CapitaLand Investment Limited - Annual Report 2021

Risk Management Risk Management COMPETITION Keen industry competition from established real estate investment managers who are able to attract and manage more capital by meeting investors’ expectations or reacting aptly to market trends. CLIMATE CHANGE Physical risks such as rising sea levels, violent storms, long intense heat waves, flash floods and fresh water depletion. Transitional risks including potentially more stringent regulations and increased expectations from stakeholders. SAFETY, HEALTH & WELL-BEING Increased expectations from stakeholders to provide a safe and healthy environment, including well-being, at our assets and operations. FRAUD, BRIBERY & CORRUPTION Any forms of fraud, bribery and corruption that could be perpetuated by employees, third parties or collusion between employees and third parties. › Sharpen focus with the restructuring to create a leading global REIM with multiple Fund AUM growth drivers. › Harness synergies and strengthen competitive advantage by preserving the existing ecosystem. › Focus on building key enablers that give the Group a competitive advantage such as enhancing the data analytics capabilities in our business processes; and leveraging innovation tools and solutions to support our customers in pivoting to a more digitally driven model. › Incorporate sustainability considerations in the Group’s business to reinforce our leading position as a sustainable REIM. › Leverage in-house team of industry analysts to keep the Group on top of latest market trends. › Assessment of the detailed physical risks in the evaluation of any new acquisitions. › Incorporate shadow internal carbon price and compute a Return on Sustainability (ROS) in the evaluation of new investment/capital expenditure decisions. This helps to price in climate- related costs and opportunities, support low-carbon investments, prepare for stringent climate legislation, and avoid stranded assets. › Regularly review the Group’s mitigation and adaptation efforts, which include • future proofing our portfolio against changing climatic conditions from the design stage and • improving the operational efficiency of our properties, setting targets for carbon emissions, water, energy and waste efficiency. › Well-established Group environmental management system which is externally certified to ISO 14001. › For more information, please refer to CLI’s Global Sustainability Report 2021, to be published by 31 May 2022. › Assess health and safety related risks in the evaluation of any new acquisitions. › Regularly review the Group’s mitigation efforts which include work-related safety targets applicable to both CLI and our supply chains. › Well-established Group health and safety management system which is externally certified to ISO 45001. › For more information, please refer to CLI’s Global Sustainability Report 2021, to be published by 31 May 2022. › Foster a culture of ethics and integrity in the Group. › Adopt a zero-tolerance stance against fraud, bribery and corruption (FBC) across our businesses. › Communicate the commitment to integrity from the top through policies and practices, such as FBC Risk Management Policy, Whistle- blowing Policy, Ethics and Code of Business Conduct Policies and Anti- Money Laundering and Countering the Financing of Terrorism Policy and mandatory FBC eLearning. › Tap on ONE CapitaLand ecosystem to benefit from the development expertise and opportunities without the associated risks. › Rely on strong experience in multi-sector asset and portfolio management, best- in-class operating platforms and track records in fund management. › Enhance our positive reputation and strong track record in sustainability efforts as a competitive advantage for the Group to build a resilient portfolio of assets and achieve resource efficiency. › Accelerate sustainability innovation and collaboration with tenants, supply chain contractors, vendors and suppliers. Material Risk Material Risk Key Mitigating Actions Key Mitigating Actions Opportunities Opportunities CYBER SECURITY & INFORMATION TECHNOLOGY Ongoing business digitalisation exposes the business to IT- related threats, which may compromise the confidentiality, integrity and availability of the Group’s information assets and/or systems. › Execute CLI’s Cyber Security Strategy through ongoing review against existing/evolving threat landscapes, and institute measures to minimise vulnerability exposure and manage threat vectors. › Ongoing mandatory staff IT Security Awareness Training to counter human intervention in the information security chain. › Periodically review and update Group-wide IT Security Policy and Data Protection Framework to ensure relevancy. › Maintain and test IT Security Incident Management Procedure to ensure prompt response and timely remediation to cyber security incidents. › Conduct annual Disaster Recovery Plan exercise to ensure timely recoverability of business-critical IT systems. › Put in place enhanced protection controls for systems that hold personal data. › Build a cyber resilient infrastructure and network to harness the full potential of innovation and digital transformation of our business processes. ECONOMIC Exposure to event risks, such as unexpected geopolitical shifts, trade wars, economic downturns and sudden changes in real estate related regulations in major economies and key markets. › Diversify our portfolio across asset classes and geographies in accordance with Board-approved country limits. › Focus on markets where the Group has operational scale and the underlying economic fundamentals are more robust. › Actively monitor macroeconomic trends, policies and regulatory changes in key markets. › Perform scenario analysis using an in- house developed ‘Value-at-Risk’ model. › Access investment opportunities globally to enhance portfolio diversification across business cycles.