INTEGRATED ANNUAL REPORT 2024 118 119 SECTION 10: ANCHORING SUSTAINABILITY www.miscgroup.com MISC BERHAD Anchoring Sustainability For more information, please refer to the Sustainability Governance section on pages 34 to 36 in MISC Sustainability Report 2024. Group Strategy & Sustainability • Oversees the Group’s sustainability efforts and strategic priorities • Drives, coordinates and monitors progress on MISC’s sustainability strategic priorities with support from cross-functional working groups at business unit and subsidiary levels • Manages external sustainability disclosures, reporting and group-wide sustainability materiality assessments • Oversees sustainability-related stakeholder engagements • Provides support and guidance to business units and subsidiaries on implementing sustainability strategies, monitoring performance and ensuring appropriate disclosures Sustainability Custodians/ Focal Champions • Supported by cross-functional work groups at business unit and subsidiary levels and composed of individuals from Corporate Functions and Business Units/Subsidiaries • Ensures the implementation of identified sustainability initiatives • Leverages leadership abilities, expertise and industry knowledge to promote a culture of sustainability across the organisation Health, Safety, Security, Environment & Sustainability Council (HSSES Council) • Guides the Group’s strategic vision and integrates sustainability into the business strategy • Oversees sustainability reporting, ESG risk management and compliance with regulations • Advocates responsible practices and innovation, embedding sustainability into governance processes • Aligns sustainability goals with long-term value creation and the Group’s mission People Development Council (PDC) • Composed of MISC’s Executive Leadership Team (ELT) • Deliberates on talent performance, career development programmes, succession planning, competency assessments and other people development-related issues Management Risk Committee (MRC) • Implements the risk management framework across the Group • Meets quarterly to evaluate significant risks and ensure effective risk management plans • Assesses the adequacy and effectiveness of controls and mitigation strategies • Reports risk-related matters quarterly to the BSRC, which then presents them to the Board • Includes the Project Risk Assessment Sub-Committee (PRASC) to address risks related to capital intensive and/or revenue projects ESG RISK MANAGEMENT Anchoring Sustainability ENHANCING SUSTAINABILITY RISK MANAGEMENT INTEGRATING ESG RISKS INTO BUSINESS PROCESSES MISC has further strengthened its ESG risk management by embedding sustainability risks across all levels of the organisation. Business units, service units and subsidiaries conduct annual reviews of their risk registers, with a particular focus on identifying and addressing risks linked to the Group’s business objectives. These identified risks are recorded in each unit’s risk profiles and are assessed, treated, monitored and reviewed quarterly to ensure consistent and effective management. At the Group level, a comprehensive risk register is maintained, capturing Primary Risks that are critical to the organisation. This includes ESG-related risks, which are continuously reviewed and updated. Material updates, along with relevant risk indicators, are reported in a timely manner to Management and the Board, ensuring proactive decision-making and oversight. FINANCIAL RISKS ASSESSMENT WITHIN ESG RISK MANAGEMENT Financial risks remain a critical focus area within MISC’s risk management framework. Business units, service units and subsidiaries consistently identify and manage ESG risks with financial exposure, including those related to gearing, cash flow requirements, net profit after tax and access to funding. These risks have been recognised for their potential impact on cash flow and profitability and their significance has been elevated to the Group’s top risks. For a detailed analysis of financial risks, refer to Our Risks and Mitigation Strategies on page 65. For further details, refer to Our Risks and Mitigation Strategies on page 65. MISC continues to progress in our sustainability risk management to strengthen our commitment to responsible and sustainable business practices. Our risk management process is designed to effectively assess and identify potential risks, including ESG risks, that could impact the organisation. By integrating sustainability considerations into our Enterprise Risk Management (ERM) Framework and Project Risk Assessment Framework, we ensure that both ongoing business operations and new capital-intensive projects are aligned with our sustainability goals. This systematic approach enables businesses within MISC to incorporate sustainability risks into their risk registers, ensuring these risks are assessed, monitored and mitigated with actionable plans. Furthermore, our risk assessment process is fully embedded into strategic planning to identify and manage risks associated with short-, medium- and long-term business strategies.
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