Page 55 - CMA Journal (Nov-Dec 2025)

Focus Section

Metric & Targets – Financial Risk

Risk Type Metric Target (2026)

q i L k s i R y t i d i u C e r r u o i t a r t n M ≥ n i a t n i a b 5 . 1 2 y 0 2 6

D e k s i R t b D e e - o t - t b q o i t a r y t i u K e e b p o l e 8 . 0 w
Credit Risk % of overdue receivables Keep <5% of total receivables

Investment Risk ROI on green investments Minimum 10% return

Climate Risk % of assets assessed for climate risk 100% by 2025

Compliance Risk Number of financial non-compliance cases Zero incidents

Supply Chain Risk % of suppliers financially stable (audited) ≥90% by 2026

Metric & Targets – Economic Risk

Aspect / Area Metric Target (2026)

Economic Value Generated d e d d a e u l a v , e u n e v e r l a t o T n o i l l i m 0 3 . s R
Economic Value Distributed m o C + s e x a T + s e i r a l a S s t n e m t s e v n i y t i n u m n o i l l i m 5 6 . s R
Opera ng Profit Margin 0 0 1 × ) e u n e v e r ÷ t i f o r p g n i t a r e p O ( % 8

Return on Investment (ROI) 0 0 1 × ) t n e m t s e v n i ÷ t i f o r p t e N ( % 6

Local Procurement s r e i l p p u s l a c o l n o g n i d n e p s f o % % 5 3
Supplier Financial Stability e c n a r a e l c t i d u a l a i c n a n i f h t i w s r e i l p p u s f o % % 5 9

t
a
r
Infla on Resilience Cost increase vs. infla on e ) c i f i c e p s y r t s u d n I ( % 3
y

r
Financial Sustainability Ra o Current ra o / debt-to-equi a o i t % 5 7 < R E D & 5 . 1 > R C
t
Community Investment m o c o t d e t a c o l l a t i f o r p f o % s m a r g o r p y t i n u m % 4
Climate-Resilient Investment % of capital allocated to climate adapta on or green projects 20%
2) Sustainability Standard (IFRS S2) Materiality and Risk
The scope for assessing materiality differs between
The same four core factors affecting sustainability are
financial reporting and sustainability reporting. Material
discussed in IFRS S2, as introduced in IFRS S1. The
misstatement is particularly significant when it occurs near
difference lies in scope. IFRS S1 informs stakeholders
the profit and loss threshold or the break-even point.
about the general requirements for disclosures of
sustainability, including climate-related information, There are three key methods used to assess risk while
preparing the sustainability report i.e. materiality
while IFRS S2 requires the company to disclose
method, through stakeholders’ engagement and
specifically climate-related information for investors and
scenario and sensitivity method.
other stakeholders, explaining how climate- related risks
and opportunities affect the financial position and 1. Materiality Method of Risk Assessment: In the first
performance, and how the Board of Governors responds step, risks are identified, prioritized, and a strategy is
developed to avoid, mitigate, transfer, or otherwise
to manage risks and seize opportunities.
manage them. Reporting such information is highly
valuable for stakeholders.

ICMA’s Chartered Management Accountant, Nov-Dec 2025 53