- As part of overall ESG management, the Board ESG Committee (BESGC) and Board Audit and Risk Committee (BARC) have separate but complementary roles in climate change and other environmental issues.
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- The BESGC oversees the management in ESG matters, including but not limited to climate-related risks and opportunities, as well as pursuing innovative practices to promote the Group’s sustainable growth.
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- The BARC is responsible for reviewing top risks and adopted measures. Key risks, including climate change, are reviewed continuously and reassessed by adopting the risk assessment criteria set out in the Enterprise Risk Management Framework.
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- As the risk owner of climate change, the Head of Corporate ESG Department, who reports directly to the Managing Director, is responsible for managing climate-related strategies at the Group level. The Department is responsible for managing the Group’s greenhouse gas (GHG) inventory; reviewing the progress of Towngas’ Carbon Neutrality Roadmap; ensuring quality and timely disclosures of climate-related issues; implementing recommendations of the TCFD, including climate scenario analysis; and monitoring evolving climate-related issues, such as policy change and stakeholder expectations, and developing strategies to respond.
Climate Change Risk Assessment
In the transition to a low-carbon economy, we understand the risks associated with a changing climate and have made appropriate provisions for them in our businesses.
These provisions are based on the risks we identified in a comprehensive climate risk assessment in 2015 of our Hong Kong operations under extreme weather events; in 2016, we extended this exercise to our project companies in the Chinese mainland. In 2019, we conducted a gap analysis to better align our climate change management against the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) under Governance, Strategy, Risk Management, and Metrics and Targets.
In 2020, we also assessed our transition risks and opportunities across Towngas’ energy-related businesses in Hong Kong and the Chinese mainland under various climate scenarios. Major transition risks comprise policy changes, reputational impact and shifts in market preferences, including upstream and downstream changes.
In 2021, we initiated another round of physical risk assessments for our critical facilities across the region. Supplemented by computer modelling studies, the assessment identified major physical risks faced by our businesses, such as rising temperatures and sea levels, drought and extreme weather events, all of which could have a significant impact on our operations.
To mitigate physical risk, we incorporate resilience measures at the planning and design stages. Additional measures to protect our existing operations against climate risks include installation of flood gates in our Infrastructure/gas facilities, as well as enhanced maintenance and inspection programmes. We also visit our project companies’ sites to understand their regional climate-related risks and to help them prepare for adverse weather events. This includes advising them on mitigation and resilience measures, as well as the provision of training in combating climate change.
We have also identified opportunities made possible by new technologies, products and services that could enable us to become more resilient and adaptive to climate change.