Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• 100% carbon neutral for direct emissions through carbon offset
• Invested US$3.9 billion in latest technology aircraft, with average fuel efficiency improvements of more than 20% over previous generation models
• Recycled all used IT equipment (100%)
• Reduction in total electricity consumed per average employee 20%
• Reduction in paper used per average employee 50%
• Reduction in carbon emissions per average employee 74%

Social Achievements

• Sponsored influenza vaccinations
• Staff trained in first aid
• Corporate gym membership subsidy
• Cycle-to-work subsidy scheme
• More than US$80,000 in corporate and employee donations to local and global charitable organisations
• Employees volunteered at Food From the Heart and Waterways Watch Society

Governance Achievements

• Compliance training conducted for all employees
• No regulatory compliance breaches or violation of sanctions-related laws
• 3 female Board directors, one is Vice Chairman (100% strong board diversity)

Climate Goals & Targets

Environmental Challenges

• Covid-19 pandemic negatively affecting all elements of the aviation industry
• Delivery delays from the world’s major aircraft manufacturers due to Covid-19 and its effects on suppliers, customers, and passengers
• Airline demand for leased aircraft declined significantly as government travel restrictions negatively impacted passenger demand
• Airline demand for capital increased significantly, particularly in the first half of 2020
• Manufacturers reduced production of new aircraft due to Covid-19 disruptions and declining airline demand

Mitigation Strategies

• Adapted strategy, benefiting from the deep experience of our management team
• Worked closely with airline customers and all stakeholders
• Resculpted its aircraft orderbook in 2020, reducing net orders by 32 aircraft and deferring 74 orderbook positions
• Added 77 commitments for aircraft to its owned fleet or future orderbook through purchase and leasebacks in 2020
• Proactively engaged our airline customers to provide assistance
• Supported airline customers including through purchase and leaseback transactions
• Worked closely with aircraft and engine manufacturers for timely delivery of new aircraft
• Resculpted orderbook and adjusted delivery timeframes to match manufacturer production and aircraft demand

Supply Chain Management

Supplier Audits: Surveyed top suppliers on their ESG practices

Responsible Procurement

• Surveyed top suppliers regarding their ESG practices (Board oversight of ESG issues, environmental issues from production, workplace safety and health, forced or child labour, support of charity organisations)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Appendix 27 of the HKEX Listing Rules

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 13 (Climate Action)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Community Engagement
• Employee Engagement and Development
• Corporate Governance
• Supply Chain Management

Environmental Achievements

• Achieved 100% carbon neutrality for direct emissions through carbon offset.
• Reduced CO2 emissions (tonnes) per average headcount by 77% in 2021 compared to 2019.
• Reduced energy consumption by 20% per average headcount compared to 2019.
• Reduced paper consumption by 54% per average headcount compared to 2019.
• 66% of owned fleet comprised latest technology aircraft (up from 59% in 2020).
• 100% of orderbook is latest technology aircraft.

Social Achievements

• Launched a pilot program to promote mental wellness.
• Organised eight company-wide virtual townhalls and eight employee surveys.
• More than 2,900 training hours delivered.
• Supported Airlink’s Covid aid to India and Airlink’s aid to Tonga.
• Participated in various community clean-up initiatives globally.
• Participated in Orbis Virtual Race4Sight, logging nearly 62,000 kilometers and raising money for the fight against avoidable blindness.

Governance Achievements

• Cybersecurity 2.0 upgrade implemented.
• 100% of employees completed compliance and cybersecurity training.
• Three female Board Directors out of eleven.

Climate Goals & Targets

Environmental Challenges

• Increasing demand for latest technology aircraft.
• Potential impact of environmental regulations on residual values of older aircraft.
• Changes in traveler preferences for airlines operating lower-emission aircraft.
• Availability of financing for airlines to invest in latest technology aircraft.
• Increasing disclosure requirements for climate change risks.
• Stakeholder perception of BOC Aviation's approach to climate change.

Mitigation Strategies

• Acquiring and leasing latest technology, fuel-efficient aircraft.
• Actively expanding customer base and selling older generation aircraft.
• Providing capital to finance latest technology aircraft.
• Improving fleet quality and lowering emissions.
• Maintaining high liquidity to support airline customers' transition.
• Engaging with the Board on climate change risks and proactively communicating ESG strategies and performance to stakeholders.

Supply Chain Management

Supplier Audits: Survey of top 20 suppliers on ESG practices.

Responsible Procurement

• ESG factors incorporated in the selection of suppliers of aircraft, IT equipment and technical suppliers and services from 2021.

Climate-Related Risks & Opportunities

Transition Risks

• Changes in environmental regulations affecting residual values of older aircraft.
• Changes in traveler preferences for airlines operating lower-emission aircraft.

Opportunities

• Increased demand for latest technology, fuel-efficient aircraft.

Reporting Standards

Frameworks Used: HKEX ESG Reporting Guide

UN Sustainable Development Goals

• Goal 1: No Poverty
• Goal 3: Good Health and Well-being
• Goal 5: Gender Equality
• Goal 8: Decent Work and Economic Growth
• Goal 13: Climate Action

Initiatives aligned with these goals are described throughout the report.

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• 100% carbon neutral for direct emissions through carbon offset purchases in 2022
• Reduced CO2 emissions per average headcount by 42% from 2019 levels
• Reduced paper consumption per average headcount by 67% from 2019 levels
• Reduced electricity consumption per average headcount by 58% from 2019 levels
• 71% of owned fleet consists of latest technology aircraft

Social Achievements

• Launched Coaching Connect initiative to encourage employee professional growth
• Delivered more than 4,200 training hours in 2022 (2.8 days per employee)
• 50% female representation in the workforce
• 30% female representation in management team
• US$27,000 contributed to Airlink and Orbis
• Over 1,300 employee volunteer hours

Governance Achievements

• Three female Board Directors (including Vice Chairman)
• Nil regulatory breaches
• 100% of employees successfully completed compliance and cybersecurity training
• 360° risk management focus

Climate Goals & Targets

Environmental Challenges

• Increasing demand for latest technology aircraft
• Residual values of older aircraft may be affected by environmental regulations
• Changes in traveler preferences for airlines with lower emissions
• Availability of financing for airlines to invest in latest technology aircraft
• Increasing disclosure requirements for climate change risks
• Stakeholder perception influenced by approach towards climate change

Mitigation Strategies

• Acquire and lease latest technology, fuel-efficient aircraft
• Expand customer base to market latest technology aircraft
• Provide capital to finance latest technology aircraft
• Actively sell older generation aircraft
• Commit to efficient energy use
• Maintain high liquidity to support airline customers' transition
• Engage with Board on climate change risks
• Proactively communicate ESG strategies and performance
• Liaise with industry partners to adopt best ESG practices

Supply Chain Management

Supplier Audits: 40 suppliers surveyed in 2022

Responsible Procurement

• ESG principles included in vendor scorecards
• Annual survey of top suppliers on their ESG practices

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: HKEX ESG Reporting Guide

UN Sustainable Development Goals

• Goal 8: Decent Work and Economic Growth
• Goal 7: Affordable and Clean Energy
• Goal 13: Climate Action

Initiatives aligned with these goals through carbon neutrality efforts, employee training and development, and support for community development projects.

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Achieved a 35% reduction in CO2 emissions per average headcount (tonnes) in 2023, compared to 2019.
• Achieved a 58% reduction in electricity use per average headcount (kWh) in 2023, compared to 2019.
• Maintained 100% carbon neutrality for direct CO2 emissions through carbon offset purchases.
• 77% of owned fleet are latest technology aircraft (surpassing the 75% target for 2025).

Social Achievements

• Achieved an average of three training days per employee in 2023.
• 50% female representation in the workforce.
• More than 4,700 training hours completed in 2023 (11% higher than 2022).
• Organized 18 CSR events, a 20% increase from 2022, with over 1,100 volunteer hours.

Governance Achievements

• Three female Directors on the Board (exceeding the target).
• 26% female members in the management team.
• 100% of employees completed compliance training.
• No regulatory breaches.

Climate Goals & Targets

Environmental Challenges

• Maintaining a reduction in paper usage despite increased business activities.
• Managing the residual values of older aircraft due to potential changes in environmental regulations.
• Meeting increasing disclosure requirements for climate change risks.

Mitigation Strategies

• Actively encouraging employees to digitalize work processes and conduct paperless meetings.
• Actively selling older generation aircraft to improve fleet quality and lower emissions.
• Proactively communicating ESG strategies and performance to stakeholders.

Supply Chain Management

Supplier Audits: Top 50 suppliers surveyed on ESG practices; all achieved satisfactory scores.

Responsible Procurement

• ESG principles included in vendor scorecards.
• Annual survey of top suppliers on their ESG practices.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Changes in environmental regulations affecting residual values of older aircraft.
• Changes in traveler preferences for airlines operating lower-emission aircraft.
• Availability of financing for airlines to invest in latest technology aircraft.

Opportunities

• Increased demand for latest technology aircraft.
• Opportunities to provide capital to finance fuel-efficient aircraft.

Reporting Standards

Frameworks Used: HKEX ESG Reporting Guide

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 1: No Poverty
• Goal 3: Good Health and Well-being
• Goal 5: Gender Equality
• Goal 8: Decent Work and Economic Growth
• Goal 13: Climate Action

Initiatives such as carbon offsetting, community investment, employee training, and promoting gender equality contribute to these goals.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed