Shui On Land Limited Shui OnLand Sustainable Development Report 2020 Shui On Land Limited STOCK CODE 272 Sustainable Development Report 2020 Sustainable Development 2 Shui On Land Limited Table of Contents 02 Chairman's Message 04 Approach to Sustainable Development 05 Becoming a Pioneer in Sustainable Urban Communities 11 About Shui On Land 12 Our Profile and Market Presence 13 Our Corporate Philosophy and Culture 14 About this Report 15 Stakeholder Engagement 17 Material ESG Topics 19 Endorsement and Approval 19 Contact and Feedback 20 Our Performance in 2020 20 2020 – At a Glance 22 Operating responsibly in challenging times 23 29 38 43 51 Clean Community Culture Care Corporate Governance 57 Appendices 57 Recognition and Awards 58 Performance Summary 64 Content Index 2020 Sustainable Development Report 1 Chairman's Message VINCENT H. S. LO Chairman 2020 was a year of momentous and far-reaching to the local community as well. In fact, over 80% of change. On one hand, the COVID-19 pandemic and our completed commercial projects held for long- the ensuing public-health crisis dealt a devastating term investment have attained “green” building blow to economies around the world. On the other certifications. As another step to underline the hand, it prompted new ways of working and living Group’s commitment to building sustainable that will likely have an impact for years to come. communities, in November we issued a further US$200 million of Green Bonds, adding to the The pandemic has also accelerated many changes US$300 million inaugural issue and taking the total in how we live, work, play and learn. The needs of outstanding to US$500 million. both the business community and home buyers are changing rapidly, with increasing priority given I am conscious that there is still much to be done to quality and sustainability. Indeed, the Chinese and our work continues. Remaining competitive and government has increasingly focused on sustainable forward-thinking in such a dynamic environment development of late, as opposed to the disruptive will require everyone at Shui On Land to have the “demolish and rebuild” approach of the past. courage to explore new opportunities, to experiment, and to move boldly and steadily forwards. I am With the Group’s unique expertise and strong track confident that given the challenges encountered and record in urban regeneration projects, I believe we overcome in 2020, our team is up for this challenge. have an important role to play in driving innovation in our business model, leveraging our strengths I also wish to thank each and every member of our in cultural preservation and in creating integrated, staff for their unyielding commitment and hard sustainable communities - to provide greater work amidst this trying period of unprecedented flexibility in the way people live, work, play and circumstances. We could not have weathered learn. We have also seen a rise in concerns about the storm without the exemplary team spirit and community health and well-being – which aligns collaboration exhibited by everyone at Shui On Land. perfectly with our decision to focus on creating I must express particular thanks during this difficult sustainable communities. year to my fellow Board members, our business partners and our investors for their steadfast To integrate these issues further into our corporate support. strategies, we introduced in 2020 our new 2030 5C Sustainable Development Strategy (5C Strategy). I am confident that 2021 will be a better year, as This ten-year strategic framework for sustainable we mark both the 50th anniversary of the Shui development will guide our ESG-related efforts as we On Group and the 20th anniversary of Shanghai seek to align with China’s goal of achieving carbon Xintiandi. This does not mean the road ahead will be neutrality by 2060, while also addressing trends in straightforward, but nevertheless, the Group is well- environmental regulation and consumers’ increasing placed to strategically meet any challenges and take calls for environmental sustainability. We will work advantage of the opportunities that may arise., as we closely with employees, customers, suppliers, build on the successes of the past fifty years. investors, and other stakeholders to achieve our ESG targets set forth by the 5C Strategy. We are already well on our way to becoming a pioneer of sustainable premium urban communities. In this regard I am pleased to note the success of THE HUB, which won the 2020 ULI Asia Pacific Award for Excellence in September. This award VINCENT H. S. LO recognises not just good design and high quality of Chairman construction, but financial success and contributions Hong Kong, 31 May 2021 2020 Sustainable Development Report 03 Approach to Sustainable Development SustainableSUSTAINABLE development DEVELOPMENT (SD) is an important Faced REPORT with increasing global and stakeholder cornerstone of our real estate business and is concerns and scrutiny about critical issues including reflected in our corporate vision to become a climate change and resource scarcity; and as China pioneerApproach of sustainable to Sustainablepremium urban communities. Development has pledged to become carbon neutral by 2060, Throughout our company’s history, we have always we recognise our role as a property developer to beenSustainable committed development to caring(SD) is an for important the environment, cornerstone of helpFaced support with increasing these globalcommitments. and stakeholder Our sustainableconcerns and 2020 – At a Glance preservingour real estate culturalbusiness. Throughoutheritage, ourand company’s building history, and businessscrutiny about model critical balances issues includingfinancial climate profitability change with and we have been committed to caring for the environment, resource scarcity; and as China has pledged to become carbon sustaining vibrant communities. We care for our sustainability, social and environmental impact, preserving cultural heritage, and building and sustaining neutral by 2060, we recognise our role as a property developer colleagues,vibrant communities. partners, We care and for stakeholders, our colleagues, andpartners, do asto helpwell support as our these contribution commitments. to Our local sustainable and regional business ourand stakeholders,utmost to upholdand do our and utmost raise to the uphold quality and raise of our the economies,model balances effectively financial profitabilityencompassing with sustainability,all aspects socialof Launched the governance.quality of our governance. responsibleand environmental management impact, as of well environmental, as our contribution social to 2030 5C andlocal governance and regional (ESG) economies, related effectively issues. encompassing all Sustainable aspects of responsible environmental, social, and governance Development (ESG) management. Strategy 95% overall 19% residential customer turnover rate, Our SD Journey satisfaction rate a decrease from Timeline of SOL’s SD journey including key achievements 22% last year 2019 2017 • Announced the new 5C Launched the updated Sustainable Development Six Major Guidelines for RMB Strategy with enhanced SD sustainable development 24% governance structure 2017-2021 10 million Highlights decrease in donated to the Wuhan Red construction waste • Over 80% of completed Cross for COVID-19 relief of our sent to landfill commercial projects were 2017 2016 to green certified 2021 sustainable -32% Started to disclose ESG • 32% decrease performance as part of the development in carbon emissions annual report intensity compared to efforts in 2020 2011 baseline • Issued Green Finance 2012 Framework and launched 30% Over 2,100 first Green Bond of • Based on the baseline of decrease in volunteer hours US$300 million 2011, announced our first water intensity contributed Six Major Guidelines for sustainable development • Hosted our first SOL 15% decrease in Sustainable Development Scope 1 and 2 emissions Forum. SD forums have intensity from 2019, and Published first been held on a regular 41% from 2011 baseline basis since. Green Bond Report 52% increase of Scope 1 GHG emissions (due to increase in 2006 1997 property area under Announced our Sustainable Masterplanning began of management) Development Policy and formed the Taipingqiao, a pedestrian- Sustainable Development Committee. friendly mixed-use world– class community. Further details of all our initiatives and contributions in 2020 will showcase our enhanced approach to ESG reporting in as well as our 2030 5C Sustainable Development Strategy (5C alignment with the priorities of the 5C Strategy as well as in Strategy) will be shared in the 2020 SD Report. The Report accordance to the ESG Reporting Guide (Appendix 27) of the Hong Kong Stock Exchange. 04 Shui On Land Limited 76 SHUI ON LAND LIMITED ANNUAL REPORT 2020 77 Becoming a Pioneer in Sustainable Urban Communities In 2017, we established a set of environmentally focused sustainable development (SD) goals we aimed to achieve by 2021. In 2019, we announced our intention to enlarge our vision of what SD means for the Company and to expand on existing internal goals by developing and implementing a 2030 5C Sustainable Development Strategy (5C Strategy). To continue to advance our work in this area, we have carefully and thoughtfully crafted this ten-year strategy to guide us as we continue our SD journey towards 2030 and beyond. C u n Care lt u a e r l e C 2030 5C Sustainable Development Strategy C e o c r n p a o n r r a e te Gov Community