KENANGA INVESTMENT BANK BERHAD 48 INTEGRATED ANNUAL REPORT 2025 SUSTAINABILITY STATEMENT Risk Management Policies and Frameworks Risk Assessment Tools Capacity Building • Climated-related risks and opportunities are embedded within Kenanga Group’s Enterprise Risk Management Framework, ensuring these matters are prioritised, monitored and managed through established risk governance structures. • The Climate Change Risk Management Framework integrates climate considerations into lending and investment decisions, supported by defined climate risk appetite thresholds and evaluation criteria for counterparties and transactions. • Additionally, climate-related expectations were strengthened within the Outsourcing Risk Management and Procurement frameworks to ensure third party risks are appropriately evaluated. Kenanga Group’s Risk Appetite Statement has also been updated to include climate-related boundaries. • In 2025, the Group introduced the Sustainability Risk Management Framework to harmonise sustainability risk management processes across all business divisions. • Kenanga Group uses a comprehensive suite of tools— including the Climate Change Risk Assessment Checklist, enhanced due diligence processes and climate risk assessment templates—to consistently assess client and sector-level climate exposures. • Climate stress testing and scenario analysis are conducted in line with BNM’s expectations to evaluate potential impacts under different climate pathways. Physical climate risks affecting the Group’s operations are incorporated into the Operational Risk Self Assessment and Business Continuity Management processes. • In 2025, a Climate Risk and Opportunities Identification Exercise was carried out across key BUs to develop detailed climate risk profiles, complemented by ongoing monitoring of financed and facilitated emissions to support future climate risk indicators. • Kenanga Group continues to strengthen internal climate risk capabilities through targeted training, awareness programmes and technical upskilling to equip employees to assess climate exposures and engage clients on transition expectations. • Climate-related information— such as client climate profiles and sector exposures—is monitored and reported monthly to relevant Risk Committees to support informed decision-making. The Group actively tracks domestic and global climate-related regulatory developments to prepare for emerging supervisory expectations. Internal capacity has been further enhanced through additional headcount and specialised professional training, including certifications in climate risk management.
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