Decarbonise our business
and build climate resilience

CO2e emissions 2022

Group carbon footprint 2022

Progress against targets

The scientific reality of climate change is being felt increasingly by communities globally. To avert the worst effects of the rapidly changing climate, the world needs to limit global temperature rise to 1.5°C and transition to a net zero carbon emissions economy by 2050.

Failure to mitigate climate change, or adapt to it, represent the two most severe global risks over the next decade, underscoring why the Group has identified it as a key risk. According to the World Meteorological Organization (WMO), the chance of breaching the 1.5°C target before 2030 stands at 50%. Every fraction of a degree counts.

Our businesses will be affected by climate change directly and by governmental and regulatory mitigation and adaptation responses. Decarbonising our operations in all sectors where we operate is a strategic imperative. We must also reduce value chain emissions and strengthen our resilience to climate impacts.

We are committed to play our part to limit global temperature rise to 1.5°C, in line with the Paris Agreement. Progress requires technological advancements, mature markets, and enabling policy environments. Our strategy is to support their development.

SwireTHRIVE and our Climate Change Policy outline what we will do to reduce our emissions and adapt to climate change.

Our ambition is to achieve net zero emissions by 2050. This will not be easy. We operate and invest in the carbon intensive aviation sector, which is difficult to decarbonise without breakthroughs in alternative fuel technology.

Our interim target is to halve our scope 1 and 2 emissions by 2030, compared with a 2018 baseline. Each of our businesses has individual targets aligned with science, nationally determined contributions, or international industry commitments. Swire Properties and Swire Coca-Cola have set science-based targets aligned with the 1.5°C pathway and approved by Science Based Targets Initiative (SBTi). Both companies have signed up to Business Ambition for 1.5°C.

To reduce emissions, we are:

Improving energy efficiency

Using more renewable energy

Choosing low-carbon and energy efficient products

Encouraging our suppliers and customers to decarbonise

The Group and its operating company Swire Properties both received an A- rating in the 2022 CDP Climate Change questionnaire.

In addition to investments already made by our businesses, we are implementing two key tools to finance and accelerate emissions reduction. Since 2019, our HK$100 million Sustainable Development fund has supported trials of innovative green technology solutions, with a view to accelerating their adoption at scale. In 2022, the Board approved a hybrid model Internal Carbon Pricing (ICP) which will be piloted in 2023. Read more in Looking Forward in the Climate section.

Carbon removal and verified carbon offsets will form part of our strategy, particularly in aviation where low-carbon solutions are not yet available at scale. But our priority is to reduce our absolute GHG emissions as much as we can first.

The Group generated 649,000 tonnes of scope 1 and 2 GHG emissions in 2022, a 11% decrease from 2021. The Beverages and Property divisions accounted for more than 80% of the Group’s emissions in 2022. Swire Properties absolute GHG emissions decreased by 1%, while Swire Coca-Cola’s emissions decreased by 8%. Swire Properties has implemented energy saving measures into their HVAC system of their Hong Kong portfolio, set strict control for the circulation pumps of the heat-pump system at Taikoo Li Sanlitun, Beijing, and decreased electricity usage for HKRI Taikoo Kui and Taikoo Hui Guangzhou. Swire Coca-Cola has procured renewable energy in Chinese mainland, and commenced numbers of solar PV installation projects for the sales and distribution centers in the US.

The emissions of our Aviation division and Trading & Industrial division decreased by 5% and 6% respectively compared with 2021.This was in part due to COVID-19 related reductions in business activity, reduced fleet size, replacement of old machineries and its components to improve the production efficiency.

For full details of the scope of our data, please see our Reporting methodology.

Electricity consumption is our largest source of GHG emissions. We used almost 900 million kilowatt-hours of electricity in 2022 and generated 529 thousand tonnes of indirect (scope 2) emissions, a decrease of 5% from 2021. This is largely contributed by the improvement in energy efficiency in Chinese Mainland for the Beverages division.

Chart data Tabular data

Total GHG emissions (scope 1 and 2) by division 2022
(thousand tonnes CO2e)

Total GHG emissions (scope 1 and 2) by division 2022
(thousand tonnes CO2e)

Scope 1 Scope 2
Property 9.9 186.0
Beverages 79.8 278.2
Aviation 15.2 43.5
Trading & Industrial 6.2 21.1
Marine Services 9.3 0.1
Chart data Tabular data

Scope 2 GHG emissions by division
(thousand tonnes of CO2e)

Scope 2 GHG emissions by division
(thousand tonnes of CO2e)

2018 2019 2020 2021 2022
Property 205 218 204 187 186
Beverages 275 267 273 256 278
Aviation 57 55 47 44 44
Trading & Industrial 37 28 23 24 21
Marine Services 2.8 2.7 2.6 1.4 0.1

By 2030, we aim to reduce our scope 1 and 2 emissions by 50%, compared with 2018 levels. In 2022, we achieved a 19% reduction compared to our baseline. Based on our 2030 projections, we surpassed our 8.9% target reduction for 2022.

As the cost of electricity rises, making our buildings and operations more energy efficient is a priority.

Designing efficient buildings
Our Sustainable Building Design Policy requires new and substantially renovated buildings to obtain the highest or, as a minimum, the second highest international or local building environmental certification.

At the end of 2022, 94% of Swire Properties’ wholly-owned existing buildings have been certified as green buildings. Of these, 98% have achieved the highest ratings. 100% of its wholly-owned projects under development have achieved green building certification ratings. Swire Coca-Cola has five LEED certified bottling plants in the Chinese Mainland and the US.

Energy saving measures
Across the Group, we continued to upgrade our lighting, cooling, boiler, and refrigeration systems to more energy efficient models. In 2022, Swire Properties continued to optimise heating, ventilating, and air conditioning systems, installed high-efficiency chillers, and conducted energy-saving retrofits across its properties. Approximately 86% of its assets (by gross floor area) in Hong Kong and the Chinese Mainland are certified to the ISO 14001 and ISO 50001 standards for environmental and energy management.

Swire Properties continues to roll out a cloud-based smart energy management platform across all its properties in Hong Kong and the Chinese Mainland. Originally developed with Schneider Electric as a recipient of the Group’s Sustainable Development Fund, the platform uses the Internet of Things, big data analysis, artificial intelligence, and cloud computing to generate energy saving insights and optimise energy consumption. This year, the platform identified opportunities to achieve a 50% reduction in energy use from air handling units serving the central link bridge at Cityplaza, Hong Kong.

Swire Properties’ hotels use solar energy to heat up water in their kitchens, and have induction cookers, variable speed controls for kitchen exhaust fans, head recovery functions for gas cooking stoves, and electric conveyor dishwashers to maximise kitchen energy efficiency. At East Hong Kong, the completion of a decorative lighting replacement scheme will reduce energy consumption from guest room lighting by 60%.

Swire Coca-Cola partnered with Tsinghua University to install more energy effective compressed air and chilling systems at its Jinqiao Shanghai plant. In 2022, the completion of the project resulted in a saving of 2.6 million kWh of electricity. In the Chinese Mainland, it has identified energy efficiency projects that could save 8,810 MWh per year and earmarked a budget of over RMB30 million to cut its energy usage per litre of product produced by 5% in 2023. 100% of its bottling plants are certified ISO 14001.

Shifting our energy mix to renewable sources is a crucial part of our decarbonisation strategy. We encourage our businesses to explore opportunities to generate and purchase more renewable electricity (RE). Swire Properties and Swire Coca-Cola have set RE targets.

More than 22 million kWh of electricity was generated from renewable sources at Swire Properties, Swire Coca-Cola and HAECO in 2022, representing a 7% increase from 2021.

Swire Coca-Cola is investing in solar photovoltaic (PV) systems on its sites in Hong Kong, Mainland China and in the US, and purchasing RE from electricity retailers and utilities. In the Chinese Mainland, four more facilities secured offsite RE agreements this year. Its plants in Yunnan, Hangzhou, Hubei and Wenzhou now operate using 100% RE. Its Guangxi and Anhui plants use a partial RE mix. At its Hong Kong plant, a newly installed rooftop PV system generates 31 MWh per year. In the US, the Sustainable Development Fund will co-fund the installation of rooftop solar PV panels at Swire Coca-Cola’s plant in Draper, Utah, which are expected to generate 4,500 MWh/year. In 2022, 21% of Swire Coca-Cola’s total electricity use was from renewable sources.

HAECO’s PV system at HKIA consists of approximately 6,000 solar panels.

HAECO – Completion of one of Hong Kong’s largest solar panel projects

This year, HAECO completed the installation of one of Hong Kong’s largest solar photovoltaic (PV) systems. The array is situated on the rooftop of HAECO’s aircraft maintenance hangar No. 2 and 3 at the Hong Kong International Airport. With a total capacity of 3 megawatts, it is estimated that the system will result in an emissions reduction of 1,000 tonnes of CO2e per year, equivalent to planting more than 48,000 trees.

Surplus power generated by the HAECO system will be sold to local power companies under the Hong Kong Government’s “Feed-in Tariff” scheme with part of the income being used to support WWF-Hong Kong.

Swire Properties procures 100% renewable electricity for Taikoo Hui, Sino-Ocean Taikoo Li Chengdu and The Temple House. At the end of 2022, its mix of renewable electricity in the Chinese Mainland stands at about 39%. One of Swire Properties’ 2025 KPIs is to generate 4-6% of the landlord’s building energy from renewable or clean energy sources in selected new office developments. At Two Taikoo Place, it is installing solar PV panels, a wind turbine, and a waste-to-energy tri-generation system, which we estimate will supply renewable energy equivalent to approximately 6% of the landlord’s building energy.

Chart data Tabular data

Proportion of electricity consumed from renewable sources
(million kWh)

Proportion of electricity consumed from renewable sources
(million kWh)

2020 2021
Total electricity used by the Group 893 952
Total RE generated on our sites 20.7 21
Total RE procured 11.5 103
% electricity used by the Group that was from renewable sources 3.6% 13.0%

Since 2020, Swire Properties has included low-carbon procurement specifications – developed in accordance with international standards such as ISO 14067 – for construction materials such as concrete with pulverised fuel ash or ground granulated blast furnace slag, rebar and structural steel with recycled content. It is the first real estate developer in Hong Kong to contractually require low-carbon building materials for new projects and is exploring extending this practice to its developments in the Chinese Mainland. In 2022, six of its buildings won the “GBA Low Carbon Buildings Top 100 Award”, presented by the Greater Bay Area Carbon Neutrality Association.

In Hong Kong, all new Swire Coca-Cola trucks use B7 biodiesel and comply with Euro VI emission standards. HAECO completed the upgrading of a fuel station to cater for the use of Biodiesel (B5). These fuels are produced from waste cooking oil, animal fat, and other oils which can significantly reduce emissions. During 2022, HAECO replaced 60% of its traditional diesel use to biodiesel in its mini fuel station in Hong Kong. Combined with the use of Hong Kong International Airport’s airside fuelling station, Biodiesel represented 48% of HAECO’s Hong Kong fleet fuel consumption.

In Taiwan, Swire Coca-Cola’s Cold Drink Equipment (CDE) team innovated a technology to retrofit old CDE models to make them compatible with eco-friendly refrigerants. They are working with customers to transition all their CDE to use eco-friendly refrigerants by 2025. This is expected to reduce more than 1,030 tonnes of CO2 equivalent emissions.

More than 90% of our GHG emissions occur outside our direct operations. We do not control these assets and activities, but through our decisions and relationships we can work to reduce material scope 3 emissions.

In 2022, we conducted a mapping exercise to identify material sources of emissions in our investments and in the value chains of our businesses. All scope 3 categories were assessed to understand what is important, applying a materiality threshold defined as 5% of total scope 3 emissions, and in accordance with the Corporate Value Chain (scope 3) Accounting and Reporting Standard. Primary data was supplemented with secondary data when necessary.

Using 2022 data, our total scope 3 GHG emissions is 7,381 thousand tonnes CO2e. We identified value chain emissions from purchased goods and services (34%), investments (33%), downstream leased assets (16%), and use of sold products (11%) as material.

Swire Pacific has a significant interest in Cathay Pacific, and accounts for a proportion of its GHG emissions under our scope 3. This proportion is equivalent to the Group’s shareholding interest in the company.

Swire Properties has established science-based reduction targets to reduce the emissions generated by capital goods and downstream leased assets, its two most significant categories of scope 3 emissions, by 25% and 28% per square metre respectively by 2030.

Tenant electricity consumption accounts for 50% of its total building energy consumption. Swire Properties helps tenants to reduce their electricity use by offering free energy audits. Since 2008, free energy audits have covered 5.8 million square metres of commercial space, identifying potential annual energy savings of 9.1 million kWh. It also procures 100% renewable electricity procured for Taikoo Hui in Guangzhou and Sino-Ocean Taikoo Li Chengdu, and continues to look for other opportunities to secure 100% RE for other operations.

Embodied carbon in capital goods is a major source of emissions for Swire Properties. It uses software tools to incorporate low-carbon considerations at the project design stage, sets procurement specifications for carbon intensive key materials, and works with contractors to source these materials and optimise energy management on its construction sites.

Emissions from packaging and the electricity consumed by its cold drinks equipment (CDE) accounts for around 60% of Swire Coca-Cola’s total value chain emissions.

To meet its 2030 target, Swire Coca-Cola needs to reduce its emissions from packaging by increasing its recycled content and promoting post-consumption recovery and recycling. Since 2021, it has used 100% recycled PET for Bonaqua water bottles in Hong Kong. In 2022, recycled aluminium constituted 3.2% of cans in Chinese Mainland and 72% of cans in the US. It has redesigned the label length of several aseptic PET products in Hong Kong to encourage recycling.

With proactive collaboration between its procurement team and beverage cooler suppliers, it has identified ‘next generation’ CDE that uses 50% less energy compared with current equipment. All its new CDE will have high energy efficiency ratings and use natural refrigerants. As the new technology is phased-in across the Chinese Mainland, it will result an estimated reduction in scope 3 emissions by 2030 that equates to just over a third of the overall reductions required to meet its Science Based Target (SBT).

Cathay Pacific has committed to achieving net zero carbon emissions by 2050, and for sustainable aviation fuel (SAF) to constitute 10% of its total fuel consumption by 2030. Its carbon reduction strategy includes modernising its fleet to improve fuel efficiency, improving operational efficiency, and providing Gold Standard accredited offsets through its Fly Greener programme.

To support Cathay Pacific in creating demand for SAF, Swire Pacific supported the launch of the Cathay Pacific Corporate Sustainable Aviation Fuel (SAF) Programme. We contributed to the purchase of internationally recognised SAF, along with Cathay Pacific’s other founding partners, which will be used to power Cathay Pacific flights. Through its programme, Cathay Pacific will issue verified emissions reduction certificates and proof of sustainability to its customers, including Swire Pacific, reducing our scope 3 carbon emissions. See Cathay Pacific’s Sustainable Development Report 2022 for details.

Representatives from our operating companies are active members of our SwireTHRIVE working groups and committees, and benefit from the collective experience, expertise and best practice sharing between our companies. We also support carbon and waste reduction projects through our Sustainable Development Fund.

Scope 3 emissions by division are included in the Appendices. Further information is available in the sustainability reports of our operating companies.

Carbon offsets can play a vital role in our net zero strategy as they allow us to compensate for hard to abate emissions within our value chain and emissions from technologically constrained sectors.

Our net zero commitment aligns with the approach defined by the Science Based Targets initiative’s (SBTi) Corporate Net-Zero Standard and references the Institute of Environmental Management and Assessment’s carbon mitigation hierarchy. We aim to reduce our scope 1 & scope 2 GHG emissions by 95% and scope 3 by 90% before purchasing high quality third-party accredited offsets to reach our goal.

Our approach contrasts with carbon neutrality which we define as counterbalancing CO2 emissions (not necessarily all GHG emissions) with carbon offsets without having reduced emissions by an amount consistent with reaching net-zero.

In 2022, we reviewed our approach, the carbon offset market, and emerging standards including the Core Carbon Principles developed by the Integrity Council for the Voluntary Carbon Market. We are producing guidelines for our operating companies to standardise and guide decision making on offsetting across the Group.

Our evolving approach builds on our existing Carbon Offsetting Policy, which has been in place since 2009. Under the current policy, all Swire Pacific subsidiaries are required to offset the emissions associated with staff business air travel. Offsets purchased must, at a minimum, meet the Verified Carbon Standard or Gold Standard. In 2022, we purchased more than 154 tonnes of carbon offsets through Fly Greener.

We have owned and managed a Verra certified carbon offset REDD+ project in Paraguay since 2010. The project is designed to generate 10,000 carbon credits per year for 20 years. The Verified Carbon Units (VCUs) are dual accredited under both the Verified Carbon Standard (VCS) and the Climate, Community and Biodiversity Standard (CCB). See the Biodiversity section for more information.

We need to prepare for the physical risks of climate change. This means designing buildings capable of withstanding extreme weather. Airports where we operate must be prepared to deal with the consequences of rising sea levels. Climate change can disrupt our operations and supply chains.

Stabilising global temperature increase at 1.5°C will require drastic action far beyond business as usual. Businesses will be expected to reduce emissions and to limit and adapt to climate change, which is likely to lead to stricter regulation and potentially carbon taxes. Energy availability and affordability will be affected. Regulators and investors increasingly expect companies to measure and report their exposure to climate risks to avoid financial shocks.

We have a Climate Working Group, which supports the implementation of our Climate Change Policy and the delivery of our climate change related targets and commitments. A TCFD Working Group comprising sustainability, finance and risk team members was formed in 2020. It is developing Group disclosure guidelines, reviewing information about risks, and determining a timeline for full disclosure to TCFD.

We have assessed the physical risks that climate change poses to our businesses. We use a specialised cloud-based platform provided by The Climate Service (TCS), now a part of S&P Global, to assess the financial implications of climate-related risks and opportunities under different climate scenarios. The assessment helps us to align our climate change disclosures with the recommendations of TCFD. In 2022, we developed a group-wide scenario analysis framework which will be used with our operating companies in scenario analysis workshops in 2023. See the TCFD section for more information.

We require our operating companies to consider climate change risks when compiling their risk registers, and to take appropriate precautionary measures. Climate change is included in our risk register. Some of our operating companies build climate resilience into their operations. Swire Properties completed a study of its exposure to risks and opportunities under different climate scenarios. The study indicated that its properties are exposed to low to moderate levels of physical risk, due to its relatively robust mitigation measures. Improvements for individual buildings were identified, including upgrading flood protection measures and alert systems, chiller efficiency improvements, glass facade inspections and smart monitoring systems.

Swire Coca-Cola assesses water access, quality, and quantity risks for all new bottling plants. It has completed a risk assessment using The Climate Service platform, details of which are included in its Sustainable Development Report 2022.

We want to improve the capacity of our businesses, our employees, and the communities in which we operate to adapt to climate change. This involves having, and helping to provide access to, information, skills, and physical resources. Swire Pacific, Swire Properties, and Swire Coca-Cola support the Business Environment Council (BEC) Low Carbon Charter in Hong Kong.

Swire Properties is a signatory to the Business Environment Council’s (BEC) Power Up Pledge in Hong Kong, which commits the company to sharing knowledge and best practices and collaborating to promote electrification of construction sites and transition away from diesel generators.

Swire Properties is committed to exploring new procurement options for off-site renewable energy for our portfolio, where feasible. Since 2021, Taikoo Hui Guangzhou became powered by 100% renewable electricity, joining Sino-Ocean Taikoo Li Chengdu in achieving net-zero carbon in its annual electricity consumption for both landlord and tenant operations and setting a new standard for the real estate sector in Asia. In 2022, Taikoo Li Sanlitun became our third portfolio in the Chinese Mainland to enter into an off-site renewable electricity agreement, with 15% of the landlord’s annual electricity consumption from clean energy sources.

Swire Coca-Cola works with governments and NGOs to protect local water sources that may be at risk from climate change or anthropogenic activities and secure access to clean and safe water for communities in need. Its flagship CSR programme “Carbon Reduction Alliance” engages value chain partners in the Chinese Mainland, to reduce carbon, and support local communities and biodiversity. Read more in Biodiversity.

Swire Coca-Cola also provides bottled water to people affected by natural disasters as part of The Coca-Cola Company’s Clean Water 24 emergency plan. Within 24 hours of a natural disaster, Swire Coca-Cola will identify the nearest warehouse and arrange delivery, in collaboration with local governments, supporting organisations and NGOs.

Swire Properties – Global AI Challenge Gold Award

Swire Properties partnered with a digital automation and energy management company in the “Global AI Challenge for Building Electrical and Mechanical Facilities”, held between November 2021 and September 2022.

Organised by the Hong Kong government’s Electrical and Mechanical Services Department and the Guangdong Provincial Association for Science and Technology, the global event was the first and largest AI event related to building electrical and mechanical services.

Swire Properties’ goal was to develop an AI model to predict the cooling demand of a commercial building. Out of 44 teams, its model had the greatest level of accuracy. The joint team won a Gold Award and the Grand Prize – the “Alliance Contracting Outstanding AI Influencer Award”.

The model is now being implemented in our Cloud-Based Smart Energy Management Platform and can accurately predict the cooling load in our buildings 24 hours in advance.

We are in the process of building on our 2030 decarbonisation plans by developing a carbon transition action plan to achieve net zero by 2050.

The implementation of the roadmap will be supported by Internal Carbon Pricing (ICP). In 2022, the Board approved an ICP model to be piloted in 2023. The hybrid model comprises a carbon fee and shadow pricing mechanism. The carbon fee for each operating company will be based on the most recent financial year’s operational emissions and will fund decarbonisation projects. The shadow pricing mechanism will be applicable to planned projects that exceed a threshold value. In this way the ICP integrates carbon pricing in the decision-making process for future operating company projects while facilitating progress towards our emissions goals. The ICP will be trialled with Swire Coca-Cola, Swire Properties, and HAECO, which contribute over 80% of our operational emissions.

We will continue to strengthen our TCFD reporting and will look to refine our scope 3 emissions calculations for key scope 3 categories. We will build on our renewable purchasing guidelines and will facilitate the sharing of information about renewable energy purchase agreements.