69 ANNUAL REPORT 2023 We have aligned our sustainability framework to global standards, including adopting recommendations from Task Force on Climate-related Financial Disclosures and Global Reporting Initiative. We constantly leverage technologies and digital solutions to monitor our sustainability performance across our business operations in the Group and work closely with our partners, suppliers and contractors throughout the value chain. We will continue to invest and demonstrate our commitment to being a responsible corporation. B. OPERATIONAL RISK PROJECT MANAGEMENT As a contractor and system integrator, CSE is subject to the risks of increased project costs, disputes and unexpected implementation delays, any of which can result in an inability to meet projected completion dates. We face potential project execution risks when projects are not accurately scoped or the quality of service performance is not up to customers’ specifications, resulting in over-commitments to customers, as well as inadequate resource allocation and scheduling. These can lead to cost overruns, project delays and losses. The Group has a project risk management framework in place with processes for regular risk assessment, performance monitoring and reporting of key projects. Particular attention is given to technically challenging and high value projects, including greenfield developments, as well as those that involve new technology or operations in a new country. Projects are managed in accordance to the respective country’s environmental laws and labour practices. HEALTH, SAFETY & ENVIRONMENT Maintaining a high level of health, safety and environmental (HSE) standards is of paramount importance to the Group. As such, we are constantly raising awareness and building a HSE culture at the ground level. Key initiatives include driving a zero fatality strategy across our global operations, enhancing competency of employees performing safety-critical tasks, strengthening operational controls, as well as developing more proactive and leading metrics to monitor HSE performance. Environmental management practices in key operating sites are also closely monitored. As a Group, we continue to embrace and leverage technology to improve HSE processes and systems. SUPPLY CHAIN MANAGEMENT We rely on vendors and service providers and their extended supply chain in many aspects of our businesses. Accordingly, our operations and reputation may be affected by vendors or their supply chains failing to perform their obligations or failing to operate in line with increased expectations of key stakeholders such as government, regulators and customers on a broadening set of ESG issues. In addition, the industry is dominated by a few key vendors for such services and equipment. Any severe delays, failure or refusal by a key vendor to provide such services or equipment arising from disruptions caused by global pandemics, component shortages, government-imposed bans on vendors and/or sanctions due to security and other concerns, or any consolidation of the industry, may significantly affect our business and operations. We monitor new legislation introduced as well as the developments and restrictions by governments and regulators on various vendors to ensure our key vendors comply with the relevant laws and regulations. We also monitor our relationships with key vendors closely and develop new relationships to mitigate supply risks. We have in place a supply chain management process, including supplier selection and supplier review processes, which is regularly updated to manage risks that may exist in our supply chain (Refer to the CSE Group Sustainability Report for more details). BUSINESS CONTINUITY We are committed to enhancing operational resilience through a robust Business Continuity Plan (BCP) that will equip us to respond effectively to disruptions, while continuing with critical business functions and minimising the impact on our people, operations and assets. As a Group, we have increased efforts in reviewing and testing our operational preparedness and effectiveness of these plans. Follow up actions are taken to strengthen operational resilience and key learning points are documented. Crisis management and communication procedures have also been embedded into the Group’s BCP processes. These procedures are constantly refined to allow us to respond in an orderly and coordinated way, as well as to expedite recovery. Our focus is on building capabilities to respond to crises effectively while safeguarding our people, assets and the interests of our stakeholders. RISK GOVERNANCE AND INTERNAL CONTROL
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