Materiality Assessment

To identify topics that comprehensively reflect changes in the global and business environment, the Company considers a broad range of inputs as follows:

• Analyze the Company’s sustainability and business context in alignment with: (1) corporate strategy development context, (2) enterprise risk factors, and (3) organizational management systems.
• Analyze the value chain and organizational context by assessing activities across the upstream-to-downstream value chain and the Company’s business ecosystem, including shopping centers, residences, office buildings, and hotels. This helps identify linkages with key stakeholders, such as customers, business partners, employees, and communities, as well as enterprise risks and short-, medium-, and long-term business strategy directions.
• Assess risks and opportunities through driver analysis based on the six-capital framework, covering financial, manufactured, natural, human, intellectual, and social capital, to reflect the Company’s overall resource use and value creation in a comprehensive manner.

Analyze sustainability trends and international standards by referencing global trends from the World Economic Forum (WEF) and the Organization for Economic Co-operation and Development (OECD), as well as topics of interest from sustainability assessment institutions and standards, such as the Dow Jones Best-in-Class Indices, the International Sustainability Standards Board (ISSB), and the Sustainability Accounting Standards Board (SASB). The analysis also incorporates feedback from stakeholders, including customers, tenants, business partners, employees, communities, government agencies, creditors, and shareholders.

Review all identified topics against topics from previous years, add or reduce relevant topics, and categorize them into topics and sub-topics using both top-down and bottom-up approaches. The top-down process draws from corporate strategy formulation, while the bottom-up process incorporates stakeholder listening and engagement. This process is reviewed annually as part of corporate strategy formulation and enterprise risk identification.

• Impact Materiality / Inside-Out: Assess actual and potential positive and negative impacts of each sustainability issue on stakeholders in a broad context. Impact severity is assessed based on the following criteria:

  • Scale: the severity or magnitude of impacts, including harm or benefits to people or the environment. The assessment refers to the GRI Standards and IFRS S1 and S2 sustainability disclosure standards, together with criteria specific to the real estate development industry and other international standards, including SASB, ESRS under the CSRD framework, GRESB, TCFD, and S&P Global CSA. Stakeholder opinions and recommendations are also incorporated into the weighted calculation for relevant topics, specifically those prioritized by stakeholders.
  • Scope: the extent of impacts, considering both the number of people affected and the geographical area affected.
  • Irremediable Character: assessed only for negative impacts, considering the difficulty, time required, and feasibility of remedying or restoring the damage to its original condition.

  In addition, the Company has begun applying the concept of Impact Valuation to measure impacts more quantitatively by converting social and environmental impacts into economic value.

• Financial Materiality / Outside-In: Assess risks and opportunities arising from external factors that may create positive or negative impacts on the Company’s financial position, cash flows, assets, and reputation over the short, medium, and long term. This aligns with sustainability-related financial reporting frameworks. The Company has defined assessment criteria covering the scale of financial impacts, likelihood of occurrence, financial-cost risks, and the Company’s preparedness to manage such impacts.

Identified topics are prioritized and presented through the Materiality Matrix. Topics assessed as having very high significance are translated into the Company’s key performance indicators and are validated and assured for transparency and credibility through the following processes:

• Internal review by the Disclosure Taskforce, with endorsement from the Risk Management Committee and the Corporate Governance and Sustainability Development Committee.
• External Assurance: The Company engages an external independent verifier to review the materiality assessment and stakeholder engagement process strengthening confidence in the completeness and reliability of disclosed information, in accordance with AA1000AS v3 and ISAE 3000.

• The Disclosure Taskforce discloses the approved outcomes on the Company’s website and integrates them into corporate strategy planning and enterprise risk management in a concrete manner. Topics assessed as “very high” significance, or Key Material Topics, are translated into annual Sustainability OKRs and Key ESG Risk Indicators. These topics are also linked to performance evaluation and compensation decisions, including salaries and bonuses, for the Chief Executive Officer, senior executives, and employees across the organization to drive sustainability into practice. This approach is reported in “Compensation Structure Linked to Sustainability Performance”