30 KENANGA INVESTMENT BANK BERHAD SUSTAINABILITY REPORT 2023 ABOUT THIS REPORT WE ARE KENANGA LEADERSHIP STATEMENTS SUSTAINABILITY AT KENANGA To further strengthen our climate risk management approach, the following was completed in 2023: Provide an overview of how climate change impacts our business, clients and the broader economy Identify and formulate appropriate climate-related strategies, feasible risk appetites and targets to improve our readiness towards climate risk management Establish the necessary guiding principles to support our lending and investment activities, ensuring they consider climate risks Inculcate awareness amongst our stakeholders on the pertinence of understanding climate risks, as well as ensuring they stay abreast of Kenanga’s climate ambitions Facilitate the integration of climate change considerations into our existing risk management practices and business activities Introduce a structured classification methodology to assess and classify our lending and investment activities to ensure they are aligned with the transition to a lowcarbon economy Develop appropriate reporting standards for our climate risk management disclosure for internal and external stakeholders Our Climate Change Risk Management Framework The CCRM Framework plays an integral role in supporting the Group as it embarks upon a phased approach towards recognising and addressing climate risks and opportunities. The Framework aims to: Updated the ERM Framework by incorporating climate change risk requirements, ensuring that the roles and responsibilities of the ‘Three Lines of Defense’ includes the management of climate related risk, describing the climate risk transmission pathway via economic activities to financial risks, and developing the mapping and integration of the climate-related risks into existing types of risks. Incorporated enhanced due diligence and climate risk assessment into the existing process on high climate risk exposure by sector. Incorporated the climate-related risk assessment into liquidity risk management and reflected it in relevant policies and procedures (i.e. assessed the impact of climate risk on depositors’ profile). Updated and enhanced the Group Outsourcing Risk Management Framework (GORMF) to incorporate climate risk as one of the risk categories. Accomplished the Central Credit Reference Information System (CCRIS) Enhancement 2023, aligning with the CCPT Framework and enabling the system to cover several key products. MANAGING OUR KEY ESG RISKS
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