2018 Sustainability Report


SWIRE THRIVE - Pursue a long-term goal of decarbonisation

Pursuing a long-term goal of decarbonisation

We must act decisively to mitigate climate change. We aim to decarbonise our operations progressively.

Our ambition is to lead in improving energy efficiency and reducing greenhouse gas emissions (GHG) in the industries in which we operate. We aim to reduce our GHG emissions in line with international carbon reduction goals. Innovation and new technologies help to achieve this and to reduce our costs.

SWIRE THRIVE - Pursue a long-term goal of decarbonisation
We recognise the world needs to act swiftly and decisively to reduce carbon emissions to mitigate damaging climate change and are committed to supporting this through progressive decarbonisation.

The 2015 Paris Climate Accord aimed to strengthen the global response to the threat of climate change. Its measures include limiting the increase in the global average temperature to no more than 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels. Businesses are setting targets to support the global response to the threat of climate change.

Taking advantage of new technologies can transform how energy is used and generated. This can reduce operating costs, increase returns and reduce the use of carbon.


The extreme weather that climate change brings is a material risk to our businesses. Mitigating its effects is a major business imperative. GHG emissions must be reduced to lower the risks associated with climate change. We work with industry groups and regulators to support reductions in GHG emissions.

“In 2018, we outperformed our SwireTHRIVE carbon target by 0.9%.”

Our operating companies have targets for reducing carbon intensity. We aim to reduce our GHG emissions in line with international carbon reduction goals. Our 2020 carbon intensity targets are intended to reduce our carbon intensity by 8-10% compared with a 2015 frozen efficiency baseline (where performance is projected assuming no improvement in current efficiencies). Innovation and new technologies will help to achieve this.

Electricity consumption is our second largest source of GHG emissions. In 2018, we outperformed our SwireTHRIVE carbon target by 0.9%. The addition of 11 bottling plants in the Beverages division during the reporting period is the reason for this increase. In 2018, indirect GHG emissions in the Trading & Industrial division decreased by 26%, mainly due to the disposal of the Swire Pacific Cold Storage business in August 2018. Indirect GHG emissions in the Marine Services division decreased by 30%, largely due to an increase of our vessel utilisation rate. Swire Coca-Cola and Swire Properties accounted for 41.2% and 30.2% of indirect GHG emissions respectively.

We are retrofitting air conditioning systems and using more energy-efficient lighting and electrically-commutated motor plug fans. Cathay Pacific continues to replace existing aircraft with more fuel-efficient aircraft.

Total GHG emissions by division (thousand tonnes of CO2e)

Marine Services
Trading & Industrial

Our total GHG emissions increased by 1% in 2018 compared to 2017. This was due to an increase in the number of flights at Cathay Pacific and the inclusion of 11 new bottling plants at Swire Coca-Cola.

Total GHG emissions by division – without jet fuel (thousand tonnes of CO2e)

Marine Services
Trading & Industrial

In 2018, GHG emissions associated with jet fuel consumption accounted for 95.1% of our GHG emissions, compared to 94.9% in 2017.

Indirect GHG emissions by division (thousand tonnes of CO2e)

Performance against SwireTHRIVE target (thousand tonnes of CO2e)

In 2018, we outperformed our SwireTHRIVE carbon target by 0.9%.

Greenhouse gases

“In 2018, Cathay Pacific increased fuel efficiency (as measured by tonnes of CO2 per revenue tonne kilometre (CO2/RTK)) by 1.99%.”

Our aviation division accounted for 96.2% of our total GHG emissions in 2018. Cathay Pacific has set a target to improve fuel efficiency by 2% (compared with the agreed industry target of 1.5%) per annum by 2020 and to achieve carbon neutral growth thereafter. It follows IATA’s four pillar strategy.

In 2018, Cathay Pacific increased fuel efficiency (as measured by tonnes of CO2 per revenue tonne kilometre (CO2/RTK)) by 1.99%. It started to operate eight new Airbus A350-1000 aircraft, which are 25% more fuel efficient than the existing wide-body fleet.

Cathay Pacific Group aims to operate its fleet as efficiently as possible.

Cathay Pacific has improved its operational fuel efficiency with a fuel monitoring system, and has reduced engine use while taxiing. In the face of additional carbon charges and rising fuel prices, these changes enable them to achieve higher efficiency and build resilience to adverse business conditions. More information can be found in Cathay Pacific’s sustainable development report.

Below is relevant information about Cathay Pacific’s new aircraft. The company has also introduced a new fuel-efficient fleet.

A350-900/1000 A321neo Boeing 777-9X
New aircraft joining fleet from 2018 onwards 18 32 21
Engine Rolls-Royce Trent XWB LEAP-1A-32 GE9X-105B
Fuel-efficiency 25% more fuel-efficient than its current long-range competitor 20% more fuel-efficient than current model of A321 21% more fuel efficient per seat than Boeing 777-300ERs

Cathay Pacific is involved in the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which caps net CO2 emissions from international aviation at 2020 levels. This scheme was developed by ICAO. In 2016, this scheme was adopted by 191-member states of ICAO. Since May 2018, 78 states, representing about 77% of international aviation activity, agreed to participate voluntarily in CORSIA.

Since 2008, Cathay Pacific has been involved in CORSIA and participates in the ICAO Global Market-based Measure Technical Task Force. It is starting to collect required fuel use data.

Swire Pacific Offshore is committed to reducing its GHG emissions in line with IMO targets. It assesses low or zero carbon fuels (see under Project Hafnium in the Climate Resilience section of this report), engages with clients about fuel and has fuel management software on its vessels.

Cathay Pacific – Alternative jet fuel

Cathay Pacific – Alternative jet fuel

Biofuel reduces GHG emissions by up to 80% compared with fossil-based jet fuel and can be produced more sustainably with little loss of performance. Cathay Pacific contributes to the Sustainable Aviation Fuel Users Group, the FAA Centre of Excellence for Alternative Jet Fuels and the Commercial Alternative Aviation Fuels Initiative. Cathay Pacific has committed to buying 1.1 million tonnes of sustainable aviation fuel over 10 years, enough for 2% of current operations. Its Airbus delivery flights use biofuels. It has an equity interest in Fulcrum BioEnergy, Inc., the business of which is to convert municipal solid waste into sustainable aviation fuel. In May 2018, Fulcrum commenced construction of its bio-refinery plant at its Sierra plant in Nevada. Once operations begin in 2020, the plant will be able to convert 175,000 tonnes of waste into over 10 million gallons of fuel in each year.

Swire Properties has a science-based decarbonisation target. It is working with contractors and suppliers to collect carbon emission data from the construction of One Taikoo Place. It is important and potentially cost-effective to manage carbon emissions from construction activities, including embodied carbon in construction materials used in new developments.

With the Hong Kong University of Science and Technology’s Department of Civil and Environmental Engineering, it is using the data collected to identify carbon reduction opportunities at future development projects. In 2018, it made a preliminary assessment of its Scope 3 emissions and is working on measures to reduce them.

Swire Coca-Cola is using transport optimisation software to improve fuel efficiency and delivery times. In Hong Kong, it increased its fleet of Euro VI trucks from 11 in 2017 to 18 in 2018. 97% of the company-owned trucks in Hong Kong are Euro VI or Euro V.

Swire Coca-Cola conducted a detailed review of its Cold Drink Equipment (CDE) to find that only 19% of its CDE uses “natural” refrigerants (i.e. CO2 or hydrocarbons) as opposed to other more harmful refrigerants (CFCs, HCFCs, HFCs). The CDE (including coolers, vending machines, carboys, fountain equipment) is Swire Coca-Cola’s principal asset, and is key to its distribution operations and their expansion. To reduce its Scope 1 emissions, it is replacing inefficient CDE with new CDE.

Swire Waste Management is replacing its Euro II tractors with Euro V tractors.

Cathay Pacific – Science-based targets

Science-based targets

Swire Properties is the first real estate company in Hong Kong to have committed to the SBTi, an initiative developed among the United Nations Global Compact, World Resources Institute, the CDP36 and the WWF Hong Kong. The initiative encourages corporations to play a substantive role in reducing GHG emissions and aims to make science-based target setting a standard business practice by 2020. GHG reduction targets are considered science-based if they are consistent with achieving decarbonisation sufficient to that which has been identified in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (“IPCC”) of the United Nations (published in 2015) to keep global temperature increase below 2°C above pre-industrial temperatures. Swire Coca-Cola is considering setting a science-based target.

Carbon offsets

Carbon offsets are purchased by Cathay Pacific and Swire Pacific Offshore. In 2018, Cathay Pacific’s Fly Greener programme offset 15,466 tonnes of CO2. This was achieved by investing in offsets generated by Gold Standard certified offset projects (including biogas digesters in Vietnam and efficient cook stoves in India). The Fly Greener programme (the first of its kind developed by an Asian airline and on which Cathay Pacific makes no profit) has offset over 165,000 tonnes of CO2 since it started in 2007.

Swire Pacific Offshore purchased credits derived from a REDD Brazil nut project in Peru, making it carbon neutral for 2018.

The projects were selected with regard to their expected environmental, economic and social benefits.

“In 2018, Cathay Pacific’s Fly Greener programme offset 15,466 tonnes of CO2.”


In 2018, our indirect emissions (primarily derived from using electricity, which is our second largest GHG emission source) were 667.8 thousand tonnes of CO2e, a 5.7% increase from 2017 (on a revised basis). This was principally due to the inclusion of 11 new bottling plants at Swire Coca-Cola.

“Swire Properties’ energy use intensity in Hong Kong decreased by 25% between 2008 and 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. Group Sustainable Building Design Policy requires new and substantially renovated buildings to try to obtain the highest or, as a minimum, the second highest international or local building environmental certification. At the end of 2018, buildings that accounted for 92.2% of its property portfolio had been certified or provisionally certified as green buildings under BEAM, BEAM Plus, LEED, China Three Star and Green Mark independent rating systems.

In 2018, Swire Coca-Cola’s Yunnan bottling plant obtained LEED Gold certification. It upgraded the facility with reference to the Group Sustainable Building Design Policy, which outlines the green building certification requirements for buildings of a certain size. Swire Coca-Cola has five LEED certified bottling plants in Mainland China and the USA.

Swire Properties’ energy use intensity in Hong Kong decreased by 25% between 2008 and 2018. Its energy use in Hong Kong decreased by 56.9 million kWh over the same period. The comparable figures for Mainland China are 35% and (on a business as usual basis) 17.5 million kWh.

As part of its SD2030 strategy, Swire Properties is committed to the following by 2020:

2018 progress update 2020 KPI
Reduction of carbon intensity (tonnes of CO2e/m2)
Hong Kong portfolio (↓25%)
Hong Kong portfolio (↓27%)
Mainland China portfolio (↓20%)
Mainland China portfolio (↓21%)
Reduction of energy consumption (kWh/year)
Hong Kong portfolio
56.9 million kWh/year (↓25%)
Hong Kong portfolio
64 million kWh/year (↓26%)
Mainland China portfolio
17.5 million kWh/year (↓19.8%)
Mainland China portfolio
23 million kWh/year (↓20%)

Swire Properties offers free energy audits to tenants. Since 2008, audits have covered 5.3 million square feet of commercial space, identifying potential annual energy savings of 8.6 million kWh.

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

In 2018, Swire Properties introduced a cloud-based energy management platform at INDIGO, Beijing. It has upgraded heating, ventilating and air conditioning units and replaced old fans with EC motor plug fans at Pacific Place, Taikoo Place, and Taikoo hui, Guangzhou, making annual energy savings of more than 1.4 million kWh. Both projects were initially supported by the Swire Pacific Sustainable Development Fund.

In 2018, Swire Properties received the American Society of Heating, Refrigerating, and Air-Conditioning Engineers Regional Technology Award for the commercial building category. It received the award for work at Two Pacific Place which reduces annual energy consumption by around 2 million kWh, equivalent to 1,600 metric tonnes of CO2.

Swire Properties – Green bond

Swire Properties – Green bond

In January 2018, Swire Properties issued its first green bond, raising US$500 million at a 3.5% coupon rate. It was the first green bond in Hong Kong to be certified under the Hong Kong Quality Assurance Agency’s green finance certification scheme. Part of the proceeds financed One Taikoo Place.

The Swire Properties green bond was rated A2 by Moody's Investors Service and A by Fitch Ratings. The Green Bond framework was also reviewed and opined on by the independent ratings and analysis firm Sustainalytics.

HAECO Hong Kong is replacing three freshwater-cooled chiller plants with one new ultra-high efficiency hybrid power chiller plant. It is also introducing a new phase change material thermal storage system. The estimated annual electricity savings are up to 5.4 million kWh, equivalent to a 4,112 tonne CO2 reduction. HAECO Americas and HAECO Landing Gear Services are replacing existing lighting with LED tubes, which will save an estimated 2 million plus kWh. HAECO Landing Gear Services is doing the same, saving an estimated 290,510 kWh.

Swire Resources’ warehouses are using more energy-efficient LED lights. Cathay Pacific Catering Services has installed sensors which are expected to save 530,000 kWh per year, equivalent to 270 tonnes of CO2 per year.

Renewable energy

We encourage using renewable energy in our operations. In 2018, Swire Properties, Swire Coca-Cola and HAECO Xiamen generated 12.87 million kWh of electricity from renewable energy sources.

At four of its bottling plants in Mainland China, Swire Coca-Cola uses photovoltaic panels and solar water heater systems to generate and use renewable energy. Some of these plants capture methane gas from wastewater treatment process to produce steam. Between August and December 2018, the photovoltaic panels at its bottling plant in Xiamen generated 1.2 million kWh of electricity, saving HK$106,000.

In 2018, HAECO Xiamen’s solar panels generated around 1.37 GWh of electricity. HAECO Hong Kong tested a micro-wind turbine to generate electricity. It has solar panels at its main offices, its mobile planning office and its windscreen working stands. HAESL has solar panels which are estimated to save 10,000 kWh annually.

“Swire Coca-Cola and HAECO Xiamen generated 12.87 million kWh of electricity from renewable energy sources.…”

There are solar panels and a waste to energy tri-generation system at Swire Properties’ One Taikoo Place development which are estimated to supply 4% of the landlord’s energy use. Swire Properties has solar panels on the roofs of its INDIGO, Beijing, Taikoo Hui, Guangzhou, and Taikoo Li Sanlitun, Beijing developments. It intends to start a renewable energy procurement study to evaluate the feasibility, scale, costs and different renewable options within its Mainland China portfolio.

Looking ahead

Swire Pacific has a climate change policy. Our businesses are expected to take due account of climate change and extreme weather by identifying the risks associated with them and by doing their best to adapt to and mitigate them where possible, having regard to global best practices.

We are improving the collection and monitoring of our GHG emissions by developing data protocols, identifying preferred calculation methodologies and setting operational boundaries.

Our carbon working group will update its carbon offset and sustainable building design policies.

We aim to establish ambitious carbon intensity targets for 2030, with our property and beverages divisions considering science-based targets.