114 CORPORATE GOVERNANCE & SUSTAINABILITY RISK MANAGEMENT Existing Risks and Possible Impacts Risk Trend Mitigation Measures Business risks Economic slowdown and uncertainties in the cities we operate may lead to substantial decline in business activities, revenue and profit. Disruptive business models and technologies as well as demographic factors are changing the behaviour and needs of tenant rapidly, leading to a new form of demand and space design. • Pace new projects with market demands. • Expand the Company’s presence in other markets, and explore other commercial opportunities in the longer run. • Monitor and evaluate disruptive business models, with a view to making our operations more robust. • Continue to carry out improvements to our retail trade mix alongside with experiential shopping, innovative and customer-focused campaigns, loyalty programme initiatives and premium lounges, and crossover promotions between Hong Kong and the Chinese Mainland from helping to broaden our reach to customers. Climate change Extreme weather conditions and climate change may increase the risks of physical damage to properties and adversely affect their valuation. • A Climate Change Policy is in place and is updated regularly. • Conduct climate risk assessments at all portfolios to manage the risks and to explore the opportunities arising from the transition to a target of net-zero carbon emission. • Science-based targets and net-zero vision have been established to achieve long-term decarbonisation, supported by investment in energy efficiency and renewable energy adoption. • 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. Cybersecurity and data protection Threats to customers, tenants and staff from cyber-attacks on our websites, applications, internet services, data and emails result in business interruption, financial loss and reputational damage. • Policies on information and cyber security are in place with regular updates. • Staff trainings, incident response drills and simulation tests are conducted regularly to raise the awareness of data security across the Company. • Regular evaluation and upgrading of the latest technologies on information security. • Insurance policy for cyber and crime are in place to transfer the risk and to reduce financial losses.