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 go beyond the five SwireTHRIVE areas, covering, for example, human rights, biodiversity and sustainable procurement.
Policies are reviewed regularly. In 2020, we introduced policies for water, energy efficiency and waste, and updated our policies for sustainable building design, sustainable procurement, sustainable food, carbon offsetting and parental leave.
All policies related to sustainable development can be downloaded from our corporate website.
As a conglomerate, we acquire and dispose of businesses. This makes it difficult to track sustainability performance and set targets. To address this, we have a reporting methodology which deals with the scope, boundaries and calculations of the relevant data. Our data collection protocols for carbon, waste and water include variance checks and procedures for dealing with abnormal data.
Our sustainable development fund offers financial support to operating companies for projects which can provide long-term sustainability benefits but cannot be justified by reference to our cost of capital targets. The HK$100 million fund is intended to assist in reducing our carbon, water and waste footprints in line with our targets.
In 2020, the fund started to support trials of new technologies that have the potential to achieve significant environmental benefit. Operating companies invite cleantech companies to pitch solutions to 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 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. In 2020, the fund allocated approximately HK$33 million to projects at four operating companies.
In 2020, Swire Pacific secured its first sustainability-linked loan.
One-third of Swire Properties’ funding comes from green financing. In 2020, Swire Properties issued green bonds totalling HK$1,934 million, converted HK$2 billion in conventional loans into sustainability-linked loans and obtained a HK$1 billion sustainability-linked loan. It obtained its first green loan, a five-year HK$1 billion facility, which will fund 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 obtained a sustainability-linked loan.
In September 2020, Swire Pacific and DBS Bank agreed to convert a five-year revolving credit facility of HK$2 billion into a sustainability-linked facility. The interest payable is reducible by reference to indicators of our ESG performance. There are targets for energy consumption, water usage, and diversity and inclusion. We must also remain in the Dow Jones Sustainability Asia Pacific Index.
Our Board, led by its Chairman, is ultimately accountable for sustainability matters. 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. Division heads meet twice a year on sustainability matters.
The GRMC oversees committees and working groups that deal with specific areas of risk, and include representatives from our operating companies. The Swire Group Environment Committee (SGEC) and the Health and Safety Committee are relevant to SwireTHRIVE. We have a Diversity & Inclusion Steering Committee (DISC), which reports directly to the Chairman (see Diversity and inclusion section).
The Sustainable Development Office (SDO), the Group Risk Management and Diversity & Inclusion departments and the Group Head of Philanthropy are jointly responsible for SwireTHRIVE.
The SDO, led by the Group Head of Sustainability, advises senior management of key developments and emerging risks related to sustainable development, and 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 to a member of our leadership team.
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). The SGEC and the working groups enable operating companies to exchange information on best practices with a view to developing specific policy recommendations, improving efficiency, reducing costs and engaging staff.
Implementation of SwireTHRIVE and our ESG policies mostly takes place in our operating companies, with oversight and guidance from the SDO and other Group departments. 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 management of risks and the implementation of sustainability policies are subject to scrutiny by our internal audit department, with support from specialist external consultants where necessary.
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.
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Dow Jones Sustainability IndexIn 2020, Swire Pacific was included in the DJSI Asia Pacific Index. Swire Pacific has been included in DJSI indices since 2001. |
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Hang Seng Corporate Sustainability IndexIn 2020, Swire Pacific received an AA rating from the Hang Seng Corporate Sustainability Index. Swire Pacific is included in the Hang Seng Corporate Sustainability, Hang Seng Corporate Sustainability Benchmark and Hang Seng ESG 50 indices. |
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MSCI Constituent MSCI Global SRI IndexesIn 2020, Swire Pacific received an AAA rating from MSCI ESG Research, making us one of the top performers in our sector. |
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CDPIn 2020, Swire Pacific received a score of B from CDP Climate Change. Swire Pacific responded to the CDP Water Security questionnaire for the first time and received a score of A. |
