Chairman’s statement

COVID-19 led to a reduction in activity levels in a number of our businesses in 2020, and this is reflected in our environmental performance metrics, particularly in respect of carbon. Despite the year’s challenges, our long-term commitment to a sustainable approach to business not only remained steadfast, it was re-enforced through the launch of the second iteration of our group sustainability strategy, SwireTHRIVE.

SwireTHRIVE now has five priority areas and reflects the need to refine our focus, to increase our level of ambition and to move faster than before. We have set stretching targets for carbon, water and waste and, recognising the importance of the people elements of sustainability, have set targets for diversity and inclusion. The targets will require us to achieve:

• A 50% reduction in carbon emissions from direct operations (excluding Cathay Pacific’s jet fuel) by 2030 (from a 2018 base year), and net zero emissions by 2050
• 55% waste managed by us diverted from landfill by 2030, and zero waste sent to landfill by 2050
• A 27% reduction in water withdrawal by 2030 (from a 2018 frozen efficiency baseline), and water neutral operations by 2050
• 30% women in senior management roles by 2024

Our businesses continued to make progress in 2020 in integrating sustainability into their operations, particularly in relation to climate change. Swire Coca-Cola’s carbon reduction targets were approved by the Science Based Targets Initiative. Swire Coca-Cola and Swire Properties signed up to Business Ambition for 1.5°C. Cathay Pacific committed to achieving net zero carbon emissions by 2050. Swire Coca-Cola and Swire Properties will have sites powered solely by renewable energy. Swire Coca-Cola is a party to a joint venture, which is developing Hong Kong’s first food grade plastic waste recycling plant.

We strengthened our carbon offsetting, sustainable buildings, sustainable procurement and sustainable food policies. We introduced water, energy efficiency and waste management policies. Ensuring the safety of our people and visitors to our sites is a priority. We will focus on improving health and safety in our contractors’ operations and will collect more data about this.

In 2020, Swire Pacific obtained its first ESG-linked loan. Swire Pacific was included in the DJSI Asia Pacific index. Swire Properties was included in the DJSI World index. Swire Pacific is rated AAA by MSCI. Swire Pacific and Swire Coca-Cola were rated A for water by CDP. Our sustainable development fund contributed HK$33 million to clean technology projects in four operating companies.

Climate change will bring significant future challenges. We have begun to assess the physical risks to our assets and the financial impact of carbon pricing. We are considering appropriate disclosures in the light of the recommendations of the Task Force on Climate-related Financial Disclosures. We will include more about this in our 2021 report.

In 2020, the Swire Trust donated HK$21 million to COVID-19 relief efforts, supporting more than 300,000 people. It continued to support education, marine conservation and arts programmes.

Much work remains to be done. Meeting our 2030 and 2050 targets will require vision, ambition, and tenacity. It will not be easy. But our commitment to sustainability remains unwavering and reflects our long term approach to business. I look forward to sharing more with you as we continue with the second phase of SwireTHRIVE and the path towards sustainability.