Our approach to
sustainable development
Sustainable development is a strategic objective for Swire Pacific. Using natural resources responsibly, minimising waste and pollution, and investing in our people and communities are fundamental to our ability to create long-term value for shareholders.
To promote sustainability in our businesses and management practices, we have a sustainable development strategy (SwireTHRIVE) and environmental, social and governance (ESG) policies.
A Group level strategy facilitates best practice sharing and consistent implementation of sustainability. It also allows us to better communicate the impact we are having as a group. SwireTHRIVE addresses five areas and is supported by policies and targets. All operating companies are expected to make progress in the five areas.
Our Sustainable Development Policy aims to ensure our companies act in a manner consistent with the 1987 Brundtland Commission’s definition of sustainable development: meeting the needs of the present without compromising the ability of future generations to meet their own needs.
Our ESG policies include the five SwireTHRIVE pillars and go beyond them, covering, for example, human rights, biodiversity and sustainable procurement.
We regularly review our policies relating to sustainability. Where we identify policy gaps, we create new policies to guide the Group’s approach. Policies are developed at the working group level, before review by the Swire Group Environmental Committee (SGEC) and the Group Risk Management Committee (GRMC), and approval by senior management.
In 2022, we updated our Company Code of Conduct and Supplier Code of Conduct, and launched a new Anti-Bribery and Corruption Policies and a Data Retention and Disposal Policy.
All policies related to sustainable development can be downloaded from our corporate website.
As a growing and diversified business, tracking sustainability performance and setting targets can be challenging. To address this, we have a reporting methodology which deals with the scope, boundaries and calculations of the relevant data. We also have data collection protocols for carbon, waste and water, that standardises our data calculation methodology, and includes variance checks and procedures for dealing with abnormal data.
We seek third party assurance on key sustainability performance data points. We are also working with a third party to validate the robustness of additional data with a view to expanding the scope of our assured data in future reporting cycles.
Our sustainable development fund (SD Fund) offers financial support to operating companies for projects which can provide long-term environmental benefits but cannot be justified by reference to our cost of capital targets. Up to HK$100 million is available annually to support projects that reduce the carbon, water, and waste footprints of our operating companies, in line with our targets.
The fund has been supporting our operating companies since 2016. Since 2019, a new funding stream was created to support trials of innovative green technology solutions. Operating companies invite companies and start-ups to pitch solutions to previously identified sustainability problems. Successful applicants receive funding to pilot the solution. If the pilots are successful, they can be scaled up for wider use in the target operating company and other operating companies across the Group.
The fund allows us to test new technologies quickly and at relatively low cost, to determine the solutions most suited to our operations and quantify their actual environmental benefits before implementation at scale. The SD Fund has helped accelerate SD projects across the Swire Group, including innovative new technologies such as Direct Current Microgrids at Taikoo Li Sanlitun shopping centre in Beijing. In 2022, the fund allocated approximately HK$21 million to projects at three operating companies.
Linking ESG performance metrics to our financing mechanisms demonstrates that we are serious about being a sustainable business. Since 2020, Swire Pacific has converted three revolving credit facilities totalling HK$4.2 billion into sustainability-linked loans. The interest payable is reducible by reference to indicators of our ESG performance including progress towards targets for energy consumption, water usage, and diversity and inclusion. We must also remain in the Dow Jones Sustainability Asia Pacific Index. Sustainable finance represented more than 35% of total financing across the Group at the end of 2022.
Swire Properties targets for at least 80% of its bond and loan facilities to come from green financing by 2030. Around 61% of its current financing is from green bonds, green loans, and sustainability-linked loans. Funds are used for green building developments and the adoption of technologies that will save energy and water and reduce waste. New Life Plastics Limited, a joint venture to which Swire Coca-Cola is a party, has also obtained a sustainability-linked loan.
Our Board, led by its Chairman, is actively engaged in formulating and implementing SwireTHRIVE 2.0, and is ultimately accountable for sustainability matters including progress against our 2030 key performance indicators. The Board provides oversight of our risk management framework and our sustainability risks, including climate-related risks. Swire Pacific also conducts regular risk identification, analysis and review management processes throughout the year through the Audit Committee and our Enterprise Risk Management (“ERM”) system, including our Corporate Risk Register (see ESG risk management section).
The Board currently comprises five Executive Directors, two Non-Executive Directors and seven Independent Non-Executive Directors. Members are selected based on their qualifications, skills and experience, knowledge of our businesses, and how they impact Board-level diversity. All Board members have relevant industry experience in either Real Estate, Aviation, Food and Bbeverage or Trading and Industrial sectors. Four out of five of our Executive Directors have had executive or board experience with one or more of our subsidiaries. Having the right blend of skills and experience ensures the Board can effectively deal with current and emerging risks and opportunities.
In 2022, the Board received external training on ESG and cyber security. Further information on our Board diversity, processes and training is available in the Corporate Governance section of the Swire Pacific Annual Report 2022.
The Board is kept informed of sustainability risks and performance by the Group Risk Management Committee (GRMC), which reports to the Board via the Audit Committee. The Board monitors performance through detailed monthly reports on health and safety, and quarterly reports on other ESG matters. It also reviews internal and external audit reports and feedback from external stakeholders. The Group Head of Sustainability briefs the Board and Division Heads twice a year on sustainability matters. The Board ultimately reviews and approves the Group’s sustainable development related targets.
Responsibility for achieving sustainability objectives and implementing SwireTHRIVE and our ESG policies on a day-to-day basis is delegated to division management, with oversight from specialist Group departments. The Sustainable Development Office (SDO), the Group Risk Management and Diversity & Inclusion departments and the Group Head of Philanthropy are jointly responsible for SwireTHRIVE. Each operating company has adopted an appropriate organisational structure to manage its most material sustainability issues and to monitor and report on its performance. The SDO is required to provide the Board of Directors with quarterly reports on performance against sustainability targets and key initiatives to drive progress.
Group departments convene committees and working groups comprising subject matter experts from our operating companies to exchange information on best practices, with a view to developing specific policy recommendations, improving efficiency, tracking progress against targets and managing risks. Formal committees relevant to SwireTHRIVE include the Swire Group Environment Committee (SGEC) and the Health and Safety Committee (both of which are overseen by the GRMC) and the Diversity & Inclusion Steering Committee (which reports directly to the Chairman).
The SDO, led by the Group Head of Sustainability, advises senior management of key developments and emerging risks related to sustainable development. It is responsible for setting group environmental policies and targets, monitoring the implementation of SwireTHRIVE and our ESG policies, and internal and external reporting on ESG matters. The SDO reports monthly to an Executive Director of Swire Pacific.
The management of risks and the implementation of ESG policies are subject to scrutiny by our internal audit department, with support from specialist external consultants where necessary.
The SDO coordinates the SGEC and five working groups responsible for defining our climate, waste, water and sustainable supply chain approaches and our response to the Task Force on Climate-related Financial Disclosures (TCFD).
Swire Pacific has established a three lines of defence risk governance model. The GRMC is supported by four risk forums and a separate Swire Pacific Risk Management Committee, which identifies risks that have a group dimension (see ESG risk management).
The objective of the Swire Group Environmental Committee is to oversee, on behalf of the Board and Management Team, the management of SwireTHRIVE. The SGEC advises them on matters required to enable:
- the Group to operate sustainably for the benefit of current & future generations
- sustainable growth by maintaining & enhancing Swire Group’s economic, environmental, human, technological and social capital in the long term
- the identification and effective management of Swire Group’s Sustainable Development (SD) risks
The Committee, which meets at least three times each year, is chaired by the Director responsible for the Group SD strategy, co-ordinated by the Group Head of Sustainability, and comprises SD heads from operating companies, while being observed by Risk Management Department, Group Public Affairs, Corporate Finance, and Staff Services.
DISC is responsible to the Chairman of Swire Pacific. It is jointly chaired by the Finance Director of Swire Pacific, or operating companies and the Group Staff Director. The other members of DISC are the HR Directors of our operating companies, the Staff Services Group General Manager, and the Group Head of Diversity and Inclusion.
DISC has general responsibility:
- to provide guidelines about diversity and inclusion to the group of companies comprising Swire Pacific and its subsidiaries, associates, and joint venture companies, and
- to formulate policies designed to promote a diverse workforce and an inclusive working environment for all Swire Pacific group employees, with a view to ensuring that companies in the Swire Pacific group are regarded as employers of choice.
DISC Terms of Reference are available on our corporate website.
Swire Pacific responds to ESG questionnaires from investors, rating agencies and sustainable stock indices. This enables us to assess our ESG performance having regard to the concerns of sustainability focused investors and to identify emerging sustainability risks and opportunities.
|
Dow Jones Sustainability Index In 2022, Swire Pacific was included in the DJSI Asia Pacific Index. Swire Pacific has been included in DJSI indices since 2001. |
|
Hang Seng Corporate Sustainability Index Series In 2022, Swire Pacific received an AA+ rating from the Hang Seng Corporate Sustainability Index. Swire Pacific is included in the Hang Seng Corporate Sustainability Benchmark and Hang Seng ESG 50 indices. |
|
MSCI Constituent MSCI Global SRI Indexes In 2022, Swire Pacific received an AAA rating from MSCI ESG Research, making us one of the top performers in our sector. |
|
CDP In 2022, Swire Pacific achieved a score of A- for CDP Climate Change and maintained its A- for CDP Water Security. |
 |
S&P Global Sustainability Yearbook Swire Pacific was included in the S&P Global Sustainability Yearbook 2023, which recognises top performers in corporate sustainability based on assessments of over 7,500 companies across 61 sectors. Companies must be within the top 15% of their industry to be included. |
|
Bloomberg Gender-Equality Index Swire Pacific was included in the Bloomberg Gender-Equality Index for the second year in a row. |