Understanding Transition Climate Risks Transition risks arise from regulatory, market, and economic changes associated with the transition to a lower-carbon economy. Tropicana referenced the International Energy Agency Net Zero by 2050 (“NZE2050”) scenario as a benchmark to support its understanding of potential transition risks, which assumes progressive tightening of climate policies, expansion of carbon pricing, and increasing energy and material transition costs over time. Risk Type Risk Description & potential impact Mitigation Measures Cost Transition Risk Under net zero transition scenarios, carbon pricing, fuel subsidy rationalisation, and decarbonisation of electricity generation may increase the cost of electricity and carbon-intensive construction materials such as steel and cement. These cost increases may affect development costs, project margins, and overall project feasibility. • Monitoring construction material, electricity, and fuel costs during project planning • Engaging suppliers and contractors to assess cost implications and availability of alternative materials and methods • Considering alternative materials and development approaches where appropriate and financially feasible • Incorporating cost contingencies into project budgeting and financial planning Policy / Regulatory Risk Transition scenarios assume progressively stricter climate-related regulations, including potential introduction or expansion of carbon pricing mechanisms, tighter building energy efficiency standards, and enhanced climaterelated disclosure requirements. These may affect development design requirements, approval processes, and reporting obligations. • Monitoring regulatory developments and industry requirements, including sustainability and climate-related disclosure expectations • Integrating applicable regulatory requirements into development planning and design processes • Ensuring compliance with relevant building codes, environmental regulations, and planning requirements Market Alignment Risk As part of the transition to a lower-carbon economy, purchasers, investors and financial institutions may increasingly prioritise sustainability, energy efficiency, and climate resilience in property developments. Failure to meet these expectations may affect the attractiveness and long-term value of developments. • Incorporating sustainability and resilience considerations into development planning and design where appropriate • Aligning developments with evolving purchaser expectations and market trends • Monitoring industry developments to maintain long-term competitiveness OUR PERFORMANCE Climate-related risks are monitored through the Group’s enterprise risk management and project delivery processes. During the reporting period, we did not record any material disruptions or losses attributable to climate-related events, nor did we experience material climate-related supply chain or project delivery impacts. As part of our climate risk assessment, we applied scenario-based analysis to better understand how physical hazards (e.g. flooding and extreme heat) and transition developments (e.g. policy, technology and market changes) could affect project delivery, operating costs and asset performance under different future conditions. These scenarios support risk awareness and planning considerations and are not forecasts. 133
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