Power Assets

Power Assets has two emissions reduction targets related to its scope 1 and 2 emissions: a 67% reduction by 2035 and a 100% reduction by 2050, compared to 2020. However, as the company does not quantify its use of offsets to achieve these targets, neither target could be scored in this benchmark to assess alignment with a 1.5°C pathway. To improve its transition planning, Power Assets will need to state if it intends to use offsets to meet its emissions reduction targets and, if so, to what extent.

Despite investing USD 178 million over the last three years on R&D expenditure, Power Assets does not disclose any details on its investments. The company outlines examples of low-carbon technologies in operation through its subsidiaries, including HK Electric’s smart-meters and carbon dioxide (CO2) sequestration through its Carbon8 pilot project. However, no financial details regarding its investments are reported. Disclosure of its R&D expenditure would help the company demonstrate its commitment to transitioning and support the emissions reduction targets laid out in its transition plan.

Power Assets does not have a comprehensive, public trade association policy and there is no evidence to suggest the company has a process to monitor and review its climate policy positions. However, the company is a member of the Hydrogen Council and supports the Paris agreement and other significant climate initiatives, such as the Task Force on Climate-Related Financial Disclosures (TCFD), United Nations Global Compact (UNGC), and the Sustainable Development Goals (SDGs). Power Assets can increase its credibility by implementing processes to ensure its policy positions and trade association memberships align with the Paris Agreement goals.

Power Assets has committed to phase out coal across all of its business operations by 2035. The company targets a 67% reduction in its scope 1 and 2 emissions by 2035, and a 100% reduction by 2050, compared to 2020. Power Assets is planning to increase its renewables capacity in the coming years. However, there is little commitment or long-term actions outlined in the company’s transition plan to support its goal of increasing its renewable energy capacity.

Power Assets intends on decarbonising its generation portfolio by expanding its renewable energy capacity, mostly offshore wind, its waste-to-energy potential, as well as its battery storage capacity. However, the company’s transition plan lacks long-term actions outlining how it is planning on increasing its renewables capacity. Through its subsidiaries, the company is focused on scaling its hydrogen production and using hydrogen as a gas replacement to help achieve its net-zero target. With regard to its commitment to phase out coal by 2035, Power Assets has outlined its intention to mostly convert its current coal assets to gas-fired units.

Power Assets has a 45% interest in two wind farms in Mainland China: Dali with a capacity of 48 megawatts (MW) and Laoting with a capacity of 49.5 MW. In addition, Power Assets’ subsidiary AVR has partnered with Carbon8 to pilot an energy-from-waste (EfW) project, which aims to produce construction aggregates from fly-ash combined with captured CO2. As of 2022, 40% of Power Assets subsidiary HK Electric’s, customers were equipped with smart meters, and the company is targeting a full roll out to its 580,000 customers by 2025.

Between 2017 and 2022, the company’s emissions intensity trend decreased by more than the rate of reduction required to align with its 1.5°C pathway between 2022 and 2027. In 2021, Power Assets Group acquired two wind power facilities with a total capacity of 30 MW in Canada. However, in 2022 its combined renewables capacity, including solar photovoltaic (PV), offshore wind and renewable natural gas (RNG), only represented around 3.6% of its total energy generation capacity. In 2022, 63.4% of the company’s electricity generation was from combined-cycle gas turbine (CCGT) and 25% was from supercritical hard coal. However, this is a significant reduction from 2021, where coal-fired power made up 56% of Power Asset’s total electricity generation.

Power Assets has a target to phase out coal across all of its business operations by 2035. However, the company is focused on converting these assets to gas-fired units. The company is heavily focused on the use of gas as a transition fuel and less on the development of its renewable’s portfolio. Although the company’s transition plan includes short- and long-term actions at the subsidiary level, it lacks financial planning and does not make use of a carbon price.

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. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. While the company has a set of time-bound, measurable indicators to mitigate the social impacts of the low-carbon transition on its business relationships, no evidence that it has the same indicators on workers and affected stakeholders. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

The company has a commitment to create and support access to green and decent jobs as part of the low-carbon transition. However, 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 offers workshops on presentation skills, problem-solving, supervisory skills, strategic thinking, and decision-making skills to its employees. 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.

While the company contributes to the social protection of affected stakeholders, no evidence that it has the same contribution to its employees. 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. 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 the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. No evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and supply chain. No evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. No evidence was found of a time-bound target for paying all workers a living wage. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company’s required working hours. The company discloses some indicators of workforce diversity, including the age and gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. No evidence was found that the company commits to gender equality and women’s empowerment.

The company commits to protecting personal data and that it has a privacy statement regarding the collection, sharing and access to personal data. However, no relevant disclosure was found of the company’s global tax strategy and the corporate income tax paid for each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. However, no evidence that the company has a lobbying and political engagement policy, nor does it specify that it does not make political contributions. No relevant disclosure was found of the company’s expenditure on lobbying activities.