Sustainability Reports 2022/23

Turquoise Scenario Brown Scenario Reference on publicly available scenario • RCP 2.6 • SSP 1 • IEA SDS 7 • NGFS Orderly pathways • RCP 8.5 • SSP 5 • IEA STEPS 7 • NGFS Hot house world pathways Global mean temperature rise • 1.5°C to 2°C by 2100, compared to pre-industrial level • Above 3°C by 2100, compared to pre-industrial level Economic and policy development • Inclusive and respects environmental boundaries, with countries committing to achieving net zero by 2050 and implementing strict climate policies with ease • Economic growth and technological advancement are driven by fossil fuels, resulting in elevated greenhouse gas emissions, and worsening extreme weather • Absence of new climate policies and insufficient short-term action plans due to institutional, political and economic challenges Business model • A swift transition from fossil fuels to renewable energy • A profit-centric business model that values financial gains over environmental and social impacts Level of commitment • Corporations are dedicated to lower-carbon operations and contribute to climate action objectives • Detailed plans, with short-term targets, result in a decarbonized economy • Lack of public awareness impedes system-wide transformation Result • Low physical risk and high transition risk • High physical risk and low transition risk With support from consultants, we hosted trainings that introduce key concepts about climate change and the TCFD framework. This enhances the knowledge of senior management in our departments and business units as well as that of the sustainability working group. Climate-related issues are complex and require collaborative efforts. We have integrated climate-related risks into our multidisciplinary Enterprise Risk Management (ERM). Climate-related risks are reviewed in our risk register. As a first step, we identify, assess and manage the risks and opportunities associated with climate change. In line with TCFD recommendations, we conducted a climate scenario analysis. We used Turquoise and Brown Scenarios to evaluate the impact of climate change on our business. The two scenarios are constructed using publicly available scenarios adopted by esteemed organizations, including the Intergovernmental Panel on Climate Change (IPCC), International Energy Agency (IEA) and Network for Greening the Financial System (NGFS). The scenarios incorporate a wide range of factors, including political, environmental, economic and social indicators, and provide data projections that enable us to consider the potential impact of climate change in the short/medium term (2030) and medium/long term (2050). These timeframes align with the global objective of reducing emissions and achieving net zero by 2050. The scenarios are science-based, well balanced and highly contrasting. They serve as a robust foundation for evaluating and comprehending the effects of climate-related risks and opportunities on our business operations and value chain. 7 Data up to 2021 was considered in the scenario analysis. Governance Strategy Risk management Metrics and targets Sun Hung Kai Properties Limited Sustainability Report 2022/23 25 Our Reporting Approach Message from the Sustainability Steering Committee Our Business Our Approach to Sustainability Value Created for the Environment Value Created for People Value Created for Customers Value Created for Supply Chain Value Created for Community Appendices