SUSTAINABILITY REPORT Cont’d TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES cont’d Scenario Analysis: Two plausible scenarios in 2050 Expected to create more: 2C world 4C world Physical Risk Average increase in global temperature by 2050 Transition Risk POLITICAL REGULATION ECONOMICAL GROWTH SOCIAL COLLABORATIVE POLITICAL REGULATION ECONOMICAL GROWTH SOCIAL COLLABORATIVE Global collaboration, regulation and standards for future-proofing operations Higher GDP growth, transition to renewables and continued demand for energy Increased interests and demands from various stakeholder groups regarding climate change Fragmented institutions which do not support transition towards “Net Zero” Increased competition for scarce resources driving inequality and lower growth for renewables Absence of action with increased pressure from stakeholders TECHNOLOGICAL INNOVATION ENVIRONMENTAL CAUTION LEGAL ACTION TECHNOLOGICAL INNOVATION ENVIRONMENTAL CAUTION LEGAL ACTION Research and development into renewables and improvements on emissions reductions Continued adoption and awareness on changing environmental regulations Carbon pricing and legal frameworks to support climate action across industries Progress towards effective solutions is delayed, and lack of adoption of new technologies Greater physical risks and lack of information surrounding future risks Increasing CO2-eq price but less rapid and unclear legal frameworks which require better regulations in place 2C Scenario 4C Scenario Table Y. Implications of physical and transition risks identified by Press Metal Type of Risk Risk Implications 2oC Scenario 4oC Scenario Physical Extreme weather events (acute) Medium risk in view of disruption on operations, but there are internal climate mitigation plans to accommodate the arising risks from extreme weather events High risk due to the increased frequency and severity of extreme weather events that affects infrastructure, supply chain and operations of the factories High risk associated with unavailability of insurance renewal Physical Changes in climate patterns (chronic) Medium risk in view of the existing factories on higher ground are not affected but the operational delays are expected Medium risk in environmental related compliance/litigation issues in view of the strategies and planning by the company to mitigate risks arise High risk due to the potential relocation of factories thus the increase in OPEX and CAPEX PRESS METAL ALUMINIUM HOLDINGS BERHAD 185
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