SUSTAINABILITY STATEMENT Managing Climate Change Risks and Opportunities WSC’s commitment to producing in a way that helps protect people, the environment and the communities where it operates includes mitigating the risks of climate change. We recognise the devastating effects and associated short- and long-term business risks that climate change presents. WSC has a solid commitment to addressing these issues and avoiding the impact of climate change by improving the efficiency of operations. Our climate change strategy includes working with employees and supply chain partners on energy-saving processes and a complete climate change risk assessment. Our management team, overseen by the Chief Strategy Officer, devises strategies to manage and minimise our environmental footprint. Progress reports and proposals on energy management, climate change and pollution reduction, supported by financial indicators and Return on Investment (ROI) calculations, are presented to the Sustainability Steering Committee. In 2022, strategic topics included a deep dive on decarbonisation, emerging business models in the electricity transition and emerging climate-related risks. Climate change risk is reviewed explicitly by Senior Management. Climate-related risks and opportunities are identified, assessed and managed using WSC’s Risk Management Framework in the same way as all other risks. The Board and senior management consider, review and monitor climate-related risks and opportunities as part of our strategic planning process, investment decisions, and regular financial and operational performance reviews throughout the year. Risk Opportunities Climate change related disclosures and regulations that could impact our regulatory reporting. Effective management of climate change risks results in less wastages and contribute to overall cost savings for the Group. Reallocation of capital to green investments by financial institutions impacts business funding. Positive differentiation in the market for long-term value creation for the benefit of stakeholders. WSC has integrated climate-related risk management into the company-wide risk scorecard. It is part of the foundation in formulating our business strategy, deciding on future R&D as well as technology investments. WSC’s climate risk management process includes mitigation efforts to reduce greenhouse emissions from our operations, climate engineering and increasing knowledge of climate systems. In 2022, we invested on: • Mitigating climate change, including planting 130,000 trees in Maran, Pahang; • Third party verification of our GHG Inventory; and • Subscription to TNB’s Green Electricity Tariff (GET) programme. Inevitably, climate change impacts operating expenses (OPEX) and capital expenditure (CAPEX), which increases product prices. Climate change reduces efficiencies and increases OPEX. CAPEX is needed to retrofit existing assets to cope with new climatic conditions. We are committed to addressing the issue of climate change and improving efficiency through adaptation by adopting new and green technology in developments and implementing fuel efficiency measures. Specifically, we have adopted a tracking system for emissions, energy use, water use and waste in our manufacturing. WSC is an active member of the Malaysian Oil & Gas Services Council (MOGSC) and continues to address climate-related issues, specifically how it affects the Energy sector. Our role and involvement in this membership include: • Identifying pressing environmental issues in climate change, water and waste; and • Collaborating on solutions that drive improvement within WSC and its supply chains. We contribute to driving change management through knowledge and information sharing, especially public policy and regulation. The Council also examines various opportunities, such as hydrogen technology. We continue to ensure consistency between our climate change policy and the position we advocate at trade associations of which we are members. When opinions contradict, we respond by identifying gaps and initiating a process that alerts the Group to new areas of good business practice. Annual Report 2022 Wah Seong Corporation Berhad 23
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