ANNUAL REPORT 2025 49 SUSTAINABILITY REPORT In the second half of 2024, the Trust conducted a climate scenario analysis to assess the financial impacts of material physical and transition risks under two different future scenarios, thereby evaluating the climate resilience of its operation strategy. These scenarios were formulated by referring to the climate and transition pathway projection published by reputable external bodies. Physical risks were modelled using the Intergovernmental Panel on Climate Change AR6 SSP1-2.6 and SSP5-8.5 scenarios, while transition risks and opportunities were analysed using the Network for Greening the Financial System (“NGFS”) Current Policies and Net Zero 2050 scenarios. Key findings and responses Anticipated financial effects to the Trust Response to risks Physical risks • Revenue losses from business disruption due to flooding and typhoons, but these are less substantial as effective emergency response plans are in place • Greater loss in revenue from decrease in labour productivity due to rising mean temperatures • Developing emergency response plans to extreme weather events and high temperature and heatstroke prevention guidelines • Arranging work schedules to minimise continuous exposure to extreme heat • Ensuring refreshments and medication are readily available to workers • Expanding remote-controlled operation technologies Transition risks • Low-level increase in operating costs due to carbon pricing • Greater energy cost savings from the transition to lower-emissions technologies • Integrating new technologies to optimise operational efficiency and reduce energy consumption • Adopting decarbonisation initiatives in line with the evolving market landscape The approach and key assumptions used in the climate scenario analysis remain relevant to the current HPH Trust’s strategy. The Trust will regularly review and update this assessment to account for any substantial changes in business operations or the external environment. Climate considerations are integrated into business planning and strategic decision-making throughout the Trust, to enhance long-term resilience. In 2025, operations at HIT and YANTIAN were suspended for a combined total of 231.5 hours due to extreme weather events, primarily typhoons affecting both terminals. However, with robust preventive measures in place, there was no major damage to equipment or business disruptions that could have caused material financial impacts during the reporting period. To advance the low-carbon transition, the Trust invested HK$102 million this year in projects related to electrifying equipment, increasing energy efficiency, reducing emissions and adapting to climate change. These actions reinforce the progress toward the Trust becoming a more resilient and sustainable business. RISK MANAGEMENT The Trust adheres to the ERM framework established by the Committee of Sponsoring Organizations of the Treadway Commission. This framework facilitates a systematic approach to identifying, assessing, and managing risks, including those associated with climate change, across various areas such as strategy, finance, operations, and compliance. In line with the ISO 14001 risk management process, climate-related risks at the port level are identified and prioritised based on their frequency of occurrence and potential severity. At the corporate level, the impact and likelihood of these climate risks are evaluated, considering existing mitigations, to determine the appropriate treatment for any residual risks. Currently, climate-related risks are among the top concerns in the HPH Trust’s risk register due to their potential to affect financial stability or operational performance. Effectively managing these risks involves implementing robust mitigation strategies to enhance the adaptive capacity and climate change resilience of the Trust. This includes the Incident Response Playbook, which outlines a standardised approach for restoring terminal operations following emergencies or disruptions. Further details on HPH Trust’s risk management and internal control systems are provided in the Corporate Governance Report on pages 94 to 123 of this Annual Report. METRICS AND TARGETS As part of its commitment to reducing emissions and promoting environmental stewardship within the global transportation network, the Trust is confident to achieve its target of a 30% reduction in emissions intensity compared to the 2021 baseline – ahead of the 2030 timeline. Building on this projection, the Trust is now redefining the next set of targets to advance its strategic vision for a low-carbon future.
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