Through surveys and workshops with internal stakeholders, we identified risks and opportunities that could materially affect our financial performance. This process was complemented by an in-depth analysis of external factors, such as regulatory developments and market trends, alongside qualitative evaluations. Please refer to the Climate Risks and Opportunities section for more information. As the Group is still in its early stages of determining whether a climate-related transition plan and associated targets will be appropriate, specific targets and resource allocation plans including evaluation on the need for material adjustments to the assets and liabilities have not yet been set. Additionally, the Group has not disclosed specific quantifiable expectations regarding changes to its financial position. While we have indicated potential changes to our financial position across certain time horizons and risk categories, these remain qualitative. At this stage, we are focused on strengthening our understanding of climate-related risks and opportunities, which will guide future strategic choices. Risk Management From 2025, Rex has started conducting annual discussions on climate change risks and opportunities involving senior management across business units. This is facilitated by an independent ESG consultant to determine the key sustainability issues that are crucial to our stakeholders. The Group has identified the relevant climate-related risks and opportunities as outlined in the Climate Risks and Opportunities section below. Each identified risk is assessed based on 1) the likelihood of occurrence; and 2) the severity of potential impacts arising from the risk. Climate-related risks may include an impact on operations at the asset level, performance at the business and regional level, arising from extreme weather conditions, or a global shift towards a lower carbon economy. The leadership at the asset level will meet regularly with the Group’s management to highlight potential climaterelated risks and undertake appropriate contingency planning and actions to mitigate these risks. This year, the Group has integrated climate-related risks as part of the overall ERM framework. These risks are evaluated in terms of their likelihood, consequences, and risk level, taking into account gross and residual risks following the application of internal controls. However, the Group is in the process of developing its approach to prioritising and monitoring climate-related opportunities, with further disclosures to be provided in subsequent years. Climate Metrics and Targets The Group has determined targets concerning the reduction of our energy consumption and GHG emissions. As the Group remains ahead of the SGX-mandated regulatory timeline for adopting IFRS S2 standards, it is taking a phased approach to integrating climate considerations into its business strategy. The Group has begun the identification and prioritisation of climaterelated risks and opportunities, and will subsequently allocate resources for ongoing monitoring and assessment. Climate-related Risks and Opportunities Risks To present our climate-related financial disclosures that are consistent with the IFRS S2 standards, our identification and assessment of climate-related risks take into consideration: • Transition risks: including changes to policy and legal obligations, technological innovation, changing market demand for products, and changing stakeholder expectations. • Physical risks: relating to the physical impacts of climate change (both acute and chronic). Acute physical risks refer to those that are event-driven, including increased severity of extreme weather events, such as cyclones, hurricanes, or floods, while chronic physical risks refer to longer-term shifts in climate patterns (for example, sustained higher temperatures) that may cause the sea level to rise or chronic heat waves. Rex International Holding Limited 73
RkJQdWJsaXNoZXIy NTM2MDQ5