RESILIENCE INDICATOR 3 Risk Management Swire Properties has established a risk management structure that provides oversight on key risk management areas, including information disclosure, risk identi昀椀cation and analysis, and crisis response. ENTERPRISE RISK MANAGEMENT (“ERM”) SYSTEM Swire Properties has an enterprise risk management (“ERM”) system with a clear organisational structure in place. The Board of Directors and the Company’s senior management are responsible for identifying and analysing the risks underlying the achievement of business objectives, and for determining how such risks should be managed and mitigated. TCFD-ALIGNED CLIMATE-RELATED FINANCIAL DISCLOSURES In accordance with its Climate Change Policy, Swire Properties publishes climate-related 昀椀nancial disclosures with reference to the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”) on an annual basis; to communicate its management approaches and strategies for climate mitigation, adaptation and resilience to stakeholders. CLIMATE RISK ASSESSMENT Swire Properties completed a comprehensive assessment of the key physical risks posed by climate change to its global assets and business operations, with an aim to develop long-term strategies that protect the business from future climate-related risks. PHYSICAL RISK ASSESSMENT This consists of asset-level modelling of both the acute and chronic physical risks associated with various climate scenarios, presented in selected timeframes from the immediate term to the distant future – 2030, 2050 and 2100. The global property portfolio has a low to moderate risk of 昀氀ooding, heat stress, water scarcity and extreme winds in all climate scenarios assessed. This is because Swire Properties’ buildings are relatively resilient and have a variety of mitigation measures in place. Examples include enhanced 昀氀ood protection and alarm systems, improved chiller e昀케ciency, regular inspections of glass facades and the installation of intelligent monitoring systems. Some resilience measures will be introduced at the planning and design stages of new developments to ensure that Swire Properties’ assets remain resilient to di昀昀erent future climate scenarios. ASSESSMENT OF TRANSITION RISKS AND OPPORTUNITIES As the world transitions to a low carbon economy, Swire Properties has comprehensively assessed international, national and local government policies, including the Hong Kong Blueprint for Climate Action 2050 as well as regulatory, market and technology trends, in the context of di昀昀erent climate scenarios. The analysis shows that the identi昀椀ed transition risks and opportunities can be e昀昀ectively managed through our existing business and sustainability strategies as we transition to a low carbon economy. Swire Properties 43