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The materiality matrix

The materiality assessment results are summarised in the materiality matrix below, showing the relationships between megatrends, material topics and relevant sub-topics. The IFRS S1 disclosure requirements, including time horizon and position of the value chain, were incorporated in the results for the first time. 

GRI reference: 3-2

The materiality matrix RESET

Filters

Material Topic




Value Chain




Time Horizon



Megatrends

Material topics

Sub-topics

Transition to net zero

Energy growth oppurtunties

Energy security and reliability

A safe, future-ready workforce

Business resilience

Community stewardship

Acting as a trusted partner in the energy transition

Intvesting in zero-carbon energy infrastructure

Reducing environmental impacts

Responding to evolving regulatory landscapes

Navigating geopolitical instability

Creating new revenue streams as other sectors electrify

Deepening CLP’s value proposition with the partners

Deploying customer-facing energy solutions

Developing Energy-as-a-Service business models

Providing customers with reliable and reasonably-priced energy

Attracting and developing diverse future talent and capabilities

Helping our people succeed

Embedding agile and innovative ways of working, mindsets and behaviours

Promoting workforce safety and wellbeing

Building resilience in the face of climate change and evolving business environment

Reinforcing cyber resilience and data protection

Ensuring thriving communities

Promoting responsible supply chain

MATERIALITY ASSESSMENT

Materiality Matrix

This interactive map shows the results of the double materiality assessment.

  • Click on a megartrend to read more and see how it relates to other material topics.

  • Click on a material topic or sub-topic to find out the linkages between them, why they are material in financial and/or impact terms, and where to read more

  • Click on a filter to find out the material topic, value chain and time horizon of each material topic or sub-topic. You may select only one filter at a time.

MEGATREND

Deglobalisation

Rising domestic protectionism is evidence that globalisation may have peaked. Even if its best days lie ahead, there will be no easy return to the unfettered movement of people, goods, capital and ideas. Geopolitical instability is spreading, including in Asia. As the world deglobalises, regional integration is growing stronger. Many nations are focused on reshoring critical manufacturing and building greater resilience in their supply chains. Businesses are facing greater regulatory and investment uncertainty as a result.

MEGATREND

Accelerating energy transition

In a world post COVID, the transition to a zero-carbon energy future remains top of mind for business and governments alike. Washington’s recommitment to climate leadership has helped catalyse global action, while Labor Government in Australia has promised to turn the country into a “renewable energy superpower” and end the “climate wars”. Globally, renewable capacity additions are set to soar by 107 gigawatts (GW), the largest absolute increase ever, to more than 440 GW in 2023. In recent years, China accounted for roughly 44% of additional global renewable capacity and more than 73% of additional Asian renewables capacity. This trend is expected to continue through 2024. Change in technology, too, has never happened so fast, nor been so transformative. In the utilities sector, AI is driving efficiency gains, helping deliver a better customer experience, and underwriting the next generation of zero-carbon energy and storage technologies.

MEGATREND

Climate change adaptation

Societies and economies will need to adapt to a hotter climate. The 2023 Global Risks Report ranks extreme weather as the second most likely of the adverse risks facing the planet over the next two years. Failure of climate change adaptation is ranked the second most severe risk in the long term (10 years). The COVID-19 crisis foreshadows what the climate crisis could look like: systemic, fast-moving, and global. At worst, unmitigated global warming could result in catastrophic scenarios that outstrip any capacity to adapt. But there are opportunities, too. According to the Global Commission on Adaptation, investments totalling US$1.8 trillion globally between 2020 and 2030 could generate US$7.1 trillion in net benefits. The inaugural Global Stocktake report released by the UN in September 2023, highlights the importance of adaptation planning in helping businesses and societies to understand climate risk and set ambitious adaptation action plans. Increasing global adaptive capacity will support greater resilience and reduce vulnerability.

MEGATREND

Technology as enabler and disrupter

Artificial Intelligence (AI), digitalisation, automation and advanced robotics are shifting the way we work, live, and interact with the world around us. COVID-19 accelerated the trend, with companies forced to bring forward the digitalisation of their operations and customer interactions by three to four years. That said, the investment will be worth the cost. In the utilities sector, AI is driving efficiency gains, underwriting the next generation of zero-carbon energy and storage technologies, and helping deliver a better customer experience.

MEGATREND

Evolving energy business models

The energy industry is moving to a customer-centred model, enabled by an intelligent, integrated and decentralised system. Customer needs, preferences and behaviours are now understood at a deeper level, thanks to an array of new technologies. In response, industry participants are exploring new business models and capabilities in areas such as microgrids, virtual power plants, smart meters, storage, EVs, and energy-as-a-service. Non-traditional players and new entrants are seeking to reshape the sector and erode the market share of incumbents. Regulators and governments are also being challenged to respond to increased public expectations, particularly in response to the treatment of vulnerable customers.

MEGATREND

Electrification

The demand for electricity is set to grow more than two-and- a-half times by 2050, driven by urbanisation and the massive electrification of end-use sectors, such as transport and industry. These changes in energy demand are creating additional strains on energy grids, especially at times of peak demand. Despite the increasing availability of renewable energy generation, widespread clean electrification is limited by current energy infrastructure. In the IEA Net Zero by 2050 roadmap, annual investment in transmission and distribution grids will need to expand from US$260 billion today to US$820 billion in 2030.

MEGATREND

Future of work

A rapid increase in the availability and use of digital collaboration tools is accelerating a structural shift in the way people work, communicate, and organise their lives. In response, companies are paying closer attention to worker health, well-being, and morale. In addition, the benefits of a flexible, digitalised, diverse and inclusive working environment have become increasingly clear, including in relation to attracting and retaining talent. That said, more than 50 percent of workers remain tethered to physical job sites, limiting their access to the benefits of the future of work enjoyed by other sectors.

MEGATREND

Data privacy and security

Cybercrime is at an all-time high, predicted to cost the world US$6 trillion annually by 2025. Critical infrastructure targets such as electricity grids, power plants and dams, are particularly vulnerable. The 2023 Global Security Outlook, released by the World Economic Forum, reveals business and cyber leaders believe current global geopolitical instability is increasing the risk of catastrophic cyber events. For example, the Australian Securities and Investments Commission declared cyber security a top priority in 2023, and is looking at potential regulatory changes that incentivise businesses to increase their cyber capabilities.

Data privacy is also in focus. Regulatory scrutiny, a steady patter of scandals involving the leaking of personal data, and changing consumer expectations around privacy are forcing companies to think more carefully about how customer data is collected and used.

MEGATREND

Trust and fairness

In many nations, the institutions of government and media have become less trusted. As a result, pressure is mounting on business to address major social, environmental and technological challenges like wealth disparity, climate change and job automation. In addition, companies are being scrutinised more closely than ever for human rights violations in their supply chains. This shift towards a more purpose-driven approach to private enterprise is a global phenomenon, driven by under 40s in particular. Governments are also looking to adjust economic and social policies to lessen social inequality. China, for example, has announced a Common Prosperity initiative to raise living conditions for low-income workers and expand the middle class. The implications for businesses (especially foreign businesses) operating in China are not yet clear.

MATERIAL TOPIC

Transition to net zero

CLP is decarbonising its existing asset base, investing in electricity infrastructure, ensuring the delivery of reliable and reasonably priced energy, and acting as a trusted partner for customers, communities, governments and investors in the transition to a just and fair energy future.

FINANCIALLY MATERIAL

Policies in most markets are still moving towards decarbonisation, despite some evidence of a ‘greenlash’ against costly net-zero targets at a time of high inflation and cost-of-living pressures. To remain competitive, CLP must focus on reducing stranded asset risk for fossil fuel-powered assets and maintain its reputation as a responsible energy provider. Potential delays in closing coal-fired plants and shifts in international net-zero policies may hinder carbon reduction targets and increase transition costs for CLP. As a result, utilities have a chance to capitalise on growing public support for nuclear energy as a component of the sustainable energy mix. At the same time, investments in non-carbon assets and transition enablers are drawing interest from investors who share CLP’s climate vision objectives, creating the environment for CLP to attract capital and gain support from the insurance market. The broader net zero agenda may also enhance the Group’s attractiveness as a commercial partner for private sector and government joint ventures in Mainland China and elsewhere.

IMPACT MATERIAL

The lower emissions that result from the transition to net-zero and investments into circular economy initiatives benefit the environment, and by extension the community, through lower greenhouse gas (GHG) emissions and resource use. CLP’s investment in the utility-scale use of energy solutions also supports the economy by facilitating major investment in critical supply chains and infrastructure.

MATERIAL TOPIC

Energy growth opportunities

Different regulatory environments across CLP’s markets affect growth opportunities locally. In Mainland China, especially in the Greater Bay Area, opportunities are significant due to the region’s large population and its proximity to CLP’s home market of Hong Kong. This offers prospects for mutually beneficial joint venture partnerships with public and private sector partners to accelerate the energy transition in line with government objectives, scale up electricity generation to meet rising demand as other sectors electrify, and introduce new energy products and services that meet customer needs.

FINANCIALLY MATERIAL

Electricity demand is expected to increase as specific market segments electrify, presenting opportunities for CLP to access new markets, establish partnerships in high-growth segments, and diversify earning streams. CLP operates in different geographies, allowing it to attract capital, technology and talent globally. The accelerating pace and scale of the energy transition presents new opportunities to CLP through customer-facing solutions and expansion into high-growth market segments by providing different energy services, such as district cooling.

IMPACT MATERIAL

Large-scale investment into low-carbon energy infrastructure enables societies to electrify and reduce GHG emissions, which positively impacts people and the environment. The provision of innovative smart and front-of-meter technologies also offers opportunities for customers to participate as partners in the energy transition.

MATERIAL TOPIC

Energy security and reliability

Energy security and reliability have been impacted by an uncertain geopolitical environment and supply chain disruptions over recent years. Higher fuel prices have resulted in assets running at reduced capacity, which has increased costs for CLP and its customers alike. The Group must balance two vital and sometimes competing objectives: providing customers with reliable and affordable energy while continuing to make progress with its decarbonisation objectives.

FINANCIALLY MATERIAL

Shortages in coal and gas could impact CLP’s profit margins by driving up input costs and forcing assets to run at reduced capacity. CLP may be able to benefit in the short term from increased demand for fossil fuel generation, but the larger commercial opportunity lies in leading a faster transition to renewables to support long term energy security. A further reduction in interconnectedness of countries and regions due to persisting geopolitical tensions could lead to trade restrictions and affect CLP's ability to access energy, critical technologies, capital and talent.

IMPACT MATERIAL

CLP’s customers and the global economy will be adversely impacted in the short to medium term by increased fuel prices impacting energy affordability. A slower transition caused by an increased reliance on fossil fuel generation will also negatively impact the environment.

MATERIAL TOPIC

A safe, future-ready workforce

CLP’s long-term success relies on its capability to attract, develop and retain a workforce that is safe and healthy, diverse and inclusive, skilled for the future, and well-supported to fulfil the customer demands of today, as well as to adapt rapidly to the social and technological changes brought by energy transition. Workplace safety, wellbeing and flexibility are top priorities. So too is the attraction, development and retention of diverse talent, with a focus on the skills needed to advance CLP’s critical decarbonisation and digitalisation agendas.

FINANCIALLY MATERIAL

The utility sector faces increasing competition, skills shortages, and heightening employee expectations around purpose and flexibility. An agile and entrepreneurial culture can help CLP explore emerging energy solutions and maintain its market position. To remain competitive in a dynamic and increasingly disrupted market, it is essential to provide employees with training and development opportunities, continue to acquire new digital capabilities, and ensure a safe and healthy work environment.

IMPACT MATERIAL

Ensuring a 'just transition' for coal-fired power plant employees and addressing risks linked to human rights practices is crucial to avoid adverse economic and social impacts for workers and communities. CLP has an opportunity to positively impact communities by addressing the social and economic implications of decarbonisation and continuing its support through community programs.  Investing in employee training and diversity governance enhances morale and productivity. CLP has the opportunity to formalise these commitments through policies that support diverse life stages, promote social mobility, eliminate career barriers, and cultivate a culture of collaboration and innovation. 

MATERIAL TOPIC

Business resilience

The accelerating pace of environmental, technological, regulatory and social changes has reinforced the importance of business resilience. CLP recognises the strategic value of anticipating, withstanding and learning from disruptive events, especially in response to the growing threats posed by climate change and cybercrime.

FINANCIALLY MATERIAL

Building resilience in the face of climate change and evolving business environment is crucial for sustainable value creation. Business resilience plays a vital role in safeguarding CLP’s assets and cash flows, especially in light of fundamental changes to the structure of energy business models and related regulatory shifts. Negative risks associated with damage to physical assets and operations caused by global warming and cybercrime require careful management. Utilising emerging AI (Artificial Intelligence) solutions may assist in the management of these risks.

IMPACT MATERIAL

Reinforcing resilience in CLP’s assets and operations underpins a stable and reliable energy supply. This benefits communities and the economy by minimising disruption.

MATERIAL TOPIC

Community stewardship

CLP recognises its obligations to meet evolving stakeholder expectations around the positive role businesses should play in society. This includes demonstrating leadership in its decarbonisation ambitions, investing in green energy solutions that support the electrification of society, and transparently reporting on its ESG performance. Environmental stewardship extends to actively managing CLP’s dependencies and impacts on nature. Employee and supplier wellbeing is another priority. The Group recognises the importance of ensuring ethical human rights practices in its value chain, as well as of supporting employees and communities impacted by the closure of its fossil fuel assets.

FINANCIALLY MATERIAL

As definitions of greenwashing become more stringent, and investor and regulatory expectations for companies’ climate and sustainability performance rise, CLP must stay vigilant in adhering to regulatory requirements and transparently report on its ESG targets and performance. Failure to do so could result in reputational damage, decreased investor ratings, and significant fines.

IMPACT MATERIAL

Business activities which meet the expectations of stakeholders benefit people, especially customers, suppliers and local communities. CLP positively impacts communities through education, women's empowerment, social inclusion, diversity, and energy poverty elimination. On the other hand, failure to address poor labor standards and human rights practices in CLP’s operations and supply chains risks harm to workers and labor rights violations.

SUB-TOPIC

Acting as a trusted partner in the energy transition

Governments, regulators, communities and customers are committing to ambitious decarbonisation agendas in each CLP market. As a provider of reliable, reasonably priced and increasingly low-carbon energy, CLP continues to look for opportunities to expand its role as a trusted partner in the transition to a just and fair energy future.

FINANCIAL OPPORTUNITY

Carbon markets will play a key role in the decarbonisation of hard-to-abate sectors of the economy and in achieving in our collective netzero ambition. Development of a pipeline of carbon offsets would represent both a commercial opportunity and a useful asset for CLP’s own net zero ambitions.

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FINANCIAL RISK

Failure to meet investor expectations that CLP acts in line with environmental regulations and in the best interests of the community and the environment may risk CLP's reputation with investors and become a barrier to raising capital.

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FINANCIAL RISK

Potential changes in energy market regulations may constrain CLP’s financial resources and weaken its ability to invest in zero-carbon energy and new business models, undermining its competitiveness, reputation and investability.

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SUB-TOPIC

Investing in zero-carbon energy infrastructure

The continued scaling of existing infrastructure and the deployment of new energy assets is necessary to respond to rising electricity demand. CLP’s investments will ensure that future electrification will draw on efficient, zero-carbon sources. There are opportunities for further investment, such as nuclear energy, to make the energy infrastructure zero-carbon and more efficient.

FINANCIAL OPPORTUNITY

Over the life of the assets, the cost of nuclear power generation is comparable with that of fossil-fuel electricity generation. By renewing/expanding its nuclear energy infrastructure, CLP could lower the cost of energy production, while also supporting decarbonisation.

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FINANCIAL OPPORTUNITY

Investments into battery projects to meet energy storage requirements of renewable energy systems, at both household (for rooftop solar) and industrial (>100MW) scales.

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FINANCIAL OPPORTUNITY

War in Ukraine has brought energy security to the fore, which could lead to a faster development of renewables to replace gas in some markets. CLP can benefit from its investment in renewables and firming capacity to support long-term decarbonisation while maintaining energy security.

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POSITIVE IMPACT

Investment in the development of a circular economy around existing and future energy infrastructure (e.g. the recycling/remanufacture of wind turbine blades), including the development of active targets to drive transformation.

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POSITIVE IMPACT

Leverage growing public support (in Hong Kong and overseas) for nuclear energy as part of a sustainable energy mix, including an extension of existing plants' life (e.g. at Daya Bay) or investment in new nuclear power plants to support the development of a larger share of zero-carbon electricity for customers.

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POSITIVE IMPACT

Cost associated with phasing out coal-fired power plants could impact investment in renewable energy and delay progress in achieving the decarbonisation goals set out in CLP's Climate Vision 2050.

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Our Sustainability AgendaServing Our Stakeholders - Partners

SUB-TOPIC

Reducing environmental impacts

Degradation of natural resources and ecosystems is having significant impacts on the environment, societies and economies. Reducing environmental impacts in the ecosystems in which CLP operates, including in relation to water, biodiversity, pollution and the prudent management of the phase-out of coal-fired power plants, is needed to meet tightening environmental regulations and increasing investor and societal expectations.

FINANCIAL RISK

Failing to manage pollutants, including high emissions associated with nitrogen oxides (NOx), sulphur oxides (SOx), particulate matter (PM), lead and mercury in densely populated areas could result in regulatory penalties and public health concerns.

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POSITIVE IMPACT

Achieving CLP's proposed phase-out of coal-fired power plants by 2040 will reduce operational GHG emissions and air pollution.

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NEGATIVE IMPACT

A potential delay in the closure of CLP's coal-fired plants could impact the Group's ability to meet carbon reduction targets.

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NEGATIVE IMPACT

Any future underinvestment in commercially viable renewable energy technologies could impact CLP's ability to decrease GHG emissions and impede progress toward our Climate Vision 2050 goals.

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Our Sustainability AgendaRespecting Nature

SUB-TOPIC

Responding to evolving regulatory landscapes

Effective progress in decarbonisation must factor in heightening government expectations, new mandatory reporting standards and public sector trust within CLP’s markets. Regulatory uncertainty and increasing competition may exacerbate risks associated with transition to new operating models.

FINANCIAL RISK

Evolving net-zero policies internationally may push CLP to accelerate its coal-fired power plant closures, forcing it to bear the transition costs (such as revenue, decommissioning and transition costs) ahead of schedule.

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FINANCIAL RISK

Failing to respond to regulatory changes in different geographies means CLP could face legal and regulatory sanction, a diminishment in government trust and thus reduced prospects for partnership, and a potential loss of market share.

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SUB-TOPIC

Navigating geopolitical instability

US-China tensions, conflict in the Middle East and Ukraine, and inflationary pressures have disrupted global supply chains and increased the pace of deglobalisation. In an increasingly unpredictable global environment, CLP's ability to procure critical technologies, as well as energy, capital, commodities and other key inputs, may be negatively impacted.

FINANCIAL RISK

International capital flows in and out of open economies such as Hong Kong may be sensitive to geopolitical developments, potentially affecting CLP’s ability to raise capital and its share price and requiring the Group to further diversify its financing channels.

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FINANCIAL RISK

Deglobalisation and geopolitical tensions could result in restrictions on trade with the Mainland. These could impact CLP’s ability to procure semiconductors and other critical technologies, as well as capital, commodities, talent and other drivers of business continuity and success.

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FINANCIAL RISK

Geopolitical tensions could impact CLP’s operating environment. Potential impacts include supply chain disruptions, increased business costs, currency fluctuations and adverse changes in international trade policies.

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FINANCIAL RISK

A lapse in the security of fuel supply in some markets could tarnish CLP’s reputation due to deteriorated supply reliability and could lead to a significant loss in revenue hurting CLP’s financial performance.

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SUB-TOPIC

Creating new revenue streams as other sectors electrify

Electricity demand is set to increase dramatically as more industry sectors electrify. CLP is enabling the transition to a low carbon economy by scaling up its zero-carbon electricity generation to meet demand and support the net zero plans of Hong Kong and other markets. In addition, electrification presents opportunities to expand into new business lines in adjacent sectors such as transport, as well as other parts of the energy value chain including electric vehicle charging.

FINANCIAL OPPORTUNITY

CLP's support of the electrification of the economy will help it retain and attract customers (e.g. EV owners and EV fleet operators) and establish it as an enabler of the Hong Kong Government's net zero plans.

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POSTIVE IMPACT

COP28 has called for a global effort to triple renewable energy capacity globally and double the global average annual rate of energy efficiency improvements by 2030, This presents CLP with opportunities to expand into new business lines and establish joint ventures in adjacent sectors, such as road transport (e.g. EV charging infrastructure), and energy services.

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Our Sustainability AgendaServing Our Stakeholders - CustomersServing Our Stakeholders - Partners

SUB-TOPIC

Deepening CLP's value proposition with the partners

The utilities sector faces challenges from regulatory changes, emerging technologies and new market entrants. Partnerships between leading utilities and new market entrants develop synergies that deliver better and more innovative customer solutions. Mainland China has significant growth potential, in particular, which could be unlocked through joint ventures with larger state-owned enterprises.

FINANCIAL RISK

Without timely investments in decarbonisation infrastructure and technology, CLP's growth potential in core markets will be limited. CLP's advantage as an integrated utility in Hong Kong may be difficult to replicate in other energy markets with different regulations.

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SUB-TOPIC

Deploying customer-facing energy solutions

Technological breakthroughs are enabling decentralised energy systems that empower consumers to take control of their energy needs. CLP is well positioned to support this transition by deploying its decades-long expertise and innovative products and services, including EV charging stations, smart meters and battery storage. The partial decentralisation of the energy system offers opportunities for CLP to develop new power solutions, such as micro-grids and energy-as-a-service, while helping the Group maintain long-term relationships with end users.

FINANCIAL OPPORTUNITY

The provision of expertise, products and services including smart grid technology, to enhance customers' energy efficiency may enhance CLP's market share and raise revenues through new, innovative product/service lines.

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FINANCIAL OPPORTUNITY

New customer-facing energy solutions (e.g. micro-grids and smart meters) and Energy-as-a-Service business models may potentially be developed into scalable and profitable businesses for CLP.

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SUB-TOPIC

Developing Energy-as-a-Service business models

Residential and commercial consumers are demanding more personalised offerings from utilities, including managing and monitoring usage in real time. Advances in technology are enabling energy-as-a-service business models, such as power purchase agreements, battery storage and charging facilities, and demand-side management. These models combine hardware and software services, giving consumers greater flexibility and choice, and allow them to partner with their retailers in the energy transition.

FINANCIAL RISK

CLP’s digitalisation agenda could be derailed by cost and time over-runs, an inability to scale, disruptions caused by imperfect implementation and/or failure to meet customer expectations.

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SUB-TOPIC

Providing customers with reliable and reasonably-priced energy

While customers’ expectations around technology and sustainability continue to shift, their need for efficient, reliable and reasonably-priced energy remains constant. CLP is striving to mitigate the impacts of the current global energy crisis on consumer prices in the short term and maintain reliability while navigating the accelerating energy transition over the longer term.

FINANCIAL RISK

With energy affordability a continued concern for Hong Kong customers and the Government, CLP may face negative sentiment and regulatory uncertainty in the longer-term.

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POSTIVE IMPACT

CLP can provide expertise and access to products and services (e.g., smart meters, PV panels) to help customers use energy more efficiently, helping them save money and lowering emissions.

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NEGATIVE IMPACT

A failure to communicate with customers ahead of disruptions caused by extreme weather may undermine CLP's reputation as a reliable energy provider, resulting in a loss of trust.

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SUB-TOPIC

Attracting and developing diverse future talent and capabilities

CLP’s ability to transition to a zero-carbon, digitally enabled future requires systematic organisational development and adoption of the capabilities required to compete effectively in key markets. The Group is focused on ensuring adequate talent supply; attracting and retaining a diverse, multi-generational workforce; developing new skills and capabilities and sharing talent effectively across the portfolio of businesses; developing leaders with the resilience, agility, stakeholder management and change leadership skills to position the Group for growth; and fostering an open and agile organisation and work culture. These efforts are underpinned by ensuring that work practices are fair, ethical and remain fit for purpose at a time of accelerating social and regulatory change.

FINANCIAL RISK

Failing to develop the talent and ways of working required for a digitally enabled, low-carbon future will hamper CLP’s ability to meet its strategic objectives and expand capabilities in new areas.

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POSTIVE IMPACT

Training provided to upskill employees enhances CLP's human capital and contributes to employee satisfaction, which correlates strongly with improved performance.

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NEGATIVE IMPACT

Younger employees with the skills required to facilitate CLP's opportunities in digitisation and the low-carbon energy transition may have different expectations compared to previous generations, which requires CLP to hire and train executives with the contemporary leadership skills to manage them effectively.

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Our Sustainability AgendaServing Our Stakeholders - Our people

SUB-TOPIC

Helping our people succeed

CLP is committed to developing an engaged and high-performing workforce, and to supporting all its people to succeed and thrive in this period of change brought about by energy transition. This is achieved through a longterm focus on maintaining strong working relationships with employees and their representatives, providing flexible working arrangements and benefits to support employees through all life stages, strengthening their wellbeing and resilience, and providing support and re-skilling to employees whose jobs are affected by the transition to net zero or other business restructuring.

POSTIVE IMPACT

People policies that acknowledge different life stages and offer employees greater flexibility can increase social mobility, remove barriers to career progression, and enhance productivity and morale.

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NEGATIVE IMPACT

As CLP decarbonises its operations, a 'just transition' for its employees — through retraining, repurposing or a supported transition into new roles — will be essential. Failure to do so may negatively impact their economic and personal wellbeing, and those of their dependents.

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Our Sustainability AgendaServing Our Stakeholders - Our people

SUB-TOPIC

Embedding agile and innovative ways of working, mindsets and behaviours

Critical to CLP’s ability to respond to a changing energy market and to the social and geopolitical uncertainties that continue to reshape its business landscape are implementing and embedding new ways of working, mindsets and behaviours, that are more efficient and commercial, while maintaining deeply held CLP values, good engagement and workplace relations, and a culture of operational excellence and safety.

FINANCIAL RISK

A lack of organisational agility and entrepreneurial culture may limit CLP’s ability to explore emerging energy solutions and new business models, and to compete against disruptive new market entrants.

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Delivering Our Sustainability Agenda

POSTIVE IMPACT

CLP can continue to shift from a hierarchical culture to one that encourages new ideas and debate as part of corporate decision-making, with the aim of enhancing an accountable, collaborative, inclusive and safe-to-speak-up culture.

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NEGATIVE IMPACT

Intensive competition, skills shortages, and changing employee preferences on the relative attractiveness of the utilities sector could make it harder for CLP to attract and retain top talent in areas requiring specialised expertise, such as nuclear and renewable energy.

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Our Sustainability AgendaServing Our Stakeholders - Our people

SUB-TOPIC

Promoting workplace safety and wellbeing

CLP is committed to providing a safe workplace environment for its employees and contractors.

FINANCIAL RISK

High safety incident rates or fatalities could lead to legal liabilities and reputational harm.

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Delivering Our Sustainability Agenda

POSTIVE IMPACT

CLP can leverage AI to improve network diagnostics and deploy robotics to enhance the safety and efficiency of maintenance operations, helping make operations safer for employees.

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NEGATIVE IMPACT

Failing to provide a safe working environment could undermine the physical and mental wellbeing, safety and wellbeing of employees and contractors.

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Our Sustainability AgendaServing Our Stakeholders – Our people

SUB-TOPIC

Building resilience in the face of climate change and evolving business environment

To ensure a reliable, reasonably-priced and sustainable supply of energy, CLP must address the challenges that natural resource constraints and extreme weather conditions pose to its physical assets. While investment is needed to manage physical climate risks, adaptation practices which can better track and analyse ESG-related data also present opportunities to build a more climate-resilient energy grid system, bringing benefits for both CLP and local communities.

FINANCIAL OPPORTUNITY

AI and data analytic tools may be deployed to improve CLP’s data collection and analysis from across its operations, enabling better tracking of ESGrelevant data, such as energy consumption, waste management, employee wellbeing and community engagement, and supporting better decision-making and compliance with relevant regulations and policies.

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FINANCIAL RISK

The potential changes to regulations and decentralisation of energy generation and transmission could impact CLP's future revenue streams.

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FINANCIAL RISK

Physical risks to CLP's physical infrastructure and operations resulting from climate change, including extreme temperatures, extreme weather events, increased rainfall, drought, flooding, and bushfires.

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FINANCIAL RISK

CLP's hydro power plants located in areas of high water stress may experience lower performance during periods of low rainfall.

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Delivering Our Sustainability Agenda

POSTIVE IMPACT

CLP's capabilities in building high-quality energy infrastructure could help communities adapt to a hotter climate and support a more climate-resilient energy grid system.

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Our Sustainability Agenda

SUB-TOPIC

Reinforcing cyber resilience and data protection

CLP operates in an ever-evolving cyber security threat landscape. It is therefore important that the business has appropriate measures in place to address these threats. Cyber security risks to CLP, its investments and business interests are business risks, and they are therefore managed in line with CLP’s established Risk Management Framework.

FINANCIAL RISK

A major cyber-security breach could present a serious risk to CLP's financial position and reputation.

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POSTIVE IMPACT

CLP's investment in cybersecurity protections (including operational technology security protocols, and specialised staff) can protect the data security of customers and the power network they rely on.

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NEGATIVE IMPACT

A successful cyber-attack on one of CLP's Operational Technologies (OT) systems, or to a lesser extent its IT system, could affect power plant operations, causing outages and disruption that adversely impact customers and communities.

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Our Sustainability AgendaServing Our Stakeholders - Customers

SUB-TOPIC

Ensuring thriving communities

CLP has a long tradition of serving its local communities through wide-ranging engagement and investment programmes. These include the provision of financial assistance – such as subsidised energy – to people and community sectors in need, and of ongoing support for those impacted by the phase-out of its coal-fired power plants and other structural changes to the energy system.

POSTIVE IMPACT

CLP continues to serve local communities through long-standing engagement and investment programmes related to education, empowerment of women, healthcare access, poverty alleviation, social inclusion, diversity and eliminating energy poverty.

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POSTIVE IMPACT

CLP provides assistance to people and different community sectors to support the provision of affordable energy.

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NEGATIVE IMPACT

Failing to provide a 'just transition' for coal-fired power plant employees may result in negative economic, health and social impacts for workers, their families and their communities.

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Our Sustainability AgendaServing Our Stakeholders - Community

SUB-TOPIC

Promoting responsible supply chains

CLP is seeking to implement the responsible, safe and ethical procurement of labour, products and services. It also recognises its responsibility to eliminate all forms of modern slavery and exploitation from its supply chains.

NEGATIVE IMPACT

Failure to identify and act on poor labour standards and human rights practices in CLP's operations and especially supply chains could result in physical and psychological harm to workers, and/or violations of their labour rights.

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Our Sustainability AgendaServing Our Stakeholders - PartnersServing Our Stakeholders - Our people

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