Annual Report 2025

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT (CONTINUED) 90 China Merchants China Direct Investments Limited Annual Report 2025 ENVIRONMENTAL PROTECTION (CONTINUED) Climate-related Disclosure (continued) Climate-related Strategy (continued) Based on the current assessment, and considering the mitigation and adaptation measures already implemented, the residual level of climate-related risk in the short, medium, and long term is regarded as minimal. Accordingly, such risks are not expected to exert a material effect on our financial statements, cash flows, access to financing, or cost of capital, either at present or in the foreseeable future. Risk Management The Company adopts a qualitative approach to identifying and assessing climate-related risks and opportunities. The scope of the assessment covers all of the Company’s operations and business units. Senior management, together with members of the ESG Taskforce, conduct qualitative evaluations at least annually to identify emerging climate-related issues, such as evolving climate trends, regulatory developments, industry dynamics, technological advancements, and stakeholder expectations, with the support of an external ESG consultant. The likelihood and potential financial impact of the risks and opportunities identified are evaluated with reference to the Company’s operations and value chain, providing a comprehensive understanding of our exposure. The findings and outcomes of the assessment are subsequently submitted to the Board for oversight and review. ESG-related risks and opportunities, including those associated with climate change, are included in the Company’s enterprise-wide risk management framework, which covers risk identification, risk assessment, risk response, and risk monitoring and reporting. These risks are managed through the same governance structure used for other material business risks, such as financial, operational, and compliance risks, to ensure consistency, comparability, and accountability across all risk categories. The Board, supported by the Audit Committee, holds overall responsibility for establishing, maintaining, and overseeing the effectiveness of the risk management and internal control systems on an ongoing basis, including conducting an annual review of their effectiveness across all material controls (financial, operational, and compliance). In addition, the Board has appointed an international accountancy firm to perform ongoing reviews of the internal control systems, covering material controls and risk. For further details, please refer to the section of Risk Management and Internal Control of the Annual Report.