UEM EDGENTA BERHAD Integrated Annual Report 2025 118 TRANSITION RISKS, IMPACTS & CLIMATE-RELATED OPPORTUNITIES TRANSITION RISKS IMPACTS CLIMATE-RELATED OPPORTUNITIES Short-Term – Medium-Term Energy Prices • Increasing energy prices affecting electricity- and fuel-dependent operations. Operational and Cost Implications • Higher operating costs across energyintensive activities, including: - healthcare support services. - facilities management. - infrastructure maintenance and plant operations. • Increased capital expenditure required to retrofit and upgrade energy systems (e.g. chillers, equipment and plant) to improve efficiency. • Greater exposure to emissions-related costs, monitored through carbon budgeting and the internal carbon pricing pilot. Energy Transition and Optimisation • Exploration of green transportation and energy-efficient infrastructure solutions for Group operations and, where applicable, client sites. • Deployment of energy efficiency solutions, including the Zero Capex Programme, to support energy optimisation initiatives. Medium-Term – Long-Term Regulatory • Expanding regulatory requirements and climate-related policies. • Adoption of carbon tax in Malaysia from 2026. Compliance and Financial Exposure • Increased compliance and reporting costs associated with climate-related regulations. • Potential carbon tax liabilities affecting operating margins, particularly for energy- and fuel-intensive operations. • Risk of penalties or enforcement actions in the event of non-compliance. Market and Reputation Considerations • Heightened scrutiny from clients, regulators and business partners. • Increased risk of losing contracts where sustainability and regulatory compliance are part of procurement criteria. Stakeholder Engagement and Readiness • Engagement with clients and stakeholders through knowledge-sharing and advisory sessions on regulatory readiness. • Offering the Zero Capex Programme to support clients’ energy transition and compliance efforts. Capability and Capacity Building • Strengthening internal capabilities to respond to evolving regulatory requirements. • Training programmes for employees and selected external stakeholders on transition risks and compliance expectations. SUSTAINABILITY AT UEM EDGENTA
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