68 AL-SALĀM REIT IDENTIFYING OUR MATERIAL SUSTAINABILITY MATTERS ANNUAL REPORT 2023 FUTURE PREPARED REPORTING WITH TCFD In FY2023, Al-Salām REIT enhanced climate risk management by adopting TCFD recommendations. This enables comprehensive reporting on climate risks and opportunities, supporting informed decision-making and responsible asset management. Our climate change framework aligns with the four (4) core components of TCFD: governance, strategy, risk management as well as metrics and targets. Governance The strategic oversight of climate-related risks and opportunities is a crucial responsibility for the Board. It highlights the assessment and strategic handling of climate-related issues by our management. Strategy The SMC serves as the cornerstone of our sustainability efforts, entrusted with assessing and managing climate-related risks and opportunities. By implementing strategies and reporting outcomes to the Board, the SMC drives our sustainability initiatives forward. Through assessments and recommendations, it ensures management addresses the challenges of the evolving sustainability landscape. Transition Risks Board of Directors Management • The Board exercises strategic oversight regarding the REIT's sustainability strategies, policies and performance, encompassing climate-related aspects • The SMC recommends sustainability strategies and initiatives to the Board, including those that are climate-related. • The Board examines and grants approval for ESG KPIs which also include climate-related indicators. • The Sustainability Committee assesses and oversees the execution of sustainability initiatives and performance, including those linked to climate considerations. Policy and Legal Transition Risk • Potential incurred costs from penalties and fines. Aligning with or exceeding expected environmental regulations allows us to effectively enter new markets and proactively tackle potential legal challenges. Technology • Incurred upfront costs from investments in new technology and its implementation. • Incurred costs from adaptation of new operational processes to accommodate new standards. By investing in and implementing cutting-edge technologies and green initiatives that decrease carbon emissions in our operations, the REIT can establish itself as a frontrunner in sustainable property management. Market • Decrease in revenue from cost increase. • Economic transitions, such as recessions, can affect property values and rental incomes. A weak economic environment may lead to higher vacancies, reduced demand, and financial challenges for the REIT. By communicating and marketing our commitment to sustainability, we can differentiate ourselves and attract environmentally conscious clients. Potential Impact Opportunities
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