SHKP Sustainability Report 2024/25

66 Sun Hung Kai Properties Limited | Sustainability Report 2024/25 Our commitment to supply chain excellence was recognized through the Sustainability Supply Chain Award at the sixth ESG Leading Enterprises 2024, co-organized by Bloomberg Businessweek/Chinese Edition and Deloitte. Sanfield’s Sustainable Supply Chain Management Guideline establishes robust processes for vendor registration, tender selection, critical supplier identification, sustainability performance scoring and risk exposure assessment. Incorporating ESG Criteria in Suppliers Selection Our procurement practices undergo regular reviews for alignment with our Supplier Construction Due Diligence Questionnaire Verification and Risk Identification Follow-up Result We conduct annual sustainability and ESG performance assessments for critical suppliers and contractors with a due diligence questionnaire, which covers environmental management, pollution control, labour practices, anti-discrimination, human rights protection, OHS, anti-corruption, code of conduct and whistleblowing Suppliers and contractors must exhibit their dedication to labour and human rights, ensuring workers receive statutory benefits, have access to complaint channels, and are free from discrimination and harassment We systematically review and verify their evidence to ensure its accuracy High-risk suppliers and contractors are identified based on their sustainability and ESG performance scores If required, senior management will initiate, chair, and oversee detailed investigations and corrective action Suppliers and contractors who attain unsatisfactory results will not be considered in the tendering process During the reporting year, Sanfield identified 18 of its 406 suppliers and contractors as Tier-1 critical No assessed suppliers and contractors were considered to have high sustainability risks 4 Code of Conduct and Sustainable Supply Chain Management Guideline. Sanfield’s supplier contracts explicitly mandate the requirements of sustainable material usage, while tender participation is restricted to invited contractors who meet prerequisites and initial assessment criteria. We assign a minimum weight to ESG criteria when selecting suppliers and contractors, prioritizing those with stronger ESG performance. Identifying and Managing Critical Suppliers We identify critical suppliers and contractors by ranking them according to their total awarded contract sum in aggregate during the reporting period. Suppliers and contractors who collectively account for 50% of the total contract sum are categorized as critical. We manage our critical suppliers as follows: 4 This year, Sanfield did not identify any non-Tier 1 critical suppliers. There was a total of 18 critical suppliers (Tier-1 and non-Tier 1) and 18 suppliers (100%) were assessed via desk /on-site assessment. No suppliers with actual/ potential negative impacts were identified. No suppliers required corrective action, termination or support in corrective action plan implementation. We engaged with all critical suppliers identified in capacity building programmes. Ongoing Monitoring and Improvement in the Contract Period Regular inspections are conducted to identify and evaluate safety and environmental issues, including concerns related to air pollution, waste management and wastewater treatment. Suppliers, contractors and subcontractors undergo biannual assessments at construction sites, covering work quality and efficiency, environmental awareness and initiatives, and site safety. Sustainability performance and scores will be integrated into the assessment criteria for future tender decisions. Advancing ESG Development Through Sustainability-linked Supplier Payment Services Programme Dedicated to working with suppliers and contractors who share our vision for a sustainable construction ecosystem, Sanfield introduced the Sustainability-linked Supplier Payment Services (SPS) programme last year, a pioneering initiative in Hong Kong’s construction industry. The programme establishes sustainability targets across ESG disclosure, safety performance, waste reduction, innovative technology adoption and carbon reduction. Sanfield’s suppliers and contractors can benefit from early payment for their goods or projects upon achieving predetermined targets, enhancing their cash conversion cycle and incentivizing improved Contributing to a sustainable construction ecosystem through our innovative SPS programme ESG performance. During the reporting year, six suppliers and subcontractors joined the programme as the first batch of participants. This year, we hosted a seminar in collaboration with DBS bank bringing together 40 suppliers and contractors as ESG partners to explore construction industry sustainability opportunities. 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