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Outcomes for stakeholders
CLP continues to be a trusted partner for its stakeholders by building strong relationships and engagement to advocate sustainability and uphold ethical business practices across its value chain. It supports government authority initiatives, aligning efforts towards shared sustainability objectives. Furthermore, CLP collaborates closely with its suppliers and contractors through capacity-building initiatives, regular engagement and adherence to high standards of governance and compliance. These efforts are ensuring that CLP and its partners are together contributing to the overall resilience and success of the business.
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In the face of the climate crisis, energy transition is a critical priority for governments around the world. CLP is continuing to engage with governments and regulators to formulate decarbonisation policies and plans, while promoting the sustainable development of energy systems. Through its participation in a range of industry and professional bodies, CLP is also providing input into the major issues affecting the energy sector and establishing itself as a thought leader for the industry.
CLP maintains a politically neutral stance and refrains from making political contributions. When considering proposals for CLP to become a member of an organisation, the respective Corporate Affairs teams review the proposals based on CLP’s business objectives and the purposes of engagement. All membership proposals are subject to the final approval of the senior management of the Group or its Business Units.
Download CLP's Policy on Making Political ContributionsJoint efforts by the private and public sectors are essential for tackling the challenges emerging in the energy sector. In Hong Kong, CLP Power works actively with the Hong Kong SAR Government under the Scheme of Control (SoC) Agreement, which sets out the electricity regulatory framework and mechanism for the city’s electricity supply.
The current five-year Development Plan, covering 1 January 2024 to 31 December 2028, was approved by the government in 2023. It provides strong support for the government’s policy priorities with focuses on investments designed to drive Hong Kong’s economic and infrastructural development, the continued delivery of a world-class reliable electricity system, the transition to a smart and resilient city and the continuation of the decarbonisation journey.
As part of the interim review of the SoC Agreement, CLP continues to enhance information transparency on fuel costs and procurement, operating expenses and borrowing arrangements.
By maintaining regular communication with government officials and legislators through channels such as site visits and information sharing sessions, CLP is fostering mutual understanding of the strategies and policy directions needed for shaping a low-carbon future. CLP also actively participates in major government and industry consultations by putting forward the Group’s well-considered positions relevant to the energy sector’s development.
CLP’s responses to major public policy consultations, along with its position on critical issues such as climate change, are available on the Group’s websites and other online channels.
None of CLP’s businesses receive any significant government financial assistance.
CLP actively engages with various organisations to keep abreast of different stakeholders’ perspectives, navigate policy uncertainties and shape informed policy-making. The table below outlines the total amount CLP has contributed to organisations influencing public policy. These contributions include membership fees, donations, sponsorships and input into policy position papers. CLP has a general policy of avoiding political contributions and no contributions were made to political parties, government officials or political candidates throughout the year.
2024 | 2023 | 2022 | 2021 | 2020 | |
---|---|---|---|---|---|
Lobbying, interest representation or similar (HK$M) | 0 | 0 | 0 | 0 | 0 |
Local, regional or national political campaigns, organisations or candidates (HK$M) | 0 | 0 | 0 | 0 | 0 |
Trade associations or tax-exempt groups (e.g. think tanks) (HK$M)1 | 7.06 | 8.05 | 8.69 | 14.12 | 8.90 |
Others (e.g. spending related to ballot measures or referendums) (HK$M) | 0 | 0 | 0 | 0 | 0 |
As a priority, CLP engages with organisations actively involved in climate change and broader energy market policies. Considerable resources are devoted to the organisations listed below (in alphabetical order) through membership, sponsorship and other contributions, including active involvement by CLP senior management.
Organisation | Description of organisation | CLP contributions and engagement |
---|---|---|
The AEC represents 20 major electricity and downstream natural gas businesses operating in the competitive Australian wholesale and retail energy markets. | The Managing Director of EnergyAustralia was previously Chair of the AEC. EnergyAustralia continues to actively participate in its various working groups on a range of energy market issues. For example, an EnergyAustralia representative chaired AEC’s Sustainability Working Group before moving into the role of Deputy Chair in December 2024. | |
The BCA is a CEO-led industry association representing more than 100 of Australia’s largest businesses. It supports the transition to a more carbon-efficient economy, with the goal of net-zero emissions by 2050. | EnergyAustralia is a BCA member and supports the BCA's advocacy for a national, bipartisan energy and climate change framework that can deliver against reliability, affordability and sustainability objectives. | |
The BEC is an independent, charitable organisation established by the business sector in Hong Kong, which promotes environmental excellence by advocating for the uptake of clean technologies and practices. | CLP actively participates in or sponsors events, public consultations and working groups organised by the BEC. CLP is also a signatory of the BEC Low Carbon Charter and the Power Up Coalition. | |
The CII is a not-for-profit industry-led organisation. It works to create and sustain an environment conducive to India's development through various advisory and consultative processes. It works closely with the Indian government on policy issues, interfaces with thought leaders and looks to enhance industry efficiency, competitiveness and business opportunities. | Apraava Energy has been a member of CII for more than a decade. Its Managing Director is the Co-Chairman of the CII National Committee on Power and its Chief Operating Officer is currently a member of the India CEO Forum for Clean Air, operating under the CII National Initiative Cleaner Air Better Life. Through these engagements, Apraava Energy plays an active role in representing the power sector in India on relevant issues. | |
A global accelerator programme for electric utilities, Free Electrons enables startups to work closely with utilities to develop digital solutions to the challenges arising from the increase of renewable energy and the decentralisation of energy systems. | CLP has been participating in Free Electrons since 2018. The 2024 programme attracted applications from over 1,000 start-up companies worldwide. CLP collaborated with at least eight startups to pilot their innovative solutions in areas such as renewables, smart grids and energy storage. In 2025, CLP will host the third module in Hong Kong. | |
The IFRS Foundation develops internationally recognised disclosure standards that bring transparency, accountability and efficiency to financial markets. Responding to the need for consistent and comparable sustainability information, it created the International Sustainability Standards Board (ISSB) in 2021 to develop IFRS Sustainability Disclosure Standards. | CLP is supporting the development of globally comparable sustainability disclosure standards in its role as a founding member of the IFRS Foundation Corporate Champions Network. Through this programme, CLP is playing an active role in building awareness and capacity for disclosure within companies and connecting a growing community of support for sustainability disclosure standards. | |
IERE is a worldwide, non-profit organisation for exchanging new electricity and energy-related technologies as well as research and development information. Its members include the electricity and energy supply industry, equipment provider businesses, academic researchers, and government bodies. | CLP joined IERE in 2000 and has been an Executive Member since 2014. Currently, CLP serves on the board as a board member and has a representative as Treasurer. CLP continues to work with IERE on projects in the joint research and development programme, such as the Technology Foresight Report, and on AI and power device life diagnosis projects. | |
KFBG raises awareness of ecological and sustainability matters, undertakes species conservation and ecosystem restoration, reconnects people with nature and promotes sustainable lifestyles. | CLP has been supporting KFBG’s 10-year forest restoration programme since 2022. This programme is supporting knowledge and capacity building on reforestation and potentially contribute to nature-based solutions and biodiversity recovery. By the end of 2024, a total of 7,794 seedlings were planted (of the 25,000 planned for this project), representing 277 species belonging to 66 botanical families. | |
Formed in 2007, CIC consists of a chairman and 24 members representing various sectors of the construction industry in Hong Kong. Its main functions are to forge consensus on long-term strategic issues, convey the construction industry’s needs and aspirations to the Hong Kong SAR Government, as well as provide a communication channel for the Government to solicit advice on all construction-related matters. | CLP is actively involved in the CIC, supporting efforts to reduce fatalities in the construction industry through the participation and leadership of both CLP Group and CLP Power in the Hong Kong Construction Industry Safety CEO Forums. | |
HKGCC is a member-led organisation dedicated to improving the business environment and its competitiveness in Hong Kong. Its membership is composed of around 4,000 companies, which include multinational companies, SMEs and start-ups, from Hong Kong, Mainland China and internationally. | CLP actively participates in and sponsors events, public consultations and working groups organised by the HKGCC. The CLP Power Chairman and Managing Director are currently serving as member of the Chamber Council and the Vice Chairman of the Real Estate & Infrastructure Committee respectively. CLP’s senior management are also serving as members of various Committees to support the Chamber’s work. | |
HKIoD, Hong Kong’s premier body representing directors, works to foster the long-term success of companies through advocacy, standards-setting in corporate governance and professional development for directors. | Since 2022, CLP has been a founding sponsoring partner of the HKIoD-hosted Hong Kong chapter of the Climate Governance Initiative, a programme that aims to raise awareness of climate issues among company directors. | |
Founded in 1999, IETA is a non-profit organisation committed to empower businesses to engage in climate action and pursue net zero ambitions to advance the Paris Agreement’s objectives and establish effective market-based trading systems for GHG emissions and reductions. IETA works in collaboration with other stakeholders to develop components of global GHG market and trading systems, strengthen business capacity and promote market-based solutions and broad participation in GHG markets. | By having a representative serve as a Council member and sponsoring IETA’s events and programmes, CLP is contributing to the development of effective carbon markets while gaining insights into the latest global and Asia carbon market trends. | |
A global, CEO-led organisation of over 200 businesses, the WBCSD is working to accelerate the transition to a sustainable world. Its Sustainable Development Goals are being pursued through six work programmes: Circular Economy, Cities & Mobility, Climate & Energy, Food & Nature, People & Society and Redefining Value. | CLP actively participates in the WBCSD’s programmes and working groups, in particular, the Nature positive workstream. In support of the WBCSD’s Roadmap to Nature Positive for the energy system, CLP’s representatives joined the relevant working group and shared practical experience in tackling nature-related matters. In 2024, CLP participated in engagement sessions to provide feedback on the prototype of the Nature Metrics Tool, aimed at helping sustainability practitioners identify the most relevant nature-related metrics to measure progress, set targets and disclose in alignment with major voluntary and regulatory frameworks. In addition, CLP leveraged the Roadmap to Nature Positive and contributed case studies to WBCSD. These case studies serve as practical illustrations that bridge the gap between theory and industry practice. | |
The WEC is a UN-accredited global energy body formed in 1923 with more than 3,000 member organisations in over 90 countries. The WEC informs global, regional and national energy strategies by hosting high-level events, publishing authoritative studies (e.g. the World Energy Trilemma Index) and working through its extensive member network to facilitate global energy policy dialogue. | CLP began participating in the WEC as a member organisation in 1988. Since the formal establishment of the Hong Kong member organisation (WEC-HK) in 2016, CLP’s CEO has been serving as Chair and representing WEC-HK and its members. In 2024, CLP contributed to commentaries on Hong Kong in the 2024 edition of World Energy Issues Monitor, as well as contributing Hong Kong’s profile for the World Energy Trilemma. |
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CLP’s Code of Conduct sets out 15 Principles that guard against corruption within CLP. The Code is applicable to the entire Group, including CLP Holdings and its wholly owned subsidiaries, joint ventures and companies under CLP’s operational control. It is available to the public in both English and Chinese.
All employees of CLP, irrespective of their position and function, are expected to fully adhere to the principles. In the case of joint ventures or companies in which CLP does not hold a controlling interest, CLP representatives are also expected to act in accordance with the Code and to make a concerted effort to influence those with whom they are working to follow similar standards of integrity and ethical behaviour. Likewise, contractors working for CLP are encouraged to follow the Code for the duration of their contract. Reports on Code of Conduct breaches are reviewed by an external auditor during the annual auditing period.
In addition to the Code, CLP has implemented an Anti-Fraud Policy as part of its Corporate Governance Framework. This is aimed at preventing and controlling fraud activities such as corruption, conspiracy, embezzlement, money laundering, bribery and extortion.
CLP has a Whistleblowing Policy in place to encourage and assist employees and related third parties (including customers and suppliers) who engage with CLP to raise concerns about any real or perceived misconduct, malpractice or irregularity. The Whistleblowing Policy is available to the public in both English and Chinese. Concerns can be reported independently to CLP Group Internal Audit 24/7 through a dedicated and confidential whistleblower hotline or email. Any concerns received are handled with care and treated fairly and properly.
Download CLP’s Whistleblowing PolicyRegular Code of Conduct training is mandatory for all staff joining the Company. CLP promotes the Code of Conduct and Whistleblowing Policy to employees, on a regular basis, by advising of any updates or revisions.
Every four years, the Company conducts a Group-wide Business Practice Review (BPR). This review includes refresher training for all employees to reinforce their understanding of the Code’s Principles and to ensure business practices remain compliant and ethical.
During the review sessions, potential issues are raised and reviewed with management. A number of case studies based on past violations are included to demonstrate the proper way to handle potential and actual situations involving Code violations. Contractors are encouraged to attend the sessions alongside CLP employees.
The latest BPR training was completed in 2022 for all regions, including Hong Kong, Mainland China, India and Australia. The next round of BPR training is scheduled to commence in 2025.
The General Representation Letter (GRL) process serves as a reporting mechanism for instances of non-compliance with the Code of Conduct. Leaders in areas of responsibility are required to sign a GRL annually addressed to the Group Chief Executive Officer (CEO) and Chief Financial Officer (CFO), outlining their area’s adherence or otherwise to the Code of Conduct, amongst other Company policies.
This process reinforces the need for personal responsibility for good governance and facilitates internal assessment of the adequacy and effectiveness of controls at different levels within CLP. As part of this annual process, business practices are reviewed and fraud risks in different areas are assessed, with any irregularities or exceptions being reported to senior management. Leaders including managers or above, Finance and Procurement staff, secretaries in the Group and other key staff identified by management, must also sign an annual Code of Conduct Compliance Statement.
The Group-wide reporting system for Code of Conduct violations applies to any alleged or potential breaches. Potential cases of Code of Conduct violations can be reported to Group Internal Audit (GIA) by employees, vendors, contractors and GIA auditors through anonymous letters, emails or phone calls. The Group Code of Conduct Committee, which comprises the Chief Financial Officer, the Chief Strategy, Sustainability & Governance Officer and the Chief Human Resources Officer, reviews and endorses any disciplinary measures to be taken.
GIA regularly reviews compliance with the Code and investigates any potential violations except those related to human resources, which are investigated by the Human Resources (HR) department. Management control standards, such as CoC compliance statements, also deter non-compliance and reduce exposure to unethical practices. The number of Code breaches and any cases of corruption are reported annually to the Audit & Risk Committee (ARC), with the relevant data verified by a third party.
To expedite responses to Code of Conduct violations in Australia, EnergyAustralia has been delegated the responsibility of managing and addressing violations by its employees. Under this arrangement, EnergyAustralia informs the ARC of CLP Holdings of cases involving senior EnergyAustralia employees.
At Apraava Energy, a separate Internal Complaints Committee has been established to handle complaints of sexual harassment at the workplace in accordance with Indian laws.
In 2024, 31 breaches of the Code of Conduct were reported. None were financially or operationally material to the Group, and none involved employees at the grade level of senior manager and above.
In addition, there were no convicted cases of corruption. Any breaches were managed internally in accordance with CLP’s complaint handling process for violations of the Code of Conduct.
Regarding whistleblowing cases, 20 cases were received in 2024 compared with nine in 2023.
Records of confirmed cases of Code of Conduct Principles breaches during the past five years are shown in the table below. Between 2020 and 2024, CLP did not have any breaches related to six Code of Conduct principles, namely Political Contributions, Gift & Entertainment, Laws & Regulations, Representation, Response to Incidents and Compliance & Report.
2024 | 2023 | 2022 | 2021 | 2020 | |
---|---|---|---|---|---|
Zero Harm Vision | |||||
Includes issues regarding health and safety and alcohol and drug abuse. | 2 | 0 | 0 | 0 | 0 |
Respect for People | |||||
Includes discrimination, harassment and other issues related to not respecting people. | 11 | 2 | 5 | 4 | 8 |
Ethics and Business Integrity | |||||
Includes unethical business behaviour related to integrity, honesty and fairness. | 8 | 0 | 2 | 10 | 1 |
Other Principles | |||||
Includes conflicts of interest, company policies, financial controls, protecting information & assets and meeting responsibilities. | 10 | 10 | 3 | 4 | 16 |
Total | 31 | 12 | 10 | 18 | 25 |
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CLP is a law-abiding company that aspires to go beyond legal requirements and bring international best practices to its operations. CLP voluntarily follows higher standards that reflect the Company’s principles and values and is prepared to forego opportunity or advantage to uphold the highest standards of corporate governance and integrity if necessary. Specific policies and guidelines for each operational area are in place to assist CLP in complying with differing jurisdictional laws and regulations relating to competition, personal data and privacy, intellectual property, health, safety, the environment, as well as employment and human resources amongst others.
One of the responsibilities of the ARC is to review and monitor the Company’s compliance with the Code of Conduct, as well as the Company’s policies on compliance with applicable legal and regulatory requirements such as the Hong Kong Exchanges and Clearing Limited (HKEX) Listing Rules, the Companies Ordinance (Hong Kong) and the Securities and Futures Ordinance (Hong Kong). The ARC also reviews regulatory and legal issues. Every six months, Group Legal Affairs compiles a CLP Group Key Regulatory and Legal Compliance Issues Report for the ARC, which covers key regulatory compliance issues in addition to legal cases in which CLP is a named defendant.
CLP is often confronted with changes in the legal and regulatory regimes of the various jurisdictions in which it operates. The Company closely monitors emerging regulations and ensures that it is prepared for changes.
In reviewing new and amended laws and regulations which came into effect during the 2024 reporting year, CLP has identified those which had or will have a significant impact on the business for inclusion in this report. The threshold applied for assessing inclusion in the report is whether significant investment or expenditure was or will be required to ensure compliance. Laws and regulations that met this threshold are outlined in the respective sections of this report:
CLP’s 2024 legal compliance performance is summarised below, according to the GRI Standards and the HKEX Environmental, Social and Governance Reporting Code.
The Company is also exposed to the risk of contractual disputes and litigation in the course of its normal operations. The Group considers each instance separately in accordance with legal advice and makes provision and/or discloses information as appropriate.
There was one new reportable case of legal non-compliance in 2024.
Number of cases | Supplementary information | |||
---|---|---|---|---|
Business practices | ||||
Anti-corruption | No reportable cases | Read more in the Code of Conduct and anti-corruption section. | ||
Anti-competitive behaviour | No new reportable cases in 2024. There is one existing and previously reported case involving Ho-Ping Power Station in Taiwan, in which the CLP Group has a 20% equity interest | The Ho-Ping litigation is against a penalty for alleged concerted action with other independent power producers (IPPs) in violation of the Taiwan Fair Trade Act. The Taiwan Fair Trade Commission (FTC) in 2013 ruled and fined nine IPPs for alleged cartel behaviour. Ho-Ping filed litigations against the FTC penalty. The FTC’s decision was eventually overruled by the Taipei High Administrative Court (THAC) in October 2014. However, the FTC successfully appealed the THAC’s decision to the Supreme Administrative Court (SAC) and the case returned to the THAC for re-examination. In May 2017, the THAC ruled again in favour of Ho-Ping and rejected the FTC’s decision. In June 2018, the SAC accepted FTC’s further appeal and, for the second time, returned the case to the THAC for re-examination. In June 2020, the THAC ruled in favour of Ho-Ping for the third time and the FTC once again appealed to the SAC. In August 2022, the SAC ruled in favour of FTC. Ho Ping submitted an application for a retrial in September 2022. As of December 2023, there had been no new progress on the application for a retrial. In April 2023, Ho-Ping lodged an administrative appeal which was rejected by the SAC. In June 2023 Ho-Ping filed an administrative proceeding which was brought to the first preparation proceedings court in November 2023. The court proposed that both FTC and Ho-Ping undertake mediation before the matter proceeds further, to which both parties agreed and await a timetable for the mediation. Four mediation sessions were held in 2024 which have been focused on the legal basis and applicable formula to determine the amount of the penalty. Further sessions will be held in 2025. | ||
Employees and contractors | ||||
Employment practices | No reportable cases | - | ||
Labour standards (child and forced labour) | No reportable cases | - | ||
Occupational health and safety | No reportable cases | - | ||
Customer | ||||
Customer privacy | No reportable cases | Read more in the Customer privacy section. | ||
Product and service information and labelling and marketing information | One reportable case | On 22 September 2023, the Australian Competition and Consumer Commission (ACCC) instituted proceedings in Federal Court against EnergyAustralia for allegedly breaching the Electricity Retail Code and the Australian Consumer Law when notifying customers of its impending price changes. On 26 September 2024, the court delivered its final judgement. This involved EnergyAustralia paying a A$14 million fine and A$50,000 of the ACCC’s costs and certain compliance orders. | ||
Access to electricity | No reportable cases | - | ||
Customer health and safety | No reportable cases | - | ||
Community | ||||
Rights of Indigenous people | No reportable cases | - | ||
Environment | ||||
- | No reportable cases | Read more in the Monitoring and compliance of emissions and other nature-related regulations section. | ||
Other | ||||
- | No reportable cases | - |
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The GPS sets out a framework for strengthening CLP’s supply chain management capability to support its “Power Brighter Tomorrows” vision and match world-class procurement practices. The GPS provides a structured path for the business to deliver value outcomes and is regularly reviewed internally.
The latest version of the GPS, which places a special emphasis on safety across the supply chain, was released in early 2022. Its five dimensions are:
For each dimension, the GPS defines levels of world-class practice from “basic” to “advanced”. Each business unit assesses the level of functional capability it requires to support its business outcomes and then develops a plan to progress from its current level towards more advanced practices.
CLP’s Whistleblowing Policy and Harassment-Free Workplace Policy are also part of CLP's procurement operations and CLP encourages all suppliers to uphold the principles outlined in these policies.
The CLP Procurement team actively participates in membership of project steering committees, providing appropriate levels of oversight and governance in procurement decision-making. Procurement commitments in the Company’s various regions are made with reference to the clearly-defined authorities set out in the Company Management Authority Manuals.
CLP's SCoC outlines sustainable procurement practices that support CLP’s environment, social and business objectives in 11 areas:
For each area, the SCoC specifies practices that the supplier must comply with and others that they should work towards achieving. While the SCoC is embedded in CLP's tender documents and contracts, the Group also encourages its suppliers to monitor, manage and disclose their performance in accordance with the SCoC. CLP extends similar principles to its own upstream supply chains.
Download CLP’s Supplier Code of ConductEnergyAustralia’s latest SCoC also reflects CLP Group’s sustainable procurement practices. It includes a whistleblowing channel that suppliers may contact directly or raise any concerns with anonymously. The Code has been added to supplier contract templates and to EnergyAustralia Purchase Order Terms and Conditions.
Download EnergyAustralia's Supplier Code of ConductCLP’s sustainable procurement team engages with key internal and external stakeholders to promote procurement practices that reduce ESG risks and enhance the ability of supplier to meet CLP’s sustainability expectations. The Company is striving to shift from a reactive approach of risk mitigation to a proactive approach of advancing opportunities in the strategic sustainability agenda.
The Procurement Leadership Team, comprising each Region’s head of procurement, oversees aggregated future procurement needs, supply market opportunities and risks and the development of procurement strategies. The Group Procurement team has enhanced its in-house capacity by setting up a sustainable procurement team responsible for the planning and implementation of procurement practices relating to sustainability.
Driven by the three-year Sustainable Procurement Roadmap, CLP's is in the process of enhancing its supply chain sustainability management with the foundation of the Sustainable Procurement Framework which cultivates long-term and mutually beneficial relationships with suppliers who share CLP’s values and goals. The framework is underpinned by the CLP Group Procurement Standard (GPS) which serves as a guide to the Group’s procurement and supply chain management practices.
In enabling CLP’s agenda of decarbonisation, building resilience and creating value in supply chain, the foundation of Sustainable Procurement draws on policies that include CLP's Value Framework, CLP Procurement Values and Principles and other procurement policies that govern daily CLP operations.
The Sustainable Procurement Framework now provides the foundation for all CLP’s supply chain sustainability management activities, including various strategies and procedures of CLP’s supply chain sustainability management, such as sustainability risk profiling and sustainability assessment. These are helping CLP to manage supply chain risks and communicate CLP’s values and principles to suppliers, alongside with the SCoC. Overall, the framework is improving CLP's competitive advantages by building commercially viable strategic relationships with preferred suppliers. It evaluates business value outcomes based on factors such as total cost of ownership management, environmental, social and governance (ESG) value, supply chain resilience and innovation.
The Sustainable Procurement Programme has been developed to provide CLP with a consolidated view of supplier sustainability risk and opportunity, for better informed procurement decisions. Implementing the three-year Sustainable Procurement Roadmap is also a key component of the Sustainable Procurement Programme. The programme not only involves regular meetings with suppliers, but has added in the use of third-party sustainability profiling and ratings, helping to ensure compliance and enhance supplier awareness of their unique sustainability journeys.
CLP’s supplier sourcing strategies are designed to identify suppliers that best meet its requirements and that deliver value at an acceptable level of risk.
Under the standard procedure, supplier selections are conducted through competitive tendering, when each supplier’s ability to fulfil criteria of quality, health and safety, environmental protection, delivery, innovation, sustainability and cost are assessed. Every supplier contract is designed to safeguard CLP stakeholder interests and ensure the supplier meets its commitments and obligations in areas such as legal and regulatory compliance, intellectual property rights, data confidentiality and security.
To better manage supplier clusters, CLP segments its contracted suppliers into tiers based on relative contract value and potential business impact, taking into account risks relating to supply chain and sustainability factors. The tiers are reviewed on an annual basis. This process of segmentation allows CLP to apply appropriate levels of governance and engagement to different suppliers for more efficient supply chain management.
In the first year of the three-year Roadmap, a key focus has been to assure compliance. This has been done by implementing an ESG profile tool that screens suppliers’ inherent sustainability risks and any relevant incidents associated with the supplier company. Since the pilot launch of the ESG profile tool, over 1,300 suppliers have been screened by the tool and rated High, Medium or Low risk. Over 80% of the screened suppliers are rated Low risk. The tool will continue to monitor these Low risk suppliers for any changes in their risk level.
The remaining 20% of suppliers are rated Medium or High risk. These suppliers are required to attend supplier engagement meetings to address their specific sustainability risks, in accordance with the Supplier Code of Conduct requirements. They will also involved as a priority in a wider due diligence process which will involve in-depth Sustainability assessment.
CLP defines critical projects by considering their importance to its business operations, as well as their sustainability risks and contract value. All suppliers contracted for critical projects are subject to sustainability risk assessments. In 2024, these contractors represented 56.5% of CLP's total procurement project spend.
Suppliers for critical projects are assessed on their sustainability practices through tools such as questionnaires, proposal evaluations, site visits and where subcontracting is involved, audits on the subcontractor's capability to meet project requirements.
The highest number of CLP's active suppliers are in Australia.
Total value of payments to suppliers in 2024 was highest in Mainland China.
In accordance with its Corporate Risk Matrix, CLP conducts ongoing risk profiles monitoring of strategic suppliers with high business criticality and spend value. The profiles are conducted in conjunction with supplier risk management and supplier relationship management processes, and cover risks related to modern slavery, labour practices, supplier continuity, employee health and safety and cyber security.
Past performance data, future business needs and technology and innovation roadmaps are regularly reviewed with suppliers. CLP takes a risk-based approach to sustainable procurement across the procurement lifecycle. ESG risks are identified and evaluated regularly at category, project and supplier levels, taking into account responsible procurement practices. This evaluation considers the following risks:
Specifically, the risk profiling process helps CLP manage ESG matters in areas such as labour practices, human rights, modern slavery, child labour, harassment, safety, environment, subcontractor management and anti-bribery along the value chain. The risk profiling results provide CLP with insights for developing sourcing strategies and risk mitigation measures for its strategic suppliers in each category.
Through year-round operational, business and executive reviews, CLP has continued to enhance its supplier relationship management process for strategic suppliers. The reviews consistently assess the delivery performance of each strategic supplier and are used to drive ongoing improvements.
Procurement and business unit personnel work collaboratively to review and assess the performance of incumbent suppliers in the market. They also monitor sustainability risks in the areas of human rights/modern day slavery, environment and community. These initiatives provide useful information for formulating effective sourcing strategies as well as managing risk and supplier relationships.
In line with its obligations under the Australian Modern Slavery Act 2018, EnergyAustralia submitted its fourth Modern Slavery Statement to the government in 2024. In 2024, EnergyAustralia implemented a Supply Chain Risk Management tool, Trust Your Supplier (TYS). This tool allows new suppliers to be onboarded and existing suppliers to be invited, through registration and includes questionnaires about employment standards and human rights. All new suppliers must complete the questionnaires and register before being onboarded. Existing suppliers are being invited to update their details in phases, starting with critical suppliers and moving on to other suppliers. The TYS tool provides ongoing risk monitoring for all suppliers using data from an independent third-party, which includes data on adverse media, sanctions and regulatory action.
EnergyAustralia remains committed to fostering indigenous inclusion by including indigenous participation clauses in its supplier contracts, particularly for contracts relating to generation sites. By doing so, it seeks to encourage its suppliers to help drive indigenous inclusion by increasing their indigenous business spend and employment as well as boosting their cultural awareness.
This initiative stems from EnergyAustralia’s Reconciliation Action Plan (RAP). The release of the second “Innovate” RAP in 2023 further clarified EnergyAustralia’s commitment to promoting reconciliation and cultural understanding as well as enhancing relationships with Aboriginal and Torres Strait Islander peoples and organisations. This year, EnergyAustralia partnered with Mob Jobs on a revised First Nations employment strategy, consulting with First Nations employees and Traditional Owner groups to ensure our approach to First Nations attraction, employment and development is inclusive and sustainable. We also engaged supplier diversity expert Kristal Kinsela to present to some of our Board and the Business Unit Leadership Team (BULT) on the value proposition of Indigenous procurement for EnergyAustralia. We have been working closely with Traditional Owner groups around our developing projects, ensuring cultural perspectives are listened to and considered. We implemented a First Nations Cultural eLearning Programme, making cultural learning accessible to all our people. This enhances our peoples understanding of the connections between EnergyAustralia’s project sites and local history and culture.
By the end of the year, the procurement team reported that it had sourced goods and services from 13 indigenous suppliers with a total of A$1,731,937 in spending.
CLP regularly conducts workshops for contractors to raise their safety, environmental and human rights awareness and capabilities. To enhance the professional development of contractor staff, workshops and training on procurement practices and supplier relationship management are conducted regularly.
CLP’s contract terms and conditions include specific sustainability requirements and expectations regarding business ethics. Suppliers are encouraged to align their practices with the requirements and expectations stated in the SCoC and are expected to adopt similar standards and practices when doing business with the Company. To ensure compliance with the SCoC and further promote sustainable procurement practices, the Company issued a letter from the Director to all suppliers, stating that suppliers must acknowledge the SCoC and be prepared to provide evidence of their adherence to its standards. This might involve submitting accreditations, certifications, sustainability assessments, compliance reviews and audit reports. This initiative has reinforced the Company's commitment to maintaining high ethical and operational standards across its supply chain. In 2024, over 1,800 of CLP's suppliers have agreed to abide by the SCoC requirements.
CLP also values direct feedback from its suppliers, since it offers candid two-way communication opportunities and, when it has a specific focus on technology roadmaps and innovation, helps CLP prepare for future challenges. In addition, CLP proactively engages with selected strategic suppliers to directly discuss sustainable procurement best practices, including ways of minimising GHG emissions. In 2024, CLP engaged first-tier wind turbine suppliers in Mainland China to understand their capabilities regarding Circular Economy (CE) in the context of wind turbine generator production. Additionally, CLP introduced the CE Strategy to internal stakeholders to foster collaboration on CE practices between CLP and the suppliers.
As part of the key focus in 2024 for the Sustainable Procurement program, the Sustainable procurement training series has kick-started to build awareness within Commercial & Supply Chain Management (CSCM) team to mitigate supply chain risks. Over 100 CSCM team members participated in the training series. The sessions included town-hall training by an internationally recognised certification body on both general awareness on Supply Chain sustainability and the ISO 20400 Sustainable Procurement guidance course. This was followed by a Climate Fresk session with 10 certified facilitators to actively engage and support the team in building the Sustainable Procurement Guide, driving sustainable practices across different categories.
In 2024, CLP Power also introduced several initiatives designed to enhance the management of its supply chain and the associated risks. These included:
The CSCM team collaborating on the Sustainable Procurement Guide during the Climate Fresk session.