47 Arise IIP | Sustainability Report 2023 Corporate Governance and Business Ethics FOSTERING ACTION ON CLIMATE CHANGE Fostering Responsible Supply Chains Fostering an Inclusive Workplace Charting the Path to Sustainable Growth GRI Index Transition Risks: Policy and Legal: We may face higher costs due to increased carbon pricing or taxes, regulatory carbon markets, Carbon Border Adjustment Mechanism (CBAM) imposed on emission-generating assets or indirectly through increased expenses for utilities and raw materials. Failure to comply can result in litigation and financial penalties. Compliance with additional regulations, such as higher water tariffs, taxes on non-sustainably managed forests, could result in increased operational costs. Technological Risk: The development of new materials and technologies for reduction of GHG emissions, and meeting low carbon construction standards, and reduction of emissions from electricity and transportation sectors is essential. However, transitioning to these new technologies and alternative solutions may require significant capital expenditure. According to the IEA, all the technologies required to solve the climate crisis already exist, however there is a financial gap to allow this ecological transition. Market Risks: Changing consumer preferences driven by climate change are shaping the expectations placed on companies. Reputational Risk: Consumers and stakeholders may express concerns if Arise IIP is perceived as not meeting societal expectations regarding climate action, potentially damaging the company’s reputation. Our presence in Africa, a continent highly vulnerable to climate change, compels us to take on the responsibility of mitigating environmental pressures while advocating for economic development. It is in this context, that we are striving for carbon neutrality as a crucial pillar of our ESG strategy. We are dedicated to identifying and executing GHG emission reductions projects throughout our business operations, with the aim of achieving a low-carbon footprint or neutrality in the near future. Our approach towards climate change is in line with the guidelines set by the Paris Agreement to limit global temperature rise to well below 2°C, ideally within 1.5°C. For our Gabon SEZ, we have signed a commitment letter to the Science Based Targets Initiative (SBTi) in the reporting period, committing to achieving net zero emissions by 2050. We aim to achieve a scale of reduction consistent with achieving carbon abatement pathways and neutralize the impact of any residual emissions by permanently removing the equivalent volume of atmospheric CO2. Climate change is also considered a crucial governance issue at the Board level, and it is regularly discussed in various contexts such as strategy discussions, business performance, investment decisions, and the assessment of scenario triggers and signposts. The ESG Committee of the Board and Board members bring diverse expertise from sectors including resources, energy, finance, government, and public policy at Arise IIP. Greenhouse Gas Emissions We prioritize efforts to reduce emissions across our global operations and along all our value chain. We have already commenced our commitment to reducing Scope 2 emissions through renewable electricity usage, we are working towards reducing our Scope 1 emissions through
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