Sustainability Report 2023/24

Acute (short/medium term) Rainfall Flood Flooding caused by excessive rainfall, which impacts infrastructure and poses a risk to life River Flood Flooding caused by overflowing rivers, which disrupts communities and damages property Storm Surge Typhoon-induced flooding, which poses substantial risks to coastal regions Typhoon Tropical cyclones with intense winds and heavy rainfall, which result in widespread devastation, including infrastructure damage and flooding Chronic (medium/long term) Drought Prolonged periods of low precipitation create water scarcity, impacting ecosystems and socioeconomic activities Extreme Heat Excessively high temperatures that strain resources and pose health risks Landslide Movement of soil, rocks or debris, which can lead to infrastructure damage, property loss and loss of life Sea Level Rise Long-term global ocean level increase, which inundates low-lying areas and contributes to coastal flooding Snow Melt Rising temperatures cause accumulated snow and ice to transition into water, increasing runoff and the risk of flooding Wildfire Uncontrolled fires spread rapidly, destroying landscapes and homes, and endangering lives 3 Physical Risk We assessed physical risks by conducting an asset-level quantitative risk assessment on eight projects in our Hong Kong and mainland portfolio. We considered our global portfolio before selecting the eight projects based on their strategic importance, financial materiality and geographical location. We used two IPCC-adopted Representative Concentration Pathways (RCP 2.6 and 8.5) to evaluate impacts in two climate futures: one with a global temperature rise below 2°C and the other with a rise above 3°C. We also included historical data and projected climate variables from dynamic climate models for a comprehensive risk assessment. In our assessment of physical risks, significant areas of uncertainty come from the methodologies employed in projecting the impacts of these risks by 2030 and 2050. The primary source of uncertainty arises from the reliance on climate models, which necessitate the use of various assumptions, including frequency, intensity and geographical distribution of climate events, to estimate future conditions. Through evaluating the severity and likelihood of physical risks to the chosen assets, we identify the material physical risks relevant to the Group The collected data is utilized to assess the vulnerability of the chosen assets in Hong Kong and Shanghai to climate-related risks 2 We gather and integrate climate data from multiple sources, including the IPCC RCP 2.6 and 8.5 datasets as well as historical data and projected climate variables from dynamic climate models 1 By adopting this science-based approach, we can enhance the accuracy of our risk assessment. Reliable and precise data empowers us to make informed decisions and formulate effective mitigation plans. In the physical risk assessment, we incorporated 10 climate variables related to the physical impacts of climate change. Sun Hung Kai Properties Limited | Sustainability Report 2023/24 < 34 > 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