Risk Management FORWARD TOGETHER 68 APAC’s dynamic growth markets. The Group continues to drive strategic long-term growth in establishing new REITs, private real estate funds and investments in various real estate sectors, including the New Economy. In addition, the Group is committed to integrate ESG into every aspect of its business, investments and operations due to gaining in tractions from investors seeking green solutions from ESR’s portfolio of assets and an increased expectation on ESG compliance and requirements. Financial Risk The Group believes that financial prudence is integral to business sustainability and adopts a disciplined financial management by maintaining a strong balance sheet and robust capital management. Financial risks such as liquidity, credit, currency and interest rate risks are closely managed and monitored by management which are mitigated by a well-staggered debt maturity profile, close monitoring of credit spread and interest rate volatility, hedging strategies and maintain a low gearing ratio. Management also maintains a robust cash flow position and ensures that there are sufficient working capital lines to meet financial obligations. Reports monitoring financial metrics and indicators are submitted to the Board at least on a half-yearly basis. Operational Risk The Group has established a set of comprehensive policies and procedures designed to identify, manage, monitor and report operational risks associated to the day-to-day activities and to facilitate the understanding and implementation of different work processes. These operational procedures and guidelines are reviewed regularly to ensure relevance and effectiveness. In addition, compliance with SOPs is assessed through training of employees and regular reviews by the Group Internal Audit department to provide recommendations on any gaps that are identified. As part of the business continuity procedures, incident reporting and escalation protocols are established and communicated to all staff for emergencies. This is to ensure the Group is able to respond effectively to disruptions resulting from internal and external events, while continuing its critical business function and minimising impact on its people, assets and operations. ESR also recognises that human capital is key to the business and has put in place measures to manage the attraction and talent management, including succession planning, periodic benchmarking of staff remuneration, performance-based rewards, among others. The Group has established a performance management framework to review all employees' performance annually. A rating will be given to each of the employees depending on their performance and remuneration will be rewarded accordingly based on the rating. In addition, a regular review of career and development plans will be conducted with all employees. Within the Group, business units' staff are required to achieve a minimum number of training hours as part of their formal job-specific training targets and fulfilling the staff's individual development plan for the year. With climate change and the associated changes in climate regulations, in addition to the increased focus on the reduction of carbon footprint, ESR evaluates the environmental performance of its existing and assets under development, where feasible, and the potential financial implications such as direct damage to assets and indirect impacts from supply chain disruptions. The objective is to build a resilient portfolio and achieve its sustainability efforts, while incorporating environmental risks as part of its due diligence process. ESR has adopted the Task Force on Climate-Related Financial Disclosures (“TCFD”) recommendations as a framework for assessing and managing climate-related risks. The TCFD provides recommendations on how to assess, identify, understand, adapt and/or mitigate climate-related risks and opportunities (both physical and transition) which will have medium and long-term effects on ESR's business, including potential financial impacts, through scenarios analysis and climate risk assessments. As the world transitions to a low carbon future, ESR will continue to increase its exposure to renewable energy solutions, explore innovative technologies and attain green building certifications, where feasible. ESR proactively engages with its tenants, contractors, and vendors on ESG best practices to help drive a sustainable economy. The Group monitors evolving changes in climate regulations under every country’s jurisdiction that it operates due to the more stringent regulations, disclosures and increased expectations from stakeholders. As Asia Pacific’s leading real asset manager powered by the new economy, ESR is focused in raising the bar in its sustainability efforts as a competitive advantage against its peers. Compliance Risk The Group is committed to comply with the applicable laws and jurisdictions in its day-to-day business processes and does not tolerate any breaches in regulatory compliance. Non-compliance may result in litigation, penalties, fines or revocation of business licenses which have potential reputational and financial impact. The Group has
RkJQdWJsaXNoZXIy MTIwODcxMw==