Sustainability Report 2020/21

Head Office Construction Hotels Property Management Number of Suppliers – (Hong Kong) 65 463 2,208 2,484 Number of Suppliers – (Non-Hong Kong) 0 9 55 43 Strategies and Management Firmly attached to our belief in Building Homes with Heart, we are dedicated to supporting the SDGs and building a more transparent, resilient and sustainable supply chain. We also strive to promote environmental and social responsibility among our business partners. A Supplier Code of Conduct is in place to facilitate communication and align our expectations of ethical standards, including legal compliance, anti-corruption, environmental protection, health and safety and labour practices, with our suppliers, contractors and subcontractors. Through green procurement policies, we also advocate for the integration of sustainable considerations in purchasing building materials, building services equipment and office products. In addition to complying with Supplier Code of Conduct and relevant environmental and social laws and regulations, such as the Waste Disposal Ordinance, the Employment Ordinance and the Occupational Safety and Health Ordinance, all our suppliers and contractors are also required to perform in accordance with the Group’s Environmental Policy , Health and Safety Policy , Human Rights and Equal Opportunities Policy and our quality requirements. We also encourage our suppliers to commit to the ten principles of the United Nations Global Compact and the Universal Declaration of Human Rights. Child or forced labour is strictly prohibited along the supply chain and we promote a discrimination-free and inclusive work environment. We closely monitor our new and existing suppliers. A comprehensive supply chain management mechanism has been established to evaluate their compliance status and performance in various sustainability aspects through the adoption of a vertically integrated approach, covering the process of selecting and retaining suppliers, regular assessment of their performance and the development of evaluation systems. Under the evaluation systems, we in particular review the human rights risks in terms of compliance and labour management. We are concerned on whether the suppliers provide reasonable compensation as well as a safe working environment to their employees. Our tender documents require business partners, contractors and suppliers to strictly follow with the laws and regulations on labour rights and interests in order to ensure appropriate labour rights protection measures are implemented and to better manage human rights risks in our supply chain. Entrenching Sustainability into Our Procurement Decisions Working with a diverse supplier base is an integral part of our procurement process, such as suppliers of building materials, building services equipment and office equipment for property-related businesses and food suppliers for hotel business. During the reporting year, we collaborated with over 5,300 suppliers, spending more than HK$8 billion. To mitigate supply chain risk, we adopted multiple sourcing strategies to avoid over-reliance on any one supplier. Our five largest suppliers contributed to less than 30% of our total purchases during the reporting year. The Group advocates taking environmental and social factors into consideration in making procurement decisions. When selecting suppliers, we give preference to those who have made strong environmental commitments such as those who follow ISO 14001 Environmental Management System standards and adopt green procurement policies. For our hotel operations, suppliers providing products which are biodegradable, recyclable, Forest Stewardship Council certified or Marine Stewardship Council certified with reasonable prices are given priority consideration in the process of selection. During the reporting year, 44% of our total procurements were made by taking environmental factors into consideration. In addition, we endeavour to support small, medium and social enterprises by offering them cooperation opportunities during our procurement process whenever possible. We prioritize purchases from local suppliers to reduce carbon emissions from transportation and to support local economic development. During the reporting year, 98% of our suppliers were locally based. Value Created for Supply Chain Sun Hung Kai Properties Limited • Sustainability Report 2020/21 35