Why is carbon material to us?

We have businesses in several carbon intensive industries. As the world transitions to a low carbon economy, these businesses are subject to increasing scrutiny and stricter regulations, which may have financial implications. Ambitious industry-wide decarbonisation targets are being set in the aviation and shipping industries.

We recognise that the extreme weather that climate change brings is a material risk to our businesses. Mitigating its effects is a business imperative. Addressing our climate impacts can also present business opportunities, for example, access to a rapidly growing global green finance market. Please see Swire Properties’ Green Bond Report 2019 for more information.

Group activity on decarbonisation

Our carbon working group helps our operating companies to implement carbon reduction policies and climate change mitigation measures under our Climate Change Policy.

In 2019, we developed a data protocol in accordance with international reporting standards, designed to improve the collection and monitoring of our greenhouse gas emissions data. Our working group is focusing on renewing our decarbonisation commitments and on ambitious carbon targets for 2030.

Swire Coca-Cola will be submitting a science-based carbon reduction target to the Science Based Targets initiative later this year. In 2019, Swire Coca-Cola mapped its major sources of emissions, established a baseline for its science-based target and identified reduction opportunities.

Greenhouse gas emissions from packaging, including its extraction, processing, manufacturing, transportation and disposal, and the electricity consumed by its cold drink equipment accounted for 60% of emissions. The aim is to reduce emissions from packaging by increasing its recycled content and promoting more post consumption recovery and recycling. All new purchases of cold drink equipment will have high energy efficiency ratings and use natural refrigerants.

Swire Properties has a science-based carbon reduction target, which was approved by the Science Based Targets initiative in 2019. With the Hong Kong University of Science and Technology’s Department of Civil and Environmental Engineering, it has evaluated the cradle to site carbon footprint of One Taikoo Place. It is cost-effective to manage carbon emissions from construction, including emissions from carbon embodied in construction materials. In 2019, Swire Properties developed a carbon accounting tool to measure embodied carbon in new development projects.

Swire Pacific Offshore is committed to reducing its greenhouse gas emissions in line with International Maritime Organisation targets. It assesses low or zero carbon fuels, consults with clients over fuel and has fuel management software on its vessels. Please see the Climate resilience section of this report for further information.

All of Swire Pacific Offshore’s vessels use Marine Gas Oil, a low-sulphur (<1.5%) and low particulate matter fuel, in accordance with the latest fuel standard, ISO 8217:2017, as a minimum.

The fleet is constantly upgraded using the latest technology and emission control equipment. New generations of vessels are certified by DNV GL for Clean or Clean Design notation, resulting in lower emissions.

Vogue Laundry replaced nine Euro III vehicles with the more environmentally friendly Euro VI model.

Cathay Pacific Catering Services replaced seven Euro II vehicles with six Euro VI vehicles.

Hong Kong Airport Services replaced nine GSE diesel tractors with Euro IIIA vehicles and four Euro IV buses with Euro VI buses.

Electricity

In 2019, our indirect emissions, primarily derived from electricity usage, our second largest greenhouse gas emission source, were 657.7 thousand tonnes of CO₂e, a 1.5% decrease compared with 2018.

As the cost of electricity rises, making our buildings and operations more energy efficient is a priority. Our operating companies exchange energy efficiency information through our carbon working group. Our Sustainable Building Design Policy requires new and substantially renovated buildings to try to obtain the highest or, as a minimum, second highest international or local building environmental certification.

At the end of 2019, 97% of Swire Properties’ existing properties, by gross floor area, were certified green buildings, of which 84% achieved the highest ratings. 100% of its projects under development have achieved the highest ratings.

Swire Coca-Cola has five Leadership in Energy and Environmental Design (LEED) certified bottling plants in Mainland China and the USA.

Swire Properties uses cloud-based smart energy management platforms and adopts technology to maximise energy efficiency. In 2019, Swire Properties reduced annual energy consumption by nearly 5 million kWh by replacing chillers. Retrofitting 98 conventional fans with energy efficient electronically-commutated motor plug fans is expected to reduce energy consumption by nearly 600,000 kWh.

With Tsinghua University, Swire Properties develops and tests methods of increasing energy efficiency in its properties in Mainland China. The partnership was extended for three years in 2019.

Swire Properties’ energy intensity in Hong Kong decreased by 26% between 2008 and 2019. Its energy consumption in Hong Kong decreased by 62.7 million kWh over the same period. The comparable figures for Mainland China are 36% and 23.2 million kWh, on a business as usual basis.

Swire Properties has the following 2020 targets:

Swire Properties offers free energy audits to tenants. Since 2008, audits have covered 5.5 million square feet of commercial space, identifying potential annual energy savings of 9 million kWh.

ISO 50001:2011 certifications have been obtained for Swire Properties’ energy management systems in all of its Hong Kong properties and in its Taikoo Hui, Guangzhou, and Taikoo Li Sanlitun, Beijing, properties in Mainland China.

Renewable energy

We encourage the use of renewable energy in our operations. In 2019, Swire Properties, Swire Coca-Cola and HAECO Xiamen generated 16.2 million kWh of electricity from renewable energy sources.

Swire Coca-Cola has committed to using 100% renewable electricity for its core operations by 2026. In 2019, solar photovoltaic (PV) systems were installed at its Nanjing and Shanghai bottling plants. Eight of its bottling plants in Mainland China have solar PV systems. These PV systems generate around 14.6 million kWh of electricity per year, 3.5% of overall electricity consumption, saving HK$1.2 million.

In 2020, solar PV systems will be installed at plants in Yuma, Arizona, and Taiwan. Swire Coca-Cola is considering entering into a virtual power purchase agreement, to match one third of the electricity usage of its USA facilities.

Swire Properties has installed solar PV panels and a waste-to-energy tri-generation system at One Taikoo Place. These are estimated to supply renewable energy equivalent to approximately 4% of the energy used by Swire Properties as a landlord. In 2019, more than 268,000 kWh of renewable energy was generated at INDIGO, Beijing, Taikoo Hui, Guangzhou, Taikoo Li Sanlitun, Beijing, and One Taikoo Place, Hong Kong.

Hong Kong Aero Engine Services is installing a 200kW solar PV array on the roof of one of its buildings, which will be connected to the local energy grid.

Cathay Pacific has committed to buying 1.1 million tonnes of sustainable aviation fuel over 10 years, enough for approximately 2% of its operations. Since 2016, all 34 of its new Airbus A350-900 and A350-1000 aircraft have been delivered from Toulouse to Hong Kong using a blend of biofuels made from sustainable sugar feedstock. 6.4 tonnes of biofuel were used in 2019.

Cathay Pacific has an investment in Fulcrum BioEnergy, a USA based sustainable biofuel developer and pioneer in the development and commercialisation of sustainable aviation fuel, made from municipal solid waste. When its plant begins operations later this year, Fulcrum will be able to convert 175,000 tonnes of waste into more than 10 million gallons of fuel per annum.