Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Resilience
• Resource Management
• Wellbeing
• Sustainable Transactions

Environmental Achievements

• 21.5% reduction of electricity intensity by construction floor area compared to 2019
• Obtaining first LEED Platinum pre-certifications for two office towers at Westlake 66 in Hangzhou

Social Achievements

• Implemented measures to protect the wellbeing of employees, customers, and communities during the COVID-19 pandemic, achieving zero infection for all personnel at Heartland 66 in Wuhan.
• Donated RMB10 million to establish the Hang Lung Novel Coronavirus Relief Fund
• Donated HK$25 million for a wide array of sustainable community investment programs

Governance Achievements

• Issuance of a Joint Statement on Oversight and Management of ESG Issues by the Boards of Directors
• Development of Hang Lung’s Sustainability Policy

Climate Goals & Targets

Environmental Challenges

• Uncertainties and challenges of the COVID-19 pandemic

Mitigation Strategies

• Multiple measures adopted to provide colleagues with support and safeguards against infection (pandemic response team, protective equipment, flexible work arrangements)

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRESB

Certifications: LEED Platinum

Awards & Recognition

• Inclusion as a constituent of the Dow Jones Sustainability Asia Pacific Index for four consecutive years
• Three-star performance rating and an A-grade disclosure rating under GRESB for three consecutive years
• Selection as a constituent of the Hang Seng Corporate Sustainability Index and the Hang Seng (Mainland and Hong Kong) Corporate Sustainability Index with an “AA-” rating or above for 11 consecutive years

Environmental Metrics

ESG Focus Areas

• Climate Resilience
• Resource Management
• Wellbeing
• Sustainable Transactions

Environmental Achievements

• Spring City 66, Kunming is 100% powered by renewable energy.
• Adopted low carbon concrete at new development projects.
• Implemented battery storage technologies to replace diesel at construction sites in Hong Kong.
• Amoy Plaza awarded Smart Energy Award for significant energy savings.

Social Achievements

• Launched initiatives worth HK$27 million to encourage COVID-19 vaccination in Hong Kong.
• Achieved a key talent retention rate of 92.6%.
• Approximately 53% of key staff members were promoted or given opportunities to broaden their horizons.
• JobMarket named Hang Lung Properties Employer of Choice and awarded Work-Life Balance and COVID-19 Caring Employer awards.
• Launched a national summer internship program for 72 students, including two with special needs.
• 1,800 volunteers completed 133 volunteering activities, contributing over 14,500 service hours and benefitting over 14,800 people.

Governance Achievements

• Established company-wide strategic ESG KPIs tied to departmental and employee performance reviews.
• Secured 28% of debts and available facilities from sustainable financing.

Climate Goals & Targets

Environmental Challenges

• Embodied carbon from building materials and emissions from tenants' energy consumption are significant sources of Scope 3 emissions.
• Physical risks from climate change (temperature, precipitation, typhoons).

Mitigation Strategies

• Developed a 2025 embodied carbon target to achieve a minimum 10% reduction in embodied carbon intensity for new development projects.
• Completed a detailed physical risk analysis for all properties and are reviewing existing risk controls.
• Piloting amendments to tenant handbook and fit-out guide for Shanghai properties to reduce Scope 3 downstream emissions.
• Implementing water management program in all properties including water-efficient fixtures, water recycling, efficient use of cooling towers, rainwater harvesting, and irrigation methods.

Supply Chain Management

Responsible Procurement

• Developed a sustainable procurement strategy and updated the Central Purchasing Department manual with enhanced ESG considerations.
• Embedded ESG requirements into priority procurement categories.
• Defined an initial framework to improve sustainability and will engage more than ten key project suppliers on 16 improvement ideas.

Climate-Related Risks & Opportunities

Physical Risks

• Temperature changes
• Precipitation changes
• Typhoons

Reporting Standards

Frameworks Used: GRI Standards, ESG Guide (Appendix 27 of the Listing Rules)

Awards & Recognition

• Amoy Plaza Smart Energy Award
• Amoy Plaza Smart Technology Excellence Award

Environmental Metrics

ESG Focus Areas

• Climate Resilience
• Resource Management
• Wellbeing
• Sustainable Transactions

Environmental Achievements

• Hang Lung Properties became the first real estate company in Hong Kong and mainland China to receive approval from SBTi for near- and long-term company-wide emissions reduction targets.
• Parc 66 in Jinan became 100% powered by renewable energy from January 1, 2023.
• 38.28% reduction in GHG Emissions Intensity (Scope 1 and 2) vs 2018 baseline
• 3.8% reduction in absolute GHG Emissions (Scope 3) vs 2021
• 56% waste diversion rate in 2022
• 16.4% reduction in electricity intensity in 2022 as compared to 2018
• 15% reduction in water intensity in 2022 as compared to 2018

Social Achievements

• Launched a pioneering three-year sustainability partnership with LVMH Group.
• Celebrated the Hang Lung As One Volunteer Team’s 10th anniversary.
• Launched the Hang Lung Future Women Leaders Program to mentor 200 female university students.
• Increased the Employee Engagement Survey percentile rank in the Gallup Overall Database to 68th.

Governance Achievements

• Established an Anti-Corruption Policy.
• Updated Sustainability Policy, Sustainable Procurement Policy, and Health and Safety Policy.
• Hang Lung Group Sustainable Finance Framework established in December 2022.

Climate Goals & Targets

Environmental Challenges

• Scope 3 emissions (indirect emissions along the value chain) present significant challenges in data availability, categorization, and accuracy.
• Rising global waste generation rates.
• Challenges in motivating water savings and conservation due to low water prices.

Mitigation Strategies

• Refined and enhanced Scope 3 emissions calculation methodology.
• Implemented various waste reduction and recycling measures.
• Conducted a detailed review of water consumption patterns and practices to identify water-saving opportunities.

Supply Chain Management

Supplier Audits: ESG review of all new suppliers; target to complete ESG review of all existing suppliers by end of 2024.

Responsible Procurement

• Sustainable Procurement Policy
• Code of Conduct for Contractors
• ESG requirements embedded into priority procurement areas

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity and frequency of extreme weather events
• Chronic physical changes such as changes in precipitation and weather patterns

Transition Risks

• More ambitious climate policies and regulations
• Changing investor sentiment
• Growing stakeholder preference for companies prepared for climate change

Opportunities

• Economic or policy incentives supporting low-carbon economy
• Higher building energy efficiency
• On-site renewable electricity generation
• Collaboration with peers

Reporting Standards

Frameworks Used: GRI Standards, TCFD, SASB

Certifications: ISO 45001

Third-party Assurance: British Standards Institution

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)
• Goal 8 (Decent Work and Economic Growth)
• Goal 11 (Sustainable Cities and Communities)
• Goal 5 (Gender Equality)

Initiatives contribute to these goals through emissions reductions, renewable energy procurement, community investment, and diversity and inclusion programs.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Distinction Award and Special Award at Hong Kong Sustainability Awards
• Excellence Award in ESG Reporting at Best Annual Reports Awards
• Grand Award in Best ESG Report at Hong Kong ESG Reporting Awards
• Outstanding Caring Company Award
• Social Responsibility Pioneer Award
• Employer of the Year and Employee Health and Safety Award at Hong Kong HR Awards
• Best Company to Work for in Asia
• ESG Award at Best CG and ESG Awards

Environmental Metrics

ESG Focus Areas

• Climate Resilience
• Resource Management
• Wellbeing
• Sustainable Transactions

Environmental Achievements

• 41% reduction in Scope 1 and 2 greenhouse gases emissions intensity compared to 2018 baseline
• Westlake 66 in Hangzhou is the first commercial development project to use low carbon concrete bricks in mainland China and Hong Kong
• 18.9% of our electricity demand in mainland China powered by renewable electricity
• Over 80% construction floor area (CFA) certified to LEED/BEAM Gold or above
• Diverted nearly 140,000 kg of municipal waste from landfill (Hong Kong Office Rejuvenation Project)

Social Achievements

• Increased percentile rank for employee engagement in the Gallup Overall Database by 6th percentile to 74th percentile
• 180 female university students across the nation benefitted from the Hang Lung Future Women Leaders Program
• Hang Lung As One volunteer team contributed 69,891 volunteering hours, benefitting 37,495 people in Hong Kong and mainland China during 2023

Governance Achievements

• Launched a program to partner with tenants on sustainability, Changemakers, applicable to interested tenants in both Hong Kong and mainland China
• Launched the Sustainable Finance Framework to further support our long-term sustainability objectives. 55% of total debts and available facilities comprise ESG-related elements

Climate Goals & Targets

Environmental Challenges

• Scope 3 emissions (indirect emissions) present significant challenges in the real estate industry, including challenges in the availability, categorization and accuracy of data
• Electricity consumption rebounded in 2023 as commercial activities picked up again after the pandemic
• Tenant electricity consumption (Scope 3) is a challenge due to less operational control over tenant-controlled areas

Mitigation Strategies

• Revisited applicable emissions categories and identified ‘blind spots’ to improve current Scope 3 emissions disclosure
• Working with LVMH Group and other leading tenants to look more closely at embodied carbon from tenants’ fit-outs and renovations
• Planning energy efficiency measures in 2024 and 2025 to support progress towards 2025 targets
• Working with tenants to reduce unnecessary lighting (LightWise program)
• Expanding the provision of renewable energy to tenants at additional locations

Supply Chain Management

Supplier Audits: ESG review for all new suppliers; annual reviews of existing suppliers

Responsible Procurement

• Sustainable Procurement Policy
• Code of Conduct for Contractors
• Use of low-carbon building materials

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (typhoons, flooding, heat waves)
• Sea level rise

Transition Risks

• More ambitious climate policies and regulations
• Changing investor sentiment
• Growing stakeholder preference for climate-prepared companies

Opportunities

• Economic or policy incentives for low-carbon economy
• Higher building energy efficiency
• On-site renewable electricity generation
• Collaboration with peers

Reporting Standards

Frameworks Used: GRI Standards, HKEX ESG Reporting Guide, IFRS S2 Climate-related Disclosures, SASB

Certifications: ISO 45001

Third-party Assurance: British Standards Institution

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Low-carbon concrete bricks
• Recycled concrete aggregate

Awards & Recognition

• Excellence Award in Environmental, Social and Governance Reporting 2023
• Distinction Award (Large Organization Category) Hong Kong Sustainability Award 2023
• Many other awards (see report)