MISC BERHAD 120 INTEGRATED ANNUAL REPORT 2023 121 www.miscgroup.com ANCHORING SUSTAINABILITY SECTION 10 ESG RISK MANAGEMENT SUSTAINABILITY STRATEGY AND ITS KEY PROGRESS IN 2023 Annual Strategic Planning & Budget Cycle Annual Risk Register Review Based on our Sustainability Strategy, we employ risk management processes to evaluate and fortify our resilience against the impacts of climate change. This process integrates the identification, assessment and management of climate-related risks within MISC through a comprehensive approach. It systematically identifies risks across the organisation, gathering insights from business units and functions. Within MISC Group, climate risk evaluation is seamlessly woven into its strategic planning and business processes, aligning with the ERM framework. We ensured a Project Risk Assessment (PRA) is systematically conducted before any new capital-intensive project commences. This meticulous assessment plays a key role in identifying potential risks associated with the project, enabling the implementation of effective controls and measures to mitigate these risks. Short/Medium/Long-Term Risks Business Units/Service Units Risk Registers • Risk Events • Key Risk Indicators • Mitigation Action Plans Input From Climate-related Risk Assessment For more information, please refer to MISC’s 2023 Climate-Related Financial Disclosures Report and Climate-Related Financial Disclosures section on pages 73 to 81 in MISC’s 2023 Sustainability Report. Input From Climate Scenario Analysis External Environment Analysis Business Outlook Risk & Opportunities Strategic Priorities Objective/Target MISC’s strategy underlines the Group’s focus and commitment to sustainability and climate change. We are guided by our Sustainability Strategy, which is aligned with the SDGs. Out of the 17 SDGs, MISC has prioritised 11 SDGs which are relevant to our business operations. In driving this forward, this strategy was created based on stakeholder feedback on our material matters, in consultation with employees and senior management from across our subsidiaries and business units. This strategy addresses 10 strategic priorities which are grouped into four key pillars – Financial, Environmental, Social and Governance, underpinnned by Stakeholder Engagement. Anchoring Sustainability Anchoring Sustainability • Process safety Short to Medium-Term • Energy efficiency • Collaboration on alternative fuel research and development • Transition to low-carbon fuel • Renewable energy mix • 4R – Refuse, Reduce, Reuse & Recycle • Ship recycling • Greater renewable resource utilisation • Marine biodiversity conservation • Promoting Circular Economy • Biodiversity Conservation • Talent Excellence • Community Investment • Health & Safety • Talent development • Youth entrepreneurship education • Engaged workforce • CSR on education • Employee safety, health and well-being • Contractor safety • Governance & Business Ethics • Responsible Supply Chain Management • Robust Culture • Assurance • Assurance • Collaboration • Cybersecurity • Financial Governance Framework (FRA/CFP) • Financial growth plans Financial Environment Governance Social Stakeholder Engagement • Towards Decarbonisation Long-Term • Transition to decarbonised fuel
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