CLP Group

CLP Group’s CEO or Managing Director approves trade association participation. CLP is not a member of climate-negative trade associations and its CEO is a member of the World Business Council for Sustainable Development’s (WBCSD) Climate and Energy Cluster Board. CLP supports a range of internal as well as external climate initiatives, such as the Science Based Targets for Nature and the Taskforce on Nature-related Financial Disclosures (TNFD), and has set targets to align with the Paris Agreement. CLP also engages with the Longhua District People’s Government of Shenzhen Municipality to promote the development of low-carbon energy.

CLP’s emissions intensity has declined between 2017 and 2022, but the company must accelerate its rate of emissions reduction to align with its 1.5°C pathway. Projections indicate CLP’s emissions intensity is expected to decrease between 2022 and 2027, driven by decreases in its coal-fired power generation. However, CLP’s rate of emissions reduction is less than half of that required to align with its 1.5°C pathway. CLP is projected to significantly exceed its total 1.5°C carbon budget for the period between 2022 and 2037. In 2022, CLP only allocated about 10% of its capital expenditure (CapEx) to low-carbon technologies and about 55% of its CapEx to fossil fuel electricity generation.

CLP purchases 22% of its power for resale to customers. CLP’s emissions intensity from its purchased power for resale decreased between 2019 and 2022 at a rate greater than that required by its 1.5°C pathway between 2022 and 2027. CLP reports providing energy efficiency services, along with its working partners to promote energy efficiency and low-carbon living in the Hong Kong property sector. However, the company does not disclose its current revenue from energy efficiency services or its expected revenues over the next five years.

CLP’s Sustainability Committee which has oversight of climate change is chaired by its CEO, who is a member of the World Business Council for Sustainable Development’s (WBCSD) Climate and Energy Cluster Board. The company has a comprehensive low-carbon transition plan informed by climate scenario analysis that has considered the implications of a 1.5°C scenario, but it can strengthen its plan by publishing its low-carbon financial commitments. CLP offers monetary incentives to its corporate executive team for progress towards emissions reduction targets. Despite this, it is unclear whether the company still incentivises targets related to fossil fuel growth.

CLP has set targets to reduce its scope 1, 2 and 3 emissions intensity by 52% and its scope 1 and 2 emissions intensity by 50% by 2030, compared to 2019. CLP also aims to reduce its scope 1, 2 and 3 emissions intensity by 84% by 2040 compared to 2019, and to achieve net-zero scope 1, 2 and 3 emissions by 2050. Supporting this, CLP will phase out its coal assets by 2040, expand its own generation capacity, decentralised low-carbon energy and utilise energy efficiency and smart grid technologies.

CLP has committed to no longer invest in additional coal-fired assets and to phase out existing coal-fired assets by 2040, expand its own generation capacity by 451 MW and decentralised low-carbon energy capacity to facilitate energy efficiency, and utilise smart grid technologies and large-scale energy storage. Further, CLP aims to investigate and assess the use of new energy technologies such as green hydrogen, energy storage and wider deployment of renewable energy as an alternative to natural gas.

Low-carbon electricity accounts for 24% of CLP’s installed generation capacity. By the end of 2022, CLP received over 22,400 applications for its Feed-in Tariff (FiT) scheme and approved 93% of these applications with a total capacity of 336 megawatts (MW). Its demand response programmes reduced peak power demand by over 130 MW. CLP has also installed 3.36 million smart meters, commissioned 100 MW of wind power capacity, added 305 MW of battery storage and pumped hydroelectricity storage and will install 379 electric vehicle (EV) chargers in Hong Kong.

CLP’s emissions intensity for its own power generation decreased between 2017 and 2022. To align with its 1.5°C pathway in 2027, the company must reduce its emissions intensity by approximately 8% per year. This requires the company to accelerate its emissions reduction rate by 1.3 times its historical trend. CLP’s emissions intensity for purchased power for resale between 2019 and 2022 decreased by at a rate greater than that required by its 1.5°C pathway between 2022 and 2027.

CLP aims to ultimately achieve net-zero scope 1, 2 and 3 emissions by 2050. Despite committing to phase out its coal assets by 2040 and develop low-carbon business models, CLP lacks long term commitments to expand its own renewable and low-carbon generation capacity. This brings into question how the company will achieve its net-zero commitments by 2050. Furthermore, CLP does not report financial information related specifically to its low-carbon transition.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. However, the company does demonstrate some ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

The company discloses the actions it takes to create jobs, including the development of new renewable generation. However, no public commitment was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company has a commitment to re- and up-skill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. For instance, it provides training programs for both workers and communities. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights and expects its business relationships to respect the ILO fundamental rights at work. Additionally, the company describes its process to identify its human rights risks and impacts in specific locations or activities through relevant business relationships. The company has a grievance mechanism available to workers. However, the company can strengthen its disclosure on its human rights due diligence process and engagement with affected stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. Additionally, the company discloses some statistics regarding the diversity of its workforce and has a public commitment to women’s empowerment. However, the company can strengthen its disclosure on these subjects, as well as on its living wage and working hours practices.

The company has a policy prohibiting bribery and corruption, and it discloses the amount of corporate income tax paid for each tax jurisdiction. However, the company can strengthen its disclosure on these topics and other key ethical business topics including personal data protection, lobbying and political engagement.