SWIRE PROPERTIES ANNUAL REPORT 2023 Emerging Risks and Possible Impacts Risk Trend Mitigation Measures Climate change • A Climate Change Policy is in place and is Extreme weather conditions and climate updated 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 carbon emission. • 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. • Piloting the use of internal carbon pricing (“ICP”) to determine the potential impacts of carbon emissions for our investments, quantify carbon risks to our business operations and better reallocate capital towards low-carbon investment and opportunities. Nature and biodiversity risks • A Biodiversity policy is in place and is updated Deteriorating natural environment and regularly. biodiversity loss may impact material • Participate in the Taskforce on Nature-related availability and adversely affect construction Financial Disclosures (TNFD) to formulate a global costs. Delay in response to growing market risk management and disclosure framework and demand for nature-inclusive design in contribute to collective nature-positive goals. properties may have adverse financial • Partner with university to conduct a biodiversity effects on the Company. assessment at our Hong Kong office portfolio to evaluate the state of urban biodiversity after the completion of the redevelopment and propose measures to further enhance urban biodiversity in future developments. • Conduct screening study of our global portfolio with biodiversity indicators to define a priority list and nature profile, and to identify the dependencies and impacts on natural assets and ecosystem services. • Explore opportunities to integrate nature-based solutions in future new development projects to further enhance urban biodiversity, increase climate resilience and promote tenant wellbeing. 117