13 MANAGING OUR KEY ESG RISKS GOOD GOVERNANCE SUSTAINABLE ECONOMIC GROWTH ENVIRONMENTAL STEWARDSHIP EMPOWERING PEOPLE AND COMMUNITIES APPENDIX Q&A WITH OUR GROUP MANAGING DIRECTOR AND CHAIRMAN, GROUP SUSTAINABILITY MANAGEMENT COMMITTEE How would you describe the sustainability progress that the Group has made this year? Q1 Has climate change impacted Kenanga’s management of ESG risks? Q2 With the development of a Sustainability Framework, Three (3)-Year Roadmap and Sustainability Goals in previous years, we were laser-focused on execution this year, bringing to life the plans and targets we have set in place. Within the organisation, we cascaded ESG-specific KPIs throughout the organisation, rolled out Sustainability Roadshows for employees, refined our whistleblowing policy, augmented our procurement policy and worked on a sustainability policy to ensure we have a strong foundation that paves way for our journey ahead. It was also a year of ensuring we internalised the heightened regulatory requirements from Bank Negara Malaysia, Bursa Malaysia, as well as the Securities Commission in relations to integrating sustainability practices in our business. On the commercial front, we stepped up engagement with clients and investee companies to further push the sustainability agenda. Our asset and wealth management arm, Kenanga Investors Berhad, has successfully secured two (2) exclusive landmark ESG mandates from notable institutional investors in the country, which is a testament to the strength of our expertise and bolsters our position as a trusted asset manager in the sustainability space. Another tangible mark of progress is our continued inclusion onto the FTSE4Good Bursa Malaysia Index. In the latest December 2023 review, our FTSE4Good ESG score has increased from 3.7 to 4.0, a direct result of our enhanced ESG practices and disclosures. Climate change has emerged as a significant factor influencing the management of ESG risks at Kenanga. The implications of climate change are far-reaching, affecting not only the environment but also posing potential risks and opportunities for businesses. Our regulators, especially Bank Negara Malaysia is at the forefront of setting regulatory standards, including mandating the assessment and disclosures of climaterelated risks by financial institutions such as ourselves. In response to this heightened regulatory scrutiny and increased investor awareness of climate risks, we have intensified our risk management approach which includes strengthening our climate risk governance and enhancing due diligence to include climate risk considerations in decisions related to the investments and corporate lending. Since 2023, our portfolios undergo ESG risk screening and climate-related exposure assessment as guided by the updated Climate Change Risk Management (“CCRM”) Framework. DATUK CHAY WAI LEONG Group Managing Director Chairman, Group Sustainability Management Committee
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