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Management Approach

Climate Change Mitigation and Adaptation

The Corporate Social Responsibility Committee has the responsibility to identify and assess any significant risks and opportunities arising from climate change at a company-wide level. In addition, the Group Enterprise Risk Management Framework has been established to address risks of varying nature. As a provider of financial and information products and services, HKEX is a relatively small greenhouse gas (GHG) emitter. Nevertheless, HKEX considers the regulatory, physical, competitive and reputational risks and opportunities arising from climate change in order to minimise any direct and indirect costs related to climate change and to manage investor interests in this area. HKEX stays abreast of environment-related regulatory developments that could impact its business, supply chain and customers, and assesses the resulting risks.

HKEX has not identified any specific regulatory requirements related to climate change that present significant risks to the Group at this time. However, the development of international policy and regulation on climate change, the introduction of regulatory measures by the Central Government to cut emissions and the evolving commitment of the Hong Kong Government to carbon reduction are anticipated and may present potential risks to HKEX as both a listed company and an exchange controller in the coming years. Most of the physical risks which HKEX is exposed to are tied to the potential impact that climate change may have on the risks of coastal flooding, frequency and severity of tropical cyclones, infectious diseases, pandemics and power failures occurring. If these physical risks are realised, some may pose risks to HKEX’s trading, clearing and settlement activities, as well as provision of products and services, resulting in loss of business. HKEX has therefore established contingency plans for managing such risks. Market closure for partial days or full days due to severe tropical cyclones or rainstorms is not frequent. Nevertheless, given that the suspension of or interruption to HKEX’s operation also affects a wide range of stakeholders, HKEX maintains documented contingency plans to ensure that market operations remain orderly in the event a tropical cyclone warning signal no. 8 or above or black rainstorm warning signal is hoisted, details of which are posted on the HKEX Market website. In addition, all critical trading and settlement systems are backed up and regularly tested to ensure efficient recovery from failure and the shortest interruption possible.

HKEX has pledged support for the Hong Kong Government’s initiative to reduce carbon emissions by signing the voluntary Carbon Reduction Charter in September 2008 and becoming a green partner of the “Green Hong Kong – Carbon Audit” campaign launched by the Environmental Protection Department (EPD). HKEX is one of the participants of the Carbon Footprint Repository developed by the Environment Bureau for listed companies in Hong Kong to disclose its carbon footprint data. In addition, HKEX has been responding to the CDP (a non-governmental organisation formerly known as Carbon Disclosure Project) annual information request since 2009 to contribute to improving climate risk management and promoting sustainable economic growth in the business community.

Energy Management

As indirect GHG emissions from the Group’s electricity consumption is the biggest contributor to its carbon footprint, HKEX implements various energy saving and efficiency measures across its premises. HKEX's Data Centre in Tseung Kwan O, Hong Kong has been awarded the Leadership in Energy and Environmental Design (LEED) Gold Certifications for Core and Shell Development and for Existing Buildings: Operations and Maintenance from the widely respected US Green Building Council and has implemented an environmental management system and an energy management system which are certified to the internationally recognised ISO 14001 and ISO 50001 standards respectively. A number of features have been adopted to meet best practice standards for environmental protection. These include the installation of LED lighting in the office areas, high-efficiency electrical and mechanical (E&M) equipment and automatic lighting control schedule to reduce energy consumption and prevent unnecessary energy wastage, and high-efficiency water fittings to reduce potable water use. HKEX has also installed sub-meters to facilitate better reporting and management of the energy consumption of selected E&M installation in its offices.

HKEX also carries out energy audits and ensures that the relevant key types of building services installation in the Data Centre and all other office premises comply with the design standards of the Building Energy Code when major retrofitting works are carried out in future.

Environmental Education and Advocacy

Environmental education and advocacy among employees encourages the adoption of environmentally responsible behaviour which helps fulfil HKEX’s commitment to minimising its adverse impact on the environment. HKEX organises its own activities and encourages its employees to join external events that promote environmental protection on a regular basis.

Paper Reduction

Paper consumption is another key environmental concern in the Group’s daily operations. Internally, HKEX have implemented a number of measures to reduce office paper use and promote the reuse of waste paper. A number of electronic system or automated internal administrative processes are used to eliminate paper records, including the leave application and approval system, performance evaluation system, process for handling share options, securities declaration and approval system, salary record system, and electronic voting system at general meetings. Corporate publications, including the annual report, interim report and marketing brochures, are printed only as necessary and Forest Stewardship Council (FSC) certified or recycled paper is used as far as possible. In addition, HKEX has implemented a number of marketplace initiatives that help market participants reduce their paper consumption, eg, the eIPO services, automated stamp duty reporting and payment, and the single licensing regime. HKEX also encourages its shareholders to access HKEX’s corporate communications via electronic means, which not only saves paper but is a more convenient, efficient and timely method of communication. As a note of appreciation, HKEX donates HK$50 to a charity with a focus on environmental protection for each shareholder's election to receive corporate communications electronically, subject to a cap of HK$100,000 per annum.

Waste Management

The Group adopts responsible waste management practices including avoidance of waste, source reduction, reuse, recycling and responsible disposal. HKEX’s CSR Manual provides guidance on its arrangements and measures to help employees handle office waste generated in a proper and environmentally-friendly manner that is also in accordance with legislative requirements and industry best practices. Recycling facilities have been made available at all offices to collect paper, plastics and metals. HKEX also collects waste power cables, electrical components, fluorescent tubes, toner cartridges and rechargeable batteries for recycling. Used IT and electronic equipment are disposed of through the EPD’s recycling and recovery of electronic and electrical equipment programmes. No significant hazardous waste was generated in view of the Group’s business nature.

Since 2009, we have completed a number of waste audits across our offices to obtain more comprehensive information on the composition and quantities of waste being generated, to review the recycling practices adopted by employees, and to identify areas for improvement. The audit findings are useful for formulating our waste reduction strategy and raising awareness among employees of our waste management performance. Working together with our contractors, we continue to improve the collection and recording of waste disposal and recycling data of each office, and extend our waste recycling collection.

To join the community in combating the municipal solid waste challenge in Hong Kong, HKEX’s Data Centre has signed the Food Wise Charter to show its commitment to promote and adopt best practices and behavioral changes to reduce food waste.

Water Conservation

The Group operates its business in leased office premises, with the exception of the Data Centre. The Group did not encounter any problems in sourcing water for its daily operations. HKEX conserves water at the Data Centre by harvesting and recycling rainwater for landscape irrigation, using dual flushing cisterns, automatic water tapping and excess water from cooling towers for toilet flushing.