Chairman’s statement

Dear Stakeholders,

At Swire Pacific, we are committed to driving sustainable development and creating a positive impact on the environment, society and the communities in which we operate. As Chairman, I am pleased to present our progress and achievements in our 2023 Sustainability Report.

Last year saw our businesses continue to emerge from the constraints of the pandemic. At the same time, 2023 was the hottest on record, climatic events impacted communities and businesses across the globe, and conflicts and geopolitical tensions threatened progress on the global sustainability agenda. We believe that Swire Pacific has an important role to play in developing and advancing new sustainable business solutions.

In 2020, we made a bold set of long-term commitments through our Group Sustainability strategy, SwireTHRIVE. We are developing roadmaps to achieve our environmental ambitions, deepening our understanding of climate risk and opportunity, and factoring the cost of carbon into business decisions. We are exploring what maturity in diversity, equity and inclusion truly looks like, and we continue to invest in our communities through the Swire Trust.

Environmental progress

This past year, we took stock of our planned near-term decarbonisation, waste and water neutrality strategies, and assessed which technologies offer our most approachable pathways to a low-carbon, water-neutral future in which none of our waste goes to landfill. Our environmental roadmaps will help Swire Pacific determine how best to deploy our resources to meet our objectives beyond 2030.

We piloted the adoption of an internal carbon pricing (ICP) mechanism with Swire Properties, Swire Coca-Cola and HAECO. Our hybrid approach of applying a carbon fee and shadow price will set budget aside for additional decarbonisation projects, and will help our businesses determine the potential impact of carbon emissions from investments, quantify carbon risks and enable decision making in line with our net zero ambitions. Their work will continue in 2024, and will guide our other businesses.

In what was a record year for our SD Fund, we received our highest ever number of funding applications and provided more than HK$84.8 million to companies across the Group to finance projects that will help Swire Pacific achieve our 2030 climate, water and waste targets. Through planned spending, the carbon fund from our ICP and our SD Fund, we continued to make progress in 2023.

Swire Properties climbed to the number two position globally in the Dow Jones Sustainability Index 2023. In July, it became the first Hong Kong corporation to issue an RMB-denominated public green bond, known as a “green dim sum bond”, and by year end utilised the proceeds on green buildings, energy efficiency and renewable energy projects, and sustainable water and waste management. This past year, it pioneered new ground as an early adopter of the Taskforce on Nature-related Financial Disclosures (TNFD), and became the only Hong Kong representative of the 40-member Taskforce on TNFD, which will help companies to integrate nature-related considerations into their investment decisions and business operations.

Swire Coca-Cola successfully piloted, and has begun to scale, advanced technology that significantly reduces energy and steam requirements for its sparkling production lines in the Chinese Mainland. It made good progress on its 100% renewable energy target, with a quarter of electricity used in 2023 coming from renewable sources. In Hong Kong, HAECO continued to expand its installation of solar panels across its hangers at the Hong Kong International Airport. Once completed, its array of more than 9,000 panels will generate an annual output of 4 megawatts of electricity, making it one of Hong Kong’s largest solar energy producers.

Cathay Group continues its journey to rebuild both its passenger and cargo businesses, and with that has come an uptick in aircraft emissions. To decouple its growth from its carbon output, it has invested heavily in modern, fuel efficient aircraft. This year it took delivery of 11 next-generation aircraft with advanced fuel efficiency improvements and scheduled another 75 new passenger and cargo aircraft to join Cathay Group’s fleet in the following years. Its SAF agreements, coalitions and Corporate SAF Programme show commitment to low-emissions flight, and I encourage our partners to join us on this journey.

Delivering on our social commitments

At Swire Pacific we remain committed to achieving a more diverse, equitable, and inclusive workplace, including increased female representation in leadership positions. We recognise that a diverse workplace can increase innovation and foster better solutions, and will help our business grow. In the first half of 2024, we will complete an internal assessment of our diversity, equity and inclusion maturity which we will use to determine how to build on progress already made.

We encourage our colleagues to contribute their time, talents and passion to community and charitable initiatives that both inspire them and align with our purpose. 2023 was the final year of the Swire Trust’s TrustTomorrow initiative. Launched in 2020, TrustTomorrow provided $150 million in additional community investment during what was a challenging period. It has set a blueprint for how we will conduct philanthropy in future. I’d like to offer my thanks for the hard work carried out by my colleagues and all organisations involved.

Looking ahead

We will continue to pursue best practices and trial innovative technologies, and are strengthening how we manage and integrate sustainability across Swire Pacific. To drive towards our 2030 goals our companies have collectively committed between HK$900 million and HK$1,400 million annually on sustainability projects over the next three years.

Last year, at the welcome return of the Swire ESG Forum, I was heartened to hear in detail our cross-functional responses to pressing sustainability challenges for our Group. It made clear that ensuring we make progress is everyone’s responsibility. I commend my colleagues for their dedication, and for standing true to our values. I invite you to read our 2023 Sustainability Report and share in my optimism that we continue to make progress.