MISC BERHAD INTEGRATED ANNUAL REPORT 2025 08 11 09 05 12 SEC 06 STRATEGIC REVIEW 10 07 13 01 02 03 04 82 www.miscgroup.com 83 www.miscgroup.com #deliveringProgress OUR RISKS AND MITIGATION STRATEGIES OUR RISKS AND MITIGATION STRATEGIES IMPACT MITIGATION STRATEGIES OPPORTUNITIES COMPLIANCE AND REGULATORY RISK R10 Strong regulatory and compliance governance helps the Group stay aligned with changing requirements, supporting its licence to operate and grow in key markets. Using disciplined frameworks and proactive engagement, the Group can better anticipate changes and reduce compliance risks, enhancing the Group’s reputation as a responsible partner • Financial penalties, sanctions and litigation that adversely affect financial performance • Reputational damage leading to erosion of customer and stakeholder trust • Reduced ability to pursue strategic projects, particularly in highly regulated or high-risk jurisdictions • Integration of compliance performance into key performance measures to reinforce accountability and consistent application across the organisation • Regular assurance activities and targeted training programmes to strengthen awareness of legal, ethical and regulatory requirements • Incorporation of critical compliance and ethics clauses into third-party agreements to manage external exposure • Strengthening of compliance frameworks and operating procedures, including anti-bribery measures, third-party due diligence and alignment with human rights standards The Group faces an increasingly complex regulatory environment due to evolving environmental, safety, trade, tax, and governance rules in multiple regions. Divergence in regulatory approaches and heightened enforcement expectations contribute to increased complexity and raise the risk of misalignment and compliance failure RISK TREND Changes in laws, regulations and compliance expectations across jurisdictions may affect the Group’s ability to operate efficiently, maintain compliance and sustain stakeholder confidence Key Capitals: Material Matters: M4 M5 M6 M7 M9 M10 M11 Operating Environment: E3 E5 E7 E4 E3 E4 E5 E6 Strategic Pillars: SP1 SP2 SP3 PHYSICAL CLIMATE RISK R11 Exposure to extreme weather conditions may pose operational risk, potentially causing damage to assets and infrastructures across MISC’s business segments Strengthening climate resilience in the Group's asset improves operational reliability and enables the Group to sustain operations and customer trust when climate risks arise. By evaluating physical climate risk and incorporating resilience strategies into design, routing, and HSSE controls, the Group can better handle disruptions and asset impacts while supporting long-term adaptation aligned with sustainability goals • Operational disruptions and delays to vessel movements and project deliveries • Increase in cost for maintenance, repairs and upgrades to the Group's asset • Installation of real-time weather updates for safer navigation • Exploring alternative shipping routes and diversify logistics strategies in climate vulnerable regions • Incorporate weather related clauses in contracts to manage operational risk • Embedment of rigorous safety controls within vessel navigation protocols and MISC’s HSSE Management Systems to manage weather- and climate-related risks RISK TREND Physical climate risk stems from extreme weather and long-term climate impacts that may affect the Group’s vessels, assets, and facilities. As an emerging sustainability risk, it is monitored through tracking hazard trends and external developments to guide future resilience and adaptation efforts Material Matters: M1 M3 M4 M5 M8 Operating Environment: Strategic Pillars: SP1 SP2 SP3 Key Capitals: Managing talent, capability, and leadership effectively helps the Group execute its strategy, adapt to change, and handle complexity. By adopting a structured approach to talent development, leadership succession, and knowledge management, the Group is able to sustain a culture of continuous improvement and adaptability, strengthening business resilience • The Group undertakes comprehensive succession planning for critical roles, supported by evidence based talent assessments and targeted development plans, to ensure a sustainable talent pipeline and continuity of leadership • Deployment of a structured capability development framework to establish clear and consistent development pathways, support continuous upskilling and reskilling, and strengthen workforce competencies across all levels • Insufficient pool of readily available and suitably prepared successors to assume critical roles, leading to operational disruptions • Higher attrition rates and emerging capability gaps may reduce operational efficiency and impede the Group’s ability to achieve MISC 2030 Ambition RISK TREND The Group actively invests in its talent and leadership pool to address increasingly elevated people and capability risks arising from the complexity of the Group’s operations. External labour market dynamics, including competition for specialised maritime, project and technical skills and evolving workforce expectations, continue to put pressure on talent attraction and retention TALENT RISK R9 Challenges in attracting, developing and retaining talent may affect the Group’s ability to execute strategy, manage complexity and sustain operational and leadership capability Material Matters: M6 M7 M8 M12 Key Capitals: Operating Environment: E3 E6 E4 E7 E5 E8 Strategic Pillars: SP1 SP2 SP3
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