SD Governance Structure
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
GRI 2-23, 2-24
Our Sustainable Development Policy (“SD Policy”) was first published in 2008 and has guided the Company’s operations since then. The Policy is reviewed periodically and was last updated in 2021. 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 that we will ensure that all potentially adverse impacts of our operations are identified and managed appropriately.
With respect to the environment, our approach follows the precautionary principle1 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 in order that they realise their full potential.
The precautionary approach is referred to in Principle 15 of the Rio Declaration on Environment and Development.
Swire Properties’ Policies
Our SD Policy is supported by the following policies that focus on specific environmental and social impacts.
Integrating SD into our Business Operations
Support from our employees is vital to the success of our SD 2030 Strategy. In 2018, our performance development review system was updated to engage employees in our SD Strategy on a deeper level. Since then, our office employees have continued to align their annual performance goals with each Pillar and the Company’s SD vision.
We have also established corporate SD performance metrics that are linked to variable compensation for our Chief Executive and the 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 2022, 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 shared proposed budget allocations with the relevant SD Working Groups to ensure adequate resources are made available to realise our SD 2030 targets. The budgets are reviewed and approved by the Board.
In 2023, Swire Properties will pilot the use of internal carbon pricing (“ICP”) to determine the potential impacts of carbon emissions from our investments, quantify carbon risks to our business operations It will take place as an internal carbon fee which links each unit of CO2 emissions to a fixed cost, allowing better reallocation of capital towards low-carbon investment and activities.
A total of HKD 3,159 million has been budgeted as the future three-year (2023 to 2025) forecast expenditure for climate-related projects, including funds generated from ICP.
Corporate Risk Management
Our Corporate Risk Register (“CRR”) incorporates ESG-related risks, such as climate-related risks. We have also integrated SD and ESG factors into our corporate risk analysis.
In 2022, we began digitalising the CRR dashboard and risk scoring model. The new digitalised CRR platform offers a standard template for updating risk details, risk scoring and risk mitigation measures, making benchmarking across the Swire Group easier. In the next phase, we plan to optimise the system and the reporting protocol. Swire Properties’ management will continue to monitor and conduct regular review of risks and the effectiveness of mitigation strategies. External risk advisors will also be regularly consulted for their risk management experience, allowing us to keep abreast of industry best practices.
Swire Properties is committed to integrating sustainability considerations into our financing mechanisms. By obtaining green financing, we reaffirm our commitment to sustainable development, and to designing and developing sustainable projects that improve the wellbeing of building occupants and local communities.
Beginning in 2018, Swire Properties launched various green financing mechanisms to fund green building developments and other projects. These have included 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 improvements in the Company’s year-on-year ESG performance. Since the launch of these mechanisms, Swire Properties has received reductions in the interest rates of all our signed sustainability-linked loans by achieving predetermined sustainability-linked performance targets.
In 2022, we secured sustainability-linked loan facilities totalling HKD11.8 billion. As of 31 December 2022, approximately 60% of our bond and loan facilities are from such green financing instruments as green bonds, sustainability-linked loans and green loans. We also continued to update our investors and analysts about our SD performance through a comprehensive ESG webinar and question-and-answer session.
In 2023, we issued our fifth annual Green Finance Report 2022, which provides information on projects funded by the green bonds and the green loan and their estimated quantitative environmental impacts, including energy and water savings, renewable energy generation and wastewater management impacts.
See More In