EY Climate Change and

Sustainability Services

2022
Global scale

EY’s strong global connectivity enables us

to assemble the right teams, share
leading practices across the world and

300+
deliver insights that are relevant to you
across your business.
EY is a world leader in the provision of

600+
PROFESSIONALS
strategic climate change services.
AMERICAS
500+
We have made considerable investment in
our climate change capability over the PROFESSIONALS
past 10 years.
EMEIA PROFESSIONALS
This investment has expanded our global
network to over 1,400 dedicated climate
change and sustainability professionals. ASIA-PACIFIC
Our team has global reach with capacity
to support organisations with
multinational operations.
In addition, our dedicated climate change
and sustainability team leverages the
experiences and expertise of EY’s risk,
strategy, finance and sector specialists. Over Supporting our
To that end, we have a proven track
record of seamlessly leveraging climate 1,400+ clients today Embedded in
change, risk, financial accounting,
sector, actuarial science and data
climate and on their technology, strategy
analytics expertise across EY to develop sustainability decarbonization and sector teams
and deliver fit-for-purpose climate- specialists strategies across EY
related risk solutions.

2
Introduction to Sustainability

Sustainability is the
Sustainable Development
ability to meet present
needs without
compromising future
generations to meet
Economic Environment Social Governance
their needs
Our Common Future, a.k.a. the Brundtland Report

Page 3
 Clarifying the key concepts

Sustainability as a strategy ESG as a focus area

Enables companies to protect and

create value.
Defined in a variety of ways, with some
focusing narrowly in the sense of “green”
sustainability, others focusing more
broadly on environment, social and
governance (ESG) issues, and others
using it as a blanket term for “doing
better in business, and doing good
beyond business”.
Increasingly utilized globally by investors,
stock exchanges and ETF sponsors.
WEF-IBC metrics, now supported by 70
businesses, support ESG measurement
and disclosures.
Often used interchangeably with
sustainability, but focuses on a specific set
of topics.

Underpinned by long-term value

Focus on purpose, value creation, stakeholder outcomes, financial and non-financial KPIs or
metrics, and long-term impact.

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15 March Board Agenda Series
 Examples of ESG matters
Environmental
• waste management
• emissions impact
• energy efficiency
• air and water pollution,
• environmental protection
• biodiversity loss and
restoration
• Climate change
Page 5
Social Corporate governance
• human rights • ownership and structural
• labor rights transparency
• working conditions • shareholder rights
• health and safety • board of directors’
independence and
• employee relations,
oversight
• employment equity
• diversity
• gender diversity
• data transparency
• pay gaps
• business ethics
• anti-corruption
• executive compensation
fairness
Environmental & social risks are growing in prominence

Economic risks
have been
entirely edged
out of the Top 5
From 2007 to 2020, top risks from impact & likelihood has gradually shifted from risks in terms of
Economic to Environmental impact and
likelihood in
recent years.

Page 6
Source: World Economic Forum. (15 Jan 2020). The Global Risks Report 2020
Environmental risks are today’s top risks in terms of likelihood and impact

Source: World Economic Forum – The Global Risks Report 2020

 Pressure is coming from mounting evidence of climate change and associated
negative impact on economic and social foundations
Natural disasters exacerbated by climate change including hurricanes, floods and wildfires cost the global economy
$210b in 2020 according to reinsurance company Munich Re, up 26.5% on 2019

40 Global historical CO2 emissions 1900-2020

In 2020 the US saw a record number
35 of billion-dollar weather and climate
Emissions in billion metric tons

2019 - CO2 disasters

30
levels 415ppm
Mean global
25 temperature is
There were 22 disasters in total
1960 - CO2 14.8°C costing the economy almost $100b
20 levels 315ppm in total
Mean global
1850-1890 - temperature
15
CO2 levels 13.9°C The world is currently warmer than it Between 1980 and 2020 billion-
290ppm has been for tens of thousands of dollar climate and weather disasters
10 Mean global years and has more CO2 particles in have cost a cumulative $1.875t and
temperature the atmosphere than it has for millions resulted in almost 15,000 deaths
5 ~13.6°C of years

Historical carbon dioxide emissions from global fossil fuel combustion and industrial processes from 1758 to 2020* (in billion metric tons)
Source(s): Global Carbon Project NOAA

SGX Workshop on TCFD – Finance

16
Page 8
This can be distilled into four key drivers

Investors Government or Regulators

► Demand for nonfinancial information and transparency ► International agreements
on company’s ► Government policies and laws
ESG performance
► Incentive schemes
► Themselves taking action through investor-led initiatives
► National development strategies (e.g., green growth)
The Glasgow Financial Alliance for Net Zero (GFANZ) brings together 139 governments – responsible for more than 85% of global
$130 trillion in assets from 450 firms across 45 countries to steer the emissions – are considering or already implementing commitments
global economy towards net-zero emissions to net zero.

Customers Corporate action

► Demand for supply
chain optimization ► Improve competitiveness and respond to industry
pressure
► Demand for
sustainable products, ► Maintain social licence to operate
health and safety and
support for local Climate change is seen as a top three challenge to negatively
communities impact business growth (32% of CEOs, 28% of boards, 44 %
investors)

Page 9
Mounting investor pressure

American asset S&P

manager with Downgraded credit ratings of top oil majors and revised risk profile
US$3.1t AUM over concerns over climate risks and earnings
Started voting
against
companies that are ESG
laggards based on their Global asset manager in over 80 countries
R-Factor™ scores (ESG scoring Divests £2b in investment because of concerns over breaches to
system) and that cannot articulate
the modern slavery act
a plan to improve in 2020

Sovereign wealth fund in Asia

American global Ruled out investing in major Saudi oil company’s initial
public offering, in part over environmental concerns
investment company
Launched US$1.3b Asset manager part of UK insurance group
global impact fund,
dedicated to investment in
companies whose core business Committed £1b in loans to real estate carbon reduction with
provides commercial solutions to the intention to seek out real estate loan investment opportunities that are
an environmental or social aligned with the UN SDGs
challenge

Page
Page 1111 Board readiness for AGM: value creation for the long term
Investors are also actively decarbonizing their portfolios

World’s largest asset manager

>450
Investors globally, who
collectively manage more than
US$40t in AUM, are signatories
to Climate Action 100+
- June 2020
• Publicly disclosed and voted against 53 companies making
“insufficient progress integrating climate risk into
business models or disclosures”
• Placed remaining 191 on watchlist
• Joined Climate Action 100+
• Started asking investee companies to disclose plans to
achieve net zero emissions from Jan 2021

US$5 Leading asset manager in

trillion Singapore
• Pledged to halve portfolio emissions by 2030 (using 2010
of AUM pledged under as baseline)
UN-convened Net-Zero • Long-term ambition to deliver a net-zero emissions
Asset Owner alliance portfolio by 2050
• Uses internal carbon price of US$42/ton to guide decisions
on new investments

Page
Page 1212 10 March 2021 Board readiness for AGM: value creation for the long term
Regulators: Looking beyond home country
Example: EU Corporate Sustainability Due Diligence
EU companies
Group 1
Companies and other undertakings
with more than 500 employees on
average and a net annual turnover
of €150 million
SMEs and micro
companies are not
directly included
Financial undertakings
providing loans, credit or
other financial services are
subject to the Directive.
Page 14
Non-EU companies
Group 2
Companies and other undertakings Those that have a direct link to the
with more than 250 employees on EU market and meet the same
average and a net annual turnover of turnover thresholds within the EU
€40 million, provided that at least 50%
of it was generated in one or more of market as the EU companies
the following sectors: covered except the employee
• Manufacture of textiles, footwear or criterion (i.e., Group 1 and 2)
the wholesale trade of textiles,
clothing and footwear
• Agriculture, forestry, fisheries;
manufacture of food products; or About 13,000
wholesale trade of agricultural raw
materials, live animals, wood, food EU companies
and beverages and 4,000 non-
• Extraction, manufacture or
wholesale of mineral resources EU companies
covered
Regulators: Looking beyond home country
Example: EU Corporate Sustainability Due Diligence – Key requirements

1 2 3
Adopt and integrate a Identify and assess actual Prevent, mitigate or
policy for supply chain or potential adverse cease actual or potential
due diligence human rights and adverse impacts
environmental impacts

4 5 6
Establish and maintain a Monitor effectiveness of Publicly report
complaints procedure policy

Page 15
Regulators: Looking beyond home country
Example: EU Carbon Border Adjustment Mechanism (CBAM)

Goods originating in non-EU EU import clearance EU customs territory

(and few non-EU countries with similar arrangements)

Landed cost =
EU Import Duty
+ CBAM charge
(price on product embedded
emissions)

Geographic scope Product scope Procedure

• CBAM reporting done by
Diverse energy intensive raw 2023 customs declarant
materials and products from the
following categories: • Imports to be made by Authorized
• Cement Declarant only
• Purchase CBAM certificates +
• Fertilizers
2026 annual declaration
• Iron & Steel • Independent verifiers to certify
• Aluminum emission calculation, Carbon cost
and CBAM declaration
• Electricity

Import from non-EU, except: Further products expected to be

covered, e.g.: organic and inorganic
Switzerland Iceland (base) chemicals, polymers, standard
Norway Lichtenstein refinery products and others

Page 16
 Other key global initiatives advancing climate-related disclosure requirements

1
On 31 March 2022, the ISSB released its long-awaited two proposed standards – one on climate-
related disclosure requirements and one on general sustainability-related disclosure requirements.
• These exposure drafts build on the work of the TCFD and incorporate sector-based disclosure
International requirements derived from Sustainability Accounting Standards Board (SASB) standards
Sustainability Standards • The ISSB is currently seeking feedback on these proposals over a 120-day period, which is ended
Board (ISSB) on 29 July 2022. The ISSB will then review this feedback and aims to issue final standards by the
end of the year.

In March 2022, the US SEC voted to advance a climate-related proposal that would require domestic
2 and foreign SEC-registered companies to disclose information about climate-related risks and
governance as well as various climate metrics, including Scopes 1 and 2 greenhouse gas (GHG)
emissions and in some cases Scope 3 GHG emissions.
US Securities and
• Certain disclosures would be required in the financial statements, while others, including GHG
Exchange Commission
emissions, would be placed with non-financial disclosures in registration statements and periodic
(SEC) reports (e.g., 10-Ks and 20-Fs).
• The proposal would require assurance over certain climate-related information, allowing for other
service providers to provide assurance on GHG emissions in addition to PCAOB registered firms
with GHG expertise.

SGX Workshop on TCFD

17 – Finance
16
Page
Customers: Corporates are themselves taking action
Example of Toyota

Source: Toyota Global

Page 18
Biggest Challenges faced by Board and C-Suite : The key questions

ESG data
“Where can we get the necessary
information in time and quality
ESG strategy required?” Operations
“How should we position “What does all that mean for our
ourselves with regards to ESG production process?”
corporate strategy?” 1

ESG Net zero

ESG integration Challenges „How to deal with
“How can we ensure ESG is decarbonization?“
integrated across the entire value
chain in a consistent way?”

ESG regulation
Customers “Are we compliant with existing
“What do our clients expect from and upcoming ESG regulations
us?” across all relevant jurisdictions?”

Page 21
Page 21 16 December 2022 Presentation title
 Now, next and beyond: How do companies usually respond?

Beyond
Next As companies reframe
As the company builds the future
Now a resilient enterprise
Immediate response
• Work with management to
• Ensure sufficient capacity within develop strategic roadmaps or
• Evaluate the company’s the organization, e.g., use of blueprints to drive action
current state of maturity tools and enablers and building • Formalize a corporate 1.5-2oC
• Identify material staff capabilities roadmap with clear targets
sustainability risks • Integrate sustainability risks (aligned with Science-Based
and opportunities into enterprise risk management Targets Initiative and TCFD
• Begin conversations within and continually assess frameworks)
management and with the and monitor
Board on sustainability
issues

Page 22
10 March Board readiness for AGM: value
Introduction to EY CCaSS Services

About EY CCaSS

EY CCaSS is a local and global leader

in strategic sustainability advisory
and assurance services.

Since 2008, our local team has

helped dozens of organisations
kickstart and advance their
sustainability journey. Our tried and
tested approach helps facilitate their
shift towards integrated thinking and
long-term value creation for all
stakeholders. The work we do helps
inspire trust in capital markets and
foster enduring, sustainable growth.

At EY, we’re making it our purpose

to help build a better working world.
One step at a time.

Together, we believe we can

reframe the future we want.

Page 23 Confidential
EY CCaSS Singapore – A team with extensive ESG experience
Cooperating with standard
markers
Select nominations:
• Technical Committee at Enterprise
Singapore for Environment and
Sustainability
• Expert Board member at MSE for Carbon
Pricing Act
• ISCA Corporate Reporting Committee
(Sustainability)
• GRI Consortium member
• SASB Standards Board
• Other nominations and EY representation
includes, TCFD, IIRC and more
Page 24
Collaborating to build capability
and advance the sustainability
landscape
Select initiatives:
• Collaborated with Sustainable Energy
Association of Singapore (SEAS) to launch
Singapore’s first GHG Manager programme
• Partnered with UN GCNS and SMU to lead
Environment Management and Community
Investment module for executive education
Appointed by Maritime and Port Authority
• (MAS) and SGX to Financial Center Advisory
(MPA) to conduct sustainability reporting
training sessions for maritime industry
• Appointed by SGX to provide sustainability
reporting training for listed companies
Working with government agencies
and regulators
Select engagements:
Partnered with MPA to launch the first sector-
•
specific Maritime Sustainability Reporting Guide
• Appointed by National Environment Agency
(NEA) to design Singapore’s Monitoring and
Reporting (M&R) scheme for Carbon Tax
• Engaged by NEA to validate all taxable facilities
for Carbon Tax in Singapore
• Nominated by Monetary Authority of Singapore
Panel (FCAP) committee to improve non-
financial disclosures for financial institutions
Supporting sustainability leaders
• Our local team comprises >20 dedicated
professionals with diverse expertise, making
us one of the largest sustainability advisory
teams in Singapore with bandwidth to work
closely with you
Strong expertise through the provision of
•
sustainability and climate change advisory/
assurance services to >100 leading
organisations across various industries
• Supported >50% of the top constituents of
the iEdge SG ESG Leaders Index on their
sustainability journey
 Let’s continue the
conversation
Contact us:
Simon Yeo
Partner, CCaSS
Office: +65 6309 6845
Mobile: +65 9692 2170
Simon.Yeo@sg.ey.com

Nhan Quang
Director, CCaSS
Office: +65 6309 6136
Mobile: +65 8691 1954
Nhan.quang@sg.ey.com