Physical Risk Assessment

This consists of asset-level modelling of both the acute and chronic physical risks associated with various climate scenarios, presented in selected timeframes from the immediate term to the distant future – 2030, 2050 and 2100. It also includes detailed asset-level assessments that evaluate individual buildings’ sensitivity and adaptive capacity to the potential effects of the identified climate risks.

The analysis identified that overall, there are low to moderate levels of risk for flooding, heat stress, water stress and extreme wind for our global portfolio in all assessed climate scenarios. These risk levels are attributed to the relatively robust adaptive capacity and mitigation measures we have integrated into our buildings.

We also identified short- and mid-term measures for individual buildings to mitigate risks and build resilience across our portfolios. Examples include:

  • Upgrading flood protection measures and alert systems
  • Improving chiller efficiency
  • Regularly inspecting glass façades
  • Installing smart monitoring systems

Some of these resilience measures will also be incorporated into the planning and design stages of new developments to ensure our assets will continue to be resilient under different future climate scenarios.

Assessment of Transition Risks and Opportunities

This is a comprehensive review of global, national and local government policies, including Hong Kong’s Climate Action Plan 2050, released in 2021, as well as regulatory, market and technological trends based on different climate scenarios involved in the global transition to a low-carbon economy.

We identified a number of risk and opportunity drivers that may have a financial impact on our business under three different climate scenarios: the “Net-Zero Scenario” (1.5°C); the “Paris Consistent Scenario” (2°C); and the “Hot House World Scenario” (3°C). The drivers include tightened building energy codes and guidelines, increased market demand for green and energy-efficient properties and climate-resilient properties.

Based on the analysis, our current business and sustainability strategies will allow us to effectively manage the identified transition risks and capture the identified opportunities during the transition to a low-carbon economy. These strategies include:

  • 1.5°C-aligned science-based targets to drive long-term carbon reduction
  • Investment in, and development of, certified green buildings with best-in-class energy efficiency and climate resilience
  • Investment in renewable energy measures throughout our portfolio
  • Wide application of innovative green technologies
  • Commitment to green financing
  • Engaging our supply chain, tenants and other relevant stakeholders in climate resilience and sustainability initiatives

During the year, we also initiated a quantitative assessment of the potential financial impacts of key identified transition risks and opportunities that will inform our risk management and strategic planning. For more information, please refer to our Climate-related Financial Disclosures.