66 CAPITALAND CHINA TRUST APPENDIX TCFD RECOMMENDATIONS Governance The Board of the Manager of CLCT (the Board) considers sustainability issues as part of its strategic formulation, determines the material ESG factors and oversees the management and monitoring of the material ESG factors. The Board sets the REIT’s risk appetite, which determines the nature and extent of material risks that CLCT is willing to take to achieve their strategic and business objectives. As part of the material risk issues being highlighted, climate change has been identified as important. The Board is kept up to date on climate change risks as part of its Enterprise Risk Management (ERM) Framework. The Board is actively involved in discussions on climate-related initiatives. Taking the lead from CLI, the Board is updated on relevant performance metrics, e.g. progress on the reduction targets and green certification. Any environmental incidents, which may include climate-related damages or disruptions, are also reported to the Board. As Environmental, Health and Safety (EHS) factors are considered as part of the asset investment evaluation process and strategy, they are presented to the Board where relevant. At REIT level, CLCT works closely with CLI China’s EHS Committee. This EHS committee drives initiatives related to climate-related risks and opportunities, as well as the broader environmental issues. In alignment with CLI, the CLCT CEO is responsible for CLCT’s climate change-related targets. A key objective of CLCT’s senior management is to transit to a low-carbon business and build a resilient and resource efficient portfolio. Members of CLCT’s senior management and relevant stakeholders will undergo annual training to further build capacity with respect to climate-related risk and opportunity management. The frequency and content of these capacity building trainings will be regularly reviewed to incorporate emerging issues relating to environmental risk management. CLI groupwide sustainability management comes under the purview of a CLI Board Committee, the Strategy and Sustainability Committee (SSC). The CLI Strategy and Sustainability Committee, chaired by Lead Independent Director, is responsible for overseeing sustainability strategies and goals including providing guidance to management and monitoring progress against achieving the goals of any sustainability initiatives in 2023. It is supported by the Group Sustainability Office and various work teams to drive continued progress and improvement in the areas of ESG. The work teams comprise representatives from CLI business units and corporate functions. The SSC, as well as the Group CEO and the Senior Leadership Council have oversight and are responsible for climate-related issues. They had also approved the CLI 2030 Sustainability Master Plan (SMP). The CLI Board is updated at least once a year, at ad hoc Board meetings covering relevant climate-related topics including the CLI 2030 SMP and discussions on the green capital expenditure plan required to meet the SMP targets (which already includes decarbonisation targets). Performance against SMP targets and Balanced Scorecard targets, including decarbonisation targets, is tracked and reported to CLI Management and Board at least annually. This governance is cascaded from the Group level to CLCT level through the operations of CLCT’s EHS Committee. CLCT conducts Sustainability Working Committee (SWC) meetings on a monthly basis and Sustainability Management Committee (SMC) meetings on a semi-annual basis. The Manager of CLCT reports to the Board on a semi-annual basis as well. When it comes to building expertise and capacity on climate-related issues for the Board and senior management, on CLI level, the Board is continuously upskilling with respect to sustainability and climate-related issues. All Board members have undergone the SGX recognised sustainability training, and all new and existing CLI Board members are regularly briefed on sustainability management at CLI, climate-related matters, including choice of climate scenarios and the decarbonisation journey, as well as the CLI 2030 SMP. With respect to the decarbonisation initiatives and targets, at CLI and CLCT levels, there are various mechanisms applied to gaining feedback on these initiatives from our various stakeholders. These include but are not limited to: annual general meetings, half yearly financial results announcements, media releases and interviews, annual reports and sustainability reports, the company website, regular analyst and investor meetings (such as the 2023 sustainability non deal roadshow), participation in relevant focus groups/panel discussions, including regulator and responses to sustainability surveys. For more details on CLCT’s sustainability management structure, please refer to pages 13 to 15 of this Report.
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