66 YINSON HOLDINGS BERHAD | INTEGRATED ANNUAL REPORT 2024 CYBERSECURITY RISK DEFINITION AND IMPACT OF THE RISK ON YINSON Cybersecurity risk is the probability of the Group’s internal systems/applications being exposed to various cyber attacks including hacking, ransomware, phishing, and others. As organisations worldwide have shifted to embrace digital transformation and leverage advanced technological solutions in optimising work efficiencies and driving business growth, the exposure to cybersecurity risk has increased which could result in loss of confidentiality, integrity, or availability of data. This would have potential adverse impacts on Yinson. Any breach in the internal IT system security may result in leakages and loss of confidential or critical data which will further lead to financial and reputational damages as well as potential legal consequences. HOW WE MANAGE OR MITIGATE THE RISK • Implementation of the Group Cybersecurity Roadmap, consisting of multiple initiatives which have strengthened the cybersecurity system within the Group. • Established new frameworks and strengthened existing security policies and plans. • Conducted our inaugural cybersecurity table-top exercise to strengthen our cyber response and recovery procedures. MOVING FORWARD (OPPORTUNITIES) • Including Operation Technology in the Group Cybersecurity Roadmap to further improve our security position for all businesses. • Updated Group Cybersecurity Roadmap to include data governance and zero trust. • Strengthening our cyber resilience through the implementation of more robust security protocols, continuous employee training, and the adoption of best practices designed to detect, prevent, and respond to cyber threats effectively. ENERGY TRANSITION RISK DEFINITION AND IMPACT OF THE RISK ON YINSON The energy transition risk arises from the global shift towards renewable energy sources such as solar and wind, moving away from fossil fuels such as oil, coal and natural gas. This transition poses a significant risk to Yinson, which is heavily reliant on its FPSO segment as it faces changes including new government policies, carbon legislation, shifting investor preferences towards environmentally friendly assets, and the increasing economic appeal of renewables investments. Yinson’s inability to adapt to this energy transition could result in lost business opportunities from sustainability-conscious clients, legal issues, and damage to its reputation. HOW WE MANAGE OR MITIGATE THE RISK • Review of Yinson’s Climate Goals Roadmap and various key strategies to manage the energy transition. • Expansion and growth of Yinson’s renewables and green technologies businesses. • Operationalising carbon abatement strategies for carbon-heavy assets (i.e. closed flaring, hydrocarbon blanketing system, combined cycle technologies to maximise energy efficiency and utilising low-emission alternatives as energy sources). • Continuous improvements in ESG Ratings i.e. FTSE4Good Index, Morgan Stanley Capital International (MSCI), Sustainalytics and Dow Jones Sustainability Index (DJSI) for S&P’s Corporate Sustainability Assessment (CSA). MOVING FORWARD (OPPORTUNITIES) • As sustainability has become a global concern, the efforts made to mitigate the energy transition risk allow Yinson to fulfil sustainability requirements from existing and potential clients while staying relevant in the industry. • Active exploration of innovative technologies to be implemented in our assets and operations. • Accelerating interest from clients and financial institutions to incorporate sustainability elements into our assets will provide the impetus for Yinson to continue its focus on its carbon reduction initiatives. • Consideration of suitable investments into key segments which could support our climate goals of carbon neutrality by 2030. • Business diversification into Yinson Renewables and Yinson GreenTech would bring in more business opportunities with the increasing demand for carbon-friendly energy solutions.
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