ESR-REIT Annual Report 2024 167 Enterprise Risk Management The Manager has established a risk management system to identify, measure, prioritise and respond to potential risks that may significantly affect ESR-REIT’s operations. We take a systematic four-step process to effective risk management: 1. Risk Identification and Assessment 2. Risk Management Application 3. Risk Monitoring 4. Reporting As part of risk identification and assessment, we have assessed environmental risks across our portfolio in Singapore, Australia and Japan using an Environmental Risk and Control Matrix. This matrix identifies, assesses, and manages environmental risks, encompassing regulatory compliance, resource efficiency, and climaterelated risks (transition: policy & legal, technology, market, reputation; physical: acute and chronic) across short-, medium-, and long-term time horizons. The matrix utilises 27 risk descriptors and is reviewed bi-annually to account for emerging risks, with quarterly updates from Heads of Department ensuring the effectiveness of existing controls. Incremental risk descriptors are reported to the board quarterly. For more details about our governance practices and risk management activities, please refer to the Risk Management and Corporate Governance sections from page 86 to 120 of the Annual Report. There were no material incidents of non-compliance with socioeconomic or environmental laws and regulations in FY2024. Open Communication for Transparency The ARCC and the Board emphasise transparency and open communication throughout the organisation, which is underscored in the Policy on Conflict of Interest. The Manager bolsters this by upholding a zero-tolerance stance on corruption. Ethical conduct and anti-corruption measures include incorporating internal guidelines on the receipt and offering of gifts and entertainment within the policy, ensuring employees are equipped with the knowledge and resources to navigate potential conflicts. We maintain a robust whistleblowing system that enables both internal and external stakeholders to report potential improprieties confidentially. The Policy on Whistleblowing has been communicated to all employees and details are available on our corporate website. Employees of the Managers and external parties can raise their concerns by filling in a form found on ESR-REIT’s website and submitting it to whistleblowing@esr-reit.com.sg. The case will be routed directly to the ARCC Chairman and designated officers, to allow independent investigation of the matter raised and appropriate follow-up actions. Internally, employees can also choose to report any observed incident to their immediate supervisor, any Heads of Departments, the Head of Compliance, Risk Management & Sustainability9, the ARCC Chairperson or the CEO. Employees can refer to the internal telephone directory for the contacts information of the various points of contact. Our investigation process ensures independent examination of all valid reports under the direct oversight of the ARCC Chairperson, with quarterly review of all cases by the ARCC. We handle all information confidentially to protect whistleblower interests. For internal grievance handling, we maintain clear escalation pathways for workplace concerns, including a structured process for addressing issues such as compensation fairness, working conditions, and interpersonal conflicts. Employees can directly consult with department heads for policy clarification, and we provide a formal escalation mechanism through our Grievance Handling Policy. 9 Head of Compliance, Risk Management & Sustainability has stepped down in November 2024 and was replaced by the ESR Group Head of Governance & Sustainability.
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