However, we recognise that the nature of our business subjects us to continuous changes and we must be prepared for adaptation. At CLP, we have for years taken a long-term view on our investments as well as our shared environment. To stay ahead of challenges, we will continue driving change within the Company to build a sustainable business fit for the future.

Our long-standing commitment to maintaining high corporate governance standards and sustainable practices underpins our approach to business. We are pleased to see increasing interest in environmental, social and governance issues in society, particularly among investors and regulators. Properly addressing these issues requires vision and a commitment to manage with a long-term view, two things which have always been a hallmark of CLP.

Following a thorough review of transformative global megatrends, we identified decarbonisation and digitalisation as our long-term drivers of change and have strategies in place to take on the resulting opportunities and challenges.

These megatrends, together with intensifying demographic and labour supply issues as well as social and political uncertainties, present significant opportunities and risks for our workforce. There is no single solution: it requires a coordinated and integrated range of strategic initiatives to build an agile, inclusive and sustainable workforce for the future.

Decarbonising our portfolio

Against the backdrop of accelerated climate change, decarbonisation continued to be a key priority of CLP in 2019 as we transition to a Utility of the Future. Late last year we released our updated Climate Vision 2050. At its heart are our pledges to phase out our existing coal-based assets by 2050, at the latest, and not to invest further in any additional coal-fired generation assets. This latest edition is a foundation stone of our business strategy, which provides a roadmap for the decarbonisation of our portfolio in alignment with, and being sensitive to, local policies in each of our markets.

We have also pledged to revisit and strengthen our decarbonisation targets at least every five years as technologies advance and cost structures change, while tracking our progress against the goals of the Paris Agreement.

Our pledges can also be seen in another context. We have been investing in renewable generation technologies since the mid-1990s and are well placed to help position renewable power at the heart of the energy transition. On an ongoing basis, we are actively pursuing further investment opportunities in low-carbon electricity generation, transmission and distribution, as well as in new energy services such as those emerging from the development of "smart cities".

Accelerating our digital transition

Our Group’s electricity value chain is increasingly supported by smart energy services. To fully unlock the potential of the future energy system, we need to develop a robust digital transformation strategy with bespoke energy services solutions for each of the local markets in which we operate.

The launch of Smart Energy Connect is a prime example of our recent efforts. As the first online energy app store in Asia, it offers a range of innovative and practical applications to help businesses and organisations in the region manage energy use in a greener and smarter way. 

As for our operations, we will continue replacing and enhancing our digital systems and processes to enable our business to deliver improved results, leveraging innovation to facilitate our people in making better decisions while placing importance on cyber resilience and data protection. Over the past year, we made good progress in building up internal expertise and enhancing the awareness of cyber security across our organisation. Going forward, we will continue being vigilant and keep strengthening our cyber resilience.

Addressing the utility workforce challenge

Industry, regional, demographic, social and political drivers are bringing unprecedented change to CLP and are redefining our people agenda. Attracting and retaining skilled resources to meet the needs of energy transition is a key priority. We continued developing leaders of the future, recruiting for new-to-CLP skills, and creating opportunities for our people to gain experience in low-carbon and innovation projects.

Digitalisation requires new skills and ways of working. We commenced providing accredited data analytics training while design thinking began to take hold at CLP for advancing our services and driving people-centric innovation.

We believe that supporting diversity and inclusion is critical to business performance as well as addressing future employment needs. Hence, we continued investing in increasing women’s participation in engineering through mentoring and strengthening female engineering networks.

Safeguarding our people

Safety remains an absolute priority for the Group and our target is one of zero harm for everybody. Sadly, we do have to report the work-related death of a team member of one of our subcontractors in Hong Kong. The Board, on behalf of everyone at CLP, expresses its condolences to the individual’s family. This regrettable event has further increased our resolve to improve the safeguarding of our people moving forward.

Outlook 

In the past months, nowhere was the risk of a changing climate more vividly displayed than by the bushfires in Australia. We have taken steps to consider the resilience of our Climate Vision 2050 against possible climate-related scenarios and will continue refining our analysis to help integrate climate risks and opportunities into long-term business planning. To ensure our transparency, we have also advanced our disclosure in accordance with the recommendations by the Task Force on Climate-related Financial Disclosures and will continue disclosing reliable and consistent information to stakeholders.

All markets go through transition periods and any country with a legacy of coal generation assets will require its private sector energy partners to be ready for the challenge of decarbonisation. We see ourselves as a ready, willing and highly capable partner in the transition to a low-carbon energy future.

Going through the transition in 2019 was challenging and our results are a stark reminder of the changes in our industry. Nevertheless, we are striving to decarbonise, digitalise our operations, deliver on our investments and keep innovation at the heart of our ongoing development, all while continuing our collaboration with different sectors of the community to run our business with purpose and with an underpinning commitment to sustainability.

The Honourable Sir Michael Kadoorie

Chairman

Hong Kong, 24 February 2020

Richard Lancaster

Chief Executive Officer

Hong Kong, 24 February 2020