GOVERNANCE Strong governance is important to MISC in delivering sustainable value and trust to our stakeholders and fostering a culture of strong business integrity. This contributes to our ability to sustain our commitment to the highest standards of governance and reinforce our business ethics and culture. This is also demonstrating our commitment to effective governance and ethical decision making in relations to ESG. Our Governance Structure MISC’s Board of Directors (Board) sits at the apex of our sustainability governance structure and maintains strict oversight of the Group’s sustainability strategy and performance. The Board is supported by multiple levels of working committees and teams, with clear lines of reporting and accountability in place. These comprise the Board Governance & Risk Committee (BGRC), Management Committee (MC), Health, Safety, Security and Environment (HSSE) Council, Corporate Sustainability department and custodians for each of the strategic initiatives. ESG-related Remuneration In 2021, our Board endorsed ESG (including climate-related) metrics into operational performance indicators and strategic initiatives as part of our management remuneration scorecard for the year 2022. STAKEHOLDER ENGAGEMENT We believe that active stakeholder engagement is a key part of our business approach, given the dynamic social, economic and regulatory landscape in which we operate. At MISC, we engage with our key stakeholders through a variety of means tailored to the nature of the relationship, from industry regulators to members of the local communities, in both formal and informal settings. Hence, various methods of engagement are required to handle their specific areas of interest. In 2021, we established a structured stakeholder engagement process and a stakeholder-inclusive approach to creating value. Sustainability Governance Structure CORPORATE SUSTAINABILITY DEPARTMENT • Tracks progress of sustainability strategic agenda • Engages external and internal stakeholders on sustainability matters • Responsible for monitoring and benchmarking group-wide sustainability performance BOARD • Board oversight on MISC sustainability performance • Provides endorsement and direction on MISC sustainability commitment BOARD GOVERNANCE & RISK COMMITTEE • Provides focused oversight on the effective implementation of MISC’s sustainability strategy • Reviews and evaluates sustainability-related reports and makes appropriate recommendations to the Board MANAGEMENT COMMITTEE / HEALTH, SAFETY, SECURITY AND ENVIRONMENT COUNCIL • Chaired by the President/Group CEO • Quarterly management stewardship on sustainability performance • Reviews and approves strategic sustainability framework and initiatives in line with MISC sustainability commitment MATERIAL MATTERS MISC has conducted a robust evaluation to assess the ESG aspects most material to the business. Our materiality assessment conformed to international frameworks, standards and other operating environment factors. The assessment featured detailed benchmarking of peer organisations and research on current and emerging sustainability trends. This includes matters that could impact the Group’s value drivers, competitive position, and long-term shareholder value creation. These material topics are then reviewed annually and validated by various levels of our sustainability governance. We refined our materiality topics based on internal and external feedback received, developments in the industry and operating environment relevant to the maritime sector, emerging ESG trends, as well as stakeholder expectations. CUSTODIAN • Championed by MC member / relevant HOD • Individual Business Units and Subsidiaries tasked to implement the sustainability initiatives WORKING GROUPS • Plans, coordinates, implements and tracks targeted material topics ANCHORING SUSTAINABILITY @ MISC SUSTAINABILITY More details of our Sustainability Governance can be found in our Sustainability Report. Details on how we respond to our key stakeholders can be found in Our Stakeholders section on page 66. Elaboration on how we define our material matters and materiality matrix can be found in Our Material Matters on page 62. MISC Berhad 98 Integrated Annual Report 2021 MISC Berhad Integrated Annual Report 2021 99
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