MISC BERHAD 42 INTEGRATED ANNUAL REPORT 2023 43 www.miscgroup.com VALUE WE CREATE SECTION 5 Our Integrated Approach to Value Creation We undertake a holistic approach in value creation, taking into consideration multiple factors that impact business outcomes. The interconnected elements include the operating environment, stakeholders, risks and mitigation strategies, material matters, integrating ESG principles, business strategy as well as the allocation of our key capitals across the Group. The table below outlines the definitions and connections between these factors in our value creation journey. Our Integrated Approach to Value Creation Identify and Prioritise our Material Matters 4 We have identified material matters, consisting of financial and non-financial imperatives, which encompass ESG considerations that impact both our internal and external stakeholders. We develop and execute effective strategies to deliver optimum value in a sustainable and responsible manner. Please refer to page 62 Embed Best ESG Practices 5 Our value creation process is dependent on our ability to align our business with the sustainability and climate-related agenda. We strive to enable long-term value creation by integrating ESG considerations into all our decisions, prioritising transparency and accountability in our actions. Please refer to page 121 Integrating Our Strategy 6 Our strategy guides the Group to achieve its short-term, short to medium-term and medium to long-term targets, in line with our mission and vision. We aim to strategically balance our current business with a growing clean energy portfolio and pursue selective investments responsibly to optimise portfolio returns. Please refer to page 70 Health and Safety Climate Change Energy Management Financial Performance Values, Governance and Business Ethics Human Rights Sustainable Supply Chain Ocean Health Security Talent Development and Retention Waste Management Diversity and Inclusion Digitalisation Cybersecurity Community Investment Evaluating our Operating Landscape 1 Our ability to operate is intricately linked to the global political and macroeconomic landscape, given their influence on both the energy and maritime industries. We closely monitor and analyse macro-environmental factors related to our business operations to identify emerging trends and opportunities. This enables us to adapt our strategies and make informed decisions that optimise our value creation capabilities. Please refer to page 54 Strengthen Stakeholder Relationships 2 We understand the importance of managing the evolving needs of our stakeholders as they play an important role in driving MISC’s sustainable growth. We foster value creation through continuous dialogues and collaborations with various stakeholders, strengthening our position as a trustworthy and reliable partner. Monitor Risks and Mitigation Strategies 3 The risks and mitigation strategies surrounding our material matters and core businesses are governed by our risk management framework and strategic priorities. We continuously monitor and effectively mitigate risks to ensure the resilience of our business. Please refer to page 66 Shift in Stakeholders’ Preference Towards New Energy and Low-Carbon Solutions Technology Developments Geopolitical Instability Project Management Asset Availability, Utilisation and Marketability Governance and Integrity Health and Safety Cybersecurity Talent Development and Retention Increasing Climate-Related Regulations and Requirements Please refer to page 48 Allocate our Key Capitals 7 Key capitals are the main inputs and resources that drive our business. We invest in these six capitals to execute our strategy and achieve long-term growth. Please refer to page 46 Financial Capital Funds acquired through financing or generated by our business. Intellectual Capital Intellectual abilities and intangible assets connected to our business, technical proficiency and accumulated experience. P Physical Capital Essential physical resources and infrastructure that ensures the seamless operation of our business. Human Capital The combined expertise and knowledge embedded in our workforce to propel our business operations. Natural Capital The use of natural resources such as water, fuel and materials to operate our business. Social & Relationship Capital Interconnected relationships between our business and our diverse stakeholder base. Employees Customers Government/Regulators Communities Business Partners/Suppliers & Vendors Shareholders/Investors/Financial Services Providers Media Industry Peers Academic Organisations Trade Associations/NGOs
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