2017 Sustainability Report

Sustainable materials

Sourcing materials responsibly

We rely on natural materials to create our products and services. Our aim is that, by 2030, all the key materials which we use should be sourced responsibly and sustainably. Our operating companies will continue to be responsible for managing their own supply chains. They have identified their key materials. Specific plans and targets are being developed with a view to meeting our 2030 aim.

We rely upon many materials to enable the creation of our products and services, and are committed to ensuring that we source these responsibly, and ultimately, sustainably.

Supply chains are becoming longer and more complex. The severity and frequency of supply chain disruptions is increasing. A World Economic Forum report indicates that when companies experience significant supply chain disruptions, it can reduce their share prices by as much as 7%1. Transparency of origin is important to consumers. We need to know more about the sources of our materials. We want to obtain them in a way that does not degrade nature, and with the people who produce them being treated with dignity and respect. This is expected of us. Sustainable sourcing limits the risk of supply chain disruptions and protects our reputation.

1 “Building Resilience in Supply Chains”, World Economic Forum, 2013.

Our operating companies are supported by our Supply Chain Sustainability Working Group, which shares best practices and develops sustainability policies and guidelines for suppliers. The working group considers joint procurement as a way of driving the market for more supply for sustainable materials in our key markets, and we intend to do more of it. Joint procurement of green office supplies and paper could save us over HK$870,000 a year.

Our Supplier Corporate Social Responsibility Code of Conduct has been adopted by all our operating companies. It sets out standards with respect to regulatory compliance, forced labour, child labour, health and safety, environmental issues, compensation and working hours, human rights, subcontractor management, ethics and reporting. Suppliers’ compliance with the code is assessed.

Our operating companies use a risk matrix based on our Supplier CSR Code of Conduct, with a view to managing and mitigating risks. Attention is focused on high risk suppliers. The results determine which suppliers need to be audited in order to ensure compliance.

Under our sustainable procurement policy, our operating companies are required to purchase, where possible, products which do not adversely affect the environment, specifically:

  • Minimal use of virgin material in the product
  • Replacement of disposables with reusables or recyclables
  • Minimal environmental impact over the life of the relevant product or service
  • Minimal packaging or elimination of packaging
  • Reduced energy or water consumption
  • Toxicity reduction or elimination

Our guidelines reflect international standards. Our businesses include sustainability criteria in procurement decisions where possible.

Description of our supply chain by division

Properties

Swire Properties’ principal suppliers perform or assist in the planning, design, construction, marketing, sale, leasing, management, maintenance and demolition of properties.

Aviation

The principal suppliers to our airlines are manufacturers of aircraft and engines and suppliers of fuel and engineering services.

Beverage

Supplies obtained by the beverages division directly from TCCC include juices, concentrates and other ingredients, fountain packaging and advertising materials. Things which TCCC authorises third parties to supply to the beverages division include packaging, speciality merchandise, sales and marketing equipment, sweeteners and carbon dioxide.

Marine Services

The principal suppliers to SPO and HUD are shipyards, engine manufacturers and suppliers of fuel.

Trading & Industrial

The principal suppliers of footwear and apparel to Swire Resources and of vehicles to Taikoo Motors are international brand-owning companies, with their own sustainability policies and standards.

At Swire Properties a green procurement monitoring system has been in place since 2015 to track consumption of office supplies, building services equipment and building materials that meet specific environmental criteria, e.g. if the products have been certified by reputable third parties. It uses the data collected to identify opportunities to source more sustainable products. In 2017, over HK$378 million of green products were procured, a 35% increase from 2016. Swire Properties is developing a more robust tracking system for its consumption of timber and concrete.

In 2017, the HAECO group asked 75 key suppliers to complete a self-assessment survey about compliance with HAECO’s code of conduct for suppliers. This was followed by an assessment of the legal, regulatory, environmental, health and safety and other risks posed by these suppliers. The risks were low in all but one case. The supplier identified as being of medium risk agreed to submit an improvement plan within 12 months.

Swire Pacific Offshore is developing a guide to sustainable materials for new ships.

Case study

Cathay Pacific – Inflight sustainable products

Through working with NGOs and its suppliers, Cathay Pacific does its best to source products sustainably without compromising quality.

ItemSustainable sourcing
Meal utensils Reusable plastic cutlery used on Cathay Pacific flights is sorted, washed and reused to minimise single use plastic waste.
Blankets Economy class blankets are made from recycled plastic bottles. Each year over 450,000 blankets are used.
Blanket plastic sheets Biodegradable plastic bags for cleaned blankets and laundry are used. Unopened blankets are reused on subsequent flights.
Napkins Napkins are made from 70% sugarcane and 30% wood pulp.
Cocktail snacks Roasted peanuts are procured from Roundtable on Sustainable Palm Oil certified sources.
Meals (seafood) In 2017, 379 tonnes of certified sustainable seafood were purchased.
Meals (vegetarian) In 2017, 38 tonnes of locally grown hydroponic vegetables were purchased.
Carpets Some carpets are made from regenerated nylon waste materials.

Case study

Swire Hotels – Sustainable sourcing

Swire Hotels buys biodegradable tableware and paper towels certified by the Forestry Stewardship Council. Disposable bento boxes are no longer used for in-room dining. The restaurants serve sustainable seafood (meeting the criteria of the World-Wide Fund for Nature Hong Kong (WWF) Seafood Guide or certified as sustainable by the Aqua Stewardship Council), organic wines (certified by Agriculture Biologique), organic poultry and fair-trade chocolates. An on-site garden supplies 10% of the vegetables and herbs used by The Temple Café at The Temple House in Chengdu. Head Chef Jerome Merlo has developed a “farm to table” menu with vegetables and herbs, such as micro-greens and nasturtium flowers, harvested from the garden. The Temple Café buys fresh, organic produce from local farmers.

Looking ahead

Our Supply Chain Sustainability Working Group (to be renamed the Sustainable Materials Working Group) identified office printed items, plastic bags and paper as items which could be procured centrally on a green basis. The purchase contracts for these items reduce costs and increase green specifications.

In 2018 the working group will:

  • Sign contracts for copying paper, office printed items and plastic bags
  • Consider developing a format for Sustainable Sourcing Policies for the group, with individual businesses being able to adapt the format for materials which are not suitable for procurement on a group basis
  • Review our Sustainable Procurement Policy and our Supplier Corporate Social Responsibility Code of Conduct, having regard to the publication of the sustainable procurement standard ISO 20400:2017
  • Assist our businesses in developing plans to engage with key suppliers, having regard for the suppliers’ sustainable development risks and commitments, and our level of control over them