TCFD I NDEX CONT I NUED Climate-Related Risks Impact Risk Identification Mitigation Strategy Physical Risks Increased severity of extreme weather events (tropical cyclones) Reduced revenue from business disruption Increased costs from repairs Increased insurance premiums As of 2022, the company has operations in two locations: Macao and Singapore. Singapore is currently outside tropical cyclone formation regions due to its proximity to the equator. Macao is located in the Northwest Pacific basin and, thus, in the tropical cyclone formation region. Sands China’s Macao properties are in a tropical cyclone zone with a 100-year return period of 213–251 km/h max wind cyclone based on the Munich Re NATHAN tropical cyclone index, but the severity is not expected to increase under any scenario in the medium or long term. However, we continue to study available research and trends on the increase in extreme weather severity. Exposure to business disruption associated with extreme weather events is incorporated into the ERM tracking and management program. The company has robust business continuity plans in place to address disasters. Additionally, the company continues to identify and expand alternative sources of energy and water to improve resiliency. For example, we implemented an emergency filtration system to reuse lagoon water in case of potable water shortage in Macao. Water from the lagoon is treated with a disc filter, carbon filter, ultrafiltration and UV light, and then pumped to the raw water tank or back to the lagoon. We also have standby water trucks ready to deploy in case of water shortage. In addition, we seek to optimize insurance options to ensure adequate coverages can be maintained and perform annual assessments of potential loss levels against insurance costs to ensure maximum utility of premiums against risk exposure. Precipitation Reduced revenue from business reduction Increased costs from repairs Increased utility costs due to increased dehumidification needs Increased insurance premiums According to the Munich Re NATHAN precipitation index, Singapore is expected to go from five to seven days of 30+ mm precipitation per year to more than seven days by 2030. Macao is already experiencing more than seven days of 30+ mm precipitation annually. In Macao, our storm water removal infrastructure is designed for a peak hourly precipitation rate of 160 mm. The company actively invests in and implements energy-efficiency projects to reduce HVAC consumption and, thus, exposure to utility cost variability. We also continue to identify alternative sources of energy to reduce reliance on one utility, where possible. In Singapore, our existing development was designed with a peak hourly precipitation value of 290 mm/hour while the highest measured 60-minute rainfall data was 147 mm/hour, occurring in 1995. Additionally, our integrated resort model offers many different amenities and services within a campus setting that contains one large building or buildings connected via climate-controlled walkways, thus reducing guest exposure to inclement weather. Heat stress and rising mean temperatures Increased utility costs due to increased cooling needs Based on the Munich Re NATHAN heat stress index, Singapore is expected to go from 20–80 days in heatwave to 80–180 days in heatwave (daily maximum temperature over 30°C for at least three consecutive days) by 2030. Macao is already experiencing 80–180 days in heatwave annually. Additionally, we have been measuring temperature variability and its impact on utility usage for more than five years. The increase in costs due to weather has been immaterial (under 1% of annual utility costs). Based on our existing data, we do not expect the temperature increase to have material short-term impact. The company actively invests in and implements energyefficiency projects to reduce consumption and, thus, exposure to utility cost variability. We also continue to identify alternative sources of energy to reduce reliance on one utility where possible. Due to energy-conservation projects, the existing air conditioning infrastructure at our properties has at least 15% spare air conditioning capacity available, as needed, for increased temperature and humidity in the future. Sea level rise, coastal and river flooding Increased repair costs due to flooding The Intergovernmental Panel on Climate Change (IPCC) projects a global mean sea level rise of 0.24–0.32 meters by 2050. According to the IPCC, most regions are experiencing sea level rise of 3–4 mm per year (2.4–3.2 cm by 2030). Marina Bay Sands’ defended and undefended flood risks are considered low in all scenarios and time horizons (WTW), even though there is an expected 10%–15% increase in floods (WWFWater Risk Filter). Sands China properties are in an area threatened by an extreme flood in a 100-year return period (WTW), and frequency is expected to increase by more than 15% beyond 2030 compared to 1985–present (WWFWater Risk Filter). Our properties in Singapore and Macao are designed and constructed above the tide line in a manner that significantly reduces flood risk, and/or there is local infrastructure in place to manage long-term flood risk. Entrances to underground areas of our integrated resorts are designed with entrance berms 200 mm higher than the predicted 100-year flood levels to reduce risk of flooding into the basement areas. Water stress Increased utility costs due to increased demand on water supply Reduced revenue due to water supply curtailment All properties in Singapore and Macao are located in areas that are currently considered low-water-stress regions. The WWFWater Risk Filter is forecasting water stress to increase in Singapore in the 2030 and 2050 time frames, but does not indicate a water-stress increase in Macao in the medium term or long term. Similar to energy-efficiency projects, we also implement waterefficiency and reuse projects to reduce our water consumption and reliance on scarce freshwater. In Singapore, we harvest rainwater, recover condensate water and use nonpotable water for irrigation, toilet flushing and other nonpotable uses. In Macao, we are studying opportunities for rainwater collection. The Parisian Macao is also built to use nonpotable water for toilet flushing once available from the local utility. Finally, we support the Drop by Drop Project, a water initiative designed to provide funding for innovative regional water stewardship and resiliency projects in our global regions. Strategy During our climate change assessment, we considered the most commonly disclosed climate-related risks. While we believe the risks below are relevant to our organization, they may not be material at this time. This risk assessment is considered preliminary, as the company continues to refine its qualitative and quantitative analysis while monitoring and managing these risks, regardless of materiality level. 2022 ESG REPORT 104
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