67 The physical and transition risks material to our business value chain are listed below: Risk Type Risk Indicator Risk Description Potential Financial Impact 2030 Potential Financial Impact 2050 Physical risk Water Stress Water stress has multiple impacts a) Loss of sales due to operational disruptions caused by unavailability of water (for water-intensive processes) - both internal and supplier materials. b) Increase in cost of water costs due to water stress. Note: We anticipate an increase in Consecutive Dry Days (CDD) of between 2-10 days across the various scenarios. However, the potential financial impact of this risk is minimal, due to contingency water sources that Sai has in place for 7-10 days at their operational sites LOW LOW Risk Mitigation - We are proactively addressing water stress by implementing comprehensive water management initiatives across our sites, focusing on reuse, recycling, and safe disposal to minimize our reliance on groundwater. Our Zero Liquid Discharge (ZLD) system at the Bidar facility is a cornerstone of our wastewater management strategy. This system is designed to minimize effluent discharge by maximizing water recovery and reuse while treating residual waste to eliminate liquid discharge entirely. In our commitment to sustainable water management, we have also significantly enhanced our rainwater harvesting capacity and increased it from 25% to 33%, to a total of 4,039 kiloliters (KL) of rainwater last year. Extreme Heat Rising temperatures could drive higher cooling costs through increased load on air-conditioning systems LOW MED Risk Mitigation - We are addressing this in two ways - firstly, effective energy demand management in all our sites to ensure that we minimize consumption per sq. ft of air-conditioned space. Further, we are also committed to increasing our renewable energy by 70% until 2027 in our energy mix. Over time we believe the cost of renewables will fall significantly and will drive down our cost of cooling. Riverine flood Increased flooding or heavy rainfall could lead to disruption or delays in manufacturing processes (e.g., through property and infrastructure damage or repairs.) and interruptions in the supply and distribution of products. LOW LOW Risk Mitigation - Our sites are under an implementation plan for water management practices to reduce the risk of flooding, such as constructing retention basins, improving stormwater drainage, and raising the site level. Right now, we don’t see this as a major risk, but if the situation arises, we will also implement flood barriers to secure our sites Tropical Cyclone Tropical cyclones could cause operational interruptions at our sites (e.g., property operations, sales loss potential, damage, and equipment repairs) or disruption in the supply chain such as across transport networks (e.g., delaying delivery of raw materials to sites or finished products). LOW LOW Risk Mitigation- We have started working towards a more resilient supply chain - looking at a broader geographical footprint and also having alternatives for key raw materials. For our sites - at the moment we don’t see major risks, but we will work towards building infrastructure like flood defenses, power back-ups, and emergency response plans if the situation arises.
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