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Climate change and TCFD
With climate change being a global concern and focus, investors are demanding more information on how climate issues and related policy change could impact an issuer's assets, business operations and financials. Our ESG Reporting Guide has incorporated key elements of the TCFD recommendations on climate-related financial disclosures, such as requiring board's oversight of ESG matters, targets for certain environmental KPIs and disclosure of impact of significant climate-related issues. In light of the direction towards mandatory TCFD-aligned climate-related disclosures by 2025, issuers are encouraged to start reporting in accordance with the TCFD recommendations the soonest.

The TCFD recommendations are structured around four thematic areas that represent core elements of how companies operate:
  • Governance – the company's governance around climate-related risks and opportunities
  • Strategy – the actual and potential impacts of climate-related risks and opportunities on the company's businesses, strategy, and financial planning where such information is material
  • Risk Management – how the company identifies, assesses, and manages climate-related risks
  • Metrics and Targets – the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material
Please refer to our How to Prepare an ESG Report and e-training for an overview of the TCFD recommendations. For practical tips in preparing TCFD-aligned disclosures, please refer to our Guidance on Climate Disclosures. Users wishing to equip themselves with the concepts, principles, drivers and theories behind climate-related issues may further refer to the resources available at the TCFD Knowledge Hub.

Climate change and TCFD:
Significant climate-related risks and mitigation measures

Commentary

Wharf (00004), Sustainability Report 2020

 

(p.22)

Taking reference to TCFD's recommendations, the Group conducted a preliminary climate risk mapping exercise across our portfolio to grasp a clearer understanding of our climate risk exposure. By using the Intergovernmental Panel on Climate Change's (“IPCC's”) Representation Concentration Pathways (“RCPs”) and reference reports, we identified relevant physical and transition risks and their corresponding financial and non-financial impacts, and came up with the corresponding risk mitigation measures

 

(p.22-p.23)

Wharf Holdings Sustainability Report

Commentary

The issuer classified risks into physical and transition risks, and provided a thorough disclosure of climate-related risks by covering the impacts of each risk and corresponding mitigation measures. A side-by-side presentation enhanced the readability of the information.

Climate change and TCFD:
Significant climate-related risks and mitigation measures

Commentary

CLP (00002), Annual Report 2020

 

(p.1)

CLP continued to enhance its disclosure with reference to the recommendations by the Task Force on Climate-related Financial Disclosures (TCFD) to allow stakeholders to track the risks and opportunities climate change presents to our business.

 

(p.151)

CLP 2020 Annual Report

Commentary

Climate change risks, which are a key issue for power companies, are embedded in the issuer's risk management process and risk register. The issuer identified, assessed, and managed climate change risks alongside other risks as an integral part of its group-wide risk management framework

Climate change and TCFD:
Significant climate-related risks and mitigation measures

Commentary

Hang Lung Properties (00010),  Sustainability Report 2020

 

(p.22)
Acknowledging the global trend, the Group continued to make gradual progress over the year in implementing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), aiming to build long-term resilience, and doing our part to support the transition towards a low-carbon economy.

(p.25-p.26)

Commentary

The issuer presented a balanced perspective which outlined the impacts of both climate-related risks and opportunities. It enabled readers to have a comprehensive picture on the consequences and benefits brought by climate change, as well as the issuer's responses in avoiding the risks or seizing the opportunities. 

Climate change and TCFD:
Significant climate-related risks and mitigation measures

Commentary

China Mobile (00941), Sustainability Report 2020 (p.38)China Mobile Sustainability Report 2020

Commentary

The issuer adopted another approach in classifying climate-related risks. The issuer classified the risks according to the risk nature, and the description enabled readers to easily match issuer's responses to the risks.

Climate change and TCFD:
Significant climate-related risks and mitigation measures

Commentary

Huayi Tencent (00419), 2020 ESG Report 2020 (p.25)Huayi Tencent ESG 2020 ESG Report

Commentary

The issuer integrated mitigation of environmental issue into its major business strategy. With reclaimed water being the major water source, the issuer substantially reduced its consumption of natural resources and legal risk in relation to water pollution.

Climate change and TCFD:
Scenario analysis

Commentary

Swire Properties (01972), Sustainable Development Report 2020 


(p.170-173)

Physical Risks
In accordance with the TCFD's recommendations, we have conducted asset-level modelling of the acute and chronic physical risks associated with the four Representative Concentration Pathways (RCP 2.6, 4.5, 6 & 8.5) used by the Intergovernmental Panel on Climate Change. These pathways broadly represent comprehensive climate scenarios related to three projected global average temperature increases: 1.5⁰C, 2⁰C and 4⁰C. 



Transition Risks and Opportunities 
Regarding the global transition to a low-carbon economy, in accordance with the TCFD's recommendations, we have reviewed global and local government policies, and regulatory, market and technological trends based on different climate scenarios such as the International Energy Agency's 2⁰C Scenario (“IEA 2DS”).

 (p.143)
 



(p.168)
Swire Property Sustainable Development Report 2020_1
...

Swire Property Sustainable Development Report 2020_2

Commentary

The issuer completed the climate risk assessment for physical and transition risks and opportunities in its global portfolio.

In the assessment, the issuer conducted its scenario analyses using publicly available scenarios developed by the Intergovernmental Panel on Climate Change and the International Energy Agency, all of which are prominent and widely used scenarios in the public domain comprehensible by international investors. This practice enhanced transparency of the climate-related risks disclosed.   

For the physical risks identified, the issuer developed short and mid-term measures to mitigate the risks and build resilience across its existing buildings, as well as for future planning and design of new developments to ensure continuous resiliency under different future climate scenarios. The issuer further identified the opportunities relating to the transition risks, which may have a financial impact on the business.

The issuer further set out its responses to the actual and potential impacts of climate-related risks and opportunities related to its businesses, strategy and financial planning.

Climate change and TCFD:
Scenario analysis

Commentary

The Hong Kong and China Gas Company Limited (00003), 2020 ESG report (p.53-57) 

The Hong Kong and China Gas Company Limited 2020 ESG report
The Hong Kong and China Gas Company Limited 2020 ESG report_1

Commentary

The issuer made reference to internationally recognized scenarios and made modifications according to its own circumstances and latest developments in developing scenarios applicable to the company. These scenarios were clearly defined in its ESG report. 

Transition risks were classified in accordance with TCFD's risk categories. The potential risks and opportunities, impacts and resilience strategies for the group across different time horizons from 2020 to 2050 were clearly presented. Together with the resilience roadmap, these enable stakeholders a comprehensive understanding of the significant climate risks, their impacts and the actions taken by the issuer in respond to such risks. 

Actions taken in achieving the targets on the roadmap were described in detail in other sections in the ESG report, with progress reported in a quantitative manner.

Climate change and TCFD:
Progress and targets

Commentary

Swire Properties (01972), Sustainable Development Report 2020 (p.13)Swire Properties Sustainable Development Report 2020

Commentary

The issuer used summary tables to show progress towards meeting its KPIs. It further classified the KPIs under various categories, including economic performance and environmental performance. To help address climate change, the issuer also set targets on reducing carbon intensity. 

The information was presented in a way that facilitated stakeholders to evaluate the effectiveness of the policies or measures adopted in achieving the targets.

Climate change and TCFD:
Progress and targets

Commentary

Allied Sustainability and Environmental Consultants Group Limited (08320), 2021 Sustainability Report

 

(p.25)

Allied Sustainability Report_2

 

(p.27)

Allied Sustainability and Environmental Consultants Group Limited 2021 Sustainability Report

Commentary

The issuer disclosed its management approach under the four core categories in accordance with TCFD recommendations.  

The issuer has linked the climate-related risks and opportunities with the relevant financial items (e.g. revenue contribution from green projects) to illustrate the impact or financial exposure to these risks.

The use of metrics enables stakeholders' understanding on how the issuer measures and monitors the climate-related risks.

Climate change and TCFD:
Presentation of TCFD disclosure

Commentary

CLP (00002), Sustainability Report 2020 (p.41)
CLP Sustainability Report 2020

Commentary

The issuer made TCFD-related disclosures throughout its ESG report and provided a reference table to help readers locating the sections relevant to each of the core elements in the TCFD recommendations. 

Integrating TCFD-related disclosures into the ESG report can avoid duplicated efforts in making two similar sets of disclosures. The use of reference table is a helpful guide in directing readers to the relevant TCFD-related disclosures.

Climate change and TCFD:
Presentation of TCFD disclosure

Commentary

Swire Properties (01972), Sustainable Development Report (p.165-p.175)
Swire Properties Sustainable Development Report

Commentary

The issuer had a standalone section in its sustainability report for TCFD-related disclosures, with information for each core elements of the TCFD recommendations presented in accordance with the order set out in the TCFD recommendations.

The presentation is particularly useful for readers who are new to TCFD as it is easy to follow and may enhance the readers
' understanding on the TCFD recommendations.

The issuer further mapped its TCFD-related disclosures to the relevant HKEX
's ESG reporting requirements, demonstrating how such disclosures can comply with local standards.

Climate change and TCFD:
Presentation of TCFD disclosure

Commentary

Hang Lung Properties (00010), Sustainability Report 2020 (p.22 - p.26)
Hang Lung Properties Sustainability Report 2020_v1
...
Hang Lung Properties Sustainability Report 2020_v2
...
Hang Lung Properties Sustainability Report 2020_v3
...
Hang Lung Properties Sustainability Report 2020_v4

Commentary

The issuer embedded TCFD-related disclosures in the climate section of its sustainability report, with core TCFD elements presented in accordance with the order set out in the TCFD recommendations. 

Similar to a standalone TCFD section, this allows readers to easily map the disclosures with TCFD elements.