SUSTAINABILITY REPORT 2023 71 APPENDIX TCFD RECOMMENDATIONS Risk Type Primary Risk Driver Potential Impacts CLCT's Risk Level in 3 Scenarios Mitigation Measures 1.5°C (CRREM, 2050) 2°C (NGFS, 2100) 3°C (NGFS, 2100) Transition Risk Carbon Price Shifts Carbon emissions priced through taxation or emissions trading schemes - Increase in operational costs associated with carbon pricing • At Group level, CLI implemented an internal carbon price to inform decision making for long term decisions before policies are implemented. • At Group level, CLI has a decarbonisation plan/ strategy in place to ensure the adoption of strategies to minimize emissions and reduce CLI’s exposure to carbon price shifts. None Negligible Moderate Significant Severe From the risk assessment performed by a third-party platform, CLI further explored additional transition risks and opportunities in a qualitative manner as a start. Some of these risks are also seen as ‘indirect’ climate-related risks to CLI and its operations so evaluating them and keeping them in view is of importance to CLI’s climate transition journey. The perceived risk level is based on the market trends, current developments and CLI’s experience and expertise in the real estate market. The perceived risk level is seen through three scenarios – a 3°C scenario which is assumed to be a ‘business-as-usual’ scenario where there is not sufficient action taken by economies and businesses to transition to a lower carbon economy and a 1.5°C and 2°C scenarios, where there are differing levels of potential action taken to tackle some of the risks of transitioning to a lower carbon economy. On the opportunity side, these were only reviewed as potential actions which CLI and CLCT can reference to inform our strategy and they have not been evaluated using the risk level heatmapping criteria or reviewed by scenario (these opportunities would be relevant in all scenarios). The following risks and opportunities are explored on a global portfolio level. The legend for risk levels for the following risks and opportunities is built upon the same financial exposure thresholds as the risk assessment performed by a third-party platform, but based on both qualitative as well and quantitative criteria that correspond to each risk level. CLI will continue to monitor these short term and medium term risks.
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