Existing Risks and Possible Impacts Risk Trend Mitigation Measures Business risks • Obtain suitable reserves of land, reinforce existing The lack of compelling development projects assets and actively explore investment and business disruption may lead to a opportunities. slowdown in business and so affect financial • Monitor and evaluate disruptive business models, performance. with a view to making our operations more robust. • Enhance competitiveness by increasing efficiency, using appropriate technology and operational procedures. Development risks • Closely work with contractors to monitor and Delay in the completion of developments manage construction progress in order to avoid may have an adverse financial effect by delays. delaying the timing of property sales and • Stringent contractor prequalification requirements leasing. and stringent requirements for approving design changes. • Build in contingencies for statutory approvals and communicate with government authorities on a timely basis. Political risks • Regular review of investment strategy, business Changes in the global and local political model and capital allocation in response to any landscape and priorities may have impact of international tensions. significant impact on the business • Maintain high level of sensitivities to political and environment. social issues by closely monitoring social media and government policies with a timely response. • Senior management engagement with government authorities to anticipate political developments in order to plan appropriate responses and to ensure compliance with applicable laws and regulations. • Maintain robust corporate governance practice through oversight functions (internal audit, risk management, the company secretary, legal counsel and independent non-executive directors). Emerging Risks and Possible Impacts Risk Trend Mitigation Measures Climate change • A Climate Change Policy is in place and is updated Extreme weather conditions and climate regularly. change may increase the risks of physical • Conduct climate risk assessments at all portfolios to damage to properties and adversely affect manage the risks and to explore the opportunities their valuation. arising from the transition to a target of net-zero. • Science-based targets have been established to achieve long-term decarbonisation. • Monitor and reduce carbon emissions from construction activities and embodied carbon from major building and construction materials with the use of innovative technologies. 111 SWIRE PROPERTIES ANNUAL REPORT 2022