Sustainability Report 2018/19

Promoting a Responsible and Sustainable Supply Chain We believe that suppliers with diverse backgrounds can contribute to our value creation. During the reporting year, we had the opportunity to work with over 4,600 suppliers, having spent over HK$9 billion on a variety of projects. Priority is given to local suppliers whenever possible to reduce carbon emissions caused by the use of transportation while promoting Hong Kong’s economic growth through the engagement of local employment and support of local business development. During this reporting year, over 95% of our suppliers were sourced locally. To maintain the stability of our supply chain, SHKP avoids single-sourcing in any specific area. A multiple sourcing strategy helps mitigate supply risks caused by business disruptions. Our five largest suppliers accounted for less than 30% of our total purchases during the reporting year. The Group aims to promote environmental and social responsibility among our partners while at the same time continuing to increase the proportion of our procurements from suppliers who prioritise environmental and social issues. We prefer suppliers who demonstrate a strong environmental commitment, for example, adopting the ISO 14001 Environmental Management System standard or those that incorporate green procurement policies. During the reporting year, 46% of our procurements were selected with environmental considerations. To reduce paper consumption, an E-Order system was adopted during the procurement process. In addition, we support small, medium and social enterprises by including them during our procurement process whenever possible. Strategies and Management Motivated by its belief in Building Homes with Heart, SHKP is committed to creating a safe, green and sustainable society. We aim to contribute to Hong Kong by pursuing the three above-mentioned SDGs with support from our supply chain firms by ensuring the well-being of their employees. This will significantly reduce the environmental impact throughout our value chain and encourage everyone to adopt sustainable practices. Throughout the years, the Group has worked relentlessly to promote health and safety at our construction sites. For our hotel business operations, we carefully monitor the level of air pollutants and wastewater generated from our operations, and dispose of trash properly while actively promoting responsible and green procurement policies along the supply chain. Our suppliers and contractors are required to adopt the Group’s environmental and occupational health and safety policies as well as strict corporate governance standards within a Code of Conduct that is in line with the Group’s environmental values. In addition, the Group upholds the 10 principles of the UNGC and encourages our suppliers to act accordingly. Child or forced labour is strictly prohibited throughout the supply chain while their rights to freedom of association and the creation of a discrimination- free work environment are fully supported. To more effectively monitor and evaluate our suppliers’ performance on a variety of sustainability aspects, including premium product quality, health and safety performance and ethical operational practices, the Group has implemented a comprehensive supply chain management mechanism that assesses their compliance in these areas through a vertically integrated approach that includes the process of selecting and retaining suppliers, regular reviewing of their performance and the establishment of evaluation systems. Head Office Construction Hotels Property Management Number of Suppliers – (Hong Kong) 55 307 2,145 2,075 Number of Suppliers – (Non-Hong Kong) 0 8 31 43 Value Created for Supply Chain Sun Hung Kai Properties Limited • Sustainability Report 2018/19 30