53 ANNUAL REPORT 2024 CLIMATE ACTION INITIATIVES (CONT’D) Climate-related Disclosures (Cont’d) Strategy (Cont’d) Transitional Risks (Cont’d) Transition Risk Impact Opportunities Market • Potential uncertainties in long-term fuel cost projections due to shifts in market dynamics and global fuel supply and demand • Increased operational costs affecting profit margins due to volatile fuel prices • Opportunity to mitigate fuel cost volatility by transitioning to low-carbon and green energy fleets, reducing dependency on fluctuating fuel markets, which include hybrid engines and potential of battery energy storage system which emits lower GHG rates Reputation • Growing pressure from stakeholders due to delayed adoption of low-carbon practices compared to industry peers • Erosion of market position and loss of key customers prioritising sustainability, resulting in reduced revenue and market share • Failure to address climate change or meet environmental expectations, leading to reputational damage and negative media coverage • Opportunity to strengthen brand reputation and market position by accelerating the adoption of low-carbon practices • Opportunity to attract investors who prioritise companies with robust ESG performance Physical Risks Physical Risk Impact Opportunities Acute • Potential short-term extreme weather events (i.e., heavy rainfall, storms, typhoon, flash floods, etc.) • Disruption of workforce operations and damage to vessels and assets, leading to increased downtime and repair needs • Higher maintenance and repair costs for vessels due to damage from extreme weather events • Opportunity for enhanced fleet management through advanced weather forecasting and realtime monitoring to minimise operational disruptions during extreme events and optimise response strategies Chronic • Potential long-term effects, including extreme variability in weather patterns such as prolonged high temperatures and shifts in precipitation patterns, can lead to increased fuel consumption and wear and tear • Long-term climate-related impacts may reduce the lifespan of vessels, leading to higher operating, capital and insurance costs • Consider adopting predictive maintenance technologies such as IoT sensors to monitor vessel conditions and optimise maintenance schedules • Opportunity to invest in climateadaptive vessel designs to reduce long-term repair and replacement costs SUSTAINABILITY STATEMENT FY2024 (cont’d)
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