SD Governance Structure
Swire Properties’ SD governance framework builds on our strong foundations of good corporate governance and high ethical standards.
Our SD 2030 Strategy seeks to reinforce these foundations by integrating economic, social, and environmental considerations into all levels of our business decision-making processes.
Sustainable Development Policy
Our Sustainable Development Policy (“SD Policy”) was first published in 2008 and has guided the Company’s operations since then. The SD Policy reflects our belief that long-term value creation depends on the sustainable development of our business, our supply chain and the communities in which we operate. These factors are continuously considered during the inception, design, construction, occupation and demolition phases of our development projects.
The SD Policy explicitly states that the Company will be a good steward of the natural resources and biodiversity within our influence and ensure that all potentially adverse impacts of our operations are identified and managed appropriately.
With respect to the environment, our approach follows the precautionary principle2 which states: “Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation”.
We strive to operate in a manner that protects the health and safety of all of the people with whom we work. We also strive to be an employer of choice by providing a working environment in which all employees are treated fairly and with respect so that they can realise their full potential.
Swire Properties’ Policies
Integrating SD into our Business Operations
Employee Engagement
Support from our employees is vital to the success of our SD 2030 Strategy. In 2018, we modified our performance development review system to further engage our employees in our SD Strategy. Since then, our office employees have continued to align their annual performance goals with each Pillar and the Company’s SD vision.
We have established corporate SD performance metrics that are linked to variable compensation for our Chief Executive and general managers of our portfolios. The Chief Executive has performance targets that are linked to health and safety throughout the company’s operations, while the general managers’ performance targets relate to energy management in their respective portfolios.
Business Integration and Budgeting
In 2021, we continued to implement SD initiatives in our day-to-day operations and decision-making at both the asset and functional levels of all our major business units in Hong Kong and the Chinese Mainland.
All our major business units now incorporate SD considerations into their annual budgets and share their proposed budget allocations with the relevant SD Working Groups.
Corporate Risk Management
Our Corporate Risk Register (“CRR”) incorporates SD-related risks, including climate-related risks, to ensure SD factors are considered when conducting our corporate risk analysis.
In 2021, we continued to partner with a risk management consultant to enhance our risk scoring model using a rating scale and risk dimensions that are easier to interpret and assess. This enhancement also facilitates benchmarking across the Swire Group through the alignment of risk scores. We continued to conduct regular reviews of risks and mitigation strategies and consulted with external risk advisors to share risk-related experiences and industry best practices.
Green Financing
Since 2018, Swire Properties has launched various green financing mechanisms that fund green building developments and other projects. These include our first green bond, issued in January 2018, and our first sustainability-linked loan, obtained in July 2019, the interest rate of which is indexed against improvement in the Company’s year-on-year ESG performance. In 2020, we issued four more green bonds, totalling HKD1,934 million. As of 31st December 2021, approximately 30% of our bond and loan facilities are from green financing such as green bonds, sustainability-linked loans and green loans.
In 2021, we issued our fourth annual Green Finance Report, which provides information on projects funded by the green bonds and green loan and their estimated quantitative environmental impacts, including energy and water savings, renewable energy generation and wastewater management impacts. We were also named one of the top 10 organisations globally in the “Post-Issuance Reporting in the Green Bond Market 2021” study conducted by the Climate Bonds Initiative, an international organisation focusing on green financing, recognising Swire Properties for the clarity, comprehensiveness and transparency of its reporting.
2 | The precautionary approach is referred to in Principle 15 of the Rio Declaration on Environment and Development. |