Sustainability

Sustainability

Message from CEO

(Extracted from Sustainability Report 2017)

DEAR UNITHOLDERS,

On behalf of the Board of Directors, I am pleased to present the first sustainability report of HPH Trust. It is prepared according to the principles of the internationally recognised GRI Standards.

This report reflects our approach to sustainability, and focuses on topics that are most material to our business and stakeholders.

OUR SUSTAINABILITY JOURNEY

Since the start of our container-handling operations in the late 1960s, and long before HPH Trust was established in 2011, we have worked diligently to establish the strong fundamentals that allow us to strategically optimise operations, infrastructure and talent. These fundamentals embed sustainability within our operations and support our long-term development and competitiveness.

As a responsible business, we are accountable to our unitholders and employees, and have a duty to run an economically sound business with strong corporate governance. Therefore, our approach to sustainability extends not only to the environment, but also to our dealings with unitholders, customers, employees, suppliers and communities.

Environmental performance and cost-efficiency are closely linked for our business. We invest in technology and management systems to maximise our efficiency, while reducing fuel consumption and emissions. For example, over the past decade, we have gradually replaced the traditional diesel-powered RTGCs with eRTGCs or hybrid RTGCs in HIT and YANTIAN. This effort greatly contributed to the successful reduction of overall carbon dioxide emission per twenty-foot equivalent unit ("TEU") by 24%.

NAVIGATING CHANGES IN 2017

The shipping industry has been undergoing important changes over the last few years, with ever-larger vessels being deployed and formation of new shipping alliances. These changes have presented economic and operational challenges. They have also driven improvements in the quality and efficiency of our operations, with a renewed focus on resource conservation and environmental performance.

The introduction of stricter environmental regulations in the shipping industry necessitated the retrofitting of vessels calling in certain countries, mandating the use of cleaner fuel while at berth. To leverage this opportunity to support and facilitate greener operations for our shipping line customers, our port in Yantian has taken a lead in green shore power technology. It is one of the first container terminal operators in China to use a mobile onshore power system, allowing vessels to connect to a cleaner onshore electrical power source and turn off their engines at berth, reducing emissions. The Ministry of Transport of China regards this system as one of the leading pilot projects for shore power in the country.

The establishment of co-management arrangements at our Hong Kong terminals was a major move forward in 2017. Working with our partners in operations planning and resource deployment, we have increased productivity and cost-efficiency. We have been able to share best operational practices while standardising key performance and productivity targets. By co-managing berth and yard resources, we can optimise vessel allocation. This allows us to further improve berthing flexibility, minimise inter-terminal transfers and optimise yard usage.

Technology and innovation continue to play pivotal roles in enhancing our operational efficiency. This year was a landmark year for HPH Trust, with CT9 North launching its remote-controlled RTGCs and an automated container stacking system at HIT. This landmark development made CT9 North the first container terminal in Hong Kong to operate all yard cranes remotely and use fully automated container stacking system at the yard.

The remote-controlled operations project has opened a new chapter in the development of container terminals in Hong Kong. It reinforces the competitiveness of the Hong Kong port while enhancing efficiency, occupational safety and the working environment of crane operators. The transition to remote-controlled RTGCs and an automated stacking system while maintaining round-the-clock operations was a world-first.

The application of new technology throughout our business is also reshaping the roles and skills of our personnel. While it is providing an opportunity to broaden the skills of our workforce, it is important that we remain diligent about recruiting and retaining new local talent across all our terminal operations. We continue to secure and train skilled technical personnel, and remain committed to building relationships and nurturing future talents for the industry.

FORGING AHEAD

On behalf of the Board and management, we invite you to review our sustainability journey during the 2017 financial year. We will continue to strengthen our sustainability governance, develop new targets and report on our performance. We intend to regularly talk about our sustainability successes and challenges with our stakeholders, and we welcome your feedback on our efforts.

YIM Lui Fai, Gerry
Chief Executive Officer

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