Sustainability Report 2023/24

Managing ESG Risks in Our Operations We regularly review our company-specific risk exposure, considering both the likelihood and magnitude of identified risks, including operational risks, ESG risks and interest rate risk. The Board has the overall responsibility for establishing and maintaining a sound and effective risk management and internal control system. This includes a clear process or framework to determine our risk appetite for these risks as well as the mitigating actions we have put in place for at least two key risks. We conduct regular reviews of our risk exposure, typically at least twice a year or more frequently as needed. Additionally, we have undertaken internal audits of our risk management processes within the last two years to ensure their effectiveness. To cultivate a strong risk culture, we have implemented key strategies. These include taking risk into consideration of the development of products and services, and providing focused training on risk management practices to new hires and existing staff. Key risk management metrics have also been established in different parts of our company in conducting our business. The company also provides self-learning materials on the intranet covering ESG topics, including climate management, sustainable supply chain management and enterprise risk management. These materials are intended to enhance the knowledge of general staff and management. To enhance our resilience to ESG risks, the Group has incorporated ESG risks into its overall risk management. The following provides an overview of some of our significant ESG risks and examples of our response. Potential Impact Example of Our Mitigation Measure Respective Material ESG topic Climate Change • Higher maintenance costs and loss of revenue due to operations disruptions by extreme weather • Increase in operating costs due to stricter global and local policies and regulations • Address physical risks by incorporating climate-resilient building features and developing adaptation plans in project development • Transit to low-carbon operations with decarbonization strategies • Disclose climate management with reference to the TCFD recommendations and IFRS S2 • Climate Change Mitigation and Adaptation Cybersecurity and Data Protection • Reputational damage and negative financial consequences under cyber-attacks and data breaches • Raise awareness of cybersecurity risks by establishing Cybersecurity Policy, conducting assessment and providing training • Monitor and respond to data breaches and cyberattacks by developing the Cybersecurity Operating Guideline • Evaluate and upgrade the latest technologies on information security • Data Privacy and Cybersecurity Ethics and Integrity • Reputational damage and negative financial consequences under integrity breaches and money laundering • Comply with the regulations and the standards stipulated in the Code of Conduct and Supplier Code of Conduct • Provide training on ethical standards, anti-corruption and anti- competition practices • Business Ethics and Anti-corruption Environmental Compliance • Reputational damage and negative financial consequences as a result of non-compliance • Accrued additional costs and arising challenges on business operations in view of more stringent environmental regulations • Meet the latest standards and regulations by regular review and update of our environmental policies • Implement ISO 14001 Environmental Management Systems and perform environmental audits • Energy, Water and Waste Health and Safety • Occurrence of work-related injuries or fatalities due to poor health and safety management • Delays in project delivery due to lost work days • Reputational damage due to cases of injuries • Implement ISO 45001 Occupational Health and Safety Management Systems • Oversee health and safety initiatives, targets and performance • Ensure that the health and safety risks in the supply chain are identified, assessed and managed • Well-being, Health and Safety Supply Chain • Supply chain disruptions due to social or environmental factors cause unstable supply and rising prices of raw materials and services • Controversies and reputational damage caused by supply chain risks and unexpected events • Use multiple sourcing strategies to avoid overreliance on any single source • Conduct inspections and assess the sustainability performance of suppliers based on the Sustainable Supply Chain Management Guideline • Supply Chain Management For other risk factors, please refer to the Corporate Governance Report section of our Annual Report 2023/24. Sun Hung Kai Properties Limited | Sustainability Report 2023/24 < 13 > 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