KENANGA INVESTMENT BANK BERHAD 50 INTEGRATED ANNUAL REPORT 2025 SUSTAINABILITY STATEMENT Overall Analysis All climate-related risks were assessed as low across short, medium and long-term horizons, reflecting the presence of established controls and a resilient operating model. This provides a stable baseline from which exposures can be monitored as external conditions evolve. Transition risks, particularly those linked to change in policies, technological developments and shifts in market sentiment, are the most relevant for the Group. Their influence becomes more pronounced over the medium to long-term, as regulatory direction and market expectations continue to shape the financial sector. Liability risks are more evident in the short to medium term, though their magnitude remains low. Physical risks are not considered material, supported by the Group’s operational resilience and the findings from the CRST. Kenanga Group will continue to enhance internal assessments and maintain oversight across all climate risk categories, allowing for timely identification of changes in exposure. Opportunities The CROs Identification Exercise highlighted six (6) potential opportunities for Kenanga Group to enhance client value and expand sustainable offerings. These include supporting clients’ transition to lower carbon business models; encouraging ESGaligned investment behaviours; exploring preferential pricing structures and product innovation; assessing adoption-focused financial instruments such as adaptation bonds; providing general transition advisory support; and strengthening ESG screening tools. These opportunities are exploratory at this stage and will be further evaluated with relevant BUs to determine strategic fit and implementation priority. Climate Risk Scenario Analysis (“CRSA”) The CRSA was conducted as a qualitative assessment to identify physical, transition and liability risks arising from evolving regulatory, market and technological developments. This enables early identification of emerging risks while supporting resilience across the Group. The current scope covers the credit portfolio, with plans to expand to additional areas and risk categories in future cycles. This progression supports alignment with the CRST methodology and broader integration of climate considerations into risk management. Guided by the Network for Greening the Financial System (“NGFS”) Phase III and aligned with BNM’s CRST scenarios, the analysis followed a structured process that links scenario selection, key driving forces, risk assessment and the development of controls and strategies. Top three (3) Key Risks Identified Across Different Time Horizon Short-term Medium-term Long-term Transition Risk - Change in Policies Transition Risk - Change in Policies Transition Risk - Shift in Market Demand and Sentiment Liability Risk Transition Risk - Technological Advancement Transition Risk - Technological Advancement Transition Risk - Carbon Tax Liability Risk Transition Risk - Change in Policies
RkJQdWJsaXNoZXIy NDgzMzc=