SD Governance

GRI 2-9, 2-11, 2-12, 2-13, 2-14, 2-16, 2-17, 2-23, 2-24
HKEX Mandatory Disclosure Requirement

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.
Board of Directors
Our Board of Directors (“the Board”) is actively engaged in formulating and implementing our SD 2030 Strategy. The Board oversees SD issues, while the Environmental, Social and Governance (“ESG”) Steering Committee reports material SD issues and the progress made towards key performance indicators (“KPIs) to the Board. The ESG Steering Committee reports material SD and ESG issues and the progress made towards our 2025 and 2030 KPIs to the Board. These are discussed regularly at each board meeting.
The Board provides oversight of our risk management framework and risks related to SD and ESG, including climate-related risks. Swire Properties also conducts regular risk identification and analyses and reviews management processes throughout the year through the Audit Committee and our Enterprise Risk Management (“ERM”) system, which includes our Corporate Risk Register (“CRR”).
ESG Steering Committee
The ESG Steering Committee is chaired by the Chief Executive of the Company. Other members are the Finance Director and six members of our senior management from the Human Resources and Administration, Portfolio Management, Projects, Public Affairs, and Technical Services and Sustainable Development (“TSSD”) departments. One of the members of the ESG Steering Committee is an Independent Non-Executive Director of the Company, who is also the Chair of our Audit Committee.
The composition of the ESG Steering Committee is reviewed annually by the Chief Executive to ensure an appropriate balance and representation of expertise and experience. The Chief Executive may also appoint any person or persons from within or outside the Company as considered appropriate.
The Chair of the ESG Steering Committee reports relevant SD matters to the Board, as appropriate. In accordance with its terms of reference, the ESG Steering Committee is responsible for:
  1. Reviewing, and suggesting any changes to, the Company’s ESG Strategy with respect to ESG matters, including approving targets or key initiatives recommended by the working groups.
  2. Ensuring that the Company’s operations and practices are carried out in line with the ESG Strategy.
  3. Reviewing the Company’s annual performance in achieving targets or key initiatives recommended by the working groups.
  4. Reviewing any significant risks, opportunities or investments that exist in connection with the implementation of the ESG Strategy.
  5. Reviewing and approving the annual Sustainability Report and any relevant ancillary public documents; and
  6. Through its Chair, reporting relevant matters of significance relating to sustainable development to the Board.
SD Working Groups
Each Pillar is supported by a working group. In 2023, there were six SD working groups that continued to work on the KPIs and future targets set for each Pillar for 2025 and 2030. These are:
  1. The Places Working Group, chaired by the Director, Office.
  2. The People Working Group, chaired by the Director, Human Resources.
  3. The Partners Working Group, chaired by the Deputy Director, Projects (HK & SE Asia).
  4. The Performance (Environment) Working Group, chaired by the Director, TSSD & Facilities Management.
  5. The Performance (Economic) Working Group, chaired by the Finance Director; and
  6. The Sustainable Development Communication and Engagement Committee, chaired by the Deputy Director – Public Affairs.
The members of each working group are carefully selected to ensure the inclusion of employees with diverse backgrounds, types of expertise and varying levels of seniority.
SD Communication and Engagement Committee
Our SD Communication and Engagement Committee identifies, prioritises and oversees the implementation of communication and engagement plans for initiatives that support our SD 2030 Strategy. It is chaired by the Deputy Director – Public Affairs. This Committee also includes representatives from distinct functions within the Company. Read more about what this Committee accomplished in 2023 here.
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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. The SD Policy is reviewed periodically and was last updated in 2021. It 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 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.

Integrating SD into our Business Operations

Driving Employee Engagement and SD Performance

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 2030 Strategy on a deeper level. This year, we further enhanced the system by introducing a comprehensive new SD e-learning module covering all basic aspects of our SD 2030 Strategy and relevant ESG topics. Our office employees continued to align their annual performance goals with each Pillar and the Company’s SD vision. In turn, these goals inform their variable compensation.
We have also established corporate SD performance metrics and targets, in areas such as health and safety and decarbonisation, that are linked to variable compensation for our Chief Executive and senior executives. The general managers have a balanced scorecard to monitor performance around energy and water management, staff turnover rate and training hours and performance targets related to energy management in their respective portfolios.
Driving Employee Engagement and SD Performance

Business Integration and Budgeting

In 2023, 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 proposed budget allocations with the relevant SD Working Groups.
In 2023, Swire Properties began piloting the use of internal carbon pricing (“ICP”) to determine the potential impacts of carbon emissions on our investments, quantify carbon risks to our business operations and better reallocate capital towards low-carbon and energy efficient investment and opportunities. ICP also facilitates engagement across departments and teams, allowing them to integrate carbon-reduction strategies with business objectives and achieve our common decarbonisation goal.
The ICP Committee, consisting of representatives from the TSSD and Finance departments, jointly administers the decarbonisation funds generated by ICP initiatives, which are used to finance innovative solutions to help us achieve our science-based targets. The ESG Steering Committee oversees the overall mechanism and project approval to ensure that funds are effectively channelled towards meaningful and impactful projects.
A total of HKD3,084 million has been budgeted as the future three-year (2024 to 2026) forecast expenditure for climate-related projects, including funds generated from ICP.
Business Integration and Budgeting

Corporate Risk Management

Our Corporate Risk Register incorporates ESG-related risks, such as climate and biodiversity-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 it easier to benchmark across the Swire Group (“the Group”). In 2023, we optimised the system and the reporting protocol, and conducted a risk workshop to identify the potential effects of geopolitical risks on our business.
Swire Properties’ management will continue to monitor and conduct regular reviews 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.
Corporate Risk Management

Green Financing

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 July 2023, we priced our inaugural public renminbi (“RMB”) green bonds, which we called “green dim sum bonds”, making the Company the first Hong Kong corporate to issue an RMB-denominated public green bond, and the first to return to the public dim sum bond market since 2019. This was also the largest-ever corporate green dim sum bond issuance in Hong Kong history. The transaction raised RMB3.2 billion, with the net proceeds being used to fund or refinance the Company’s existing or new eligible green projects. This issuance also demonstrates our support of the Hong Kong government’s green financing efforts, and our support of the city’s aspirations to become the world’s leading green technology and green finance centre, as well as an international offshore RMB trading hub.
During the year, we secured sustainability-linked loan facilities totalling HKD7.2 billion and green bonds totalling HKD6.0 billion. As at 31 December 2023, approximately 60% of our bond and loan facilities were from green financing instruments such as green bonds, sustainabilitylinked loans and green loans. We also continued to update investors and analysts about our SD performance through a comprehensive ESG webinar and question-and-answer session.
In 2023, we issued our sixth annual Green Finance Report, 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.
Green Financing