SUSTAINABILITY & GOVERNANCE 120 SUSTAINABILITY REPORT The climate risk assessment revealed a number of climate-related risks and opportunities, tabled below, that may be financially material to our operations. Each of the identified risks includes our considered mitigation and adaptation measures. Physical Risks and Opportunities Climate Scenario Analysis for Physical Risk This year, CDLHT undertook a physical risk analysis, in line with the ISSB’s IFRS S2 requirements, to better understand the quantitative impacts on asset value and the business’s financial implications. The analysis will support CDLHT in undertaking any necessary mitigative and adaptive actions to protect the business from climate change impacts. Climate Quantification Assessment For each physical risk, a climate quantification assessment was conducted to assess the potential financial impact of the hazard across all three RCP scenarios. Physical Climate Risk Acute Risk Asset Impact Chronic Risk Financial Impact Risk Assessment Impact Analysis Property Net Income Property Appraisal Value Income Cashflow Balance Sheet Climate risks are taken into consideration under CDLHT’s Enterprise Risk Assessment Framework Drought Heat Stress Wildfire Flooding External Heat Extreme Weather Climate risk quantification assessment process Physical Climate Risk Financial Impacts Across all CDLHT‑owned assets, nine physical climate hazards — cyclones, pluvial flooding, fluvial flooding, tidal flooding, extreme winds, extreme heat, heat stress, drought and wildfire — were assessed across short‑term, medium‑term and long‑term horizons. From this review, pluvial flooding was identified as the hazard with the highest risk to our portfolio, while all other hazards were assessed as minimal impact. While currently we are reporting qualitatively, pluvial flooding will be further quantified next year to support a more detailed evaluation. Transition Risks and Opportunities In addition to physical climate risks, we conducted a comprehensive assessment of key transition risks and opportunities across three major jurisdictions — Singapore, the UK, and Italy, which were identified as the locations with high transition‑risk impact across the portfolio. This analysis systematically examined how evolving regulations, market dynamics, technological developments, and stakeholder expectations could affect CDLHT’s operations and long‑term strategy.
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