2022 was a milestone year for Swire Properties as we celebrated 50 years of transformative placemaking and sustainable urban development. While the pandemic prevented us from hosting major events for most of the year, we were fortunate to end 2022 with a family day for our employees and our annual community White Christmas Street Fair in Taikoo Place.

Our ongoing efforts to integrate sustainable development into every facet of our business are now being recognised globally. We were ranked first in Asia and fourth on the Dow Jones Sustainability Index (“DJSI”) among real estate companies worldwide. We maintained our Global Sector Leader position in the Mixed Use Developments category of the Global Real Estate Sustainability Benchmark (“GRESB”) for the sixth year in a row, and were ranked first on the Hang Seng Corporate Sustainability Index for the fifth consecutive year.

In addition to giving us positive encouragement, this recognition motivates us to remain focused on realising our SD 2030 Strategy.

The wider impacts of climate change are a growing concern to businesses worldwide. Increasing our climate resilience and proactively managing the associated risks is now a priority.

While discussions at COP 27 in November 2022 highlighted the challenges of achieving net-zero decarbonisation targets, we remain committed to our 1.5°C-aligned science-based targets, paving the way to achieve net-zero by 2050. We continue to make excellent progress in tackling our Scope 1 and 2 emissions, achieving an absolute emissions reduction of 28% in 2022 compared to our 2019 baseline year.

These gains have been enabled by our broad adoption of technology and innovation to reduce energy use and carbon emissions throughout our operations. Recognising the importance of data, I am particularly interested in the insights into energy saving generated by the rollout of our Cloud-Based Smart Energy Management Platform across our portfolios. This year, we integrated a pioneering machine-learning model into the platform that predicts cooling demand around the clock. The model was developed in partnership with a digital automation and energy management company and won a Gold Award and the Grand Prize at the “Global AI Challenge for Building Electrical and Mechanical Facilities” competition. We also signed an off-site renewable electricity purchase agreement for Taikoo Li Sanlitun, making this our third project in the Chinese Mainland to adopt sources of clean energy. We continue to explore renewable energy opportunities in our other projects.

Our journey to net-zero is not ours alone: supporting our stakeholders and our communities in their efforts to decarbonise is vital to the success of our common objectives. We continue to collaborate with our suppliers and tenants as we track and monitor performance along the whole lifecycle life cycle of our buildings.

To address upstream carbon emissions during construction, we have worked with our partners to ensure that almost 100% of the concrete used at Two Taikoo Place, our latest development in Hong Kong, was certified low-carbon concrete. Accordingly, the development obtained the Grand Award in the New Building category (Projects Under Construction and/or Design - Commercial) at the 2021 Green Building Awards, organised by the Hong Kong Green Building Council (“HKGBC”) and the Professional Green Building Council..

To limit our downstream impact, we launched our Green Performance Pledge (“GPP”) in July 2022, a bespoke sustainability programme for office tenants. The GPP works closely with our tenants to measure and identify ways to reduce their energy, waste, and water consumption. Interest and uptake for the GPP has been overwhelmingly positive: 52 of our tenants, representing over 30% of the occupied lettable floor area of Swire Properties’ Hong Kong office portfolio, are already participating. Meanwhile, almost 70 food and beverage (“F&B”) tenants have joined our Green Kitchen Initiative, integrating sustainability features into their kitchen fit-outs and operations.

In March 2023, we published our third Places Impact Report, featuring Taikoo Hui Guangzhou. Produced in partnership with the South China University of Technology, the report explores the socioeconomic impacts of our placemaking efforts and provides insights into the future role that Taikoo Hui may play in enhancing community vibrancy and building social cohesion.

People are critical to the implementation of our SD 2030 Strategy and to our overall success. We aspire to build an inclusive, supportive work environment where employees can thrive. This year, we were delighted to be included in the 2023 Bloomberg Gender-Equality Index, acknowledging the Company's commitment to achieving gender equality.

These positive impacts extend into our local communities in the form of our Community Ambassadors, who volunteered over 6,100 hours of their time this year, giving back to society through NGOs, social welfare initiatives and in many other valuable ways.

As at 31 December 2022, green financing accounted for 60% of our current bond and loan facilities. This means that we have achieved our 2025 KPI of having a minimum of 50% of green financing three years ahead of schedule.

In 2023, we begin piloting the use of internal carbon pricing (“ICP”) to accelerate our transition to a low-carbon economy. Taking the form of an internal carbon fee, the ICP will create an internal mechanism to allocate costs to our carbon emissions and set aside a special fund to increase our investment in decarbonisation projects.

Today’s increasingly complex business landscape requires that we remain firmly committed to our vision and values. As we look ahead to the next 50 years, I want to take the opportunity to thank everyone who has worked with us over the years for your dedication, confidence and trust in Swire Properties.