Risk Governance Framework

Under our risk management framework, the Board and management are responsible for identifying and analysing the risks underlying the achievement of business objectives and for determining how such risks should be managed and mitigated.

As summarised in the following diagram, the Board oversees management of the design, implementation and monitoring of risk management and internal control systems. Management provides confirmation to the Board, through its Audit Committee, on the effectiveness of these systems.

The management of risks is subject to audit by GIAD with support from specialist external consultants, where necessary.

Completing the Review of our ERM System

Our Enterprise Risk Management (“ERM”) System helps us identify, analyse and manage business risks. Risk identification, analysis and management processes are completed on a regular basis throughout the year and the results help to guide our business decisions.

Our Corporate Risk Register incorporates SD-related risks, such as climate-related risks. We have also integrated SD factors into our corporate risk analysis.

In 2019, we held a workshop to identify new risks and evaluated their potential impacts on the business. To validate the findings, in 2020 we conducted a risk dimensioning workshop and two virtual risk identification workshops with business unit leaders and department heads in Hong Kong and the Chinese mainland respectively. The major risks of the company were reviewed, validated and ranked in the workshops. A new dashboard format for the Corporate Risk Register was also adopted, facilitating a clearer and more precise presentation of our risk profile.

Risk Profile

The following table provides an overview of our risk profile, including what we consider to be Swire Properties’ principal existing and emerging risks, possible associated impacts, and mitigation measures that are in place or under development. Many of these mitigation measures refer to activities discussed in more detail elsewhere in this report.

Existing Risks and Possible Impacts
Mitigation Measures
Business Disruption

Severe disruption to the business caused by acts of humans or acts of nature may lead to adverse financial impacts.

  • The Business Recovery Plan (“BRP”) for major incidents and other business compliance measures for specific scenarios, operational emergencies, health and safety is in place.
  • Ensure properties in earthquake and hurricane zones are built to meet the relevant building codes and safety standards.
  • Purchase insurance to the extent practicable to cover financial losses due to property damages, business interruption and third-party liability.
Political Risks

Changes in global and local political landscape and priorities may lead to significant impacts on the business environment.

  • Closely monitor social media and government public affairs.
  • Ensure compliance with applicable laws and regulations, including internal guidelines and policies.
  • Maintain robust corporate governance practices through various oversight functions, including audits, risk management, company secretaries, legal counsel, independent non-executive directors and SD 2030 working groups.
Business Risks

The lack of compelling development projects and any business disruption may lead to a slowdown in business pipeline affecting financial performance.

  • Continue to obtain suitable land reserves, reinforce existing portfolios and actively explore opportunities in emerging markets.
  • Closely monitor the market development of disruptive business models and embed these into our operations as appropriate.
  • Maintain competitiveness by enhancing efficiency and automation with the appropriate technology for customer-related and operational procedures.
Brand and Image

The failure to maintain brand position and brand perception may lead to a reduced business profile and less competitive proposition.

  • Ensure consistent, responsible and responsive communication in handling major incidents to safeguard the Company’s reputation, drawing reference from the BRP.
  • Closely monitor social media to evaluate and provide responses to any negative social media content as appropriate.
  • Conduct regular materiality analyses to identify and anticipate current and future economic, political, social or environmental issues that may lead to group-wide negative reputational impacts.
Development Risks

Delays in the completion of developments may cause substantial financial impacts on property sales and leasing.

  • Closely monitor and manage construction progress and contractors in order to avoid delays in project development.
  • Implement stringent prequalification assessments of contractors and approval mechanisms for design changes.
  • Build in additional time during development planning to obtain statutory approvals and communicate with government authorities on a timely basis.
Emerging Risks and Possible Impacts
Mitigation Measures
Climate Change

Extreme weather conditions and climate changes may increase the risks of physical damage to properties and adversely affect their valuations.

  • A Climate Change Policy is in place.
  • Conduct climate risk assessments for all portfolios.
  • Science-based targets that aim to achieve long-term decarbonisation have been established.
  • Monitor and reduce carbon emissions from construction activities and embodied carbon from major building and construction materials.

See More In

Green Financing

We are committed to integrating sustainability considerations into our financing mechanisms.

Investor Relations

We believe in keeping our investors properly informed of our operations and our plans, and in being transparent and proactively communicating with them about all matters.

Climate-related Financial Disclosures

We publish climate-related financial disclosures in four categories: Governance, Strategy, Risk Management, and Metrics and Targets.

Green Financing

We are committed to integrating sustainability considerations into our financing mechanisms.

Investor Relations

We believe in keeping our investors properly informed of our operations and our plans, and in being transparent and proactively communicating with them about all matters.

Climate-related Financial Disclosures

We publish climate-related financial disclosures in four categories: Governance, Strategy, Risk Management, and Metrics and Targets.