MESSAGE FROM THE GROUP SUSTAINABILITY COMMITTEE CO-CHAIRS

In July, the International Maritime Organization (IMO) adopted its 2023 Strategy on Reduction of Greenhouse Gas (GHG) Emissions from Ships, with enhanced targets to tackle harmful emissions - a commitment to ensure an early adoption of alternative zero or near zero emission fuels by shipping lines by 2030, with a target to reducing at least 70 per cent GHG emissions by 2040. In May, the European Union also adopted new rules to extend its Emissions Trading System to cover GHG emissions from all ships with a 5,000 gross tonnage and above entering EU ports.

With the advent of new regulations, our customers decarbonisation efforts have picked up pace. They have designed next generation ships using alternative fuels such as LNG and methanol. They expect more from us in assisting them on their decarbonisation journey. A number of our ports have started providing shore power to ships and many more ports are in the process of installing shore power facilities. Furthermore, we continue to improve our operations to ensure we provide the highest levels of service and efficiency expected by our customers.

On 19 December 2023, we were notified by Science Based Targets initiative (SBTi) that our near-term, long-term and net-zero targets have been validated and approved, making Hutchison Ports the first global port operator to join over 5,000 companies with approved science-based targets to achieve our net-zero commitments. This is a significant milestone for Hutchison Ports.

We are committed to reduce scope 1 & 2 GHG emissions by 54.6 per cent by 2033 from a 2021 base year; reduce absolute scope 3 GHG emissions by 32.5 per cent within the same time frame; and achieve netzero by 2050. With the targets set, we went straight to work on implementation. We are pleased to report that our business achieved a 19 per cent reduction in emissions in 2023 against the 2021 baseline. We are extremely proud of our achievement and thanks to everyone involved for getting us there.

It is recognised that although GHG emissions reduction is important to protect our environment, there are other equally important areas we need to focus on. We have issued our Biodiversity Policy, which sets out our vision to protect our local environment from adverse biodiversity impact due to our operations, preserve natural resources and raising overall environmental protection awareness. Our Go Green and Dock School programmes continue to make a difference in the local communities we operate in. There are a number of case studies relating to biodiversity in this report and I hope you enjoy reading them.

We could not have achieved all these initiatives without the support of our employees. Developing safe, inclusive and happy workplaces where employees with different backgrounds feel supported, proud and recognised continues to be our priority. We value the contribution of our people and continue to foster a culture of resilience, collaboration, innovation and excellence. During the Covid pandemic, we introduced the BEWELL campaign to support our employees. We are pleased that over 1,500 employees participated in our Global Connect programme in 2023 which encourages a life-long learning culture for our employees and networking to bring our people together. Our people are our most valued asset and our continued success is built on their commitment and talent.

We undertook a gap analysis in early 2024 to reassess our top priorities. This involved both internal and external stakeholders. The analysis identified decarbonisation, energy use and efficiency, cyber security and data protection, occupational health and safety and port security as our priorities. With these priorities in mind, we will continue to focus on our environment, our people and our business.

Looking forward, 2024 will also be a challenging year with regional conflicts continuing. The Red Sea crisis has already caused a major disruption to the global supply chain. However, we shall continue to strive to meet the expectations of our stakeholders to build a sustainable business.

Together we can make it happen!