Sustainability Report 2021/22

Value Created for the Environment Risks Possible impacts Acute physical risks, such as extreme weather events Events such as flooding and typhoons may occur with more frequency and intensity, damaging buildings and creating electricity shortages. Business may be disrupted, leading to loss of revenue and capital. Chronic physical risks, such as changes in rainfall patterns, sea levels rise Heavy rain and rising sea levels may lead to flooding, which could damage structures and facilities. This may impair the value of our properties and increase maintenance costs. Transitional risks, such as policies, legal requirements and technological risks Strict global and local policies and regulations are expected to increase operating costs. For example, real estate may be required to use technology and renewable energy to reduce carbon emissions, hence higher technological inputs and risk. Opportunities Possible impacts Sustainable building Amid increasing market demand, we may need to incorporate more climate-resilient elements into new developments, and continually enhance the performance of existing buildings. Ultimately, this may lower operating and maintenance costs. Innovation To accelerate decarbonization, business innovation may be stimulated, and advanced technology may be adopted. We support the Business Environment Council’s Low Carbon Charter to develop and promote decarbonization in the property and construction sector in Hong Kong. The Group Sustainability Policy , Environmental Policy and Sustainable Building Policy cover our commitments to aspects such as green building and emissions reduction. In particular, our Climate Change Policy outlines our dedication to improving climate resilience and adaptability. For more details, please refer to Promoting Sustainable Buildings and Building an Extensive Renewable Energy Network sections. We are dedicated to facilitating the transition to a low-carbon economy by integrating sustainability considerations into our financial mechanisms. We issued two sustainability-linked loan facilities during the reporting year, which will be used for supporting our daily operations and sustainability projects. For more details, please refer to ESG Finance section. Risk management Physical and transitional risks relating to climate change are factored into our risk assessments and strategies. This year, we engaged a consultant to study water-damage prevention in property management. With ISO 14001 and ISO 50001 systems in place, our property management and construction subsidiaries effectively manage our environmental performance and risks relating to climate change, energy and carbon emissions in our daily operations. These systems provide a framework to monitor our targets as we transition to low-carbon operations. For properties managed by Kai Shing, an adaptation plan has been implemented in accordance with ISO 22301 Business Continuity Management. A Sustainable Supply Chain Management Guideline is in place, which outlines general principles for vendor registration, tender selection, identification of critical suppliers, performance scoring and risk exposure. For more details, please refer to Managing Environmental and Social Risks of Our Supply Chain section. Climate-resilient elements are incorporated into our buildings. For example, • Floodgates are fitted at main entrances and carpark entrances for low-lying areas and flood-prone areas • Water baffles, typhoon nets, water cut-out sensors and IoT water-leakage detectors are installed for washrooms and machine rooms. Submersible pumps are equipped to remove flood water at some shopping malls • Remote-monitored sensors at key locations, such as mains switch rooms, are provided to warn staff of flooding • Intelligent water windows to prevent rainwater entering rooms with equipment are installed. When the water level reaches one inch, the ventilation vanes in the window will close automatically and seal with waterproof plastic strips 17 Sun Hung Kai Properties Limited • Sustainability Report 2021/22