98 YINSON HOLDINGS BERHAD | INTEGRATED ANNUAL REPORT 2024 ME3 BIODIVERSITY MANAGEMENT Strategies to reduce negative impact from operations to enhance ecosystem resilience through partnerships and conservation efforts. Concerned stakeholders S5 S8 Risks • Evolving regulations may pose compliance challenges, requiring constant adaptation to stay within the legal framework. • Dependence on specific biodiversity-related resources can increase exposure to supply chain vulnerabilities. • Inadequate biodiversity management practices may lead to reputational damage. Opportunities • Preserving biodiversity ensures continued access to crucial ecosystem services. • Commitment to biodiversity management builds a positive brand image. • Biodiversity-conscious practices contribute to Yinson’s long-term resilience, mitigating environmental risks and ensuring sustainable resource availability. WHY IS THIS TOPIC MATERIAL TO US? Yinson firmly believes in biodiversity management to safeguard our planet’s biodiversity, recognising its critical role in sustaining ecological equilibrium, supporting human health and ensuring long-term prosperity. As a global player in the energy and marine sectors, we understand that biodiversity is not an abstract concept — it directly influences our business operations. We believe that actively engaging in conservation efforts and risk management helps to minimise our negative impact on biodiversity. Healthy ecosystems contribute to stable weather patterns, clean air and water, and resilient supply chains. By preserving biodiversity, we safeguard our well-being and that of future generations. MANAGEMENT APPROACH Yinson’s commitment to biodiversity is outlined in our Biodiversity Policy, which sets out how we strive to develop a business model that promotes sustainable practices that preserve and enhance natural ecosystems. Our Biodiversity Policy supports the Kunming-Montreal Global Biodiversity Framework, which sets goals and targets to halt and reverse nature loss by 2030; the United Nations’ Sustainable Development Goals (“SDGs”), SDG 14 (Life Below Water) and SDG 15 (Life On Land), as well as the UN Global Compact environment principles 7, 8 and 9. We also support the biodiversity efforts in the countries where we operate. For example, in Malaysia where we are headquartered, we operate in alignment with the National Policy on Biological Diversity, which sets five goals that mirror the KunmingMontreal Protocol. We are firmly committed to supporting these goals by identifying our nature-related risks and dependencies and integrating biodiversity considerations into our operations. We are also committed to collaborating with external partners to protect natural ecosystems, such as through our membership in the CEO Action Network, which focuses on sustainability advocacy, capacity building, action and performance. Here, we have pledged to disclose our performance against time-bound biodiversity commitments by December 2026. While we acknowledge nature degradation as a significant risk, we also see it as an opportunity to unlock new possibilities for the business. To better understand naturerelated risks and opportunities, Yinson has explored various tools recommended by the Taskforce on Nature-related Financial Disclosures (TNFD) guidelines to analyse metrics such as proximity to key biodiversity areas. We recognise the principle of ‘common but differentiated’ responsibility, underscoring our business’s crucial role in the push for decarbonisation and the ambitious nature of conservation efforts. Nature-related risk assessment and impact management To understand our dependency and impact on the natural environment, Yinson conducted a high-level nature-related risk assessment across our business operations. The scope of the assessment covered Yinson Production and Yinson Renewables, as both businesses represent the Group’s most material impact on the environment. Yinson employed a scenario analysis approach to understand our long-term business resilience and exposure to nature-related risks. The outcome of the assessment is summarised below. Our FPSO assets have incorporated environmental design values to mitigate potential impacts on biodiversity, including those related to water risks. These designs account for various environmental loads and events, such as increased wave and wind heights, which could affect marine ecosystems where the FPSOs operate. With a conservative return period to withstand maximum environmental loads (up to 100 years), our FPSO designs aim to minimise disturbances to marine habitats and biodiversity caused by extreme events. Meanwhile, some of our solar photovoltaic assets are strategically located in areas with the highest solar irradiation in the world, which are the most suitable for solar energy generation. However, these areas tend to be desertic with water availability being a constraint. The most water-intensive activity during solar farm operations is module cleaning. We recognise that water risks and biodiversity are closely linked;
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