Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• intense competition in the foundation industry leading to price pressure
• liquidity risk due to net current liabilities
• potential tax liabilities related to intra-group leasing arrangements
• delays in projects due to factors outside of control (e.g., obtaining governmental approvals, adverse weather conditions)
• labour shortages in Hong Kong and Macau
• potential legal and arbitration proceedings

Mitigation Strategies

• strategic decision to discontinue foundation works business in 2010 (prior to current reporting period)
• negotiations with financiers to remove repayment on demand clauses from certain borrowings
• Deed of Indemnity executed by Controlling Shareholders to cover potential tax liabilities
• plans to expand fleet of machinery and equipment and workforce
• plans to continue to enhance competitiveness and cost control
• ongoing discussions with financiers to further reduce net current liabilities

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Obtained ISO 14001 Environmental Management System Certification and ISO 50001 Energy Management System Certification.
• About 80% of materials used in the United Christian Hospital project were regional materials produced within 800 kilometers.
• Implemented an ISO 50001-based EnMS (energy management system).

Social Achievements

• No fatal accidents happened in the Group’s projects during the year and the accident rate was lower than the industry average for the construction industry.
• Provided environmental protection training for every new employee.
• Maintained good business relationships with suppliers and subcontractors.

Governance Achievements

• Complied with all the code provisions set out in the Corporate Governance Code.
• Established a reporting system and developed relevant policies to effectively implement internal monitoring and risk management.
• No cases of corruption involving either of the Company or individual employees during the reporting period.

Climate Goals & Targets

Environmental Challenges

• Decrease in turnover and profit due to challenging business environment in the construction industry, prolonged debates in the Legislative Council leading to a large logjam in funding approval for public works, resulting in a substantial drop in the number of open tenders in the market, intense competition and suppressed contract prices.
• Severe price competition for tenders limited in number as a result of filibusters on funding approval for public works and infrastructure projects.

Mitigation Strategies

• Strategically decided to keep the current team structure and resources in place to capture every opportunity for bidding for major projects.
• Repaid a large portion of its borrowings during the year to save interest expenses and disposed of certain equipment to free up working capital.

Supply Chain Management

Responsible Procurement

• Detailed assessments performed on suppliers and contractors to ensure that they meet the Group’s internal requirements; covering suppliers’ and contractors’ past performance, labour rights, performance in occupational safety and health and environmental protection, financial position and business ethics.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Hong Kong Stock Exchange Environmental, Social and Governance Reporting Guide

Certifications: ISO 14001, ISO 50001, OHSAS 18001, ISO 9001

Awards & Recognition

• April 2017, The Best Sub-Contractor of “Automatic Forms” CRBC-CEC-KADEN Joint Venture Promotion Programme For April of 2017 (Liantang/Heung Yuen Wai Boundary Control Point Site Formation and Infrastructure Works – Contract 6)

Environmental Metrics

ESG Focus Areas

• Pollution Control
• Use of Resources
• Green Operation
• Equal Employment
• Occupational Health and Safety
• Training and Development
• Protection of Rights and Interests
• Supply Chain Management
• Quality Products
• Corporate Governance
• Giving Back to Society

Environmental Achievements

• Awarded ISO 14001:2004 (environment management system accreditation) and renewed the certificate after passing the relevant audits conducted by external certification body.
• Implemented an ISO 50001-based EnMS (energy management system) that helps ascertain current status of energy use in order to devise corresponding measures to promote efficient energy use in machinery and facilities and to formulate a clear framework to promote continual improvement in energy management and raise staff awareness on energy efficiency and conservation.
• No prosecution due to violation of the relevant environmental protection laws during the reporting period.

Social Achievements

• No violations or complaints concerning discrimination or recruitment.
• No fatal accidents happened in the Group’s projects during the year and the accident rate was lower than the industry average for the construction industry.
• Implemented a policy of diversity and non-discrimination.
• Provided industry-related safety trainings for the employees.
• Donated to more than 10 different charitable institutions and community organizations.

Governance Achievements

• Complied with all the code provisions set out in the Corporate Governance Code.
• Established conflict of interests mechanism.
• Formulated fair, open and impartial procedures for product or service procurement or tendering to inhibit any potential corruption.
• Employs independent auditors to audit the Group’s financial statements.

Climate Goals & Targets

Environmental Challenges

• Challenging business environment in the construction industry due to prolonged debates in the Legislative Council leading to a large logjam in funding approval for public works, social incidents in Hong Kong, and the outbreak of COVID-19.
• Intense competition and suppressed contract prices due to a substantial drop in the number of open tenders in the market.
• Economic uncertainties in the global environment and interruption in the operation of Legislative Council delaying the construction market's full recovery.

Mitigation Strategies

• Obtained a major contract for the Airport Logistic Centre (HK$500 million).
• Maintained a healthy financial position and a net cash balance.
• Continued efforts to bid for new projects.
• Investment in a property holding company to explore opportunities in property investment or property development.

Supply Chain Management

Responsible Procurement

• Detailed assessments of suppliers and contractors to ensure they meet the Group’s internal requirements.
• Code of conduct and supplier assessment system.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather

Reporting Standards

Frameworks Used: Hong Kong Stock Exchange Environmental, Social and Governance Reporting Guide

Certifications: ISO 14001, ISO 50001, OHSAS 18001, ISO 9001

Third-party Assurance: PricewaterhouseCoopers

Environmental Metrics

ESG Focus Areas

• Pollution Control
• Use of Resources
• Promoting Green Operation
• Equal Employment
• Occupational Health and Safety
• Training and Development
• Protection of Rights and Interests
• Supply Chain Management
• Quality Products
• Corporate Governance
• Giving Back to Society

Environmental Achievements

• Awarded ISO 14001:2004 (environment management system accreditation) and renewed the certificate.
• Implements an ISO 50001-based EnMS (energy management system) to promote efficient energy use.
• No prosecution by any governmental authority for any purported breach of any applicable environmental laws and regulations during the reporting period.
• Reduced wastewater discharge through wastewater recycling and reuse.

Social Achievements

• No fatal accidents happened in the Group’s projects during the year and the accident rate was lower than the industry average for the construction industry.
• Provides environmental protection training for every new employee.
• Regularly reviews and improves the employment and employee welfare system.
• Hosts recreational activities to help employees relieve work pressure and enhance employee relations.

Governance Achievements

• Established a reporting system and policies to effectively implement internal monitoring and risk management.
• Complied with all the code provisions set out in the Corporate Governance Code.
• Established guidelines no less exacting than the Model Code for relevant employees in respect of their dealings in the securities of the Company.
• Passed certification of ISO 45001:2018 Occupational Health and Safety Management System.

Climate Goals & Targets

Environmental Challenges

• Sharp decrease in construction projects in Hong Kong amidst the economic downturn caused by the COVID-19 pandemic.
• Delay in the rolling out of construction projects in West Kowloon and Kai Tak districts.
• Group’s revenue decreased by 61%.

Mitigation Strategies

• Recently awarded a new contract for the development of public housing in the East Kowloon district.
• Foresees a better utilisation of its machinery and labour in the latter half of the coming year when it obtains a few more new contracts.

Supply Chain Management

Supplier Audits: Regular assessments of suppliers’ social, environmental protection, occupational health and safety standards.

Responsible Procurement

• Detailed assessments of suppliers and contractors to ensure they meet the Group’s internal requirements.

Climate-Related Risks & Opportunities

Physical Risks

• Typhoon, heavy rains and heat wave

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Hong Kong Stock Exchange Environmental, Social and Governance Reporting Guide

Certifications: ISO 14001, ISO 50001, ISO 45001, ISO 9001

Third-party Assurance: Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• ISO 14001
• ISO 50001
• ISO 45001
• ISO 9001

Environmental Metrics

ESG Focus Areas

• Employee Communication
• Employee Wellbeing
• Sustainable Supply Chain

Environmental Achievements

• Adopted zoning control for lighting and air-conditioning systems in the office to save electricity and reduce indirect greenhouse gases.
• Set air conditioners’ temperature at 25℃ to save electricity and reduce indirect greenhouse gases.
• Priority was given to energy-efficient and low-emissions models to save electricity and reduce indirect greenhouse gases.
• Recycled construction materials and reused them after recycling to reduce construction waste.
• Set up a sewage treatment tank on the construction site for sewage treatment. The treated water is subsequently used for washing on-site machines, equipment and vehicles, road spraying, watering and suchlike, thereby lowering the water consumption and sewage.
• Encouraged paperless office by replacing traditional paper documents with electronic documents to reduce waste paper.

Social Achievements

• Formulated employment policies that comply with relevant laws and regulations.
• Offer competitive remuneration packages for employees according to the assessment on their experience and performance.
• Provide personal safety protection equipment for all construction workers.
• Hold monthly safety meetings to review the performance of subcontractors in occupational safety and health and environmental protection, as well as jointly develop effective improvement and corrective actions.
• Select and reward frontline workers with outstanding performance in occupational safety and health and environmental protection each month.

Governance Achievements

• Established a comprehensive system of prevention, monitoring and reporting in the Group, and explained to all employees, Suppliers, contractors and business partners about the details of the anti-corruption policies and handling principles of the Group.
• Arranges anti-corruption training for directors and employees every year.

Climate Goals & Targets

Environmental Challenges

• Exhaust Emissions
• Use of Resources
• Employee Well-being
• Equal Employment
• Employee Communication
• Equal Employment
• Occupational Health and Safety
• Occupational Health and Safety
• Supplier Selection Criteria
• Supply Chain Management
• Stringent Regulation
• Supply Chain Management
• Sustainable Supply Chain
• Supply Chain Management
• Product Safety
• Quality Construction
• Customer Service
• Quality Construction
• Protection of Consumer Data Privacy
• Quality Construction

Mitigation Strategies

• Promoted measures to mitigate and control the impact of risks related to the challenges listed above; details are provided in the report.

Supply Chain Management

Supplier Audits: 100%

Responsible Procurement

• Fair, impartial and open evaluation criteria
• Compliance with all laws, international conventions, contractual requirements and all codes of the Group
• Regional procurement by giving priority to procurement from local suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons, flooding, extreme heat

Transition Risks

• Stringent laws and regulations related to climate change

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Hong Kong Stock Exchange Environmental, Social and Governance Reporting Guide

Certifications: ISO 14001, ISO 50001, ISO 45001, ISO 9001

Third-party Assurance: DW Certification Limited

UN Sustainable Development Goals

• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 11
• Goal 13

The report details how various initiatives contribute to these SDGs.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Employee Communication
• Employee Wellbeing
• Sustainable Supply Chain

Environmental Achievements

• Reduced emissions from transportation by encouraging video conferencing and implementing regional procurement policies prioritizing local suppliers.
• Improved energy efficiency by adopting zoning control for lighting and air conditioning, setting air conditioner temperatures at 25°C, and prioritizing energy-efficient equipment.
• Reduced waste through waste reduction at source, material recycling and reuse, and sewage treatment for reuse.

Social Achievements

• Implemented a transparent recruitment process to ensure fairness and impartiality.
• Offered competitive remuneration packages and benefits to employees.
• Organized various activities to promote employee well-being and relieve work pressure.
• Established open communication channels to collect employee feedback and address concerns.
• Obtained ISO 45001:2018 Occupational Health and Safety Management System certification.

Governance Achievements

• Established internal rules to standardize the open tender and quotation process for supplier selection.
• Implemented a comprehensive supply chain management mechanism with regular monitoring and assessment of suppliers.
• Arranged anti-corruption training for directors and employees annually.
• Established whistle-blowing procedures to encourage reporting of improper or illegal activities.

Climate Goals & Targets

Environmental Challenges

• Acute risks from natural disasters (typhoons, flooding, extreme heat) causing construction disruptions and supply chain interruptions.
• Increasingly stringent laws and regulations related to climate change leading to higher operating and compliance costs.
• Long-term risks from climate change causing unstable supply of construction raw materials and impacting employee health and travel.

Mitigation Strategies

• Adopting measures according to government guidelines for inclement weather and hot weather.
• Implementing various measures to conserve energy and reduce emissions, strictly abiding by environmental laws and regulations.
• Upholding green procurement, implementing regional procurement policies prioritizing local suppliers to reduce energy consumption and greenhouse gas emissions.

Supply Chain Management

Supplier Audits: 100%

Responsible Procurement

• Fair, impartial, and open evaluation criteria for supplier selection.
• Requirement for suppliers to comply with laws, international conventions, contractual requirements, and Group codes.
• Regional procurement prioritizing local suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons, flooding, extreme heat

Transition Risks

• Stringent climate change regulations

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Hong Kong Stock Exchange Environmental, Social and Governance Reporting Guide

Certifications: ISO 14001, ISO 50001, ISO 45001, ISO 9001:2015

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 6, Goal 7, Goal 8, Goal 9, Goal 11, Goal 12, Goal 13, Goal 16, Goal 17

The Group actively integrates the UN Sustainable Development Goals into its ESG measures.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• ISO 14001, ISO 50001, ISO 45001, ISO 9001:2015