25 KENANGA INVESTMENT BANK BERHAD Sustainability Report 2022 Awards and Recognitions Empowering People and Communities GRI Content Index ESG Performance Data 24 Environmental Stewardship About This Report Who We Are Progressing Towards A Sustainable Future Managing Our Sustainability Risks Good Governance Sustainable Economic Growth Our 3-Year Sustainability Roadmap 2023-2025 2023 Building Sustainable Ecosystem • Enhance sustainability governance structure with sub-committees/working group with clear roles and responsibilities • Promote sustainability culture and increase ESG literacy amongst Kenanga’s stakeholders through targeted sustainability literacy programmes • Identify and integrate ESG risk in group-wide risk management including climate risk throughout the Group’s business operations as per updated materiality matrix 2024 Strengthening ESG Foundation • Develop KPIs and targets for the identified ‘Key Focus Areas’ in Kenanga’s Sustainability Framework • Assess and ensure group-wide readiness to embark on climate-related financial disclosures according to key regulators’ requirement in line with BNMCCPT and Climate Risk Management and Scenario Analysis by Bank Negara Malaysia, as well as Bursa Securities’ Sustainability Reporting Guide 3rd Edition • Upskill relevant sustainability-relevant roles within the organisation and ensure alignment in line with Bursa Securities’ Corporate Sustainability Practitioner Competency Framework • Obtain assurance of our sustainability reporting process for data and reporting credibility 2025 Amplifying ESG Impact • Expand sustainable products and services while focusing on thematic and impact investing in sectors related to Water & Waste, Food Security, and Energy Transition, and others as relevant • Fully integrate and increase our ESG due diligence practices across our business operations including sustainable value chain practices such as procurement and investment • Adopt suitable sustainability ratings and standards for continuous improvement on sustainability performance PROGRESSING TOWARDS A SUSTAINABLE FUTURE Objective: This Roadmap complements our Board-approved sustainability goals and targets, and supports the implementation of regulators’ and rating agencies’ requirements on sustainability disclosures which will be translated to relevant KPIs. MANAGING OUR SUSTAINABILITY RISKS RESPONSE TO ESG AND CLIMATE RISKS Effective and prudent risk management practices are critical to business long-term viability and maintaining stakeholder confidence. As a responsible and committed financial institution, it is our objective to ensure that the business is being managed in a sustainable manner, taking into consideration of the ESG expectations from our stakeholders. OUR APPROACH For effective management of risks, the Group is governed by the Enterprise Risk Management (“ERM”) Framework and the philosophy adopted is based on the ‘Three Lines of Defense’ approach. The ERM Framework defines the roles and responsibilities throughout the organisation to ensure accountability and ownership, as well as sets out the principles of sound corporate governance to assess and manage risks to ensure risk-taking activities are aligned with the Group’s long-term viability and its capacity to absorb losses. The Group Board Risk Committee is responsible to ensure the Group’s activities are consistent with its approved risk appetite, strategies and policies. ESG factors have rapidly become a critical business driver for organisations in recent years. Kenanga remains committed to integrating ESG considerations into our risk management processes through proactive management, a reinforced ESG risk culture, and robust corporate policies and procedures. For this reporting period, Kenanga has identified ESG-related risks, including climate change, as one of the key emerging risk. KEY EMERGING RISKS Risks The Impact Our Response Cyber Security With the rapid adoption of digital innovation and remote work arrangements, cyber threats are becoming more prevalent. Our Technology Risk Management Framework and Cyber Resilience Framework incorporate industry best practices in managing various technology-related risks, including cyber security risks. Climate Change Climate change may lead to significant financial consequences to our investment and lending practices. Integrated our Climate Change Risk Management Framework (“CCRM Framework”) into our multi-disciplinary Enteprise Risk Management Framework in FY2022 to guide our investment and lending/financing activities, ESG and climate risk assessment screenings. For more information on our Risk Management Framework and Governance, please refer to the Statement on Risk Management and Internal Control on pages 110 to 114 of our Annual Report 2022. “Climate risk management is increasingly becoming one of the most crucial elements in ensuring the Group’s long-term viability. Our CCRM Framework serves as a fundamental guiding principle and roadmap for the bank's approach to climate risk management. This forward-thinking approach enables the alignment of our portfolio with practical climate goals and strategies.” TAI YAN FEE Group Chief Risk Officer, Kenanga Investment Bank Berhad
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