Corporate Social Responsibility

THE ENVIRONMENT

The Environment

Global warming and energy conservation

Swire Pacific has established a Climate Change Task Force to focus on challenges associated with global warming.

The aviation industry is contributing to climate change through the emission of carbon dioxide (CO2), nitrogen oxide (NOx) and water vapour into the upper atmosphere. It is estimated that by 2050, aircraft will be responsible for 5% of global emissions of greenhouse gases. NOx emissions from aircraft, especially during takeoff and landing, can also have a significant effect on local air quality. Since 1998, annual CO2 and NOx emissions generated by Cathay Pacific Airways' aircraft have increased by 32% and 12% respectively, reflecting substantial growth of the airline's fleet. During the same period, however, Cathay Pacific achieved a decrease in CO2 emissions of 8.7% per ATK (Available Tonne Kilometre), and in NOx emissions of 22.3% per ATK, thanks in part to the introduction of newer generation aircraft, powered by engines that are quieter, more fuel-efficient, and generate lower levels of carbon dioxide and unburned fuel.

Coupled with rigorous engine and mainframe maintenance programmes on older aircraft, these factors have seen fuel efficiency improve by 9% per ATK since 1998. In 2006, Cathay Pacific's fuel costs accounted for HK$12,600 million - a 10.9% increase on the previous year and representing 30.4% of Cathay Pacific's operating costs - so improving fuel performance per unit of capacity is highly desirable for the airline. Cathay Pacific operates one of the youngest passenger fleets in the world, with an average age of just seven years, and the airline's current fleet development programme will see this figure drop further by 2010, with associated improvements in fuel efficiency as advanced new aircraft come on stream.

Cathay Pacific expends considerable effort on flight planning, and so far as is commercially practicable, selects optimal routes to minimise fuel consumption. The airline has endorsed the Pearl River Delta Project initiated by the Hong Kong Civil Aviation Department (CAD) to promote improved routings within the PRD region, and this project has the potential to reduce fuel consumption by some 25,000 tonnes a year. Close monitoring of fuel uptake and the application of stringent weight criteria in aircraft design and when purchasing aircraft fittings, are part of an ongoing effort to reduce consumption, while cockpit crews are trained on effective takeoff, landing and optimal cruising speeds.

Swire Properties has a dedicated Energy Manager, who is committed to developing and monitoring energy conservation programmes for the properties developed and managed by the company. Initiatives include installing passenger sensors on escalators, so they reduce operating speeds when traffic is light, and the use of occupancy sensors in apartment buildings, so that when no one is home, the room thermostats will automatically switch to energy saving mode.

Around 90% of Swire Properties' buildings (as measured by floor area) now operate with water-cooled air conditioning systems. 2005 data indicates that the chillers are saving in the order of 5,000 kWh/year, which equates to over 3,000 tonnes of carbon dioxide emissions. Three Pacific Place, Swire Properties' most recent 34-storey, Grade A office tower, is equipped with the latest energy efficient building services technology, including a Miconic 10® lift control system and LONWORKS® building control system. The tower façade consists of a non-reflective clear glass double-glazed curtain wall that is friendly to the neighbourhood in terms of reduced solar glare. The building has been graded 'Excellent' by the Hong Kong Building Environmental Assessment Method (HK-BEAM) scheme.

Environmental services contractor, Swire SITA, operates two major landfill sites and has aftercare contracts on six completed sites in Hong Kong. Together, these eight sites generate annually around 80 million cubic metres of methane (CH4) - a potent greenhouse gas that can be harmful to the environment; with an energy value of 49 Mega Jules per kilo when combusted, it is, however, a potential source of useful energy. Swire SITA and power generation company, Towngas, are jointly exploring the feasibility of capturing and converting gas from the WENT Landfill - one of the largest and deepest landfills in the world - for distribution to Towngas end users in Western New Territories. The project will be one of the largest 'green' energy recovery and reuse programmes in the world.

Swire Coca-Cola HK implements recycling and efficiency measures at its Shatin production plant to reduce energy consumption. These include using recycled bottle-rinsing water to cool the refrigerant in its air-conditioning systems, and employing a heat exchange system to transfer waste heat from one production line to another. The plant uses air blowers to generate low-pressure compressed air to dry bottles with less use of energy. Solar panels are now used to heat water for boilers.

Swire Cold Storage in Australia operates fully automated cold stores that have dramatically reduced energy consumption and chilled air wastage, and the division has converted the majority of its refrigeration plants to ammonia, which is more environmentally benign than other refrigerants. Energy saving devices, such as rapid roll doors and inflatable dock seals to reduce warm ambient air infiltration, have also been introduced in many cold store facilities. Energy management tools are used to control electricity usage. In addition, reject heat from the refrigeration process is used to heat defrost water and all water used in the refrigeration process is recycled.

In the UK, the Swire Group Charitable Trust has recently contributed £100,000 to the National Oceanographic Centre in Southampton to fund research into levels of dissolved CO2 in the world's oceans - an initiative supported by the installation of monitoring equipment onto The China Navigation Company's round-the-world service vessel Pacific Celebes.