As Jardines makes progress on its sustainability journey, how does sustainability fit into the Group’s plans for the future?

Ben

Our home base is Asia. Asia faces complex and urgent sustainability challenges, which could have a big impact on the growth and prosperity of the region and our communities. This motivates us to do our part to address these pressing issues now.

As a key pillar of our business strategy, we increasingly consider sustainability in our investment decisions, day-to-day operations and engagements with our partners. We’re searching for opportunities from innovative technologies and practices, efficiencies in resource consumption and circularity, and we’re looking at sustainability as a factor in our capital allocation decisions.

We believe all of this will make our businesses and our communities stronger for the future.

John

We operate in growing consumer markets and we meet our customers’ different needs through our broad portfolio, which covers many sectors and markets. Our goal is to be market leaders in each of our businesses and we see entrepreneurialism, innovation and operational excellence as key to achieving this. To succeed, we must adapt to changing stakeholder demands and find new sources of competitive differentiation. Just as we have expectations for financial performance, equally, we have expectations for sustainability across our businesses, which we will monitor accordingly.

As Ben says, we see sustainability as strengthening our businesses and embedding it across our operations creates long-term value for our stakeholders. The alignment of our sustainability strategy with developing trends in Asia allows us to capture future business opportunities and drive growth.

What have been the key highlights and challenges since the launch of Jardines’ “Building Towards 2030” sustainability strategy in 2021?

Ben

Our sustainability strategy prioritises climate action by decarbonising our businesses and building climate resilience. We’re also driving responsible consumption by using fewer resources in operations and encouraging our businesses to convert waste into resources for greater circularity. And we aim to shape social inclusion by addressing key social and economic issues in our communities, especially mental health and education.

As a Group, we have made good progress in advancing this strategy. All of our businesses have set targets for Scope 1 and 2 emissions reductions. Hongkong Land, DFI Retail Group, Gammon and Hactl have already had their targets validated by the Science Based Targets Initiative (‘SBTi’), and a number of our other businesses will be seeking SBTi validation in the near future.

Setting targets is of course just one part of the journey towards our Group ambition of net-zero by 2050 – we need to meet those targets. With this in mind, all of our businesses have developed detailed roadmaps, with a focus on interim milestones, identifying opportunities around lower carbon fuels, renewable energy and electrification.

In terms of challenges, it’s worth remembering that decarbonisation may not be a straight line to net-zero emissions in 2050. We may see our emissions temporarily increase at times, due to market conditions or business growth, as they did in 2022. New technology may not deliver the significant emissions reductions we expected, or may do so but only on timelines longer than anticipated. Further, the policy environment in our markets may not develop as quickly as we would hope.

We have, however, built a solid foundation and have a credible plan to achieve our objectives. And, as conditions change, we will reconsider our assumptions and adjust our approach, to ensure we continue to make progress on our decarbonisation journey.

John

Our progress on decarbonisation has been a key highlight. We’ve seen our holistic and rigorous approach to sustainability increasingly recognised by stakeholders, and that has been reflected in improvements to our sustainability ratings. Other highlights for me are the actions of our businesses, both big and small. DFI has invested in innovative water loop systems to replace traditional centralised refrigeration. This new technology is expected to improve energy efficiency compared to the traditional system, water loop uses 80% less refrigerant gases which contribute to climate change.

Astra’s agribusiness has already operated a circular business model for a number of years, converting all of its solid waste to energy, mulch and fertiliser. In Hong Kong, our businesses have come together to convert locally-sourced waste cooking oil from their restaurants into B5 biodiesel which is then used by Gammon as a lower carbon fuel to power their equipment. This is an example of Group synergy and we’re looking for more.

We also invest in social inclusion in our communities for positive impact and to strengthen our social licence to operate. There’s been a jump in volunteering across the Group since we set up the Colleague Volunteering Programme three years ago. I’m also happy to share that we have brought back the in-person format of our flagship mental health fundraising campaign, Walk Up Jardine House, which raised over HK$5 million for MINDSET, our mental health charity, in last year’s event.

What is Jardine’s approach to sustainability in capital allocation?

John

We’re increasingly embedding sustainability into all aspects of our business, including capital allocation. To make sure our business investments are aligned with our sustainability objectives, we need to assess all our capital allocation plans through a sustainability lens. This will help us identify and explore new areas of potential growth.

In 2023, we developed guidance and frameworks to integrate sustainability due diligence and carbon costs into the capital allocation process, both at the Group level and within our businesses. We want to give decision-makers a clear view of sustainability-related risks and opportunities as they decide when and where to allocate resources.

We hope to roll out the framework to our Group businesses in 2024. Going forward, this approach to capital allocation should allow us to plan more effectively as our markets transition to a low-carbon economy. It’ll also help future-proof our business, achieve our decarbonisation ambitions and manage climate risks in a focussed and cost-effective way.

How have you integrated sustainability considerations into the governance structure and decision-making process?

Ben

Our strong governance approach underpins our sustainability agenda. It ensures transparency, ownership and accountability and it builds trust among our stakeholders.

I chair the Sustainability Leadership Council, which brings together the senior leadership from the Group and our key businesses to discuss an aligned approach to sustainability. The consensus from this dialogue is brought back to individual company boards, which are ultimately responsible for overseeing sustainability within their business.

The senior management teams in our businesses ensure that sustainability priorities are embedded at the operational level. Sustainability updates are provided twice a year to our boards across the Group, with an appropriate focus on priority areas such as decarbonisation.

John

One more point to add is that we now integrate sustainability considerations into our financial planning and forecasting, recognising that a bold vision and long-term perspective is vital. We budget for the necessary resources – the capital and operational expenditure – to deliver the right results.

What’s in store for Jardine’s sustainability strategy?

Ben

Jardines has always taken a long-term view of the growth and development of our businesses and our communities. We apply the lessons we learn to unlock future opportunities and refine our approach. We have a unique opportunity to leverage our diversified businesses and scale to make a meaningful difference for our Group and our communities.

In 2024, we will continue to prioritise our efforts in decarbonisation. Our businesses will progress their Scope 1 and 2 emissions reductions and will track their achievements carefully. There is also a focus on understanding better where we can use renewable energy and its cost impact. We’ll also collect data on Scope 3 emissions, so we can establish a preliminary Group-wide picture.

Working together on our sustainability journey alongside our businesses, I’m inspired by the expertise, passion, curiosity and collaboration that runs throughout the Group. We have the right people and mindset to move Jardines forward for a stronger future.

John

Ben Keswick

Executive Chairman
John

John Witt

Group Managing Director