Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Environment
• Safety Performance
• Society

Environmental Achievements

• Reduced CO2 emission per unit of town gas by 21% from 2005 to 2013 (0.79kg to 0.62kg)
• Obtained 12th consecutive Wastewi$e Label
• Awarded CarbonCare® label for 5% reduction in office-related carbon emissions
• Saved more than 37 terajoules in energy at Tai Po production plant through heat recovery, resulting in savings of 2,400 tonnes of carbon emissions and approximately HK$6 million in fuel costs
• Reduced polyfoam packaging material use by approximately five tonnes per year

Social Achievements

• 918 employees volunteered approximately 72,025 hours
• Received the “Highest Service Hour Award” for the sixth consecutive year
• Launched the “Towngas Health, Safety, Environment and Caring Programme” for new employees
• Distributed 15,600 nutritious fresh food packs to underprivileged single-parent families
• Launched the “Gentle Breeze Movement” in mainland China for community projects

Governance Achievements

• Complied with all code provisions set out in the Corporate Governance Code
• Implemented a strict internal Code of Conduct
• Established an effective environmental management system (EMS)

Climate Goals & Targets

Environmental Challenges

• Defining the organizational boundary for ESG data collection and reporting in mainland China proved challenging due to the varied nature of the portfolio
• Higher number of leaks in mechanical joints of older metal pipes due to cold spell
• Increase in third-party damage incidents due to increased roadwork activities

Mitigation Strategies

• Continued to refine the process for determining the portion of the company included for each reported data point
• Implemented additional measures including enhanced trench inspections, coordination with roadwork parties, and leakage surveys
• Ongoing programme to replace older pipelines with more modern and durable materials

Supply Chain Management

Responsible Procurement

• CSR Code of Practice developed for suppliers
• Compliance checks conducted by Corporate Supplies Department

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products
• Expansion of natural gas businesses in mainland China

Reporting Standards

Frameworks Used: GRI G4 Guidelines – Core option

Certifications: ISO 14001

Sustainable Products & Innovation

• Energy-efficient gas appliances
• New flue ducts for wok ranges and stockpots

Awards & Recognition

• Forbes Global 2000 Leading Companies
• Global Chinese Business 1000
• Hang Seng Corporate Sustainability Index series
• Hong Kong Corporate Governance Excellence Award
• Hang Seng Pearl River Delta Environmental Awards
• Green Enterprise Awards
• CAPITAL Entrepreneur Supreme Public Utility Service Award
• American Society for Training and Development Excellence in Practice Citation
• United Nations’ World Summit Award
• IT Excellence Awards
• Sing Tao Excellent Services Brand Award
• Highest Service Hour Award
• President's Award – The Community Chest
• Friend of Social Enterprise
• Volunteers with Service Hours Exceeding 10,000 Award
• Five Stars Outstanding Corporate Citizen in China 2013
• Enterprise with the Best Corporate Social Responsibilities 2013

Environmental Metrics

ESG Focus Areas

• Creating Business Opportunities
• Ensuring Health and Safety
• Protecting the Environment
• Contributing to Stakeholders
• Strengthening Corporate Governance

Environmental Achievements

• Carbon intensity of gas production (Hong Kong) - 0.592 kg CO2e/unit of town gas, ↓23% compared with 2005 baseline
• Electrical power consumption at Towngas’ North Point Headquarters: ↓4.29% compared with 2019
• >1,600 tonnes of metal recovered through Used Gas Appliance Recycling Programme
• 117,822m3 water conserved through the reverse osmosis systems at Tai Po Gas Production Plant

Social Achievements

• Launched new training programmes to build a succession pipeline for expanding business in mainland China
• Developed various channels and platforms to attract young talent to the gas industry
• Total new recruits: 203 (Hong Kong) 1,493 (outside Hong Kong)
• Average training hours per employee: 17.5 (Hong Kong)
• Love on Delivery programme distributed 30,000 fresh food packs to 1,000 underprivileged families
• 5,814 customer compliments received (Hong Kong)

Governance Achievements

• Reinforced our culture of integrity and launched e-learning modules to further promote business ethics
• Ensured the effectiveness of our risk management framework by continuously mitigating risks that may have a significant impact on our business

Climate Goals & Targets

Environmental Challenges

• COVID-19 outbreak impacting business and the overall economy
• Climate change and extreme weather conditions
• Ageing workforce and knowledge transfer
• Data privacy concerns

Mitigation Strategies

• Activated Corporate Preparedness Plan for Infectious Diseases, implemented various measures to reduce infection risk (sanitisation, temperature checks, protective equipment, work-from-home arrangements)
• Strengthened emergency preparedness plans and modified facilities to withstand extreme weather
• Conducted a study on transition risks to identify impacts and develop mitigation plans
• Developed talent development programmes for different employee levels
• Implemented AI in maintenance work and customer inquiries to improve service efficiency and quality
• Isolate sensitive customer information according to our dedicated Data Privacy Standing Committee

Supply Chain Management

Supplier Audits: Over 170 major suppliers assessed on CSR performance

Responsible Procurement

• Towngas Purchasing Policy
• CSR Code of Practice for Suppliers
• Sustainable Purchasing Policy
• Life-cycle Costing (LCC) methodology

Climate-Related Risks & Opportunities

Physical Risks

• Rising temperatures and sea levels
• Drought
• Extreme weather events
• Flooding

Transition Risks

• Policy changes
• Reputational impact
• Shifts in market preferences
• Higher compliance costs
• Reduced gas sales revenue

Opportunities

• Development of new technologies, products and services
• Revenue from low-carbon products and services (e.g., biofuels)
• Development of waste-to-energy products and smart energy projects

Reporting Standards

Frameworks Used: GRI Standards: Core Option, GRI G4 Oil and Gas Sector Disclosures, Hong Kong Stock Exchange’s updated ESG Reporting Guide

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Hong Kong Quality Assurance Agency

UN Sustainable Development Goals

• Goal 6: Clean Water and Sanitation
• Goal 7: Affordable and Clean Energy
• Goal 9: Industry, Innovation and Infrastructure
• Goal 13: Climate Action

The report details how Towngas' initiatives contribute to these goals through various projects and programs.

Sustainable Products & Innovation

• Energy-efficient appliances
• Advanced biofuels (HVO, cellulosic ethanol)
• Smart gas meters
• Optical Light Back Protection Device
• Water Heater Hydropower Generator Module

Awards & Recognition

• Many awards listed in the report, including those related to environmental excellence, safety, service, and CSR.

Environmental Metrics

ESG Focus Areas

• Energising the Ecosystem
• Neutralising our Footprint
• Engaging with Society
• Revitalising our Strengths
• Greening the Future
• Young-at-heart with Resilience

Environmental Achievements

• Electricity use at North Point Headquarters building reduced by 13.5% (2015 baseline)
• Conserved >120,000 m3 of water via the reverse osmosis systems at the Tai Po Gas Production Plant
• Recovered over 1,400 tonnes of scrap metal through the Used Gas Appliance Recycling Programme
• Reduced carbon intensity from gas production by 28% (2005 baseline), reaching 0.549kg CO2e/unit of town gas
• Extended Scope 3 GHG emissions quantification and disclosures to the Group level
• Hong Kong’s first hydrogen fuel cell charging facility for electric vehicles at a padel court in Sai Kung
• Produced green methanol successfully
• Installed solar panels on our governor kiosks to power monitoring equipment
• Generated over 560,000 kWh in 2023 from various solar PV systems (84% increase from 2022)

Social Achievements

• Rice Dumplings for the Community programme set a Guinness World Record™
• Over 42,000 households benefited from Towngas Concession Schemes totalling HK$24 million
• Volunteer service hours: 14,487 (Hong Kong) >440,000 (Mainland Utility Businesses)
• Launched the Sending Warmth to Thousands with Smart Technology programme, donating 10,000 Smart Controllers and Smart Meters
• Organised three Sensory Restaurant on Wheels™ events for elderly people with swallowing difficulties
• Launched Towngas Tan Hui Platform, achieving a total carbon reduction of about 900 tCO₂e

Governance Achievements

• Established the Board ESG Committee to provide effective oversight of all ESG-related matters
• 5% of the variable compensation of the Managing Director and senior executives is linked to the achievement of ESG objectives
• Upgraded the Privacy Management Programme online platform to enhance privacy management
• Provided anti-corruption training to the Board

Climate Goals & Targets

Environmental Challenges

• Climate resilience
• Asset integrity and crisis management
• Market competition
• Liquidity risk
• Credit risk
• Increased capital expenditure due to climate change
• Decline in gas demand due to climate change concerns
• Manpower crisis
• Manpower shortage and retention challenge
• Gas leakages, supply disruptions, fire/explosions
• Severe damage to Towngas critical infrastructure/facilities
• Feedstock supply interruption
• Increased fuel cost
• Nonconforming quality of key materials for gas business
• Disruption of operations due to IT issues
• Data breach and loss of sensitive information
• Fraudulent activities
• Employee misbehaviour and media attacks
• Influence on operations from regulatory changes

Mitigation Strategies

• Proactive risk management and advanced technologies to address gas leaks and infrastructure damage
• Robust crisis management systems
• Diversify businesses to transform into a multi-energy provider
• Implement financial liquidity stabilising measures
• Credit Monitoring
• Enhance resilience plans for extreme weather events
• Reduce GHG emissions and set reduction targets with concrete action plans
• Invest and diversify businesses for energy transition
• Implement comprehensive safety management system
• Conduct regular safety inspections and audits
• Carry out comprehensive incident investigations
• Encourage active reporting, open communication and experience sharing
• Provide adequate training
• Establish emergency plans
• Manpower succession plan
• Undertake active leakage and repair (LDAR) programmes
• Collaborate with regulatory authorities and industry peers
• Develop and strengthen emergency response plans
• Apply for insurance
• Diversify fuel sources
• Increase gas storage capacity
• Establish a dedicated team for gas supply chain management
• Conduct regular supplier evaluation and quality inspections
• Adopt robust protective system
• Conduct regular security assessments
• Develop and strengthen contingency plans
• Ongoing monitoring on information security regulations
• Implement whistleblowing programme
• Develop clear ethical standards and policies
• Active and on-going monitoring of regulatory changes and requirements

Supply Chain Management

Supplier Audits: 33 tier 1 suppliers assessed via self-assessment surveys and/or site visits in Hong Kong

Responsible Procurement

• Code of Practice for Suppliers
• Sustainable Purchasing Policy
• Towngas Smart Energy Approved Supplier-Best Creative Award
• Towngas Domestic Appliance Packaging Guideline

Climate-Related Risks & Opportunities

Physical Risks

• Heavy rainfall and floods
• Increased temperatures

Transition Risks

• Policy and Legal Mandates
• Technology
• Market
• Reputation

Opportunities

• Development of energy-efficient products
• Hydrogen development
• Renewable energy projects

Reporting Standards

Frameworks Used: GRI Universal Standards 2021, GRI 11 Oil and Gas Sector Disclosures 2021, IFRS® Sustainability Disclosure Standards – IFRS S1 and IFRS S2, ESG Reporting Guide (SEHK), TCFD Recommendations, CASS-CSR 4.0, SASB Standards for the Gas Utilities & Distributors sector

Certifications: ISO 14001, ISO 45001, ISO 27001 (Hong Kong data centre), ISCC EU and ISCC PLUS (green methanol)

Third-party Assurance: Deloitte Touche Tohmatsu

UN Sustainable Development Goals

• Goal 7: Affordable and clean energy
• Goal 12: Responsible consumption and production
• Goal 13: Climate action
• Goal 6: Clean water and sanitation

Report details how initiatives contribute to these goals

Sustainable Products & Innovation

• Smart appliances
• Smart controllers
• Smart meters
• Green methanol
• Nickel-hydrogen batteries

Awards & Recognition

• Dow Jones Sustainability Asia Pacific Index
• S&P Global ESG Score (China) Top 1%
• S&P Global Sustainability Yearbook (China)
• Hang Seng Corporate Sustainability Index AA+
• Business Sustainability Index (BSI) first place
• Numerous other awards listed in the report