OVERVIEW AND FINANCIAL REVIEW MARKET REVIEW LEADERSHIP STRUCTURE PROPERTY PORTFOLIO SUSTAINABILITY & GOVERNANCE FINANCIAL STATEMENTS AND OTHER INFORMATION 123 CDL HOSPITALITY TRUSTS Annual Report 2025 Risk Management The Boards and management are responsible for identifying material climate-related risks and implementing appropriate mitigating measures, which are consolidated within CDLHT’s Enterprise Risk Management (“ERM”) framework. A structured risk management process is used to map climate-related risks, assess the severity of their potential impacts on business activities, and identify suitable risk mitigation measures. As a result, climate-related risks have been incorporated into CDLHT’s updated ERM Manual. The Boards also oversees the setting of targets for climate related risks, opportunities, and disclosures, and the Management updates the Boards on the targets set on a quarterly basis. We continue to strengthen our climate risk management policies and systems, recognising their importance in supporting informed business decisions. Climate-related considerations are taken into account as part of the evaluation process for investments. For portfolio management decisions more broadly, climate risk factors form part of the overall assessment framework alongside financial and operational considerations. We remain focused on building our expertise in this area and are committed to providing transparent and regular updates on our progress in the years ahead. Risk management is a key component of CDLHT’s ESG policy and takes into account the MAS Guidelines on Environmental Risk Management for Asset Managers. CDLHT’s ESG risk management process includes: • A risk identification checklist that guides the scoping of an ESG risk universe, shortlisting the most relevant ESG factors for CDLHT’s operations. Sustainability-linked financing milestones TOTAL SLLs (S$) AS AT 31 DEC 2025 S$1.1 Billion Across multiple currencies: SGD, GBP, EUR, JPY 65% yoy from 31 Dec 2024 (S$666M) TOTAL SLLs AS A % of TOTAL FACILITIES AS AT 31 DEC 2025 59% Proportion of total facilities that are sustainability-linked 22% yoy from 31 Dec 2024 (37%) Secured S$304 million sustainability-linked facilities in 2023, marking the Group’s commitment to ESG-linked financing FY 2023 FY 2024 FY 2025 82% (S$311 million) of maturing loans refinanced as sustainability-linked facilities, increasing the total sustainability-linked facilities to S$666 million as at 31 December 2024 82% (S$427 million) of maturing loans refinanced as sustainability-linked facilities, increasing the total sustainability-linked facilities to S$1.1 billion as at 31 December 2025 % OF MATURING FACILITIES REFINANCED AS SLLs 82% S$427M of maturing facilities refinanced as SLLs in FY 2025 • Alignment with the overall Enterprise Risk Management system, which subjects all risks, including ESG risks, to three lines of defence mechanisms. This system prioritises and assesses risks according to likelihood, degree of impact, and urgency vis-à-vis other risks. It is maintained using a risk matrix, with controls assigned to each risk. Additionally, when addressing ESG risks, appropriate treatments are developed, including avoidance, mitigation, or transfer. • Processes to monitor, assess and manage the ongoing risks of environmental impacts on individual investments and at the portfolio level. Risk and return profiles of the investment portfolio are expected to be updated in response to material events, such as natural disasters or significant regulatory changes. In FY 2025, the Managers continued to systematically assess climate‑related risks, including Scope 3 GHG emissions relevant to CDLHT’s business and value chain. Climate risks are evaluated on an ongoing basis, and any new risks or material findings identified are escalated and communicated to the Boards for review. Where higher‑risk areas are identified, the Boards provide oversight on the consideration of appropriate mitigation measures, ensuring climate‑related risks are addressed in a timely and structured manner. Metrics and Targets: We have disclosed Scope 1, 2 and 3 emissions inventories on page 125 and our performance against our climate-related targets on page 106. Additionally, climate-related metrics are included in our employee and management performance scorecards and are factored into their remuneration. These metrics are tied to the achievement of CDLHT’s climate-related targets, thereby motivating our employees to support the achievement of these goals.
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