Upgrade climate risk governance Sustainability decisions should be treated with the same importance as financial decisions. Adam Pradela, Chief Financial Officer, Corporate Sustainability, DHL GroupEstablish or adapt risk, financial and strategic governance Climate risk is a strategic imperative that requires ownership at all levels, including the Executive Committee and Board. To truly embed climate risk governance, companies should integrate it fully into their risk management, strategy and financial planning. This is key to ensuring business development plans are adequately informed by climate considerations. AIA has revised its investment criteria, ensuring that new investments align with the company’s net-zero commitments and overall resilience. Its governance structure also includes regular portfolio reviews to maintain alignment with climate goals and allow for adjustments as needed. Source: BCG.CASE STUDY 8 AIA investment governance At the operational level, it is essential to cascade climate risk management objectives and KPIs into business objectives to create ownership and accountability across an organization. This should be supported by clear policies and guidelines from the top, ensuring that relevant functions within a company are actively driving and owning climate risk management. Embed climate risk into decision processes Companies should integrate climate risks into their decision-making processes. By systematically embedding climate risk considerations into decisions of all kinds – strategy formulation, CapEx plans, investment approvals, supplier selection, maintenance planning and more – businesses can better anticipate future challenges, avoid unforeseen costs and align strategies with stakeholder expectations. We have built a robust climate governance, which includes a NetZero oversight committee and an executive body committee dedicated to oversee all ESG-related matters, including climate- related matters, monitor performance against ESG goals and ensure that we continue to integrate ESG into our strategy, operations and culture. Amita Chaudhury, Group Head of Sustainability, AIA GroupEnabler 1 46 The Cost of Inaction: A CEO Guide to Navigating Climate Risk

The Cost of Inaction 2024