Sustainability Report 2021/22

Value Created for Supply Chain 39 Sun Hung Kai Properties Limited • Sustainability Report 2021/22 Head Office Construction Hotels Property Management Suppliers (Hong Kong) 91 149 3,812 3,089 Suppliers (non-Hong Kong) 0 3 47 7 Strategies and Management Upholding Sustainability Value in Procurement Decisions We have an extensive and diverse supplier base providing building materials, building services equipment and office equipment for our property-related businesses and food for our hotels. We use multiple sourcing strategies and suppliers to avoid overreliance on any single source, mitigate supply chain risks and foster fair competition. During the reporting year, we worked with more than 7,198 suppliers and spent more than HK$9.67 billion. Our five largest suppliers contributed less than 30% of our total purchases. Complementing our belief in Building Homes with Heart, we are committed to embedding the SDGs as key principles in our corporate philosophy, and establishing a transparent, resilient and sustainable supply chain. We work with our business partners to advocate ethical and sustainable practices, creating greater value for us and the community at large. Our Supplier Code of Conduct stipulates standards in a number of areas which we expect our suppliers 1 , contractors 1 and subcontractors to uphold, including legal compliance, governance, business ethics, environmental protection, health and safety, human rights, equal opportunities and labour practices. Our Sustainable Building Policy and green procurement guidelines integrate sustainable considerations into the selection of our suppliers and the sourcing of building materials, building equipment and office products. Suppliers and contractors are required to comply with applicable environmental and social laws and regulations, including the Waste Disposal Ordinance, the Employment Ordinance and the Occupational Safety and Health Ordinance. They are also required to adhere to our Environmental Policy , Health and Safety Policy , quality and business ethics requirements. We encourage suppliers to commit to the principles of the United Nations Global Compact and the Universal Declaration of Human Rights. We have zero tolerance for child and forced labour in our supply chain, and we proactively foster a discrimination-free and inclusive work environment. A successful sustainability journey relies greatly on suppliers adhering to our standards and requirements. We monitor and evaluate new and existing suppliers’ compliance and performance in different aspects with our well-established comprehensive supply chain management mechanism. A vertically integrated approach standardizes the selection and retention of suppliers, the regular assessment of their performance, the risk management along the supply chain and the development of evaluation systems. We prioritize the evaluation of human rights risks in suppliers’ compliance and labour management, especially their ability to offer reasonable compensation and a safe working environment. Our tender documents clearly state that all business partners, contractors and suppliers must strictly observe laws and regulations on labour rights and interests to ensure appropriate labour rights protection measures are implemented. In accordance with our green procurement guidelines, we integrate environmental and social factors into our decision-making. We give preference to suppliers and contractors who share our environmental commitments. Priority is given to those who follow ISO 14001 Environmental Management System standards, who comply with the BEAM Plus Scheme, and who adopt green procurement policies and sustainable measures or earn relevant awards. Sanfield, for example, includes environmental concerns in its contractual specifications, encouraging the use of reusable temporary steel platforms, rechargeable power stations for power cranes, and replacing wood formwork with aluminium. In our hotel operations, preference is given to products that are biodegradable or recyclable, Forest Stewardship Council- or Marine Stewardship Council-certified and are reasonably priced. During the reporting year, 39% of our total procurement took environmental factors into consideration. We support small, medium and social enterprises – and, wherever practical, partner with them for our operations and procurement. We also prioritize purchases from local suppliers that support the economy and – by curbing carbon emissions from transportation of materials and products – reduce our carbon footprint. During the reporting year, 99% of our suppliers were local. 1 Our suppliers and contractors provide cleaning, security, laundry, landscaping, construction activities, E&M services and etc.