CapitaLand Malaysia Mall Trust | Annual Report 2020

The Manager’s ERM Framework is adapted from the International Organization for Standardization (ISO) 31000 International Risk Management Standards. It is also guided by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control-Integrated Framework and other relevant best practices and guidelines. It specifies the required environmental and organisational components needed to manage risks in an integrated, systematic and consistent manner. The ERM Framework and related risk management policies are reviewed annually and updated in compliance with latest regulatory requirements as well as best practices in the industry. A robust internal control system and an effective, independent review and audit process underpin the Manager’s ERM Framework. While line management is responsible for the design and implementation of effective internal controls using a risk-based approach, CL IA reviews such design and implementation to provide reasonable assurance to the AC on the adequacy and effectiveness of the risk management and internal control systems. CMMTGroup’s ERMprogramme is basedon fostering the right risk culture. CapitaLand’s Group Risk Management Department (GRM) conducts regular workshops to enhance risk management knowledge and promote a culture of risk awareness within the CapitaLand Group. Risk management principles are embedded in all our decision-making and business processes. Once a year, the Manager coordinates CMMT Group’s RCSA exercise. This requires that the respective risk and control owners to identify, assess and document material risks which includes Environment, Social and Governance (ESG)-relevant risks; along with their key controls and mitigating measures. Material risks and their associated controls are consolidated and reviewed by the Manager before they are presented to the AC, Exco and the Board. MANAGING MATERIAL RISKS The Manager takes a comprehensive, iterative approach in identifying, managing, monitoring and reporting material risks across CMMT Group. These material risks include: Material Risk Details Key Mitigating Action Business Interruption/ Pandemic › Business disruptions arising from the COVID-19 pandemic have negatively impacted the real estate industry, of relevance to CMMT Group, amongst others, retail, resulting in potential structural disruption in this asset class › It accelerated thepaceof pre-existing trends of digital adoption, which has disrupted and transformed the real estate industry to an even greater extent › It also spurred stakeholders’ attention on the diversification and resilience in CMMT Group’s supply chain › Continue to place the well-being of our tenants and shoppers, being top priority by adopting contactless technologies and innovative technical solutions to enhance the safety, cleanliness and hygiene at CMMT Group’s properties › Futureproofingof CMMTGroup’s business throughdigitalisation of business operations and processes, innovation and flexibility in CMMT Group’s offerings such as accelerating omnichannel solutions, assisting customers with digital transition, optimising the use-of-space, and extending offerings in the new norm › Build collaborative relationships and work closely with supply chain contractors, vendors and suppliers to achieve environmental and social goals through CapitaLand’s Supply Chain Code of Conduct 1 Climate Change › Physical risks such as rising sea levels, violent storms, long intense heat waves, flash floods and fresh water depletion › Transitional risks including pot en t i a l l y more s t r i ngen t r egu l a t i ons and i nc r ea s ed expectations from stakeholders › Regular reviews of CMMT Group’s mitigation and adaptation efforts, which include future proofing our portfolio against changing climatic conditions from the design stage and improving the operational efficiency of our properties, setting targets for carbon emissions, water, energy and waste efficiency › CapitaLand has in place a Group environmental management system which is externally certified to ISO 14001 › For more information, please refer to CapitaLand’s Global Sustainability Report 2020, to be published by 31 May 2021 1 CapitaLand is a signatory to the United Nations Global Compact (UNGC). CapitaLand has developed a Supply Chain Code of Conduct which is primarily based on the legal compliance of local laws pertaining to labour, environment, business integrity and ethics, health and safety and establishes expectations on supplier business conduct as it relates to how goods and services are provided to CapitaLand and CapitaLand’s clients. 119 BECAUSE TOMORROW MATTERS