Lendlease Annual Report 2021

Core operational and market risks Description Mitigation Value creation Health, Safety and Wellbeing Failure to provide an environment which promotes health, safety and wellbeing impacts our ability to achieve our corporate and social responsibilities We are committed to the health, safety and wellbeing of our people. Through our Global Minimum Requirements, which include both physical safety and health and wellbeing, we empower our people to operate in a consistent standard across all our operations Disruption Responsiveness to disruption, including digital disruption as well as other new methods and materials emerging in the investment, development and construction sectors With the increasing dependence on technology, our strategic intent aims to turn disruption into an opportunity by creating a culture that fosters innovation and focuses on adopting leading edge technologies to deliver innovative solutions and generate a competitive point of difference Commercial Commercial performance fails to meet our corporate objectives Our capital deployment guidelines mitigate risk and improve performance. Quarterly business reviews assess business operations against approved strategy to drive consistent, focused and risk assessed investment decisions Execution Failure to execute strategy or projects affects our ability to meet our corporate objectives Our risk management approach and use of stage gates across our property and construction operations contribute to the mitigation of execution risk. To inform our investment decisions, we use internal research to develop a ‘house view’ of property cycles in every region and the strength of our gateway cities Geopolitical Global and local events or shifts in government policy occur in the regions in which we operate, adversely impacting our ability to achieve strategic objectives. Failure to adequately understand governments’ mandates, expectations and performance standards We are committed to growing our business in sectors that are supported by positive global trends. We are sensitive to geopolitical shifts and concentration risk and coordinate our approach to government in all regions to mitigate against sovereign risk Regulatory and Counterparty Non-compliance with regulatory and policy requirements by Lendlease or our clients/suppliers Client, investor or supply chain ethics fail to meet our standards Failure to adequately select, govern and drive value from counterparties Failure to comply with government regulations impacts our ability to access government opportunities To further improve our culture of compliance, we focus on aligning business priorities with the necessary compliance and assurance measures. We are focused on maintaining an ethical and resilient supply chain to ameliorate the risk of material substitution and modern slavery. We have an appetite for relationships with parties who are aligned with our values Corporate Culture Failure to create and maintain culture which supports the Group's core behaviours, principles and values to drive disciplined strategy execution Our values drive our approach to business and delivery of long term value. We empower our people to make business decisions that are aligned to our core values and behaviours, principles, and five areas of value creation. Additionally, each Region has an appointed Voice of Risk who is part of the Regional Leadership Team and has been appointed as an independent participant to challenge both the business and Risk function on enterprise and operational risk Cyber/Data Governance/ Asset Protection Failure of cyber resilience and defence systems. Leakage, misappropriation or unauthorised storage of data. Unauthorised control of systems and physical asset infrastructure (i.e. lifts, security, air conditioning) Physical and data security continue to be key focus areas globally. We invest in preventative technology and education of employees to achieve a sustainable security culture Customer Loss of existing client (including government) relationships, or inability to tailor services to future clients’ needs, impacting the Group's financial objectives Bid leadership training of key employees reinforces understanding of customers’ requirements. Recurrent client survey feedback informs our business strategy. A single platform assists in customer data security and aligns customer service across all regions Non-scalable Growth People: inability to attract, retain and upskill key talent necessary to deliver strategic objectives Process: lack of scalable processes to support predictable growth To deliver the desired level of performance, we continue to invest in growing our core capabilities through active talent management and targeted professional employee development to attract, retain and grow the best people. Our processes are designed to be consistent, scalable and effective Corporate and Environmental Sustainability Failure to comply with regulatory, societal and investor expectations of corporate and environmental sustainability such as climate change and social responsibility We are committed to creating places where communities thrive and optimising our corporate and environmental sustainability performance (including climate change and social responsibility) through our Sustainability Framework and integrating sustainability considerations into our business strategies. We continually increase engagement through training programs to promote sustainable behaviours in the organisation globally. We have endorsed the TCFD recommendations on climate change and have begun reporting Lendlease's resilience to the changes in both policies and the physical environment (as noted in the Climate Related Strategic Resilience section) Business Continuity Failure to properly plan for and/or appropriately respond to events which may disrupt Lendlease’s business To achieve organisational resilience, we are committed to operating in a way that supports our ability to respond to threats and disasters without affecting our core business operations. We continue to invest in the learning and development of our people to better prepare them in the event of disruption through training programs and various threat scenario simulations to stress test the plan Lendlease has 12 Enterprise Risks. These are stress tested globally on a six month basis. Each one has a cascade of granular risks and opportunities which are operational and market and allows for a true portfolio lens to be placed over the risk profile. 51 A sense of place 50 Lendlease Annual Report 2021 Risk and Climate Related Resilience