Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Responsibility
• Resource Conservation
• Waste Reduction

Environmental Achievements

• Reduced greenhouse gas emissions by 10.34% between 2011 and 2019
• Achieved 100% sustainably sourced paper purchase since 2011
• Hang Seng 113 building achieved LEED Platinum certification
• Hang Seng Tower office building attained LEED Gold certification
• Hang Seng 113 uses approximately 25% less energy than conventional air conditioning
• Purchased Renewable Energy Certificates worth 330 MWh
• Received a Renewable Energy Contribution Award in the CLP Smart Energy Award 2019
• Earned the Gold Class Fresh Water Award for its headquarters and Quality Fresh Water and Quality Flushing Water awards for Hang Seng 113
• 53.3% of statements and advices sent electronically to customers (13.3% increase from 2018)
• 89.82% of shareholders adopted e-communication services, saving approximately 13.39 million sheets of paper
• 78.6% of Commercial Banking customer transactions processed via digital channels

Social Achievements

• Donation via eChannels to charitable organizations reached more than 500,000 transactions and HK$60 million in amount
• Supported the Conservancy Association’s Hang Seng – CA Eco-Rangers orienteering event
• Supported Friends of the Earth (Hong Kong)’s Power Smart Energy Saving Contest, WWF (Hong Kong)’s Earth Hour, the Green Power Hike and the Environmental Bureau’s Charter on External Lighting
• Implemented workplace enhancement program using technology and digital solutions to achieve paperless working

Governance Achievements

• No sanction for breach in environmental laws or regulations was identified or reported in 2019
• Monitors environmental management system (EMS) to ensure it continues to meet ISO 14001 standards
• Established a committee under Environmental Policy to verify that EMS and business strategies complement each other

Climate Goals & Targets

Environmental Challenges

• Climate change and extreme weather events
• Reducing paper consumption despite increase in data collection

Mitigation Strategies

• Enhancing curtain wall at headquarters to prepare for typhoons and other extreme weather
• Implementing paperless working and reducing storage space
• Using electronic channels for customer communications

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Encouraging suppliers to improve their environmental performance
• Using environmentally friendly products and services

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (typhoons)

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: ISO 14001

Certifications: ISO 14001, LEED Platinum (Hang Seng 113), LEED Gold (Hang Seng Tower)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Renewable Energy Contribution Award in the CLP Smart Energy Award 2019
• Merit Award in the Green Building awards

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced total electricity consumption by 8% using 2018 as base year
• Reduced total Scope 1 and 2 greenhouse gas emissions by 8%, using 2018 as base year
• Reduced water consumption by 9%, using 2018 as base year
• Diverted 66% of waste from landfill
• Reduced paper consumption by 10%, using 2019 as base year
• Purchased Renewable Energy Certificates worth a total of 330 MWh from local electricity suppliers

Social Achievements

• Launched the Hang Seng Academic Assistance Programme with a HK$10 million donation to provide tutoring, counselling, laptop donation and other academic support to more than 4,600 disadvantaged primary and lower secondary school students. The Programme also provided job opportunities for close to 700 youth tutors
• Customer satisfaction rated at more than 98% for the past four years
• 99% of staff are full-time equivalent
• 93% of Executive Committee members appointed from the local community
• Staff in Hong Kong undertook over 3 days of learning and development programmes on average in 2020

Governance Achievements

• Established a high-level ESG Steering Committee
• Established a dedicated ESG Department
• Became the first Hong Kong bank to sign up to the international Task Force on Climate-related Financial Disclosure (TCFD)
• Launched the ESG Speaker Series

Climate Goals & Targets

Environmental Challenges

• Deeper integration of sustainability into long-term strategies
• Maintaining business in the post-pandemic operating landscape
• Fulfilling evolving requirements and expectations of stakeholders
• Climate change risk

Mitigation Strategies

• Established a Climate Risk Management framework
• Incorporated a transition risk questionnaire into the annual credit review for customers in climate-sensitive sectors
• Regular meetings between ESG and risk management teams
• Planning to set up a dedicated climate risk taskforce

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• HSBC Group’s Ethical and Environmental Code of Conduct for Suppliers of Goods and Services
• Sustainability standards included in purchasing policy documentation
• Requirement for suppliers to establish environmental management systems

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Sustainable finance solutions
• Green projects

Reporting Standards

Frameworks Used: GRI Standards, GRI G4 Financial Services Sector Disclosures, HKEx’s ESG Guide, SASB standards

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Hong Kong Quality Assurance Agency

UN Sustainable Development Goals

• SDG 4: Quality Education
• SDG 13: Climate Action

Initiatives such as the Hang Seng Academic Assistance Programme and Hang Seng Yunnan Low-carbon Village programme contribute to these goals

Sustainable Products & Innovation

• Green loans
• ESG investment funds and bonds
• SimplyFund platform

Awards & Recognition

• Gold award at the 2020 International ARC Awards
• Bronze award at the 2020 Galaxy Awards
• Employees Retraining Board Manpower Developer Award

Environmental Metrics

ESG Focus Areas

• Climate Risk Management
• Sustainable Finance
• Environmental Management
• Customer Service
• Employee Wellbeing
• Community Investment
• Corporate Governance
• Financial Crime Prevention
• Data Privacy
• Supply Chain Management
• Human Rights

Environmental Achievements

• Reduced electricity consumption by 9.8%
• Reduced greenhouse gas emissions (Scope 1 & 2) by 22.5%
• Reduced water consumption by 7.5%
• Reduced paper consumption by 30.8%
• Diverted 57.3% of waste away from landfills
• Purchased 2,920 MWh of renewable energy (nearly nine times more than in 2020)
• Installed solar panels at Mong Kok office generating over 60 MWh annually
• Achieved carbon neutrality in operations by 2030

Social Achievements

• Launched "SimplyFund" in-app investment service
• Launched Hang Seng Olive Wellness App
• Partnership with yuu for insurance products
• Offered 100% Personal Loan Guarantee Scheme for unemployed individuals
• Supported SME customers through Special 100% Loan Guarantee
• Invested over HK$31 million in community investment
• Contributed close to 10,300 hours of volunteer time
• Improved employee engagement score to 72%
• Speak-up Index rose from 74% in 2019 to 80% in 2021
• 98.6% of external hires were local
• Provided 310,514 learning hours to employees

Governance Achievements

• Formalised climate risk management structure
• Organised climate risk training for the Board
• Incorporated climate risk considerations into lending business
• Implemented annual ESG KPIs and action plans
• Achieved ISO 14001 certification for all offices and branches
• Implemented a transition risk questionnaire into annual credit reviews
• Published climate-related disclosure information referencing TCFD recommendations
• No non-compliance with laws and regulations resulting in significant fines or sanctions

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to COVID-19
• Increased market competition for staff
• Staff exits due to emigration
• Customer satisfaction drop due to changes in channel usage
• Waste recycling rate decrease due to increased food waste in offices
• Data limitations in climate risk assessment

Mitigation Strategies

• Implemented remote working and flexible working policies
• Built internal pipeline through upskilling, reskilling, and internal deployment
• Enhanced digital banking services
• Installed food waste decomposers and planned food waste collection points
• Engaged external consultant for gap analysis against regulatory requirements and market best practices
• Developed a Climate Change Management Roadmap

Supply Chain Management

Supplier Audits: 1,684 contracted suppliers, all required to acknowledge compliance with Ethical and Environmental Code of Conduct

Responsible Procurement

• Ethical and Environmental Code of Conduct for Suppliers of Goods and Services
• Sustainability standards included in purchasing policy documentation
• Assessment of suppliers' commitment to reducing carbon emissions
• Preference for local suppliers and environmentally friendly products

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Increasing temperatures
• Rising sea levels

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products and services
• Growth in sustainable finance

Reporting Standards

Frameworks Used: GRI Standards: Core option (May 2020 version), SASB standards for Commercial Banks, TCFD recommendations, HKEx ESG Reporting Guide

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Hong Kong Quality Assurance Agency (HKQAA)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 10 (Reduced inequalities)
• Goal 11 (Sustainable cities and communities)
• Goal 13 (Climate action)

Initiatives aligned with SDGs through sustainable finance, community investment, employee wellbeing, and environmental management

Sustainable Products & Innovation

• Green loans
• Sustainability-linked loans
• ESG investment funds, bonds, and structured products

Awards & Recognition

• Hong Kong ESG Reporting Awards: Grand Award for BEST GRI REPORT, Grand Award for BEST ESG REPORT
• Bloomberg Businessweek Financial Institution Awards 2021: SME Engagement Outstanding Award
• Asiamoney: Best Bank for SMEs, Hong Kong
• The Asset: Best Bank, Domestic (Hong Kong)
• The Asian Banker: Best Digital/Mobile Banking Service, Hong Kong
• Renewable Energy Contribution Award in the Smart Energy Award 2021
• Kam Fan Advertising Gold award for GO!GingerOnion

Environmental Metrics

ESG Focus Areas

• Sustainable Finance
• Climate Change
• ESG Investing

Environmental Achievements

• Launched green mortgage and Electric Vehicle loans.
• Hang Seng Indexes launched the Hang Seng Climate Change 1.5°C Target Index aiming for at least a 7% annual reduction in GHG emissions intensity compared to the underlying index and at least a 50% reduction in GHG emissions intensity compared to the underlying index.

Social Achievements

• Launched ESG-related product promotions and opened Wan Chai Business Banking Centre with ESG-trained staff.
• Launched “Hang Seng Green Moments” initiative to promote “Shop Green”.

Governance Achievements

• Hang Seng Indexes became a signatory of the UN Principles for Responsible Investment.
• Hang Seng Indexes added new ESG-related indexes, reaching a total of 18 by December 2022.

Climate Goals & Targets

Environmental Challenges

• Lack of quantitative sustainable finance data disclosure in the 2022 ESG Report, affecting meaningful comparison with previous year's data.

Mitigation Strategies

• Hang Seng is aligning its sustainable data recording process in an upgraded system to enable future accurate and complete disclosure.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Principles for Responsible Investment

Sustainable Products & Innovation

• Green mortgage
• Electric Vehicle loans
• Green deposit
• Green and sustainability-linked loans
• Green and sustainability-linked trade finance facilities

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Climate Goals & Targets

Environmental Challenges

• Data and system limitations in disclosing financed emissions (Scope 3).

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Reduce the environmental impact of our daily operations and offer customers a wide range of green solutions
• Enable younger generations to reach their full potentials, promote well-beings and professional development
• Maintain and uphold high standards of corporate governance by adopting ESG governance policy and risk management policy to be in line with international and local corporate governance best practices

Environmental Achievements

• Hang Seng Bank Headquarters Workplace Transformation received the Grand Award for Existing Buildings Category: Completed Projects – Commercial at the Green Building Award 2023
• Reduced energy consumption by 21.1% (against 2018 baseline) as of September 2023
• Reduced GHG emissions (Scope 1 and 2) by 33.8% (against 2018 baseline) as of September 2023
• Reduced water consumption by 31.6% (against 2018 baseline) as of September 2023
• Diverted 52.7% of waste away from landfill
• Reduced total waste by 52.3% (against 2018 baseline)

Social Achievements

• Ranked 1st in Hong Kong for gender equality by Equileap
• 811 job positions filled by internal employees (37.6% of open positions)
• Launched the Accelerating Wealth Programme to bring diversity into recruitment
• Launched Money Master mobile app to help customers achieve financial goals
• Launched SimplyStock with new pricing for customers under 30

Governance Achievements

• Maintained an AA rating from MSCI ESG Ratings
• Maintained an AA+ rating on the Hang Seng Corporate Sustainability Index
• Maintained a low-risk rating from Sustainalytics
• Established a Sustainable Financing Committee for Wholesale Banking
• Refreshed Code of Conduct issued in 2023

Climate Goals & Targets

Environmental Challenges

• Data and system limitations in disclosing financed emissions data
• Data and methodology limitations impacting climate scenario analysis
• Intense market competition for frontline personnel
• Evolving cyber threat landscape

Mitigation Strategies

• Aiming to further enhance financed emissions disclosure as more data becomes available
• Continuously enhancing data collection and reporting processes
• Implementing internal talent pipeline and employee retention strategies
• Ongoing investment in cybersecurity defenses and controls

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sustainable procurement policy implemented March 30, 2023
• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons and floods

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products and services; sustainable finance

Reporting Standards

Frameworks Used: GRI Standards, SASB Standards for Commercial Banks, TCFD recommendations

Certifications: ISO 14001, ISO 45001, WELL Gold certification

Third-party Assurance: Hong Kong Quality Assurance Agency (HKQAA)

UN Sustainable Development Goals

• Not disclosed

Referenced the principles of the United Nations’ Sustainable Development Goals

Sustainable Products & Innovation

• Green loans
• Social loans
• Sustainability-linked loans
• Green trade finance
• ESG-related investment funds and bonds

Awards & Recognition

• Green Building Award 2023
• WELL Gold certification
• Renewable Energy Contribution Award in the Smart Energy Award 2023
• Best ESG Index Provider – Hong Kong, Best of the Best Awards 2023 – Asia Asset Management
• Most Innovative Index – Hong Kong, Best of the Best Awards 2023 – Asia Asset Management
• Best Payments Bank in Hong Kong – The Asian Banker
• Best API Initiative, Frictionless Transaction Awards 2023 – The Asian Banker
• Best Mobile Banking Service in Hong Kong – The Asian Banker
• Excellence in Branding – HKMA
• Safest Bank in Hong Kong – Global Finance
• Best SME’s Partner Award – The Hong Kong General Chamber of Small and Medium Business
• Fund House of the Year – Hong Kong – AsianInvestor