SHKP Sustainability Report 2024/25

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 28 Sun Hung Kai Properties Limited | Sustainability Report 2024/25 Strategy The Group has developed climate strategies and action plans to address the growing climate- related risks while capturing opportunities that contribute to long-term sustainability and business resilience. We conducted a scenario analysis and risk prioritization exercise to identify climate-related risks and opportunities that are material to our business and value chain. This assessment considered both financial and non-financial impacts, enabling us to respond to climate challenges in a structured and informed manner. For more details, please refer to the Risk Management section below. Decarbonization Advocacies In support of international and local climate goals, the Group has been a supporter of the TCFD since 2023. We fully support the HKSAR Government’s Climate Action Plan 2050 and the Energy Saving Plan for Hong Kong’s Built Environment 2015–2025+. As a participant in the Carbon Neutrality Partnership, we are committed to supporting the city’s ambition to achieve carbon neutrality by 2050. In addition, we have signed the Business Environment Council’s Net-zero Carbon Charter. Low Carbon Transition Plan Our multi-pronged Decarbonization Strategy sets the overarching direction for our transition to a green economy, addressing various aspects, such as green energy, green transport and stakeholder engagement. Building on this strategy, the transition plan is organized along two horizons: short/medium-term (to 2030) and medium/long-term initiatives (to 2050). The pace and sequencing of implementation might be adjusted as resource availability, regulatory conditions, technological advances and stakeholder expectations evolve. In recent years, the Group has significantly increased its investment in renewable energy, developed green buildings, and integrated innovative technologies into daily operations to enhance energy efficiency and reduce emissions. For more details on the transition plan, please refer to the Risk Management section below. 10-year Targets on GHG Emissions and Electricity Consumption We have established 10-year targets on GHG emissions and electricity reduction in the Group. Additionally, specific energy-saving targets have been established for the majority of our residential and commercial buildings, hotels and malls. For more details, please refer to the Accelerating Decarbonization Throughout Our Operations section. Sustainable Finance We have embedded sustainability factors into our financial mechanisms, and our two sustainability-linked loans (SLLs) have received an overwhelmingly positive market response. To further promote green practices across our value chain, Sanfield continues its partnership with DBS Bank to launch a sustainability-linked financing mechanism tailored for suppliers and contractors. For more details, please refer to the Sustainable Finance section. Deployment of Renewable Energy We continue to expand our renewable energy infrastructure, including solar panels installations, across our managed properties and construction sites. We are pioneering innovative renewable energy solutions through a joint venture to develop Hong Kong’s first privately funded solar farm on a landfill site. We also purchase RECs to support our decarbonization journey. In addition, EV charging facilities are being increasingly installed at our properties. For more details, please refer to the Expanding Our Adoption of Renewable Energy with Solar Panels section. Collaborations with Research Institutions As part of our green building innovation efforts, we have continued our research collaborations with research institutions, including the pilot testing of low-carbon construction materials with PolyU. For more details, please refer to the Transformative Sustainable Development Practices Through Innovation section. Tenant Engagement We actively engage our tenants to improve their and our environmental performance by providing free energy and carbon audits along with technical recommendations. We signed a green lease agreement with UBS, the anchor tenant at International Gateway Centre, to reaffirm our commitment to decarbonization. For more details, please refer to Accelerating Decarbonization Throughout Our Operations and Promoting Sustainability via Green Lease sections. Scenario Analysis Prior to identifying our climate strategies and action plans, in 2023, we engaged an independent consultant to conduct a scenario analysis to assess both physical and transition risks and opportunities that could impact our assets, business operations and value chain. Given the majority of the Group’s portfolio is located in Hong Kong, we consider our climate- related risks and opportunities to be primarily concentrated in this region, and our scenario analysis therefore focuses on local assets. We use a mixed-method scenario analysis to examine impacts over the short/medium- term (up to 2030) and medium/long-term (up to 2050) timeframes. These timeframes are chosen to align with the global objective of reducing emissions and achieving net zero by 2050. We believe that projections beyond 2050 introduce greater uncertainty due to the assumptions required. Therefore, the Group prioritizes a balanced approach that ensures data reliability while still addressing long-term risks. To assess the potential impacts of climate change on our business, we conducted a scenario analysis using climate pathways developed by globally recognized institutions, such as the Intergovernmental Panel on Climate Change (IPCC), the International Energy Agency (IEA) and the Network for Greening the Financial System (NGFS). These scenarios incorporate a wide range of factors, including political, environmental, economic and social indicators. Key variables considered include projected shifts in population, economic activity, weather patterns, energy usage, land-use patterns, technology and climate policy. Separate sets of scenarios were applied to physical and transition risks to reflect distinct risk drivers. Insights from this analysis have informed our climate strategy by helping us identify risk hotspots and actions to build long-term resilience. Climate-related risks and opportunities are managed and incoproated into the Group’s enterprise risk management (ERM) and internal control framework. Business units are responsible for identifying, assessing and monitoring risks, including those related to climate change, through our regular risk management processes conducted twice a year. The Risk Management Steering Committee reviews the results from these assessments, provides guidance, and monitors the implementation of respective risk mitigation plans. The senior management also oversees this process to ensure alignment with the Group’s risk appetite and strategic direction. The effectiveness of the Group’s risk management and internal control systems is subject to the independent assurance by the Internal Audit Department. These controls and procedures are embedded within the Group’s governance structure and are implemented across relevant internal functions through established lines of responsibility and authority, documentation protocols and operational procedures.