UEM EDGENTA BERHAD Integrated Annual Report 2025 70 Description Capital markets have undergone a structural shift in how risk and value are assessed, with ESG considerations now embedded into mainstream investment analysis rather than treated as peripheral factors. Investors, lenders and rating agencies increasingly evaluate how effectively organisations identify, manage and disclose ESG-related risks and opportunities, recognising their direct impact on resilience, cost of capital and long-term enterprise value. In Malaysia, this shift is reinforced by the introduction of the National Sustainability Reporting Framework (“NSRF”), which is anchored on the ISSB Standards, including IFRS S1 and IFRS S2. The move towards globally aligned, climate-related and sustainability-related disclosures elevates transparency from a voluntary practice to a regulatory and market expectation. As reporting requirements become more rigorous and comparable, organisations face heightened scrutiny over governance, risk management processes and the credibility of sustainability-related data. ESG risks represent uncertainties and potential adverse events that may disrupt the effective execution of our business strategy, impact operational performance, or affect the long-term resilience and availability of resources across our value chain. Failure to comply with ESG-related standards could result in significant consequences, including revenue loss, market share erosion due to shifting customer preferences, diminished confidence from investors and rating agencies, financial penalties from regulatory bodies, and reputational damage that may lead to negative publicity. In addition, unmanaged ESG risks can disrupt operational continuity and service delivery, such as through safety incidents, supply chain interruptions, environmental non-compliances or community impacts, which may directly affect contract performance and customer satisfaction. ESG RISK R7 Context Globally, sustainability expectations have evolved from voluntary good practice to regulatory and market discipline. Investors, clients and regulators increasingly scrutinise how organisations manage climate-related risks, workforce welfare, supply chain integrity and governance standards — particularly in sectors that support critical infrastructure and public services. Heightened disclosure requirements, supply chain due diligence requirements and climate transition policies across major markets are raising the bar for transparency, comparability and accountability. For UEM Edgenta, operating across healthcare support, infrastructure and facilities management, ESG considerations are closely linked to service reliability, occupational health and safety performance, responsible procurement practices, environmental efficiency and community impact. As a steward of essential assets and services, the Group recognises that effective ESG management underpins operational resilience, stakeholder trust and longterm value creation. Mitigation • Formalising our Sustainability Policy, ESG governance structure and multi-year Roadmap, which collectively provide the foundation of our sustainability governance framework, ensuring clear accountability from the Board of Directors through senior management to business units, embedding ESG considerations into strategy, risk management and operational execution across the Group. • Integrating ESG and climate-related risks into our Enterprise Risk Management processes with regular reporting to the Board and senior leadership, to ensure timely identification, monitoring and mitigation of sustainability-related risks that may affect service delivery, regulatory compliance and long-term value creation. • Continuing to comply with applicable ESG regulations while proactively preparing for evolving sustainability reporting requirements, including the the NSRF with alignment to ISSB standards. • Establishing an internal NSRF Task Force to steer readiness efforts, strengthen data governance and reporting processes, and drive cross-functional coordination to ensure structured and effective implementation. • Progressively reviewing and enhancing policies, procedures and internal controls to support robust, transparent and decision-useful sustainability disclosures in line with regulatory expectations. • Embedding ESG principles within operational practices across healthcare support services, facilities management and infrastructure operations, including strengthening occupational health and safety standards, improving environmental efficiency and maintaining responsible service delivery for essential public assets. • Actively engaging stakeholders across our value chain to identify material ESG matters, climate-related risks and emerging threats, while maintaining responsible procurement practices and vendor engagement initiatives to reinforce labour standards, safety performance, ethical conduct and environmental stewardship beyond direct operations. • Conducting awareness and structured training programmes, alongside ongoing communication, to enhance ESG competencies at leadership and operational levels, ensuring consistent and effective implementation of sustainability practices across the organisation. KEY RISKS AND MITIGATION
RkJQdWJsaXNoZXIy NDgzMzc=