A quantitative overview of our 2016 sustainable development performance data can be found here.OUR PERFORMANCE
At Swire Pacific, we invest in sustainable development, not just because it is the right thing to do, but because it helps to achieve long-term growth through innovation and improved efficiency. We think long-term and are responsible stewards of resources. All this informs our approach to daily operations, strategic planning, investment decisions, relationships with employees, community involvement and the environment. Our aim is to integrate economic, environmental and social sustainability into our business and management practices.
Swire Pacific’s 2016 financial results were affected by difficult economic conditions. This did not affect our commitment to sustainable development. Our new environmental sustainability strategy, Thrive, which was introduced in 2016, is part of that commitment. It is intended to enable us to identify, track and accelerate our progress in the sustainability areas which are most material to our group.
Swire marked its 200th anniversary in 2016. This provided an opportunity not just to reflect on our achievements but to look forward as well. We operate in changing and complex markets. Globalisation and technological progress is increasing the pace of change. For Swire to succeed in creating long term value, sustainable development should be a strategic imperative.
By emphasising sustainable development, both as a concept and in practice, we will be a more robust, competitive and resilient business in the long term. This is why, despite the current economic challenges, we continue to invest in sustainable development in order to make our business more sustainable. This year, for example, we announced our intention to offer, from 2017, additional central support for projects which can deliver long term benefits in terms of sustainable development, but which would otherwise fall short of our cost of capital targets. Such support is intended to encourage innovation and to improve our overall environmental performance and contribute to long term growth in shareholder value.
Swire Pacific is part of the individual economies and communities in which it operates and therefore of the global economy and community. In order to continue to succeed, we need to play a part now in protecting the environment by addressing climate change, water scarcity and waste. We also need to address biodiversity, sustainable materials and resilience to climate change. These matters are key areas of focus at the heart of Thrive.
We are focused on the greenhouse gas emissions of our aviation and marine services businesses, on material usage by our trading and industrial businesses, on water consumption by our beverages business and on energy consumption by our property business. There are no quick-fixes. But, in line with our motto, “Esse quam videri – to be, rather than seem to be”, we will search for ways to make our businesses more sustainable and to work with others who share our sustainability values.
In 2016, we continued our efforts to incorporate sustainable development principles, tools and approaches into our businesses. We developed a strategy intended to mitigate operational risk and to build long-term resilience by improving environmental efficiency and innovation. We called the strategy Thrive. It was developed by the Swire group sustainability committee, which includes representatives from all our operating units. The aim of Thrive is that our businesses should have a positive environmental impact while continuing to succeed in the long term. When the natural environments that we depend on thrive, so do we. Thrive identified six areas that are material to all our operating units. They are carbon, water, waste, materials, biodiversity and climate resilience. There are commitments, indicators of progress and targets in relation to each of them. We have agreed on the indicators of progress and are developing short and long term targets.
We are extremely grateful for the time and effort put in by all involved to develop Thrive. It represents a comprehensive plan for the Group to 2020 and beyond and could provide a blueprint for the right approach by conglomerates to sustainability.
Thrive was introduced at our Sustainable Development Forum in November 2016. It recognises the importance of environmental matters, in that Swire can only continue to flourish in the long term by playing a part now in protecting the environment by addressing climate change, water scarcity and waste. We also need to address biodiversity, sustainable materials and resilience to climate change.
Our businesses differ in respect of their sector, size and location. We underestimated how difficult it would be to develop a sustainability strategy that works for all of them, and in ways which are consistent with our values and resonate with our employees. We do not have all the answers and are learning as we go. We are still working on environmental targets and on tracking and managing performance. We will report on these matters next year.
Our intention to offer additional support to innovative sustainability projects from 2017, as referred to in the Chairman’s statement, is a welcome development. We will use this mechanism to further encourage support for Thrive and will report on our progress in next year’s report.
Financial investors are increasingly interested in sustainability. Our Sustainable Development Office is working more closely with investors and external analysts and with our own finance people accordingly.
We are constituents of the Dow Jones Sustainability Asia Pacific Index, the Hang Seng Corporate Sustainability Indices, and the MSCI World ESG and MSCI Global SRI Indices. We want to do more to publicise our sustainable development efforts and challenges. This report is a start.
We have come a long way in addressing sustainability issues, but we have a long way to go. We face challenges in managing our use of natural resources and in reducing our emissions. We are committed to sustainable development. We have solid foundations on which to build and, in Thrive, a sound strategy for the future. We look forward to reporting on our progress in future reports.