Climate Risks and Opportunities Sands conducts climate-related risk evaluation as a part of our management of environmental risk and in coordination with the ERM process. We assess climate-related risks by identifying risk likelihood and potential impact in various time frames and climate scenarios. In 2021, we undertook an initial internal climate risk assessment, which considered the most commonly disclosed climate-related risks. This past year, we augmented our qualitative evaluation with a third-party climate risk assessment model to prioritize climate-related physical risks, as well as refined our quantitative carbon price estimation methodology to improve our assessment of transition risks. Assessment The climate-related risk evaluation process uses multiple methods to identify risks, including background research, third-party climate risk modeling tools, ongoing risk monitoring and stakeholder engagement. The intent of our physical risk assessment approach is to identify impacts across multiple time horizons and potential climate outcomes in alignment with the Task Force on Climate-related Financial Disclosures (TCFD) guidance. We incorporate climate scenarios with varying levels of emission controls and predicted temperature increases of 4 degrees Celsius to below 2 degrees Celsius (RCP 2.6, RCP 4.5 and RCP 8.5). We utilize alternative time horizons (present day, 2030 and 2050) alongside the proposed climate scenarios to highlight emerging risk patterns and facilities at risk. Our physical risk assessment is consistent with the TCFD’s recommendations for categorization of climaterelated risks: Acute risk: Extreme weather events such as cyclones or river floods Chronic risk: Gradual changes in key climate variables such as temperature, humidity and precipitation The climate risk assessment references wellestablished and recognized indexes, research and studies such as the Intergovernmental Panel on Climate Change, Munich RE (Standardised Precipitation-Evapotranspiration Index, Fire Weather Index, Heat Stress Index), HighResolution Forecast-Oriented Low Ocean Resolution (HiFLOR) model as shared by the NOAA Geophysical Fluid Dynamics Laboratory, Saffir-Simpson scale for tropical cyclones and JBA flood maps, WWF Risk Filter, WRI Aqueduct Water Risk Atlas and Climate Central Coastal Flood Screening tool. We use a quantitative scenario assessment to evaluate transition risks related to policy and legal changes, specifically carbon pricing. The International Energy Agency’s Global Energy and Climate Model and Singapore’s carbon pricing scheme provided the foundation for this assessment with stated policies (STEPS) and net zero emissions by 2050 (NZE) scenarios at varying time horizons (2030, 2050) included. Other transition risks such as new technologies, updated market requirements, emerging reputation considerations and supply chain issues are identified in a qualitative manner. Identification and Mitigation Our assessment takes into consideration the most commonly disclosed climate-related risks. Identified physical and transition risks include increased severity of extreme weather events, precipitation, heat stress and rising mean temperatures, sea level risk, coastal and river flooding, water stress, carbon tax schemes and climate regulations, changes in consumer preferences, reputational risk and inability to meet our ESG commitments. We believe these risks are relevant to our organization but may not be material at this time. As we continue to review and reassess which risk management strategy is most appropriate (mitigation, adaptation or acceptance), a number of measures to address climate risk have been put in place including development of business continuity plans and acquisition of insurance policies to address severe weather events. Systems within our properties, such as our water removal infrastructure, air conditioning infrastructure and entrance berms are designed for scenarios beyond those predicted within our assessment. In addition, energy- and water-efficiency projects, along with our approved science-based emissionsreduction goal and renewable energy strategy, help lower utility consumption and offset costs related to potential increases in temperature. The company also identified climate-related opportunities with respect to operating costs and sustainable service options. We continually seek energy- and water-efficient alternatives and initiatives to implement throughout our resort portfolio and expand sustainable options primarily to our MICE and food and beverage customers. 103 Further information can be found in the TCFD Index on page 103. APPENDIX GOVERNANCE SOCIAL ENVIRONMENT OUR PERFORMANCE INTRODUCTION OUR STRATEGY 43 CLOSING
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