Sustainability Report 2023/24

Within our managed buildings, we have installed climate-resilient elements to mitigate physical risks: • Provide floodgates, flood sensors and submersible pumps in properties located in low-lying and flood-prone areas • Install water baffles, typhoon nets, water cut-out sensors and IoT leak detectors in washrooms and machine rooms • Install remote-monitored sensors at crucial facilities, such as mains switch rooms to quickly warn staff of potential flooding • Install intelligent windows, which close automatically and seal ventilation vanes with waterproof plastic strips when water level exceeds one inch, to prevent rainwater from entering equipment room Following this analysis, we have identified material physical risks and opportunities, along with their corresponding business and financial impacts, as well as our resilience strategy. The results were: To mitigate and adapt impact posed by physical risks, our business units have adopted different action plans and measures. When launching new development projects, we prioritize climate resilience in our building designs, incorporating features such as typhoon-resistant structures. We also assess the climate risks associated with project locations. Where necessary, we conduct additional tests, such as wind tunnel tests, to ensure our buildings can withstand extreme weather conditions. Typhoon Rainfall Flood Extreme Heat River Flood RCP 2.6 RCP 8.5 RCP 2.6 RCP 8.5 RCP 2.6 RCP 8.5 RCP 2.6 RCP 8.5 Location 2030 2050 2030 2050 2030 2050 2030 2050 2030 2050 2030 2050 2030 2050 2030 2050 Hong Kong Shanghai The risk analysis, which considered data projections for 2030 and 2050, identified six risks as negligible and four risks as low to medium. The results are summarized and presented at the city level, as illustrated below. No risk Low risk Medium risk High risk Acute Physical Risks (short/medium term) Chronic Physical Risks (medium/long term) Typhoon Rainfall Flood / River Flood Extreme Heat Potential Impact • Higher property damage losses • More typhoon-induced business interruptions • Greater threats to human health and safety, and to the environment • More business interruptions due to flood damage to facilities and equipment • More supply chain disruption from flooding and transport issues • More building and equipment damage from high temperatures and power outages • Increased occupational health risks (discomfort, exhaustion and heat-related illnesses) • Reduced productivity owing to extended construction time Potential Financial Impact • Increased operating costs for asset repairs, inventory replacement, supply chain disruption and suspended construction • Increased property insurance premiums • Decreased asset value • Decreased revenue owing to business disruption • Increased operating costs for increased cooling demands • Increased expenses owing to impacts on employees’ health Example of Our Strategy • Implement a Sustainable Supply Chain Management Guideline to assess environmental and social risks to our supply chain • Incorporate sustainable and climate-resilient features in new and existing buildings • Provide emergency support mechanisms and operational handbooks to guide staff in preparing for and responding to extreme weather events • Activate an emergency support centre during extreme weather to maintain business continuity Sun Hung Kai Properties Limited | Sustainability Report 2023/24 < 35 > 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