We conduct asset-level modelling of both the acute and chronic physical risks associated with various climate scenarios. These are presented in selected timeframes from the immediate term to the distant future – 2030 (short term), 2050 (medium term) and 2100 (long term). The process also includes detailed asset-level assessments that evaluate individual buildings’ sensitivity and adaptive capacity to the potential effects of the identified climate risks.

The most recent assessment 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.

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

The relevant 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.

In 2022, we performed a comprehensive review of global, national and local government policies, including Hong Kong’s Climate Action Plan 2050 and 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:

With the support of a risk management consultant, in 2023, we undertook a pioneering study to quantify the financial impact of climate-related transition risks and the opportunities associated with a transition to a low-carbon economy. Twelve facilitated workshops were held, involving over 50 colleagues across different business units. These workshops evaluated the risks and opportunities related to policies and regulations, markets, reputation and liability, supply chains, and technologies under three future climate scenarios (1.5°C, 2°C and 3°C). The findings included: