102 WASCO BERHAD SECTION 4 SUSTAINABILITY JOURNEY Our Assessment Methodology Our assessment evaluated both physical and transition risks across three time horizons: Short-Term (2027), Medium-Term (2035), and Long-Term (2050). The process involved: Climate Resilience and Scenario Analysis To understand the resilience of our strategy against a range of possible climate futures, we commissioned a third-party expert to conduct our first comprehensive climate scenario analysis in 2025. This analysis forms the basis of our risk identification and strategic planning process. Our Scenario Framework The assessment was conducted against two distinct and plausible climate scenarios, allowing us to test our strategy against both an orderly transition and a more disruptive, high-emissions future. The scenarios selected were from the Intergovernmental Panel on Climate Change (“IPCC”): Regional Rivalry Pathway (SSP3-7.0): This scenario paints a picture of a fragmented world with limited international cooperation on climate. It is characterised by a prolonged reliance on fossil fuels, geopolitical instability, and rising physical risks, leading to a global warming outcome of approximately 3.6°C. Scenario 2: Scenario 1: Sustainability Pathway (SSP1-2.6): This scenario envisions a globally coordinated, sustainabilityfocused transition where strong climate action limits global warming to approximately 1.8°C. It is characterised by effective international cooperation, rapid technological advancement in renewables, and the implementation of carbon pricing. 02 Financial Impact Assessment: Conducting a highlevel financial impact assessment for the most significant risks to provide an orderof-magnitude estimate of potential financial exposure, helping to contextualise and prioritise our response. Risk Assessment: Evaluating each identified risk based on its likelihood and magnitude of impact across seven key business areas, resulting in a risk rating (e.g. Moderate, Major, Severe) under each scenario and time horizon. Risk Identification: Assessing how identified hazards interact with Wasco’s key receptors (e.g. sites, infrastructure, staff, transport, and operations) to define specific risks, including the potential business impacts (e.g. revenue loss, increased OPEX/ CAPEX, operational disruption, and reputational impacts). Hazard Identification: Identifying relevant physical and transition hazards (e.g. flooding, extreme heat, policy and market changes) using climate scenarios (SSP1-2.6 and SSP3-7.0), supported by global climate models and external data sources (e.g. World Bank, IPCCaligned datasets). 01 03 04 The insights gained from this rigorous process are detailed below and will be crucial for stress-testing our strategy, identifying vulnerabilities, and ensuring Wasco remains resilient and profitable in the long term. SUSTAINABILITY JOURNEY
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