scenario The NDC scenario includes all pledged policies, even if not yet implemented, based on the trajectory associated with global NDC commitments to limit the impact of climate change. 2-3°C Moderate Moderate RISK MANAGEMENT We adopt the TNB Risk Management Framework to assess and mitigate transition and physical risks and opportunities across TNB business entities integrated into day-to-day operations. For more information on sustainability governance, please refer to pages 58-59 of the Sustainability Statement. Refer to the SORMIC report page 184-191. GOVERNANCE The TNB Sustainability Governance Structure governs climate-related matters. Climate Resiliency In reference to the Representative Concentrating Pathways (RCP) scenarios from the Intergovernmental Panel on Climate Change (IPCC) and scenarios proposed by the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), the following arethe risk exposures to our business: Metric & Target TENAGA NASIONAL BERHAD Integrated Annual Report 2023 108 Transition Risks and Opportunities Our transition risk exposures are associated with transitioning to a low-carbon economy and achieving carbon neutrality by 2050, which is the nation’s aspiration. Type No Transition Risk Short/Medium/ Long Term* Potential Impact Management Approach Policy & Legal 1 Carbon Price Uncertainty about the government implementing carbon pricing as an instrument to capture the external cost of GHG emission Medium term Cost Implement a decarbonisation strategy as per the TNB Energy Transition Plan Active engagement with regulatory bodies and government agencies on carbon pricing regulations 2 Emissions Reporting Obligations Increased expectations from regulatory bodies to track and publicly report emissions Short term Cost Digitalise emission data and indicators Monitor and report emission metrics and performance for informed decisions Embark on greenhouse gas (GHG) scope 3 emissions measurement Active engagement with regulatory bodies to keep abreast of emission