2015 Sustainable Development Report We Grow We Nurture Table of 2015 About Message About Corporate Environment Health and Employees Business Community Performance Standard Verification Contents At a Glance this Report from the CEO HAECO Governance Safety Partners Data Disclosures & Statement 2 and Performance HAECO Sustainable Sustainability Indicators Development Management Report 2015 Corporate Governance and 2015 Message Sustainability Health and Business Performance Verification At a Glance from the CEO Management Safety Partners Data Statement 03 06 11 22 33 41 57 Standard Disclosures & About this About Performance Report HAECO Environment Employees Community Indicators 04 08 16 27 36 47 Table of 2015 About Message About Corporate Environment Health and Employees Business Community Performance Standard Verification Contents At a Glance this Report from the CEO HAECO Governance Safety Partners Data Disclosures & Statement 3 and Performance HAECO Sustainable Sustainability Indicators Development Management Report 2015 2015 At a Glance Environment Employees Community 1,200 Over HKD MWh 880,700 3.2 Million in Renewable Energy Training Hours Charitable Donations Generated Health and Business Safety Partners + 10.5% TOP 20 Lost Time Injury Rate Group High Risk Suppliers Surveyed Table of 2015 About Message About Corporate Environment Health and Employees Business Community Performance Standard Verification Contents At a Glance this Report from the CEO HAECO Governance Safety Partners Data Disclosures & Statement 4 and Performance HAECO Sustainable Sustainability Indicators Development Management Report 2015 About this Report This report covers the sustainability performance of the HAECO Group in the 2015 calendar year. In the report, we share the progress and challenges we faced since our last reporting cycle. Scope of this Report This report covers those businesses in which Taikoo (Xiamen) Landing Gear Services HAECO Group has a major interest and those Company Limited (“HAECO Landing Gear Across the Group, sustainable development that have a significant impact on the Services”), represents the balance of economic growth, community and the environment due to Hong Kong Aero Engine Services (“HAESL”), the environment and society. Our long-term their size. These include: Taikoo Spirit Aero Systems (Jinjiang) commitment to sustainability is measured Composite Company Limited Hong Kong Aircraft Engineering Company against the following: (“HAECO Spirit Aerosystems”) and Limited (“HAECO Hong Kong”) , HAECO USA Holdings, Inc. Environment, Taikoo (Xiamen) Aircraft Engineering (“HAECO Americas”). Health and Safety, Company Limited (“HAECO Xiamen”), Employees, Taikoo Engine Services (Xiamen) Company Other businesses not covered in this report Community, Limited (“TEXL”), include low-percentage ownership companies, Business Partners. as well as small and start-up companies. Table of 2015 About Message About Corporate Environment Health and Employees Business Community Performance Standard Verification Contents At a Glance this Report from the CEO HAECO Governance Safety Partners Data Disclosures & Statement 5 and Performance HAECO Sustainable Sustainability Indicators Development Management Report 2015 The content of this report is governed by This Report Reasonable assurance is provided by the Hong HAECO’s Sustainable Development Policy and Kong Quality Assurance Agency (HKQAA) in determined by the materiality of the Group’s accordance with the International Standard on operations and their impact. The report content Assurance Engagement (ISAE) 3000. has been approved by the Sustainable sets out the policy and Development Committee, which is chaired by governance procedures Recognition the Group Director Airframe Services. In 2015, of the Group; the reporting scope was expanded to include In 2015, HAECO Group was listed on the Asia natural gas consumption at HAECO Americas. ex-Japan Climate Disclosure Leadership Index (CDLI) by CDP (formerly known as the Carbon Reporting Standards and Disclosure Project). Acknowledgement by the CDLI indicates that HAECO was rated among the Assurance provides information on top 10% of all companies in the region that the Group’s impact on the This report is prepared in accordance with the responded to CDP in terms of disclosure. In economy, the communities Core option of the Global Reporting Initiatives addition to CDP, HAECO Group monitors in which it operates, and the (GRI) Sustainability Reporting Guidelines (G4) Bloomberg Equities, a widely used database environment; and and the Environmental, Social and Governance among financial professionals. In 2015, HAECO (ESG) Reporting Guides published by the Hong scored 45.87 on environmental, social and Kong Exchanges and Clearing Limited (HKEx). governance disclosure, giving it a top 3 ranking among all listed companies in industrial sectors in Hong Kong. outlines areas of concern, new initiatives, past performance and action plans. Table of 2015 About Message About Corporate Environment Health and Employees Business Community Performance Standard Verification Contents At a Glance this Report from the CEO HAECO Governance Safety Partners Data Disclosures & Statement 6 and Performance HAECO Sustainable Sustainability Indicators Development Management Report 2015 Message from the CEO Safety remains our highest priority. We continue to strengthen our Safety Management Systems and develop a proactive safety culture by standardizing risk management procedures and systems through the implementation of various safety awareness programmes. In 2015, the Group’s lost time injury rate decreased by 10.5% compared to the previous year. Our success starts with our employees. We invest in talent and offer training and career growth opportunities consistent with HAECO’s strategic objectives. We participated in job fairs, forums, recruitment events and exhibitions, with a view to attracting potential new recruits. Group companies are investing in improving staff amenities and exploring e-learning systems that facilitate staff training. We will continue our efforts to provide support for staff in their professional training and career development as part of our people development strategy. Environmental protection and climate change mitigation are the shared The HAECO Group operates in a responsible and forward-thinking responsibilities of all our Group companies. The Group recognises the need way on all aspects of sustainability. We continuously improve our to reduce the impact of its operations on the environment. In 2015, we have approach towards people, performance and the environment. We developed our 2020 environmental strategy and target to reduce our strive to become the best in class service provider of aircraft electricity intensity by 10%. We also aim to further reduce our carbon engineering and maintenance solutions by investing in talent, intensity by using alternative sources of energy and investing in energy managing our impact on the environment and nurturing the efficient equipment. HAECO Group companies are looking at opportunities communities in which we operate. to install intelligent Building Management Systems and are carrying out regular audits to identify energy usage and environmental impact reduction opportunities. Table of 2015 About Message About Corporate Environment Health and Employees Business Community Performance Standard Verification Contents At a Glance this Report from the CEO HAECO Governance Safety Partners Data Disclosures & Statement 7 and Performance HAECO Sustainable Sustainability Indicators Development Management Report 2015 The Group is committed to maintaining strong relationships with the HAECO Group also participated in the Swire supply chain sustainability communities in which it operates. In 2015, the Group donated a total of working group to help promote sustainable procurement practices among HK$3.2 million to various community and charitable events and Swire Group companies. organisations. Over 700 volunteers donated 4,000 hours in support of The prospects for the HAECO Group’s businesses in 2016 are mixed. volunteer activities. However, we remain committed to ensuring that our companies will The Group favours suppliers who share its sustainability standards. Our continue to conduct our businesses in a sustainable way. We will keep up suppliers are invited, through the Group’s supplier code of conduct, to the good work on sustainability and live up to the HAECO brand in creating demonstrate their commitment to legal compliance, safe operations, value and providing best-in-class services to airlines around the world. environmental protection and the wellbeing of their staff. Major suppliers are invited to conduct annual self-assessment questionnaires. In addition, HAECO undertook a ‘sustainability risk assessment’ in 2015 to identify Augustus Tang suppliers and partners who would require further review. HAECO also Chief Executive Officer actively engaged with business partners to look for opportunities in driving sustainable improvements and choices for our Group businesses. The October 2016 Table of 2015 About Message About Corporate Environment Health and Employees Business Community Performance Standard Verification Contents At a Glance this Report from the CEO HAECO Governance Safety Partners Data Disclosures & Statement 8 and Performance HAECO Sustainable Sustainability Indicators Development Management Report 2015 About HAECO Established in Hong Kong in 1950, HAECO is one employed over 16,000 people. The Group