Sustainability and Core Competences

Philippe Lacamp, Head of Sustainable Development11th May 2011

Institutional InvestorsCost ReductionCost ReductionReduced Cost of CapitalSupply Chain and Customer LoyaltyEngaged Employeesg g p ySmarter InnovationRisk ManagementEnhanced Brand Value and ReputationpLicense to Operate / License to Grow

…Risks to business operations…Risks to business operationspp

Nasa Flood Map – PRD after 1m sea level riseWarehouse in Southern China after flooding

Rise in Electricity BillsIncrease in diseases/outbreaks

Opportunity or opportunistic?Opportunity or opportunistic?Opportunity…or opportunistic?Opportunity…or opportunistic?

Group Structure

John Swire & Sons LimitedJohn Swire & Sons Limited

Properties Aviation Beverages Marine ServicesTrading & Industrial

Swire Pacific Limited

Industrial

Sustainable Development – Swire Company Values

WHAT is SD?

“development which meets the needs of the present without compromising the ability of future generations to meet their own 

d ” d ld d l

WHAT i S i ’ hil h SD?

needs”  United Nation World commission on Environment and Development, 1987

WHAT is Swire’s philosophy on SD?

• sustainable business hinges on sustainable communities in a sustainable environment.

• ethical duty - it’s the right thing to do.• in pragmatic terms ‐ complementary with long‐term value creation for our shareholders.

Sustainable Development ‐ Competencies

Swire is committed to: responsibility

• be a good steward of the environment

• safeguard the health and safety of our• safeguard the health and safety of our stakeholders

• be an employer of choice• be an employer of choice

• promote sustainable choices in our value chainsvalue chains

• contribute to the communities in which twe operate

Sustainable Development – Policies

• Adopted for long term value creation, “to excel as ,corporate citizens and run best in class businesses” Business

PartnersEmployees

• All companies in which Sustainable

Partnersp y

Swire has a controlling interest have action plans to apply the policy

Development Policy

Communities

Health &

Safetyto apply the policy

• Major operating companiesEnvironment

y

• Major operating companies annually publish their own Sustainable DevelopmentSustainable Development reports in addition to Swire Pacific’s central report

Sustainable Development Governance Structure

Swire Pacific Board

Group Risk Management Committee (GRMC)

GRMC Working Committee Audit

Human Resources C itt

Finance Committee

Legal Committee

Health &Safety

C itt

InsuranceCommittee

Environment Committee

CommitteeCommittee

Enterprise Wide Risk 

Management Working 

China Health & Safety Working 

Environment Best 

Practices Working 

IT Committee

GroupGroup Group

Sustainability – Language of Engagement

Regulations/ComplianceBottom Line

Industry Leadership

g p

Ri k M t O t it f I tiRisk Management Opportunity for Innovation

Ethical

The Environment  – Materiality Mapping

ption 

ions

ion

tion

ption 

l on sks

consum

pG emissi

ir polluti

onsumpt

consum

pdisposal

e po

llutio

ersity

ris

Energy c

and GHG

Local a

Water c

Material 

and 

Noise

Biod

iv

M

Properties

Aviation – airlinesAviation  airlines

Aviation – services

BeveragesBeverages

Marine Services

Trading and IndustrialTrading and Industrial

The Environment  – Carbon Management

Types of emission sources Tonnes of CO2e

Direct emission from stationary combustion sources 31,667y

Direct emission from mobile combustion sources 5,903,560

Direct emission from fugitive sources 9,790g

Indirect emission from purchased electricity & steam 328,604

Total 6,273,621Total 6,273,621

The Environment  – Carbon Management

Properties•10‐year energy efficiency plan for new and existing buildings; energy audit for tenants• research and development, e.g. collaboration with Tsing Hua University

Aviationl d i A i i Gl b l D l l h i i l i i i i l• lead in Aviation Global Deal, sectoral approach on international aviation emission control

• proactively search and invest in the development of alternative fuel

Beveragesg• reduce energy intensity in production; pilot energy recovery & reuse system, e.g. methane• invest in clean energy in distribution network, 100% recyclable bottles

Marine Services• funding a voluntary REDD programme in Paraguay  for SPO and clients• use cleaner fuel, e.g. low sulphur fuel, install fuel monitoring system, ‘Green Zone’

Trading & Industrial•energy audits for retail outlets of Swire Resources• improve operational energy efficiency• improve operational energy efficiency

The Environment  – Carbon Management

Aviation Division commits to:

• fuel efficiency improvement of 1.5% per year (2009 – 2020)

• carbon neutral growth by 2020

• 50% emission reduction by 2050 (2005 baseline)

• Fly Greener offset programme• Fly Greener offset programmeto engage customers

The Environment  – Carbon Management

Properties Division :

• building management – invested HK$48 million in energy efficiency improvement works in its portfolio in Hong Kong

• building design – BEAM Platinum or LEED Gold standards

• tenant engagement – free energy audit for its tenantsg g gy

• R&D – partnership with Tsinghuaand Hunan University to explore y pbest industry practices

Core Competencies – Innovations at Festival Walk

Web-based Energy Sub-meters- dynamic remote management by Tsinghua University

Recycling of Cooking Oil- as biodiesel used to power the company boat

Recycling of Fluorescent tubesand e-waste

LEDs / Induction Lamps / T5

2010 Client of the Year – Low Carbon Operation Award of the Chartered Institution of Building Services EngineersInstitution of Building Services Engineers (CIBSE)

Core Competencies – Innovations at Festival Walk

Reclaiming  Energy fromWaste Ice

Before – Electric heating was used to melt waste ice

Ice Melting Water Tank

Ice Rink - Glacier

Now – Icy water is used to cool down office space

28

Our Low Carbon Operation Journey (2000‐2010)Core Competencies – Innovations at Festival Walk

Investment: $40MAnnual Saving: 14M kWh

10,500 Ton

33%33%d i CO i i b l ti

Energy Saving Initiatives:

= reducing CO2 emission by planting 450,000 trees

OR

= annual electricity consumption of Modulating Valve Installation Cooling Tower Conversion Innovative Chiller Plant Control Logic

= annual electricity consumption of 3,000 HK households

Energy Efficient Light Fittings – Phase 1 VSD in AHUs – Phase 1 , Joint Study with Tsinghua University Chiller Plant Replacement Energy Efficient Light Fittings – Phase 2, VSD in AHUs – Phase 2

Core Competencies – Innovation at Swire Beverages

Lightweight Packaging

R di Solar air-conditioningReverse vending Solar air-conditioning

Core Competencies – Innovation at Swire Beverages

Community Development & Engagement:y p g g

ACC Ground Source Heat Pump integratedinto the production;200k kWh electricity savedy1000 tons of CO2 = 300 HK homes10 Olympic swimming pools of water

Sustainability ‐ Group Wide Initiatives

Centre for Tropical Forest SciencePNG

Cold Storage solar array – CaliforniaProvides 12% of electricity required

Swire Institute of Marine Science(Xiamen University Marine Station fundingA d i A il 2011)

Finlays agri-business assistingwith global water guidelines

Announced in April 2011)

Sustainability – Languages used….

Regulations/ComplianceBottom Line

Industry Leadership

g p

Ri k M t O t it f I tiRisk Management Opportunity for Innovation

Ethical

The Environment – Water Challenge

The Environment – Water Challenge

Brisbane, Australia

8 provinces, 4 million people, China

The Environment  – Water Management

The Environment ‐ Response to the Water Challenge

The Environment – Joined up response to the Water Challenge

lowinfra‐red 

rain

low flow 

fixtures 

sensors

rain harvesting system

45%reduction in water use;  savings of one Olympic swimming pool per week

Sustainability – Languages used….

Regulations/ComplianceBottom Line

Industry Leadership

g p

Ri k M t O t it f I tiRisk Management Opportunity for Innovation

Ethical

Sustainability – Partnership & Leadership

Hong Kong Retail Management Association

The Climate Group

Carbon Disclosure Project

The Climate Group

COP participation

Health and Safety – A crucial part of SD

Swire is committed to safeguard the health and safety f k h ldof our stakeholders:

• monitor and report lost time injuries and accidentsp j

• review measures to prevent recurrence (including trainings and awareness programmes)(including trainings and awareness programmes)

• devise health and safety policiesand procedures

Employer of Choice – True sustainability

Our people are key to the sustainable development of our businessesour businesses.

• support, reward and develop

• an in‐house organisational and leadership development companyleadership development company 

• Staff Code of Conduct

• care for staff in need (EAP)

• support staff to serve the communitysupport staff to serve the community

Our Value Chains

Our value and supply chains are part of our reputation. 

They are part of our responsibility.

S li C d f C d t h ki• Supplier Code of Conduct ‐ checking

• Advocating the responsible use of our products and services by our customers and consumers

Our Value Chains – responsibility and choice editing

Voter / Citizen pressure

GovernmentGreen consumers

Government regulation

Corporate procurement 

d d i

Lobbying

and productiondecisions

ConsumerConsumer pressure

Community Development & Engagement

• Swire Group Charitable Trust

• Group companies’ cash and in‐kindp p

sponsorship

• Corporate  volunteeringo po a e o u ee g

Sustainability in the Community ‐ Education

• Education

LEAP (Life Education Activity Programmey g

CELL (Community English Learning Lab)

Taikoo Primary School , 1923

Sustainability in the Community; Arts and Culture

Hong Kong Philharmonic Orchestra

Shakespeare for All ADA

Hong Kong Philharmonic Orchestra

Sustainability; Environment

STEP (SusTainable lifestyle(SusTainable lifestyle Education Programe)

Thank You and Visit us Online

SustainabilitySustainabilityis ourResponsibilityResponsibilitywww.swirepacific.com/sd