Climate Adaptation
Goal and Performance Highlights
Performance
Goal
Challenges and Opportunities
Beyond reducing greenhouse gas emissions, Central Pattana also faces physical risks arising directly from climate change. These include increasingly severe and unpredictable natural disasters such as floods and droughts, as well as rising average global temperatures. These challenges may affect business continuity, the structural safety of buildings, the management of essential resources such as water and energy, and consumer behavior as environmental conditions change.
Recognizing and preparing for physical risks enables the Company to strengthen organizational climate resilience. Designing and upgrading shopping centers to withstand extreme weather not only protects asset value, but also reinforces Central Pattana shopping centers as safe and dependable centers of life, or Safe Havens, for communities and tenants in every situation. This approach builds trust and helps preserve stable long-term revenue-generating capacity.
| Stakeholders | Opportunities | Challenges |
|---|---|---|
| Tenants and Lessees (Retail and Offices) and Residential Customers | Protected by resilient building structures | Risk of business interruption and merchandise damage from disasters |
| Employees | - | Safety, occupational health, and commuting difficulties during extreme weather events, supported by the BCP |
| Customers | Safety while using services during disasters, supported by the Company's upgrade of buildings into Safe Havens | |
| Suppliers and business partners | - | Risk that supply chains and transportation routes may be disrupted by natural disasters, causing delivery delays |
| Communities / Community representatives including regulators and government bodies, academia and independent organizations | Joint exposure to site-level climate risks, such as floods and droughts, with the Company providing support by making its own spaces available as recovery hubs. | |
| Shareholders | Protection of asset value through preventive CAPEX | Financial risks from asset damage and revenue loss |
| Creditors | Liquidity and debt repayment risks in the event of severe damage, mitigated through insurance-based risk transfer | - |
Management Approach and Value Creation
The Company prioritizes climate resilience through the climate adaptation strategy by integrating physical risk management into enterprise risk management (ERM), project development, and financial planning in accordance with IFRS S1 and IFRS S2. This approach protects asset value and ensures business continuity through the following framework:
Physical Risk Assessment and Scenario Analysis
- Site-specific risk assessment: The Company assesses physical risks across all shopping center and residential project locations, covering acute risks such as floods and severe thunderstorms, as well as chronic risks such as rising global temperatures, drought, and water stress.
- Scenario analysis: The Company uses assessment results under the TCFD framework and IFRS S2 requirements to analyze potential financial impacts over the short, medium, and long term. This informs proactive adaptation directions and assesses portfolio vulnerability.
Asset Protection and Business Continuity
- Resilient building design: The Company integrates climate-proof design criteria from the development of new projects through to the retrofitting of existing assets. Examples include elevating flood-protection areas, selecting construction materials that withstand high heat, and increasing green areas to reduce the urban heat island effect.
- Smart water management: The Company has planned for drought and flood risks by investing in treatment and recycled water systems, as well as rainwater storage systems. These measures reduce reliance on public water sources and mitigate impacts on operating expenses.
- Upgrading shopping centers as Safe Havens: The Company develops business continuity plans (BCP) and internationally benchmarked emergency response plans to ensure that shopping centers can continue operating and serve as reliable safe spaces for communities during disasters. The Company also defines proactive adaptation measures to prevent issues and impacts from more severe climate conditions, such as air quality management measures, upgrades to air engineering systems, and indoor air quality control.
Value Chain and Community Resilience
- Supply chain resilience: The Company assesses and monitors physical risks that may disrupt the supply chain, particularly risks related to shortages of key construction materials and transportation disruption, to reduce financial impacts from project delays.
- Tenant and partner engagement: The Company communicates and coordinates with tenants to prepare for disasters, prevent damage to merchandise, and preserve revenue-generating capacity for both tenants and the Company.
- Community support: The Company works with government and local agencies to use shopping center spaces as hubs for assistance and recovery for surrounding communities during climate-related crises, helping local economies recover quickly.
Financial Planning and Adaptation Metrics
- Capital allocation: The Company integrates climate risk data into CAPEX considerations for preventive building maintenance and investments in adaptation technologies.
- Financial risk transfer: The Company implements financial risk management strategies through property and business interruption insurance that covers natural disasters, protecting organizational cash flow and net profit.
- Metrics and monitoring: The Company defines indicators linked to business resilience, such as the proportion of assets assessed for physical risks, reductions in tap water use, and the estimated value of avoided costs. These metrics are used to review and continuously improve the strategy.
Stakeholders Directly Impacted
Tenants and Lessees (Retail and Offices) and Residential Customers
Employees
Customers
Suppliers and Business Partners
Communities / Community Representatives Including Regulators and Government Bodies, Academia and Independent Organizations
Shareholders
