Principles Materiality A materiality assessment identifies and assesses an organization’s sustainability-related impacts, risks and opportunities. The process involves engagement with key stakeholders and evaluates changes in impact over time. The outcomes of the assessment should inform the organization’s strategy and determine reporting content. Key recommendations Describe steps taken to identify, assess and validate key impacts, risks and opportunities, including how the company considers stakeholder perspectives. Describe how the company determines actual and potential impacts on the environment and people, as well as risks and opportunities that affect or may affect the company’s development and performance. Describe how material issues can evolve over time. Clearly disclose assessment outcomes. Demonstrate the involvement of management in the process. Explain how the process aligns with enterprise risk management. Provide external assurance for the process. Methodology notes Information in the body of the report or through clear links to additional resources. Disclosure of outward impacts, financial impacts and dynamic materiality. Of the reports we reviewed: Swire Pacific Swire Pacific’s Sustainability Report 2024 includes a detailed yet concise description of its double and dynamic materiality process. Swire Pacific conducts its materiality assessment every two years. This is an important component of dynamic materiality, indicating how topics change over time. In addition to assessing whether new topics have emerged, the company uses a forward-looking lens to see how topics may evolve in the future. Swire Pacific’s most recent materiality process followed three steps: identification, assessment and prioritization, and validation. During the identification process, the company conducted research to determine an initial list of potentially material topics, considering external sources such as the GRI Standards and ESG investor topics. In the assessment and prioritization phase, the company applied the double materiality lens and engaged with internal and external stakeholders to determine which topics are material. For impact materiality, it considered the likelihood and severity of the impact. For financial materiality, it aligned the assessment with the enterprise risk management framework and considered the severity and likelihood of the impacts. Part of the assessment involved consideration of vulnerability – whether an impact has control mechanisms in place that may affect the severity of the impact. In the third step, management validates the assessment results. It clearly discloses and prioritizes the materiality results on a matrix in the report, indicating both the potential impact on society and the environment and the potential impact on enterprise value. Swire Pacific discloses a detailed description of each topic in a table, showing where the impact occurs in the value chain and describing the inward and outward impact of each topic. % show how the materiality process and enterprise risk management process interact, demonstrating how sustainability risks inform key business decision-making processes. 0 1 2 3 4 5 6 6 0 1 2 3 4 5 6 6