2017 Sustainability Report

Making lives brighter

Welcome to CLP’s 2017 Sustainability Report! As part of our commitment to being transparent and accountable for our performance, we are moving our 16th report online to communicate with you better. We hope you like this change and would appreciate any feedback so we can continue to improve.

About this report
Chairman & CEO Message

“We developed a new set of Clean Energy Targets, namely a 30% renewable and 40% non-carbon emitting capacity targets for 2030, both of which contribute to SDG 7.”

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6 Capitals

Our Capitals

We rely on a range of capitals as input to create value for our stakeholders who define our success. These capitals include social and relationship, financial, human, manufactured, natural, and intellectual capitals.

6 Capitals

Financial Capital

Can be in the form of equity, bonds, bank loans and perpetual capital securities. These funds are from investors, shareholders and lenders and allow us to invest and procure the goods and services we need to deliver what we sell.

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Manufactured Capital

The man-made physical objects used in the production and delivery of what we sell. Distinct from natural resources, they include equipment, infrastructure and buildings.

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Intellectual Capital

The knowledge-based intangibles, including intellectual property, subject knowledge and expertise, and experience in developing and implementing standards, systems and processes, needed to deliver what we sell.

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Human Capital

Our people’s competencies, capabilities and experience, their motivation to innovate, as well as their support for our values, vision and mission. We attract and retain talent that together build a CLP culture that is based on a strong heritage but is also agile and innovative.

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Social and Relationship Capital

Refer to how we engage with stakeholders to build mutual trust and understanding. The relationships established with our suppliers, customers, regulators and communities ensure we have the necessary legal and social licenses to operate in all our geographies.

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Natural Capital

The natural resources such as fossil fuels and renewable resources that we use to produce the energy or services we sell, and the short-term and long-term impacts we have on air, water, land, biodiversity and the broader environment, throughout the lifecycle of our projects.

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Our Value Creation Journey

At the heart of our success is our value creation process, which draws on various inputs and through our business activities converts them to outputs that create positive value for our stakeholders.

1. Capital Inputs


Financial Capital
Financial

Shareholder funds

108,697

HK$ million

Total borrowings

57,341

HK$ million

Net assets

121,507

HK$ million

Climate action bonds raised

500

US$ million
Manufactured Capital
Manufactured

Generation capacity

19,395

equity MW

Capacity purchased

5,159

MW

Renewable energy assets capacity

2,751

equity MW

In Hong Kong,

15,678 km

of transmission and high voltage distribution lines

14,715

substations

Supplier spend

30.9

HK$ billion
Natural Capital
Natural

Fuel costs

15,473

HK$ million

Fuel use | Coal

471,976

TJ

Fuel use | Gas

91,426

TJ

Fuel use | Oil

5,069

TJ
Human Capital
Human

Total remuneration

5,573

HK$ million

including retirement benefits costs of $561 million

Employees

7,542

Training hours per employee

46.9

on average

Females in leadership positions across the Group

23.4 %

Social and Relation Capital
Social Relationship

Taxes

2,094

HK$ million

Community spending

41 %

Environment

23 %

Community Wellbeing

14 %

Community Engagement

13 %

Education and Development

9 %

Arts and Culture

Donations

14

HK$ million

Volunteering hours by CLP staff and family members

19,945

hours
Intellectual Capital
Intellectual

Companies covered by our Innovation Pipeline

over 180

companies

Participating in venture capital funds that have committed

75-100

US$ million
Cybersecurity software on operational technology assets launched in Hong Kong and progressively rolled out over the next 12-18 months

2. Our Business Activities


Generation
Generation
  • Operate power assets
  • Design and build power assets
Delivery
Delivery
  • Operate transmission and distribution networks
  • Design and built transmission and distribution networks
Customer
Customer
  • Smart energy use
  • Customer promise and experience
Our Corporate Goverance
Do-the-right-thing culture
Do-the-right-thing culture

High integrity Governance Framework
High integrity Governance Framework
Effective board oversight
Effective board oversight

Transparent shareholder communication
Transparent shareholder communication

Innovation & technology
Enhance the performance of our core operation
Enhance the performance of our core operation
Pursue business adjacencies
Pursue business adjacencies

Develop new markets and areas
Develop new markets and areas

3. Value We Created


Financial Capital
Financial

Market capitalisation

202

HK$ billion
(as at 31 Dec 2017)

Revenue

92,073

HK$ million

Operating Earnings

13,307

HK$ million

Dividends

7,352

HK$ million (Total)

2.97

HK$ per share
Manufactured Capital
Manufactured

Total electricity sent out (equity plus capacity purchase basis)

83,897

million kWh

Customer accounts – Total

5.18

million

In Hong Kong

Supply reliability

Over 99.999 %

Unplanned customer minutes lost in Hong Kong

1.57

minutes
(average of the past 3 years)
Natural Capital
Natural

Carbon intensity:

Group (equity basis)

0.80

kg CO2/kWh

Hong Kong

0.51

kg CO2e/kWh

Renewable energy generation capacity (equity basis)

2,751 MW

14.2 %

Non-carbon emitting generation capacity (equity basis)

4,350 MW

22.4 %

Human Capital
Human

Lost time injuries rate (number per 200,000 man-hour)

0.13 employee

0.14 contractor

Decent and sustainable employment opportunities

835

new hires in 2017

Competitive pay and benefits with real increases on remuneration

Sustainable pension schemes received the inaugural Best Asian Private Pension Fund award

Social and Relation Capital
Social Relationship

Direct beneficiaries

439,000+

Organisations benefited

451

Community programmes implemented

647

programmes
Set up first named professorship in sustainability in Hong Kong
Intellectual Capital
Intellectual

Projects launched under our Innovation Pipeline

7

projects
Improvement in operational efficiency
Partnership and collaboration with other organisations, including signing an MoU with the Israel Electric Corporation, and the Smart City Consortium in Hong Kong