At CLP, we are committed to sustainable development and the management of our business for the long term. In 2017, we made progress in setting new Group targets that contribute towards the United Nations 2030 Sustainable Development Goals (SDGs) and the Paris Agreement on Climate Change. Our targets will not only help track our contributions to these two milestone international developments, but will also provide a foundation and direction for exploring new business models and opportunities.
Aligning Our Strategy With the Sustainable Development Goals
The 17 United Nations 2030 Sustainable Development Goals (SDGs) indicate the development direction and needs of the world, thus providing helpful medium to long term signals on emerging opportunities and risks for business to consider when developing or reviewing their business objectives and strategies. In 2017, we deliberated on four of the SDGs as being most relevant to our business strategy and that we could make significant contributions to. They were: SDG 13 – Climate Action; SDG 7 – Affordable & Clean Energy; SDG 8 – Decent Work & Economic Growth; and SDG 9 – Industry, Innovation & Infrastructure. We also developed targets for three of the four SDGs as outlined in the following sections.
Strengthening Our Climate Vision 2050
During the year, we undertook a comprehensive review of our Climate Vision 2050, which was first published over a decade ago. Further to the review, we developed a new set of “Energy Transition Targets”, which are a set of decadal carbon intensity reduction targets spanning out to 2050, that contribute to SDG 13. The most significant development in this regard was the tightening of our carbon intensity reduction target for 2050 from a 75% reduction in our carbon intensity to 82% reduction over 2007 levels. This change strengthens our transition trajectory downwards – moving us one step closer towards a carbon neutral world. We also 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. While all of these new targets remain challenging, they do not depend on the development of new technologies and are appropriate and measured having regard to the speed of change and the realities of the development of power markets in the Asia Pacific region. Furthermore, in order to reflect more holistically our contribution to supporting the development and maintenance of energy capacity, we will begin to report our progress on a basis that includes our capacity purchase in addition to just what we own.
Pursuing Opportunities Through Innovation
Over our century long history, we have recognised emerging trends and have been a pioneer in adopting new technologies and practices. The digital revolution is yet another emerging trend from which we can seize opportunities presented by this phenomenon. In 2017, a Director of Big Data, reporting to our Senior Director of Innovation, was recruited to be part of the new Innovation team and tasked to define and refine how we leverage all the new and emerging technologies to help us and our customers be more efficient. In 2017, we invested in a venture capital fund in Silicon Valley which can help us explore new opportunities. We also applied new technologies and have continued to utilise data analytics in our operation to boost performance and efficiency. For example, in Hong Kong, we are using drones as “inspectors” to look at aspects of our Black Point Power Station, particularly the operational areas where access by our staff is difficult or potentially dangerous. In Mainland China, we started using robots to clean our solar panels. As we have made innovation a priority in our long-term plans for the Group, we are currently exploring metrics and potential targets for our innovation endeavours as our contribution towards SDG 9 – Industry, Innovation & Resilience.
Nurturing Our Human Capital
With all the new business innovation opportunities coming up, we will continue to strengthen our talent pool. The launch of the CLP Power Academy in Hong Kong last year is one good example of this effort. In addition, one of our main focuses is unlocking the potential for attracting, developing and retaining more females into our industry. In 2016, we had announced our three priorities to improve our gender diversity: increasing the number of women in leadership positions in CLP; increasing the number of female engineers we employ; and ensuring gender pay equity. In 2017, we moved forward with setting new Group targets for these three priorities. The target to “ensure equal pay for work of equal value is maintained in all our businesses, any gender pay equity gap for females is eliminated, and will meet all relevant local compliance and disclosure standards”, contributes to SDG 8 – Decent Work & Economic Growth.
Elevating Our Focus On Protecting Lives
The two fatal accidents in our Hong Kong operation last year which claimed four lives were a tragic reminder that we must be forever vigilant in our efforts to protect the safety of our staff, contractors and customers. We express our deepest sympathy to the families of the deceased and reiterate that we are making every effort to find ways to help us avoid similar accidents in the future. In 2017, we undertook a comprehensive review of safety management under the supervision of the Board. That review highlighted that the level of serious incidents across the Group had remained relatively stable despite a strong downward trend in the total number of safety incidents in recent years. As a result, we significantly strengthened the focus of our safety procedures on the reduction of serious incidents, introduced specific action plans to improve standards in this area and further elevated the classification of safety in our Group risk register to ensure a sustained increase in oversight on safety. We also appointed a new Senior Director of Health, Safety and Environment to oversee the new approach and will closely monitor the implementation of these plans on an on-going basis with a determination to do as much as we possibly can to prevent the recurrence of such tragic accidents.
Transitioning While Ensuring Energy Security
A core belief we have on sustainable energy is the need to address the energy trilemma: providing a safe and reliable electricity supply in an environmentally responsible way and at a reasonable cost. While pursuing an energy transition towards a low carbon future, it is crucial that energy security is not overlooked or taken for granted, as some of the new types of low carbon generation will not yield energy in the same pattern or quantity as traditional types of generation. In 2017, we continued to work diligently on securing long-term, reliable fuel supply to cope with the local economic development and environmental needs of Hong Kong, while in Australia we continued to help meet the local demand given the tight supply. We also continued to engage in public dialogue on policy matters relating to our industry, as we believe it is important for us to share our practical regional experience and insight, to support the development of sound low carbon energy policy and initiatives.
Globally, we note the trend in the development of smart cities, which comes with unprecedented connectivity across all sectors and regions. To support the development of a smart city, we believe a reliable, efficient and clean energy system is essential. At CLP, we have the drive, desire and expertise to be an integral part of these exciting new developments. We are well-prepared to recognise and seize the opportunities that they are bringing, benefitting from a diversified portfolio, our forward-thinking, clear focus, agility and a capable workforce. We look forward to a dynamic and bright future that we believe will come through continued positive engagement with all our stakeholders.
The Honourable Sir Michael KadoorieHong Kong, 26 February 2018
Richard LancasterHong Kong, 26 February 2018