Manulife US REIT - Annual Report 2021

MANULIFE US REIT 78 Enterprise Risk Management Key Risks Details Key Mitigation Actions Information Technology, Business Disruption and System Failure Risks • Unauthorised access, disclosure, modification or deletion of sensitive and confidential data such as market sensitive information that may affect share price, bid information, intellectual property and/or financial information. • Information resources are not securely developed, transmitted or stored and cyber security being compromised. • TheManager has anenterprise-widebusiness continuity and disaster recovery programme. This includes policies, plans and procedures that seek to minimise the impact of natural or man-made disasters, and is designed to ensure that key business functions can continue normal operations in the event of a major disruption. • The business continuity team also establishes and conducts regular testing. Property Damage Risk • Significant damage to property as a result of severe events caused by natural and other disasters, human negligence or wilful attack may severely disrupt MUST’s business operations and lead to the loss of rental from tenants. • Each property has adequate insurance coverage for the risks such as all risk, wind, flood, fire, earth movement, gross rent loss, vandalism/publicdisturbance and terrorism. • With support from its Sponsor, the Manager has in place a global Business Continuity Plan (BCP). This includes policies and procedures that seek tominimise the impact of natural or man-made disasters, and is designed to ensure that key business functions can continue normal operations in the event of a major disruption. • The business continuity teamestablishes and conducts regular BCP testing. Environmental Risk • Physical risk arises from the impact of weather events and long-termor widespread environmental changes, such as climate change, fire and earthquake. • Transitional risk arises from the processes of adjustment to an environmentally sustainable economy, such as punitive actions for polluting the environment and changed expectation fromthe stakeholders to address environment impact. • The Manager follows the Sponsor’s sustainable real estate policy and works in conjunction with the Sponsor to implement various initiatives to drive a greener future such as environmental management system, green building certification, carbon emissions and energy efficiency. • Assessment of potential acquisition includes examinat ion of env i ronmental and soc ial sustainability risks and opportunities. Pandemic Risk • An epidemic of an infectious disease has spread across a large region, for instance multiple continents or worldwide, affecting a substantial number of people. • This could affect MUST's office business as a result of a decline in office usage and demand, adverse effects on tenants' business, as well as health and safety concerns of our tenants, employees and vendors. • Pandemic risk can have an adverse impact on the business operations, financial results and future prospect, leading to downward valuation of MUST's properties. • The business continuity teamestablishes and conducts regular BCP testing. • Established playbooks such as Return to Office: Tenant Guidebook and Return toOffice: Best Practices Playbook to provide guidance on what needs to be done amidst the COVID-19 pandemic.