Based on our current assessment and the controls embedded within project planning and delivery processes, climate-related risks are not expected to have a material effect on the Group’s financial position, financial performance or cash flows over the short to medium term, notwithstanding the Government’s announced introduction of a carbon tax in Malaysia targeting the iron, steel and energy sectors. The impact remains uncertain at this stage as key parameters, including pricing levels and implementation details, have yet to be finalised and will depend on how affected industries adapt, decarbonise and manage cost pass-through. Physical risks remain the more direct source of potential disruption, as these can affect construction timelines, site conditions and asset performance at specific locations. These risks are addressed through measures already embedded within project planning and delivery, including drainage and flood mitigation design, construction scheduling buffers and contingency planning across the current development pipeline. Transition-related risks are expected to develop more gradually and are primarily reflected through changes in cost structures rather than immediate operational disruption. For property development activities, such risks are generally industry-wide and may affect input costs, particularly for energy-intensive materials and contractor services. Over longer time horizons, climate-related risks may give rise to financial implications as the frequency and severity of physical hazards evolve and as transition measures such as regulatory requirements, energy pricing and market expectations continue to develop. At this stage, the Group is not able to reliably quantify the potential financial effects of these risks due to uncertainties surrounding future climate conditions, policy developments, technological changes and the characteristics of projects that have yet to be planned or approved. Scenario analysis is therefore used to support risk awareness and planning considerations rather than to provide precise financial projections. Performance Indicator FY2025 FY2024 FY2023 Material adverse financial impacts arising from climate-related physical or transition risks Nil Nil Nil Significant weather-related disruptions impacting project delivery or construction schedules¹ Nil Nil Nil Health and safety incidents directly attributable to extreme weather or climate-related conditions² Nil Nil Nil 1. Significant weather-related disruptions refer to events such as flooding, extreme rainfall, or heat conditions that materially affected construction progress, site accessibility, or project timelines, based on management’s operational reviews. 2. Climate-related health and safety incidents refer to confirmed incidents where extreme weather conditions (e.g. heat stress, flooding) were identified as a direct contributing factor, based on internal incident reporting and investigation. Climate-related risks are also monitored through other areas of the Group’s sustainability and operational management, including Health and Safety, Procurement, Sustainable and Green Design, Water Management, Energy and Emissions, and Economic Performance. AR 2025 | SUSTAINABILITY 134
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