFRS S1 and S2 standards. Climate-related opportunities are viewed as the organisation’s capability to respond effectively to identified risks rather than as guaranteed financial upside. Managing climate-related risks has supported service innovation, particularly in energy efficiency and decarbonisation solutions for clients, where operational improvements and emissions management are increasingly integrated into service delivery. SUSTAINABILITY AT UEM EDGENTA
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