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