CLP Holdings (中電集團)

CLP has implemented board-level oversight of climate change and has one member of the board with significant expertise in the low-carbon transition. CLP’s CEO is a Council member of the World Business Council for Sustainable Development, and Chairman of the Board of Directors of the Business Environment Council (BEC). CLP’s Sustainability Executive Committee’s (SEC) remuneration is linked to climate change, with members receiving between 5-13% of total remuneration for participating in the SEC. CLP has a comprehensive transition plan, which includes plans to phase out coal by 2040 and a net-zero target for 2050. CLP’s strategy has been informed by scenario analysis and considers climate risks and opportunities.

CLP aims to invest in opportunities in decarbonisation and digitalisation. In addition to developing its renewable and low-carbon electricity portfolio, CLP is enhancing grid connectivity in Hong Kong and India and building a 350 megawatt (MW) battery storage system in Australia. The company is also investing in electric vehicle (EV) charging infrastructure through a joint-venture offering the deployment of EV charging in private and public car parks in Hong Kong. CLP is developing demand-side management services as well, including energy audits, demand response programmes for commercial and industrial customers to lower system demand and online assessment and management tools.

CLP aims to reach net-zero emissions by 2050. This is supported by setting targets to reduce its scope 1, 2 and 3 emissions intensity from electricity sold by 52% by 2030, its scope 1 and 2 emissions intensity from electricity generated by 50% and scope 3 emissions intensity from sold products by 28%, compared to 2019. Additionally, the company has a target to reduce its scope 1, 2 and 3 emissions intensity to 100 gCO2e/kWh by 2040. While this target represents a significant increase in ambition relative to CLP’s previous targets, CLP should aim to be carbon neutral by 2040 as this is aligned with the 1.5°C pathway for electricity generation companies with assets in emerging economies.

CLP reduced its scope 1 and 2 emissions intensity from 810 gCO2e/kWh in 2015 to 650 gCO2e/kWh in 2020. However, this rate of reduction only represents about 9/10ths of the rate required by its 1.5°C pathway between 2015 and 2020. CLP’s emissions intensity is projected to annually decrease by about 1% between 2021 and 2025. This reduction is not aligned with the company’s 1.5°C pathway which requires a 7% annual reduction. Furthermore, despite CLP’s commitment to phase out coal by 2040, without increased ambition and earlier retirement dates for these assets, 46% of its coal assets will remain in operation after 2040.

CLP has a target to achieve net-zero for scope 1, 2 and 3 emissions by 2050. CLP has intermediate targets to reduce its scope 1, 2 and 3 emissions intensity to 300 gCOe/kWh, and reduce its scope 1, 2 and 3 emissions intensity to 100 gCO2e/kWh by 2040. CLP plans to phase out coal by 2040.

CLP plans to take a regional approach to their phase-out of coal, commencing with sale of its Vung Ang II coal-fired project in Vietnam in 2020. CLP aims to expand its renewable capacity through development and additions to its portfolio. Additionally, the company is building a battery facility and investing in decarbonisation and digitalisation.

CLP’s revised transition plan announced its focus on reducing absolute emissions and emissions intensities, rather than renewable and low-carbon capacity targets. To support these efforts, CLP moved its coal phase-out date forward to 2040, set a net-zero target for 2050 and intermediary targets for 2030 and 2040.

Between 2015 and 2020, CLP’s emissions intensity has decreased by 20% due to a 70% increase in its delivered low-carbon generation and a 4% increase in coal-fired power. However, the rate of decrease should be increased by a factor of around two for CLP to align with its 1.5°C pathway.

CLP’s transition plan outlines region-specific approaches. CLP commits to cease investing in additional coal assets, phase out coal by 2040 and invest in renewable energy projects and battery storage facilities. However, without increased ambition, 46% of its coal assets will remain in operation after 2040.