53 ANNUAL REPORT 2025 MST GOLF GROUP BERHAD Governance and Oversight Oversight of sustainability-related risks is carried out through the Group’s sustainability governance structure, as described in the Sustainability Governance and Strategy section. The GRSC reviews sustainability-related and climate-related risks on a quarterly basis, while the SWC monitors operational sustainability-related risks, emerging issues, and mitigation measures at the management level. The Board retains overall accountability for sustainabilityrelated risks and ensures that these risks are appropriately integrated into the Group’s strategic planning and risk management processes. In addition, the Audit Committee supports the broader risk governance framework through its oversight of internal controls, reporting integrity, and internal audit reviews, which collectively contribute to the robustness of the Group’s sustainabilityrelated risk management processes. Risk Identification and Inputs Sustainability-related risks and opportunities are identified through a combination of internal operational insights, stakeholder engagement, and external developments across the Group’s value chain. These inputs include operational observations across retail outlets, offices, warehouses, academies, and indoor golf facilities, as well as employee hazard reporting, workplace safety feedback, customer service trends, supplier engagement outcomes, procurement reviews, and environmental performance monitoring. Additional inputs are drawn from the Group’s materiality assessment, climate-related analysis such as temperature trends and rainfall patterns, as well as regulatory and market developments. The Group also monitors evolving expectations arising from Bursa Malaysia, national authorities, industry developments, and international sustainability standards to identify emerging sustainability-related risks, opportunities, and disclosure requirements. Through this process, sustainability-related risks and opportunities are identified based on a combination of operational realities, stakeholder expectations, material sustainability matters, and external developments relevant to the Group’s business model and operating environment. Risk Assessment and Management Once identified, sustainability-related risks are assessed based on their potential impact and likelihood, taking into account both external conditions and internal operational practices. The results of these assessments are consolidated into sustainability-related risk registers and reflected in the risk heat maps presented below, which provide an overview of the relative significance of identified sustainability-related risks based on their likelihood and potential impact. Sustainability-related risks are assessed using the same structured methodology applied to other enterprise risks within the Group’s ERM framework. This helps ensure consistency in risk evaluation and allows sustainability-related risks to be prioritised alongside strategic, operational, financial, and compliance risks. The assessment process considers both short-term operational impacts and longer-term strategic implications, particularly in relation to climate-related risks, regulatory developments, workforce dynamics, supply chain practices, customer expectations, and broader market trends.
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