IHH Healthcare Berhad | Annual Report 2024 54 Strategic Report Principal Risks Key Area Principal Risks Factor Description Environmental, Social and Governance (ESG) Climate-related risks are increasingly important to the Group, given their potential to disrupt operations and the increasing regulatory requirements. From a physical risk perspective, acute events such as extreme weather and chronic changes in climate patterns can directly disrupt hospital operations and indirectly affect supply chains. This may, compromise services and supplies, potentially impacting the delivery of safe and reliable care. Transition risks include heightened ESG reporting requirements, increased scrutiny from local regulators on ESG matters, and possible carbon taxes in more of the countries that we operate in. These developments necessitate continuous investment in compliance capabilities and risk management to adapt effectively. Financial The rising global healthcare costs, primarily driven by the escalating expenses of medical advancements, treatments and equipment, could present a challenge to the Group’s financial performance. This situation may be further exacerbated by growing pressure from insurance payors for price adjustments due to the surge in healthcare costs. People and Culture Attracting, developing, engaging, retaining and building a resilient and skilled healthcare workforce is critical for delivering high-quality patient care and achieving organisational goals. Workforce management challenges such as a declining talent pipeline, evolving skill requirements, technology disruption, high turnover and changing employee priorities and expectations necessitate the continual redesign of workforce model and employee value propositions. Failure to address these issues could lead to operational disruptions, compromised patient outcomes, diminished brand reputation, increased costs, and present challenges to meet regulatory requirements. Pre-mitigation risk remained unchanged Pre-mitigation risk increased Pre-mitigation risk decreased Trend indicates change in pre-mitigation risk level over the year:
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