ENVIRONMENTAL, SOCIAL AND GOVERNANCE Description & Implication on Value Creation Governments, regulatory bodies and financial institutions are placing more stringent demands on the sustainability practices of organisations, while investors and business partners are considering ESG performance when deciding which companies to partner with or invest in. As such, it is vital that we take the lead on this front – not only by ensuring compliance with ESG requirements but by developing breakthrough solutions that deliver shared benefit for our business, communities and the environment. Opportunities • Proactively embracing renewable energy by installing solar panels within our operations and exploring energy efficiency technologies • Establishing Energy business as a low-carbon, sustainable oil and gas player through cutting-edge initiatives such as its industry-first floating wind turbine, which is being developed in collaboration with Cerulean Winds Limited • Enhancing our long-term client, investor and employee value propositions by building our reputation as a leader in ESG Risk Impact • Non-compliance ESG requirement may hinder funding resources from financial institutions • Low emissions technology may not have sustainable supply chain leading to a rise in material costs • Obligatory investment in climate commitment into business strategy Our Response & Mitigating Actions • Actively planning initiatives to ensure compliance with ESG policy/regulations and consistently monitoring ESG regulatory requirements in our areas of operation • Initiating engagement with tax consultants to explore potential taxes associated with ESG •Continuously engaging with our stakeholders to understand ESG issues that matter to them and provide updates on our sustainability efforts •Establishing a Management Sustainability Working Committee to oversee and implement sustainable practices across all aspects of our operations Capitals Impacted Stakeholders Material Matters Strategy M4 M8 M1 M2 M3 IMPACTING Risk Trend KEY RISKS AND MITIGATION Management Discussion and Analysis – Strategic Review DAGANG NeXCHANGE BERHAD 66
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