the extent of plantation affected. A notable outcome of these efforts has been a significant reduction in fire incidents since 2023, a testament to the efforts of the crisis team and respective risk owners. We are refining our financial projection methodology and will publicly report when we have more confidence in our methodology and in line with regulatory reporting requirements. Scenario Analysis We completed our first TCFD-aligned climate scenario analysis in 2022 and updated it in 2023 with targeted focus areas. This included a detailed yield assessment using ten years of internal regional data on temperature and FFB performance, combined with World Bank climate projections for Indonesia through 2051. Climate-related risks and opportunities were evaluated under two warming scenarios: 2°C increase above pre-industrial levels by 2100 – aligned with the Paris Agreement, assuming strong policy action and transitional risks during the shift to a low-carbon economy. 4°C increase above pre-industrial levels by 2100 – a business-as-usual path with no major interventions, leading to more severe physical impacts. Our analysis highlighted potential effects on FFB yields and the need for additional flood mitigation measures. Conversely, water deficit and fire risk were sufficiently managed by our existing risk mitigation measures. The results of the analysis are summarised on pages 24-28 of our FY2023 Sustainability Report. We are increasing renewable fuel use, demonstrated by the Lubuk Pakam Refinery’s 2018 transition from coal to palm shell for its boilers. Renewable energy practices from our palm oil operations have also been rolled out to other crop facilities, including two rubber factories, two sugar factories, one tea factory, and one cocoa factory. These sites use renewable energy derived from palm shells and sugarcane bagasse10. Although our mills represent a minority of our total non-renewable energy consumption, we are assessing the feasibility of installing solar panels at remote locations that are not connected to the state electricity grid (currently, 14 out of 27 mills rely on grid electricity). We are also performing a study to evaluate the feasibility of transforming POME biogas into electricity and bio-CNG, with the potential to market these products in the industrial sector. As we introduce new initiatives, we continue to monitor and conduct audits to evaluate their performance. Successful measures are scaled and replicated at other locations, adapting them as necessary to reflect site-specific conditions. This approach forms part of our broader renewable energy strategy, which is aligned with government regulations and quotas. In addition, we are certifying more facilities under ISO 50001 energy management standards to systematically improve efficiency, reduce costs and enhance environmental performance. Detailed energy consumption data can be found on pages 66-68 in the Appendix. TASKFORCE FOR CLIMATE-RELATED DISCLOSURES (TCFD) Risk and Opportunity Management To strengthen our resilience against climate-related risks, we began aligning with TCFD recommendations since 2022. The Board of Directors provides continuous oversight of our risk management efforts. To support this, the Board receives a detailed analysis, including key insights and actionable recommendations, every three months. In 2023, we enhanced our ERM framework, by integrating climate-related physical and transition risk. The team worked closely with the research, sustainability, and operations teams to assess climate risks and embed them into a matrix that evaluates both financial and operational impacts, considering their potential and likelihood of occurrence. Recognising the inherent physical risks of fire, flood, and drought, we maintain a robust data collection system, gathering quarterly data from our operations on incidents, weather, hotspots, and infrastructure. This data-driven approach allows us to analyse past events, predict future risks, and implement proactive management strategies. We monitor and record losses resulting from climate-related events, particularly drought, fire and flooding. We produce quarterly reports for the sustainability committee indicating 98% of fuel used in mills is from renewable sources 23 energy managers and 9 energy auditors across all facilities, who identify and implement energy reduction initiatives 10 Sugarcane bagasse refers to the fibrous material left after extracting juice from sugarcane. 30 Indofood Agri Resources Ltd. Sustainability Report 2025 Sourcing Appendix Product Community People Environment Our Business Our Approach At a Glance CEO Statement
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