51 Environmental, Social and Governance Report 2023 PILLAR 2: PROPERTY PORTFOLIO Listed REITs — As part of regulatory requirements, the listed entities under the Group have conducted climate risk assessments to understand the material climate-related risks and opportunities and their associated impacts on the business and asset portfolios. These entities carried out comprehensive climate risk assessments using climate scenario analysis to identify physical and transition risks pertinent to their operations. The identified physical risks and impacts were assessed using their respective risk management frameworks (risk appetite, parameters, rating and matrix) to derive the inherent risk profile and eventual risk register after considering their climate change adaptation and mitigating strategies and actions. Appropriate enhancements were also made to existing governance policies and processes, such as the ERM framework, to ensure adequate oversight and instil accountability, responsibility and ownership of climate-related risks and opportunities material to the business. Capability training in the form of an external course for directors was also arranged to raise awareness and improve their level of competency in managing climate-related issues. As an illustration, our listed REITs published the climate-related disclosures in their respective sustainability report. The disclosure included material climate-related risks that were identified through the climate risk assessment as well as the accompanying mitigating actions to address these risks and their associated impacts. Some of the climate-related risks that were identified include: Climate Change Resilience Climate-related risks Specific climate-related risks identified, as examples under Suntec REIT Specific mitigating actions/measures, as examples under Suntec REIT Transition • Policy & Legal —More stringent energy efficiency requirements for buildings • Market — Greater market demand for green buildings • Technology — Costs to transition to lower-emissions technologies • Continue to maintain and improve existing green building certification ratings • Complete the implementation of on-going energy saving initiatives for our properties and continue to look out for new energy saving initiatives to implement • Refresh existing sustainability roadmap and ESG performance targets to ensure they meet/align with market expectations and commitment • Maintain regular review of existing building data to provide analysis of the performance of the building and establish operational gaps to improve efficiency • Continuously engage with vendors to upgrade existing Building Management System (“BMS”) to integrate other Mechanical, Electrical and Plumbing (“MEP”) systems to one common platform like Smart FM or Digital Twin • Consider piloting innovative energy management technologies that can support energy and carbon reduction in the existing portfolio • Explore partnerships with technology providers to facilitate innovation and implementation of low-carbon solutions Physical • Increase intensity and frequency of extreme weather events (e.g., storms and floods) • Increase in average temperature • Rise in sea level • Maintain regular site review on capacity of existing stormwater drainage systems and consistently maintain the condition of such systems • Continue annual inspection of façade/structure integrity to check for weak spots and potential leaks • Continue to set aside funds for planned rectifications in capital expenditure (“CAPEX”) • Continue with existing MEP Systems Optimisation Programme to achieve energy efficiencies across portfolio • Develop Standard Operating Procedures (“SOP”) for extreme temperature days including tenant engagement and actions • Maintain existing SOP for air infiltration into properties during period of poor outdoor air quality (smoke and dust) • Consider flood barrier installation for affected properties if required In addition, Suntec REIT has also set a decarbonisation target to attain net zero carbon status for all assets by 2050. As of 2023, both 177 Pacific Highway in Sydney, Australia and 55 Currie Street in Adelaide, Australia have achieved carbon neutral status while several other assets within the portfolio are utilising renewable energy from the electricity grid.
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