Multifaceted Approach to Decarbonization

Sustainability | Apr 1, 2022

The real estate sector – including building materials, construction and operations – is responsible for 40% of global CO2 emissions, making the decarbonization of this sector critical for broader success in creating a low carbon future. Climate resilience is one of our sustainability priorities. We aim to reduce our carbon footprint in line with climate science and have set relevant targets to be achieved by 2025 and 2030. This January, we took a step further by being one of the first real estate companies in Asia to commit to setting both near-term and long-term targets to reach net-zero value chain greenhouse gas (GHG) emissions by no later than 2050. The targets will be in alignment with the Science Based Targets initiative’s (“SBTi”) Net-Zero Standard. In addition to setting ambitious targets to accelerate our decarbonization efforts, we have adopted a multifaceted approach to decarbonize our operations.

1. Enhancing Property Energy Efficiency 

We leverage technology to improve the energy efficiency of our properties. With the installation of smart energy meters at all properties in mainland China and major properties in Hong Kong this year, coupled with the adoption of a smart digital energy data collection platform, our data collection and analysis capability and efficiency, and data accuracy will be enhanced. We are also piloting an artificial intelligence technology at our Hong Kong headquarters in the Standard Chartered Bank Building, to drive energy efficiency improvements and we are optimistic that this AI technology will help our building to achieve over 10% of electricity reduction of mechanical ventilation and air conditioning consumption. And we are also exploring other AI options in our other properties. In new projects under development, such as Westlake 66 in Hangzhou, carbon reduction measures have been adopted in the early planning stage. 

In 2022, we will be investing more than HK$120 million on energy efficiency initiatives. 

We will continue to innovate in energy and electricity management, aiming for an 18% reduction in electricity intensity by 2025, compared to the 2018 baseline.

Standard Chartered Bank Building in Hong Kong is using AI technology to enhance energy efficiency

2. Enhancing Property Resilience Against Climate Change 

To address physical risks from climate change, we worked with an expert consultancy firm to complete a detailed physical risk analysis for all properties in 2021, modelling the impact of potential changes to temperature, precipitation and typhoons, under various scenarios from now until 2030 and 2050. Four workshops were also conducted to review and discuss the findings, including a corporate level discussion of the results and their implications with top management. We are currently reviewing our existing risk controls, evaluating key areas, and prioritizing properties that may require enhanced adaptation measures.

We plan to invest approximately HK$5 million on technical analyses of identified hazards for priority properties in 2022, and aim to complete a technical analysis for climate adaptation measures for all properties by 2025. 

3. Supplier and Tenant Collaborations 

To be able to transition to a low carbon future, working hand in hand with our suppliers and tenants is crucial. With a sustainable procurement strategy in place, we will engage more than 10 key project suppliers on 16 improvement ideas such as low embodied carbon materials and energy efficiency. An ESG conference is planned for late 2022 focusing on embodied carbon and other priority areas to advance sustainability in partnership with some of our suppliers. Our 2025 target seeks to build a robust digital platform to assess suppliers’ ESG performance.

Planned amendments to our tenant handbook and fit-out guide for office and retail tenants will include sustainability provisions and will be rolled-out in Shanghai before being extended to all our properties. To assess tenant understanding of and commitment to sustainability, we are collaborating with the Hong Kong University of Science and Technology’s Environmental Management and Technology Program as part of the students’ final year Capstone Project. We plan to incorporate sustainability provisions into 100% of our leases by 2025.

4. Upskill Employees on ESG Knowledge 

Equipping our employees with ESG knowledge is vital in our journey to achieving sustainability leadership. Other than hosting webinars on important topics such as climate resilience and sustainability leadership for our employees, we aim to provide priority ESG training across all departments and seniority levels by 2025, starting with practical ESG training in four major departments in 2022.

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