ISSUE 12 l DECEMBER 2022

Planning for better times 

The return of passenger traffic and the progressive reopening of borders and relaxation of travel requirements in Asia in the last few months brings a sense of normalcy to the aviation sector. There is, of course, still a way to go until passenger numbers are back to pre-pandemic levels across the globe, but the upward trajectory in traffic gives grounds for optimism that better times lie ahead. As we grow in traffic numbers, we remain committed to a ‘green recovery’ where we actively reduce the environmental footprint of new and existing activities where possible. 

We continue to look beyond this challenging cycle, building HKIA as the leading international aviation hub and a sustainable airport. In November, the Third Runway at Hong Kong International Airport (HKIA) was officially commissioned, marking a key milestone of the airport’s expansion into a Three-runway System (3RS). The Third Runway and Associated Works has obtained an excellent rating under CEEQUAL’s Sustainability Performance Assessment for Interim Client and Design Award. Our new icon, the Sky Bridge, has received a provisional gold rating for BEAM Plus New Buildings and commenced operation in the same month, linking Terminal 1 (T1) with T1 Satellite Concourse (T1S) to offer visitors a pleasant and smooth travel experience. 

Year 2022 had been a fruitful year for us with significant achievements made in various sustainability aspects. These include: 

  • ESG evaluation by Sustainalytics – After achieving a strong environmental, social, and governance (ESG) rating from Standard & Poor Global Ratings (S&P) in June 2022, another strong result from Sustainalytics was received in November 2022.  The multi-dimensional ESG risk assessment measures AAHK’s management and exposure on industry-specific material risks. AAHK was rated as “low risk” by Sustainalytics among the five risk categories of ESG risk severity from “negligible” to “severe” (noting that the lower risk the better). Head to our “Spotlight” section where you can learn more details on ESG evaluation. 

  • HKIA Sustainability Leaders Group meeting – The 2nd meeting was held at HKIA in October. This meeting brought together sustainability leaders from key aviation-related business partners (BPs) to discuss key sustainability challenges and solutions at HKIA. AAHK provided updates on various environmental projects including our carbon reduction programme and numerous decarbonisation initiatives developed under the HKIA Business Partners Carbon Support Programme, updates on AAHK’s Green Airport Design and Construction Strategy, as well as our preparation for the Municipal Solid Waste (MSW) charging. Ideas for new sustainability programmes were also discussed during the meeting.  

  • HKIA Carbon Capacity Building Programme – In partnership with Business Environment Council (BEC), we organized five events in 2022 to further enhance the skills and knowledge of our BPs in carbon management. Following the events, BPs developed their own carbon management plans and carbon target trajectories which included their forward-looking carbon reduction initiatives with a goal to achieve the HKIA 2035 midpoint target, with a view to net zero carbon by 2050. From the events, our BPs also gained more insight on the latest energy efficient technologies to explore, enabling them to consider what could be applied at their own premises to drive carbon reduction. In Event 5, we also formally launched the HKIA Greenovation Fund to support our BPs in piloting new and innovative technologies at HKIA.  

  • Awards and Recognitions – We are delighted to share our achievements during the year. These awards showcase AAHK's sustainability leadership.  

    • CLP Smart Energy Award  – Sustainable Vision Award
       
    • Standard Chartered Corporate Achievement Awards  – Sustainable Corporate (Environment) – Leadership Award

    • HKQAA Hong Kong Green and Sustainable Finance Awards  – Outstanding Award for Green and Sustainable Bond Issuer (Infrastructure) – Largest Single Green Bond and Pioneering Organisation in Climate Disclosure Planning 

    • TVB ESG awards 2022 – Grand Award, Best ESG Performance (non-listed company), Best ESG Report (non-listed company), ESG Project Innovation Award and Innovative Climate Technology Award

Finally, I would like to take this opportunity to thank our BPs who remained actively engaged with us this year and continued to support our sustainability initiatives throughout what has been a difficult and challenging period. I wish all our friends at HKIA a wonderful holiday season ahead. More importantly, stay healthy, and we certainly hope to see more of you, in-person in 2023! 

 

Peter Lee 
General Manager, Sustainability 
Airport Authority Hong Kong  

ESG evaluation – supporting AAHK’s sustainability journey

Since pledging to become the World’s Greenest Airport, back in 2012, a decade of transformation has seen AAHK look to make good on its aspiration across every applicable environmental, social, and governance (ESG) metric. At the same time, the thread binding AAHK’s development and operational strategies has been its commitment to ESG principles, and its success in ensuring sustainability is at the very core of all its operations at HKIA. This successful approach has been recognized by external financial stakeholders particularly in light of AAHK’s recent innovative approach to sustainable finance. AAHK issued its inaugural green bond in January 2022 which was more than three times oversubscribed. The funds raised have been allocated and earmarked for a number of the AAHK’s key environmental projects that contribute to airport decarbonisation and green building design and construction. The issuance of our first green bond demonstrates AAHK’s commitment to making Hong Kong International Airport (HKIA) one of the world’s greenest airports, and supports HKSAR Government’s policy to promote the development of sustainable finance as an international hub.

Understanding investor demand

Capital markets are now looking beyond financial returns in their investment. The integration of ESG factors is used to enhance traditional analysis by identifying potential risks and opportunities beyond financial valuations. International and regional standards and frameworks aim to improve disclosures in ESG performance and differentiate companies across ESG aspects. Mass data is now accessible, allowing investors to make informed decisions regarding a company’s ESG risk level and performance. Rating agencies are supported by large research and analytical teams and provide a good third party evaluation of a company’s ESG credentials.  

AAHK receives impressive ESG rating

To transparently demonstrate AAHK’s ESG performance to existing and potential investors, AAHK completed two comprehensive ESG evaluations with two global leading ESG rating agencies, Standard & Poor Global Ratings (S&P) and Sustainalytics. AAHK received strong ESG ratings from both rating firms which is a testament to our robust strategic approach and implementation plans.

In June 2022, we received an inaugural rating of 74 out of 100 for our ESG performance from S&P Global. We are pleased to note that our rating is higher than the Asia-Pacific (i.e. 62) and global (i.e. 66) average, which demonstrates that our sustainability approach meets and exceeds global standards. Operating the first airport with its ESG rating publicised by S&P globally, AAHK was described by S&P as having “good capabilities to address its moderate yet growing environmental and social exposure, and focus on maintaining its capacity to navigate potential disruptions”.

In November 2022, we received a “low risk” ESG rating from Sustainalytics, with a score of 10.8. Again, it gives us pleasure to note that AAHK is ranked in the top 5 in the airport sector (out of the 82 evaluated airports) and in the top 3rd percentile globally in terms of ESG performance. Strong scores were attained across business ethics, corporate governance, occupational health and safety, community relations and emissions, effluents and waste areas.

These ratings send a clear message to financial stakeholders that HKIA has a high-level of business resilience and a robust process in place to prepare for, and competently address, the potential ESG risks.  

With HKIA expecting to welcome an increasing number of business and leisure travellers in the months and years ahead, we will continue to place sustainability at the centre of our long-term development and work closely with our business partners to transform HKIA into an Airport City and strengthen our position as an international aviation hub.

Latest update on Municipal Solid Waste (MSW) charging    

In 2021, the Environment Bureau announced the Waste Blueprint for Hong Kong 2035, targeting to reduce per capita Municipal Solid Waste (MSW) disposal by 40-45% and increase the recovery rate to about 55% through the implementation of MSW charging and other waste management initiatives. The MSW charging is expected to commence by the second half of 2023 the earliest.  

In line with the "polluter-pays" principle, all waste disposed of by residential and non-residential premises (including the commercial and industrial sectors) will be subject to charging through the following charging modes: 

Charging by designated bag/label: 

  • Waste will be wrapped in designated bag or affix designated label before dispose at the waste reception points 
  • Designated garbage bags price at $0.11 per litre, with nine different sizes 
  • Charge for a designated label at a uniform rate of $11  
Charging by weight:  
  • “Gate fee” on the basis of the weight of the MSW, at HK$365 and HK$395 per tonne depending on the location of the refuse transfer station.
To ensure smooth implementation of the MSW charging, the Government will adopt multi-pronged approach which includes a preparatory period to facilitate the public to get prepared, strengthen community recycling network and launch of stakeholder engagement activities.  

AAHK will also collaborate with the tenants, airlines and airport business partners to develop a practical scheme for back-charging waste producers for all non-recyclable wastes they generated in areas which are under AAHK’s control. Learn more  

ACI Asia-Pacific Releases Tendering Guideline for Climate Resilience Planning
 
AAHK, in collaboration with ACI Asia-Pacific Regional Environment Committee, has developed a Tendering Guideline for Climate Resilience Planning for Asia-Pacific and Middle East Airports. A key objective of the guidance document is to facilitate airport operators’ understanding of the key elements of a climate risk assessment, which identifies an airport’s vulnerability to adverse impacts and capacity to adapt to climate hazards. The Tendering Guideline provides information on physical risk assessment, with supplementary high-level guidance on transition risk assessment. Airport can use the assessment to develop adaptation actions to better manage a changing climate and improve resilience. In addition, this guideline provides sample contract clauses which can be used in the tendering process to commission a climate resilience study. Learn More 


Hactl Green Week (7 Nov – 11 Nov) 

Since the launch of Green Week in 2016, Hong Kong Air Cargo Terminals Limited (Hactl) has been hosting the annual event to drive behaviour change towards a sustainable terminal. Early in November, Hactl presented its 7th Green Week under the theme of “Our Green Terminal” to nurture sustainability partnerships with its staff and community members through a series of featured activities.   

Apart from launching an online platform as an accessible way for staff to take part in the activities with fun quizzes and games, social enterprises and NGOs were also invited to host booths at the terminal to promote the importance of diversity and inclusion at Hactl and raise staff awareness on sustainable consumption by promoting fair trade products, organic items and local produce.  

Impactful sharing and live performance sessions were held by service users and people in recovery from mental illness to reduce the stigma around mental health issues and support the integration of ethnic minorities on Lantau Island. Moving forward, Hactl will harness human resources in the community and co-create a greener and more inclusive terminal with its staff and partners. 


 


HAECO deployed environmental-and human-friendly products to protect marine life and workers  

Hong Kong Aircraft Engineering Company Limited (HAECO) partnered with Henkel Adhesive Technologies, a leading solution provider in the chemical manufacturing industry to pioneer new solutions for sustainable development. The Henkel Adhesive Technologies’ environmental-and human-friendly products, such as cleaning agents with fewer aromatics, are now being used for HAECO‘s aircraft maintenance service in their Xiamen facility to protect marine life and workers from exposure to harmful and hazardous chemicals. Apart from product application, HAECO and Henkel Adhesive Technologies will learn about each other’s environmental processes and visions of sustainable development through experience sharing and company visits in the partnership. Learn more  


UPS to Electrify Over 30% of Ground Fleet in Hong Kong by 2026 

United Parcel Service (UPS) is accelerating its commitment to environmental sustainability by adding 15 electric vehicles to its ground fleet and replacing all existing diesel-powered vans at Wing Hong Operations Centre by 2023. The company invested over HKD 1 million in green fleet development and related supporting facilities in 2021 alone. 

UPS aim to increase its electrify ground fleet to over 30% in Hong Kong by 2026 to in line with the carbon neutralisation and global goal by 2050. Learn more. 
We are eager to share and showcase environmental and sustainability practices. Please contact Tammy Fung and Iris Pang to discuss your ideas.
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