Towngas ESG Report 2020

Environmental, Social
and Governance Report

2020
Go Green
EVERY DAY
BOARD STATEMENT 3
CONTENTS
01 BOARD
STATEMENT
01 Board Statement 3 The Towngas Board of Directors (the Board) is committed to our environmental, social
and governance (ESG) development for a sustainable future. This commitment is
02 Managing Director’s Message 4 reflected in our Vision and Mission, which guide our evolving ESG strategy.
03 Building a Brighter Future and a Greener World 8
04 2020 Highlights 10 Our ESG Framework covers five key areas: To further integrate ESG practices into our business
05 operations, the ESG Committee has been established.

Our ESG Approach 14
• Creating Business Opportunities, The Board has appointed the Managing Director be the
06 Creating Business Opportunities 26
• Ensuring Health and Safety, Chairman of this Committee, which has responsibility
07 Ensuring Health and Safety 36 • Protecting the Environment, for our strategies, policies and practices on ESG
08 • Contributing to Stakeholders, and matters. Updates on ESG related policies, initiatives,

Protecting the Environment 48
• Strengthening Corporate Governance progress, goals, targets and achievements are
09 Contributing to Stakeholders 62 reported and discussed on a regular basis.
10 Strengthening Corporate Governance 82 Material ESG issues are prioritised and regularly
reviewed through our engagement with stakeholders The Board will continue our commitment to our ESG
11 Data and Reporting 88
as well as monitoring of global trends. The Board efforts in every aspect of our operations as we work
12 GRI & ESG Content Index 98 has the overall responsibility of overseeing these towards creating a sustainable world and long-term
13 Appendices 112 material ESG issues and evaluating, determining and value for stakeholders.
14 integrating relevant risks and opportunities into our key

Verification Statement 115
governance processes. Our governance procedures
are applied to all areas of decision-making and
strategic planning across Towngas.
4 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 MANAGING DIRECTOR’S MESSAGE 5
02 MANAGING DIRECTOR’S
MESSAGE
In 2020, we faced an extremely challenging year as a result of the COVID-19 outbreak,
which affected all of us in Hong Kong and mainland China. Although the pandemic
had an impact on our business and the overall economy, as a resilient and innovative
company Towngas was able to emerge relatively unscathed from the past year’s events.
In large part, our recovery was due to the decisive actions of our senior management
team and dedication of our colleagues who worked closely together and with the
community to combat and contain the coronavirus.
As a result of their efforts, we were able to keep the pandemic mostly under control in
our operations.
Response to COVID-19 home arrangements. As a result of these and other

measures, we were able to minimise the infection
The health and safety of our employees, and indeed rate among our staff.
all of our stakeholders, came under threat during
the year because of the outbreak of COVID-19. We As a caring organisation, we also reached out to the
recognised the seriousness of this threat shortly after community and offered help in the form of food relief,
it emerged in early 2020 and took immediate steps temporary jobs for the unemployed, and assistance
to reduce the risk of infection among our staff and to businesses in the catering sector, our valued
contractors. partners and one of the industries most affected by
the pandemic.
After activating our Corporate Preparedness Plan
for Infectious Diseases, we initiated a variety of
measures across our facilities in Hong Kong and
mainland China. They included a comprehensive
programme of sanitisation, temperature checks, the
To stay ahead of challenges distribution of protective equipment and work-from-
and embrace the new

normal, we will continue to
maintain our commitment
to environmental, social and
governance development and
build a sustainable future.
Alfred Chan Wing-kin

Managing Director
6 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 MANAGING DIRECTOR’S MESSAGE 7
While embracing the new normal, we will continue partnership agreement with Shanghai Gas Company Building a Workforce for the Future The Year Ahead
to maintain our commitment to environmental, social Limited in October 2020. This collaboration will enable
and governance (ESG) development in terms of the us to capture more opportunities and promote the long- As our workforce ages and our older workers near After the trials of the year just passed, we can
safety of our operations, environmental performance, term growth of the natural gas industry. retirement, we have had to ensure their experience reasonably expect a better year in 2021.
social good, corporate governance and diversity under and skills are effectively passed on by developing our
our ESG Framework, with a focus on innovation. We Also underway were various waste-to-energy projects, employees and attracting young people to our industry. As the pandemic dies down, the economy in mainland
believe this will drive not only our ESG performance but such as utilising bio-grease and agricultural waste to China is expected to recover, and Hong Kong will
also our business development. produce advanced biofuels and converting food waste In 2020, we continued to organise talent development return, albeit slowly, to GDP growth. At Towngas, we
into natural gas. These and other related projects programmes for different levels of employees, will continue to evaluate ways of improving both our
Preparing for a Climate Resilient are contributing towards the transition to a circular from apprentice schemes for entry level positions business and ESG performance over the year ahead in
Future economy. to our Young Towngas Leadership Competencies our journey towards a more sustainable world.
Acceleration (YTLC+) Programme for staff with
Resilience was critical not only in our response to Accelerating Innovation and Digital less than 10 years of work experience who show I would like to thank our hard-working staff who
COVID-19 but also to climate change – another Transformation leadership potential. New programmes were also remained dedicated to providing our customers
impending crisis of great importance. launched during the year for graduate trainees and with outstanding service during a difficult year, as
One of the reasons we are considered a leader in ESG staff with management potential to gain experience in well as our business partners and stakeholders in
During the year, we continued to strengthen our is our culture of innovation. It has played a key role in our mainland China businesses. These programmes the community for their faith in us. I look forward to
emergency preparedness plans and modify our our success and will continue to be a main driver in the are intended to build a succession pipeline for our continuing our collaboration with stakeholders to create
facilities so that they are capable of withstanding growth of our businesses. expanding business in mainland China. a better, greener future.
extreme weather conditions. As we understand that
we must be prepared for different climate scenarios, In recent years, we have been using digital technology Through other programmes such as Career in a
we conducted a study on how transition risks could to underpin innovation. One example is our smart Nutshell, as well as our collaborations with leading Alfred Chan Wing-kin
impact our energy-related business, both positively energy business which, in combination with big data, corporations and tertiary educational institutes, we Managing Director
and negatively. This was in accordance with the artificial intelligence and the Internet, can improve are not only creating a sustainable supply of talent
recommendations of the Financial Stability Board’s energy efficiency and reduce emissions for our for Towngas, but also for the overall development of
Task Force on Climate-related Financial Disclosures. customers in mainland China. Hong Kong.
What we have learned from our study of transition risks
and opportunities across our portfolio is helping us to Another example is our cooking appliance with anti-
develop plans to mitigate these climate-related risks scorch function, which is equipped with an intelligent
and build resilience strategies. temperature sensor. We have also developed our own
digital technologies that improve our service efficiency
As we head towards a low-carbon economy, we have and quality, such as our Riser Health Analytics System,
been expanding our city-gas business, since natural which automatically analyses inspection videos and
gas is the cleanest fossil fuel and will likely continue to identifies corrosion on gas service pipes. In addition
be a mainstream fuel source in the short-to-medium to these innovations, we added new enhancements
term in mainland China. In one of the most exciting to our online virtual assistant, Tinny, so that it is better
developments of the year, we signed a strategic able to handle customer enquiries.
8 ENVIRONMENTAL, SOCIAL AND
GOVERNANCE REPORT 2020
BUILDING A BRIGHTER FUTURE AND A GREENER WORLD 9
03 BUILDING A BRIGHTER FUTURE

AND A GREENER WORLD
The world today is facing an existential crisis of unprecedented proportions. As the challenge of environmental and
climate change becomes increasingly severe, a growing number of people are recognising the urgent need to cut
carbon emissions, reduce waste and use resources more responsibly. Digital
Transformation
How we cope with this challenge along with that of ageing populations across our world will define our future and The Facts
the wellbeing of generations to come. • The world is becoming increasingly connected online
• 5G1, artificial intelligence (AI), robotics, the Internet of Things (IoT) and big data are
At Towngas, we have been monitoring and responding proactively to megatrends. We believe that resolving
fundamentally transforming our world
the challenges we face is within our capabilities, particularly through the use of innovation and technology. It is
our hope that through the actions we are taking we can manage our risks and opportunities and contribute to Risks and Opportunities
sustainable development.
• Companies must innovate to survive and meet customers’ expectations
• Data privacy is a primary concern for customers; data leaks can damage corporate reputation
• Technology can help Towngas manage energy more efficiently and serve customers better
Towngas’ Response
• Develop a smart energy business by harnessing digital technologies, such as big data, AI
and the internet, to enhance energy efficiency for our customers
• Isolate sensitive customer information according to our dedicated Data Privacy Standing
Climate Committee
Emergency
• Implement AI in areas such as maintenance work and processing customer inquiries to
improve service efficiency and quality
The Facts
• The world needs more energy to meet the needs of growing populations
• Average temperature increase must be limited to well below 2 degrees Celsius above
pre-industrial levels, pursuing efforts to limit to 1.5 degrees Celsius, to avert environmental
catastrophe
Ageing
• The scarcity of resources is a growing concern
Population
Risks and Opportunities The Facts
• The world is experiencing an increase in extreme weather events
• People aged 65 and above will comprise over 30% of the population of Hong Kong and
• Countries are introducing new climate-related policies, regulations and environmental mainland China by 2050
pledges, such as China’s commitment to achieve carbon neutrality by 2060
Risks and Opportunities
• Taking on the challenge of sustainable energy presents opportunities for business growth
• An ageing workforce is a challenge for Towngas’ succession plans and knowledge transfer
Towngas’ Response • Older customers have special needs on our service and products, especially with regard to
• Expand our waste-to-energy business to help create a circular economy safety
• Strengthen our emergency preparedness and modify our facilities to withstand extreme • Attract young people to retain essential skills
weather conditions
Towngas’ Response
• Conducted a study to identify climate transition risks and opportunities under various
scenarios and assessed Towngas’ climate resilience • Launched Career in a Nutshell programme to make a career in the gas industry more
attractive to young people
• Develop new training programmes to build a sustainable talent pipeline
• Launched cooking appliances with an anti-scorch function for the elderly
• Introduce tailored community programmes that meet the needs of the elderly in the community
1
The fifth generation of wireless technology
10 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 2020 HIGHLIGHTS 11
04 2020
HIGHLIGHTS
Protecting the Environment
Climate Change Resources
Creating Business Opportunities • Carbon intensity of gas production (Hong Kong) • Electrical power consumption at
0.592 kg CO2e/unit of town gas Towngas’ North Point Headquarters:
↓4.29% compared with 2019
-
- ↓23% compared with 2005 baseline
Financial Green Sustainable
Performance Finance Business
• Revenue • Towngas’ • In the process of developing • Conducted a scenario analysis on • Used Gas Appliance Recycling Programme:
HK$40,927 million HK$734.4 million 2 pilot projects in Hebei climate-related transition >1,600 tonnes of metal recovered
Green Bond province to convert agricultural
risks and opportunities
• 437 projects continued to support four major waste into products such as
outside Hong Kong waste-to-energy projects furfural and/or cellulosic ethanol
• Customer accounts:
- 1.94 million smart
• Developing a
for town gas business energy business,
(Hong Kong) including solar photovoltaic power
Contributing to Stakeholders
generation systems and energy
- 31.81 million
storage facilities Employees Customers Community Suppliers
for city-gas business
(mainland China) • Number of employees • 99.99% supply • Volunteer service hours • Assessed
- 2,495 reliability rate - 16,633 hours (Hong over 170
- 2.53 million (Hong Kong) (Hong Kong) Kong employees and major suppliers
for water business customers)
(mainland China) - 51,067 in Hong Kong
(outside Hong Kong) • Set up a team of
departmental - 714,300 hours and mainland
(mainland utility employees) China on their
data protection
• Average training hours corporate social
coordinators
per employee: • Love on Delivery responsibility
to enhance the
- 17.5 hours effectiveness of the programme distributed performance
(Hong Kong) Privacy Management 30,000 fresh food
Programme packs to 1,000
underprivileged families
Ensuring Health and Safety • 5,814 customer
compliments received
Occupational Safety and Health Customers and Public (Hong Kong)
• Implemented Corporate Preparedness • Customer-related emergency reports
Plan for Infectious Diseases during (Hong Kong)
COVID-19 to protect staff and contractors ↓35% in last five years
• Serious gas-related accidents (mainland China)

↓84% in last five years
• Accident frequency rate (Hong Kong)
Strengthening Corporate Governance
- Employees : 0.32
- Contractors : 0.25 Risk Management Business Ethics
• No major incidents at our chemical
accidents per 100,000 man-hours plants (mainland China) effectiveness of our
• Ensured the • Reinforced our culture of integrity
risk management framework by and launched e-learning modules to further
continuously mitigating risks that may have a promote business ethics
significant impact on our business
12 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 2020 HIGHLIGHTS 13
Major Corporate Awards and Recognitions in 2020

iMoney Brand Awards 2020 The 8th ib Design Excellence & Remarkable
· Professional Culinary School Brand Award Brand Awards
The following awards are listed in alphabetical order. A complete list of the awards won by Towngas in 2020 is
by iMoney · Remarkable Brand – Mia Cucina
available on our corporate website.
by Interior Beauté
Award for Excellence in Training and Family Top Brand 2019 Manpower Developer
Development 2020 – Gold Award · Parents & Kids Activities – Parents & Kids Courses Award Scheme
The 19th Hong Kong Occupational Safety
· Best in Future Talent Development by ESDlife (2018 – 2020)
and Health Award
· HR Professionals’ Favourite Campaign · Manpower Developer
Global 2000 · Safety Management System Award – Gold
· 5S Good House Keeping Best Practices Award
by The Hong Kong Grand Prize Award
Management by Forbes by Employees Retraining Board
– Gold
· OSH Annual Report Award – Gold
Association
Highest Service Hour Award 2019
· Private Organisations – Best Customers · Best Workspace Infection Control Measures
Sing Tao Service Award – Silver
Participation – Honour
· Private Organisations – Category 1 – Merit
Awards 2019 · Safety Performance Award
Caring Company · After-sales Services Award (i) The Hong Kong and China Gas Company Limited
by Social Welfare Department
by The Hong Kong Council of Social Service by Sing Tao Daily (ii) Towngas Telecommunications Company Limited
China IDC Industry 2020 Home Journal Best Brand Awards (iii) U-Tech Engineering Company Limited
Quality Service Award · Best Kitchen Design (iv) P-Tech Engineering Company Limited
by Home Journal by Occupational Safety and Health Council
by China IDC Industry The 1st Greater Bay Area Business
Annual Ceremony Sustainability Index
· Ranked First
Organisation Committee Hong Kong Customer Contact
· Exemplar Level
Association Award 2019
Constituent Companies of the Hang Seng · Mystery Caller Assessment Award –
by The Chinese University
Corporate Sustainability Index Series Commerce and Public Utilities – Gold Award
of Hong Kong
· Towngas by Hong Kong Customer Contact
· Towngas China Association
By Hang Seng Indexes Company Limited
Hong Kong Service Awards 2020
Corporate Social Responsibility Award 2020 · Public Utilities
U Favourite Food Awards 2020
· U Favourite Great View Restaurant
by Capital Magazine by East Week
The 5th Hong Kong Business
by U Magazine
Customer Service Excellence Award 2019 HSBC Living Business Award Sustainability Index -
· Grand Award – Silver Award · Sustainable Supply Chain · Ranked First
· Digital Transformation Award –Gold Award Leaders · Exemplar Level
· Team Award – Field & Special Service – by Business Environment Council by The Chinese University
2019 Hong Kong Awards for
Bronze Award of Hong Kong
Environmental Excellence
· Public and Community Services –
by Hong Kong Association for Customer IFAPC Outstanding Listed
Service Excellence Companies Award 2020
Gold Award
by The Hong Kong Institute of
by Environmental Campaign
Elite Awards 2019 – Star Cooking School Award Financial Analysts and Professional
Committee
by Ming Pao Weekly Commentators Limited
The 8th Hong Kong
Employer of Choice Award 2020 IFPHK Financial Education Leadership
· Employer of Choice Award
Volunteer Award
· Corporate Award
Award 2020
· Corporate Social Responsibility Award · Corporate Financial Education Leadership –
Categories of Awards:
· Corporate Sustainability Award
by Agency For Volunteer Service Business and Service Environment Governance
Gold Award
by Job Market Publishing Limited by Institute of Financial Planners of Hong Kong Health and Safety Social
14 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 OUR ESG APPROACH 15
05 OUR ESG APPROACH

The Hong Kong and China Gas Company Limited (Towngas) is committed to putting
ESG Framework
environmental, social and governance (ESG) issues at the forefront of our business as
part of our effort to create a sustainable world. This is reflected in our Vision and Mission,
which guide us in our evolving ESG strategy for the benefit of future generations. The ESG framework we have developed takes into consideration both our positive and negative impacts on
stakeholders. It articulates five focus areas for sustainable development: creating business opportunities;
To articulate our ambition of creating a sustainable future, we developed an ESG ensuring health and safety; protecting the environment; contributing to stakeholders; and strengthening corporate
Framework that is aligned with our Vision, Mission, Commitment and Responsibility. This governance.
framework has been endorsed by our ESG Committee.
Our framework centres on our philosophy of “Growth = innovation x implementation”. Under this philosophy, we
invest in innovation and creativity through research and development while also encouraging our employees to
propose new ideas.
We will continue to focus on these five areas in order to achieve the long-term sustainability of our business and
VISION create shared value for our stakeholders.
• To be Asia’s leading clean energy supplier and quality service provider, with a
focus on innovation and environmental friendliness.
Creating Business Ensuring Health

Opportunities and Safety
MISSION
• To provide our customers with a safe, reliable supply of energy and the caring, Diversify our Manage our operations
portfolio for business safely and responsibly and
competent and efficient service they expect, while working to preserve, protect development provide a safe and healthy
and improve our environment. growth and deliver environment for our
sustainable economic employees and workers
performance
COMMITMENT
• To conduct ourselves in an ethical and transparent manner so that all
stakeholders know we are accountable to them for the decisions and actions
Strengthening Protecting the
Corporate Environment
we take to become a sustainable business. Governance
Reduce our
Uphold strong environmental footprint
corporate governance and combat climate
standards and operate change
RESPONSIBILITY ethically
• To recognise the importance of our employees and their contributions to the Contributing to
success of our business, and our responsibility to keep them safe, informed, Stakeholders
engaged and equipped to undertake our mission.
Create value for all of
our stakeholders and
the communities in
which we operate
Supporting the Sustainable Development Goals

Make cities and human settlements inclusive, safe,
resilient and sustainable
As a responsible energy supplier, we support the United Nations Sustainable Development Goals (SDGs) so that
we can help to overcome the global challenges we all face and achieve a better and more sustainable future. Potential Impacts Actions Taken/Achievement
Provide a safe and reliable • Town gas supply reliability: 99.99%
supply of energy
Among these SDGs, we selected four that are most relevant to our operations and value chain and could • 84% reduction of serious gas-related accidents (mainland
Promote recycle and reuse China) in last five years
make the greatest positive contribution. We also took into consideration any potential negative impacts on our
within our company’s
operations, including our risks to people and the environment, and decided which of our products, services or businesses and for • In the process of developing 2 pilot projects in Hebei province to
investments would contribute most to the SDGs. In addition, we reviewed the impacts and contributions of all customers convert agricultural waste into products such as furfural, paper pulp
and cellulosic ethanol
SDGs for our company at each stage of our value chain. Produce both hazardous
and non-hazardous waste • Expanded hydro-treated vegetable oil (HVO) plant in Zhangjiagang
during business operations city to convert inedible bio-grease feedstock into an advanced
To help our staff understand Towngas’ commitment to the four SDGs, we organised seminars on each SDG biofuel, bringing annual production capacity to 250,000
and along the value chain
during the year. tonnes
• >1,600 tonnes of metal recovered through Used Gas
How we are contributing to SDGs Appliance Recycling Programme
Ensure availability and sustainable management of

water and sanitation for all Take urgent action to combat climate change and
its impacts
Potential Impacts Actions Taken/Achievement Potential Impacts Actions Taken/Achievement

Deliver a safe and reliable • 2.53 million customer accounts with drinking water up to Promote a low-carbon climate-related transition risks and
• Identified
supply of drinking water to national standard lifestyle along our value chain opportunities under various scenarios, and assessed
our customers Physical and transition risks Towngas’ climate resilience to align with Task Force on Climate-
• 3rd reverse osmosis system to be installed at Tai Po Gas related Financial Disclosures (TCFD) recommendations
Production processes that affect our operations and
Production Plant businesses
consume/generate • Climate Change Risk Assessment extended from Hong Kong to
significant amount of water/ Generate greenhouse gas mainland China
wastewater emissions that accelerate
• 23% reduction of carbon intensity in Hong Kong compared
climate change
with the 2005 baseline
• Partnership with green groups to promote environmental protection
and sustainable development
Ensure access to affordable, reliable, sustainable and
modern energy for all
Potential Impacts Actions Taken/Achievement

4 3 2
Expedite our coverage of 1
• 1.94 million town gas customer accounts in Hong Kong 5
gas supply and promote
17
31.81 million city-gas customer accounts in mainland China
6
fuel conversion to gas •
16 15 1
7
Develop a clean energy • Increased resources for town gas production – Landfill gas
8
business accounts for approximately 1% of our fuel mix
4
9
13
12 11 10
Fossil fuels as the major distributed energy systems
• Continued to develop
raw materials of town gas
and smart energy businesses
production
• 2 research facilities in Shanghai city and Suzhou city, with ongoing
research for launch of biomass utilisation and sustainable aviation
fuel in 2021
Managing ESG at Towngas Stakeholder Engagement
Towngas has established an ESG Committee that is responsible for overseeing the Company’s ESG strategies, policies We engage in ongoing dialogues with stakeholders in order to understand their expectations of Towngas with
and practices. Headed by the Managing Director of the Company, Mr Alfred Chan Wing-kin, this Committee comprises regard to our sustainability performance. From what we learned in these discussions, we are able to formulate
eight Executive Committee members and two members of senior management. The Chairman, who is appointed by an ESG strategy that answers their concerns, reduces our risks and aligns with their values.
the Towngas Board of Directors, reports ESG matters to the Board.
Stakeholder Engagement Approach
Together, the ten members represent different areas of our business, including operations, finance, human resources,
engineering, commercial, health, safety and the environment, and community engagement. The Committee is thus able Our key stakeholders comprise both internal and external stakeholders who are significantly affected by our
to facilitate the decision-making of the Board and contribute to the sustainable growth of the Company. operations, or are expected to be affected by our business, as summarised in the graphic below.
The ESG Committee is responsible for identifying and reviewing ESG issues, risks and opportunities; tracking Regular Engagement Channels
ESG performance and recommending strategies to improve it; reviewing and evaluating the annual ESG
Report and recommending its endorsement by the Board/Executive Committee; and providing updates to the
• Employee surveys and meetings • Publications
Board/Executive Committee on the latest relevant ESG matters.
• Feedback channels (e.g. suggestion (e.g. newsletters and leaflets)
boxes, Talk to MD) • Company websites, social media
In 2020, the ESG Committee met on two separate occasions. • Internal publications (e.g. bulletins, platforms and the Towngas App
newsletters) • Regular maintenance visits, safety
Members of the ESG Committee
• Intranet inspections and safety talks
Employees
Mr Alfred Chan Wing-kin (Chairman) Mr Daniel Fung Man-kit* • Ambassador programmes/activities Customers • Customer Focus Team
Managing Director Head of Strategy & Innovation and Commercial – Hong Kong Utilities • Social media platforms (e.g. Yammer • Surveys and focus groups
Mr Peter Wong Wai-yee Mr Martin Kee Wai-ngai* in Hong Kong, WeChat and Weibo in • Customer Service Hotline
Deputy Managing Director Executive Vice President, Hong Kong and China Gas Investment Limited
mainland China) • Customer centres
Mr John Ho Hon-ming and Hua Yan Water
Executive Director, Chief Financial Officer and Company Secretary Mr Isaac Yeung Chung-kwan
Mr Philip Siu Kam-shing Head of Corporate Affairs
Chief Operating Officer – New Energy Business Mr Victor Kwong Chiu-ling • Seminars and workshops • District Council Focus Team
Mr Simon Ngo Siu-hing General Manager – Corporate Sustainability • Supplier assessment system • Community programmes
Head of Engineering – Hong Kong Utilities (e.g. factory audits) • Working Committees
Local
Miss Fan Kit-yee • Management meetings and supplier Communities • Towngas Volunteer Service Team
Contractors
Head of Corporate Human Resources * New members (effective 1 July 2020) and Suppliers conferences
• Site/factory visits
Key ESG Topics Discussed by the ESG Committee • Green partnerships and community
programmes
The Committee was briefed on the new requirements of the Hong Kong Stock Exchange’s • Annual General Meeting • Meetings
ESG updated ESG Reporting Guide and discussed the approach that should be taken to meet the • Annual and interim reports NGOs • Questionnaires
Reporting new requirements. The Chairman of the Committee reviewed the 2020 materiality assessment
• Analyst and investor briefings for
and acknowledged the changes in material issues from the 2019 materiality matrix.
interim and annual results
• Company website (especially • Working groups and committees
The Committee discussed the increasing interest in ESG issues among stakeholders and our the “Investor Relations” Section’s • Seminars, visits and workshops
ESG
approach for enhancing Towngas’ ESG performance. Related preparation work, including the Announcements and Circulars Professional
Enhancement Bodies
establishment of targets under the ESG framework, is continuing. and other correspondences) and and Regulators
publications
Investors • Non-deal roadshows
The Committee was briefed on the ongoing work to align with the recommendations of the
Climate • Investment conferences
TCFD. The Committee acknowledged the key transition risks and opportunities, as well as the
Risks and • Investor meetings and telephone
resilience of Towngas’ assets and operations under different scenarios. For more details on the
Opportunities conferences
study, please refer to the Climate Transition Risks and Resilience section.
• Meetings and regular communications
The Committee reviewed and supported the community initiatives undertaken by Towngas in with credit rating agencies (S&P and
Community Moody’s)
2020, in particular initiatives related to COVID-19. For more details on our community initiatives
investment • Site visits
during the year, please refer to the Community section.
Towngas 2020 Materiality Matrix
Case Study
8
9 8
In 2020 we launched our ESG Enhancement Plan with the aim of improving our ESG performance and 19 9
7 10 11 19
20 25 20 25
7 10 11
awareness. We also organised the first Group-wide Sustainability Award, which encourages our staff and project 21 35 38
26 13
21 35 38
26
13 12 36 32
companies to create innovative, long-term sustainable development projects. Three awards were available: 12 36 32
22
24 15 34
22 27 33
Environmental Social Sustainability 24 15 34 37
14
Participation Award 27 33 17
Importance to stakeholders
Excellence Award Award 37
to promote the use of to recognise our joint to acknowledge
advanced technologies in ventures and departmental project continuity 23 3
39
18
waste treatment, as well as efforts to combat the and influence 40
29
continuous waste reduction COVID-19 pandemic through
and recycling innovative measures, social
participation and employee
caring programmes
A series of ESG trainings and publications, as well as other ESG related activities, will be rolled out in 2021.
16
Materiality Assessment 1
28
2
To ensure our ESG Report addresses topics that reflect Towngas’ significant economic, environmental and social
impacts, we conduct a series of stakeholder engagement activities every year. 30 5
4
31 6
In preparing our materiality assessment, we adopted the internationally recommended three-step process of Impact of Towngas' business on the economy, environment and society
Identification, Prioritisation and Validation. Less Important Important Very Important
We mapped the materiality of 40 issues, with the most important issues listed at the top right quadrant of the
matrix, while less important issues are found at the bottom left. Issues shown in the middle of the matrix are those Creating Business Opportunities Contributing to Stakeholders
we have identified as emerging in importance. 1 Direct economic value 19 Employment management system
2 Financial risks and opportunities associated with ESG issues 20 Employer-employee relations
A total of 23 issues were prioritised as material for Towngas to address and report on. 3 Direct economic contribution 21 Training and development
4 Indirect economic impacts 22 Diversity, equal opportunity and non-discrimination
The material issues identified remain similar to those of last year, with safety and customer privacy continuing to be 5 Economic impacts of procurement practices 23 Respect for the rights of association and collective
the most important. Additionally, two emerging issues were identified as important: supply security and reliability, 6 Reserves and production bargaining
and a future-proof workforce. This indicated that our stakeholders are concerned with how we guarantee the 24 Responsible marketing communications
supply of goods and services, as well as how we upskill employees and attract new talent with the skills needed 25 Quality management and after-sales service
to capture opportunities arising from emerging technologies, automation and digitalisation. Ensuring Health and Safety
26 Customer privacy and cybersecurity
7 A safe and healthy work environment
27 Supplier environmental and social assessment
8 Asset integrity and process safety
28 Community engagement, impact assessment and
9 Customer health and safety
investment
Identification Prioritisation Validation 10 Project/engineering quality assurance
29 Respect for indigenous rights
11 Emergency preparedness
• Reviewed and adopted ESG • Results of the survey • The prioritised list 30 Involuntary resettlement
issues from previous stakeholder were consolidated, of material issues 31 Participation in public policy
engagement exercises analysed and assessed was presented to Protecting the Environment 32 Future-proof workforce*
to identify a prioritised the Towngas ESG 12 Greenhouse gases and other air emissions 33 Supply security and reliability*
• Emerging ESG issues were also list of potentially material Committee members 13 Water and effluents 34 Accelerated digitalisation*
included issues for discussion and
14 Waste 35 Provision of community crisis support*
validation
15 Energy
• Over 450 external and internal • A materiality matrix
Towngas stakeholders in Hong was then formulated to 16 Materials Strengthening Corporate Governance
Kong and mainland China plot the ratings based 17 Protection of ecosystem services
36 Anti-corruption
completed an online survey to on their importance 18 Fossil fuel substitutes
37 Prevention of anti-competitive practices
confirm or rate the importance of to Towngas and to
ESG topics in relation to Towngas’ stakeholders 38 Prevention of child labour or forced labour
businesses and operations 39 Respect for human rights
40 Protection of intellectual property rights
* Emerging issues
The table below prioritises the top 23 material issues for Towngas to address and report on in 2020 and their Stakeholder Engagement Results and Our Response
corresponding boundaries, where the impacts occur and Towngas’ involvement in them.
In line with our annual arrangement, in 2020 we organised focus group sessions, telephone interviews and an
Boundaries online survey with our internal and external stakeholders. Through this exercise, we came to understand the
key issues that are important to our stakeholders, such as exploring new business opportunities and further
Material Issues Contractors Impacts strengthening our health and safety measures during the pandemic. Recognising the importance of these issues
Employees and Customers Community to stakeholders allows us to focus on improving our performance.
Suppliers
7. A safe and healthy work environment The table below indicates the key issues and stakeholder feedback from the engagement process and our
corresponding responses:
8. Asset integrity and process safety
Ensuring
9. Customer health and safety Health and
Safety
10. Project/engineering quality assurance New Business
Our Response
Opportunities
11. Emergency preparedness
Explore different renewable We understand that we are heading towards a decarbonised world.
12. Greenhouse gases and other air emissions energy development or Towngas has considered its business model and explored opportunities
Protecting environmental protection that may arise from this transition. As gas continues to play an important
13. Water and effluents the business options in the market. role as a lower-emissions fossil fuel for the transition, we are diversifying our
Environment
15. Energy portfolio to pursue a low-carbon and circular economy. Please refer to the
Transitioning to a Low-carbon Future section for more details.
19. Employment management system Stakeholders’ Feedback
20. Employer-employee relations
21. Training and development Our Response

Innovation
22. Diversity, equal opportunity and non-discrimination
Adopt further innovations to Building a culture of innovation is important to our business development
24. Responsible marketing communications Contributing create business opportunities. and for addressing sustainability challenges. We have established various
to platforms and initiatives to encourage creativity among our employees,
25. Quality management and after-sales service Stakeholders instil an innovative mindset and promote the growth of our business. We
will further expand our communication channels to share our innovation
26. Customer privacy and cybersecurity Stakeholders’ Feedback
experiences across the value chain and spread related knowledge.
27. Supplier environmental and social assessment

Please refer to the Innovation in Action section for more details.
32. Future-proof workforce*
33. Supply security and reliability* Pandemic Our Response

Response
36. Anti-corruption
A dedicated taskforce, led by our top management, has been established to
Ensure a safe and healthy
provide comprehensive measures to protect our employees, contractors and
37. Prevention of anti-competitive practices environment for our stakeholders
customers. Please refer to the Safety during the COVID-19 pandemic
Strengthening and support our community.
38. Prevention of child labour or forced labour section for more details.
Corporate
Governance
39. Respect for human rights Various programmes were also launched to address the needs of the
Stakeholders’ Feedback community; more details are available at the Supporting people during
40. Protection of intellectual property rights COVID-19 section.
* Emerging issues
Key Innovation Projects

Innovation in Action
Innovation is an important element of our corporate culture at Towngas. To encourage new and innovative As an innovation-driven company, we are taking advantage of the trend in digital transformation to produce
ideas that benefit our business, we have established a number of platforms and initiatives that inspire our advanced new features that make our gas facilities safer and more convenient for customers. Many of the
staff and help them to acquire an innovative mindset. innovations developed at Towngas, including those that are part of our smart home concept, are created by our
staff with financial assistance from our Innovation Funding programme.
The Innovation Funding programme we set up in Hong Kong in 2016 provides financial incentives for our staff
to develop creative new proposals that support our business expansion in any part of the Company. In 2019, Optical Light Back Protection Device
the Funding was extended to mainland China. So far, we have disbursed up to HK$1.78 million in grants for
21 projects undertaken in both Hong Kong and mainland China. In 2020, four new projects were approved This Optical Light Back Protection Device detects light instead of sensing temperatures inside a gas cooking
and under development. appliance. As a result, the detection time is shortened, reducing the possibility of damage to the appliance while
also contributing to better gas safety.
We also share information about emerging technologies at Towngas and the industry through our publication,
Innovation Headlines , as well as through seminars, company tours and social platforms such as Facebook, Smart Gas Meter
Yammer and WeChat.
By adding an internal valve and intelligent control logic unit, our smart gas meters now include over-
flow detection, continuous leakage detection and regular safety inspection alert functions. This ensures
Innovation Platforms at Towngas the gas supply is automatically cut off and that Towngas is notified if any
abnormalities are detected.
We also introduced a new device which was invented to upgrade the

Dream Zone meters currently in use in older buildings. This device could be mounted
Dream Zone is a collaborative, relaxed easily onto the gas meter to automatically report the meter reading to our
venue conducive to creative thinking. system via home Wi-Fi on a monthly basis, thus eliminating the tedious
It provides information on various chore of taking meter readings manually while enhancing accuracy of
innovation tools with a space reserved meter reading.
for brainstorming.
Towngas Hall of Innovation

This showcase of original concepts Thanks to the Innovation Funding programme, we were able to develop the Water Heater
developed by colleagues features ideas Hydropower Generator Module, which converts the energy generated by flowing water
that have enhanced Towngas’ service into electricity for igniting an appliance. Batteries are no longer required.
and efficiency. It was relocated to a
larger venue in 2020 in order to display From concept to development, the
more inventions in future. entire project took us nearly two years
to complete, and installation of the
module in existing water heaters is
G = i x i Lab ongoing. The module not only adds
convenience for our customers but
The G = i x i Lab, equipped with a also reduces the impact of discarded
3D printer and scanner, is a place batteries on the environment.
where staff can turn creative ideas into
practical applications.
26 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 CREATING BUSINESS OPPORTUNITIES 27
06 CREATING BUSINESS
OPPORTUNITIES
Turning Promises into Action
Although global carbon emissions fell by a record 7 per cent in 2020 because of the
COVID-19 pandemic, this was only a temporary respite from issues associated with
the worldwide climate emergency. At Towngas, we have the resources, expertise and
determination to take on the challenges of climate change through the innovative
research we do in green technologies and the investments we make in green businesses.
With these and the other measures we have undertaken, we are well positioned to make
a significant contribution towards a more sustainable future for our stakeholders and the
world at large.
Management
Approach
In line with our vision to be Asia’s leading supplier of clean energy, we have been developing more sustainable
forms of energy that will substantially transform our business in years to come.
We recognise that the global energy transition currently under way poses not a challenge to our business of
supplying gas in Hong Kong and mainland China, but an opportunity. By diversifying into related businesses such
as clean energy and smart energy, we can play a leading role in this transition.
Beyond developing new forms of energy, we will also continue to capture business opportunities in sectors such
as waste treatment, water supply and telecommunications. By taking advantage of these opportunities, we can
remain commercially competitive and thrive under the new green economy.
Progress
Areas NEW ENERGY AND
DIVERSIFIED BUSINESSES
Growth of Our Business
Towngas is a limited liability company incorporated and headquartered in Hong Kong and listed on The Stock
Exchange of Hong Kong Limited (Stock Code: 3). Founded in 1862, Towngas was Hong Kong’s first public
• Green energy
utility. Today, we are one of the largest energy suppliers in Hong Kong, operating with world-class corporate • Telecommunications
management and leading-edge business practices. For the past years, Towngas has evolved from the simple gas • Information technology
company supplying fuel for street lamps to our current leading position in the energy industry of mainland China • Civil and building services engineering
and beyond. • Manufacture of gas-related products Vehicle fuel:
In addition to our Hong Kong operations, Towngas today has a portfolio that includes 436 projects1 in
5 LPG refilling stations
(Hong Kong)
27 provinces, autonomous regions and municipalities in mainland China, as well as one in Thailand.
>40 LNG/CNG refilling stations
in operation or under construction
For details on the changes in our business portfolio during the year, please refer to our Annual Report 2020. (mainland China)
Aviation fuel:
Business Profile in 2020 approximately
3.3 million tonnes
HONG KONG MAINLAND UTILITIES (Hong Kong)
Coalbed
methane LNG:
• Town gas • City-gas approximately
• Sales of branded gas appliances • Midstream facilities 180,000 tonnes
• Water supply and wastewater treatment (mainland China)
• Sales of gas appliances and kitchen furnishings
• Smart energy projects
Coal Methanol: Methanol Waste oil HVO:
approximately
Town gas sales: Gas sales:
>254,000 tonnes 88,000 tonnes
27,947 million MJ 26.9 billion m3 (mainland China)
(mainland China)
Customer accounts served: Number of city-gas customer accounts: Coal Ethylene glycol:
Ethylene
glycol
>1.94 million 31.81 million approximately

30,000 tonnes
Sales of gas appliances: Sales of gas appliances: (mainland China)
>250,000 units >800,000 units Data centres:
Water sales: 7 in Hong Kong and mainland China,

917 million tonnes accommodating up to 16,000
Number of water customer accounts: server racks
2.53 million
1.
2019 year end: 406 projects, inclusive of city-gas projects re-invested by the Group’s companies For a full summary of Towngas’ roles and services, please refer to the Appendix I: Our Roles and Services section.
Business Coverage in 2020 Financial Analysis
Revenue
HK$40,927 million
Capital Expenditure
Heilongjiang HK$7,295 million
Jilin
Manpower Costs
Liaoning
HK$3,284 million
Inner Mongolia Beijing

Gansu Analysis of Expenditures
2%
Customer Services
Hebei
58% 2%
Distribution
Shanxi Fuel Cost
Ningxia
3%
Other Expenses
Shandong Yellow Sea
8%
Marketing &
Towngas Group Hong Kong headquarters Henan Jiangsu Equipment Costs
Piped city-gas projects (Towngas)
Piped city-gas projects (Towngas China)
10%
Corporate
Liquefied natural gas receiving stations
Shaanxi Administration
Provincial natural gas pipeline networks Sichuan

Hubei
Anhui
Shanghai
17%
City high pressure pipeline networks/ Other Production
Underground gas storages (Towngas) Costs
City high pressure pipeline networks Chongqing
(Towngas China)
Upstream projects (Towngas) Zhejiang
Upstream project (Towngas China) East China Sea Analysis of Revenue
Smart energy Hunan
Distributed energy systems Guizhou Jiangxi Fujian 7%
Equipment Sales and
CNG/LNG refilling stations (Towngas)
37% Maintenance Services
CNG refilling stations (Towngas China) Gas Sales
(Industrial)
Water/Waste treatment
Yunnan Guangxi
Guangdong 8%
Telecommunications Gas Connection
Income
Coal mining
Thailand Thailand
Coal-based chemicals
Hong Kong
13%
Coal logistics Phetchabun Phetchabun Water, Oil, Coal,
Hydro-treated,
Biomass Vegetable Oil related
Oilfield Sales and Others
Others (Towngas) 21%
Others (Towngas China) Hainan
Gas Sales
(Residential) 14%
Gas Sales
(Commercial)
Green Financing Transitioning to a Low-carbon Future
Our green initiatives are financed according to our Towngas Green Bond Framework. In late 2017, we became Towngas is helping to fulfil the demand for the energy required to power economic growth as well as reduce
the first energy utility in Hong Kong to issue green bonds. We obtain post-issuance stage certification from the emissions contributing to climate change. The challenge of sustainable energy presents an opportunity for the
Hong Kong Quality Assurance Agency (HKQAA) under its Green Finance Certification Scheme in order to reinforce
growth of our businesses, as we transition to a more sustainable business model:
investor confidence.
More information about our Green Bond Framework is available on our corporate website.
City-gas City water Conventional fuels
Use of Proceeds
Our Green Bond was issued through a HK$600 million (ISIN HK0000375300) and a JPY2 billion
(ISIN XS1720566790) transaction under the Medium-Term Note Programme. Proceeds from the green bond of Smart energy City-waste Biomass fuels and
systems treatment chemicals
HK$734.4 million have been allocated to the following four waste-to-energy projects:
Estimated Amount and

Project Category Location Equity Project Cost Ratio Allocated
(millions) (HK$ millions)
ISIN ISIN
HK0000375300 XS1720566790
Landfill Gas Utilisation Tseung Kwan O, 100% HK$350 145.0 35.0
Hong Kong (24.3%) (25.4%)
Kitchen Waste Processing Suzhou city, 55% RMB220 23.0 24.0

(Waste to Energy) Jiangsu province (3.9%) (17.5%) The Role of Natural Gas in Energy Transition
Hydro-treated Vegetable Oil Zhangjiagang city, 100% RMB935 400.0 56.0
(Waste to Energy) Jiangsu province (67.0%) (40.7%) As a leading energy supplier in Hong Kong and mainland China, we see natural gas as a critical component in the
Agricultural Waste to Green Tangshan city, 100% RMB355.5
transition from fossil fuels to renewables.
28.9 22.5
Chemicals and Paper Pulp Hubei province (4.8%) (16.4%)
Towngas has been working closely with commercial and industrial customers, such as hotels, hospitals and
commercial laundries, to switch from coal/diesel to gas. We are also promoting the use of gas-powered desiccant
Project Update
dehumidifiers to improve indoor air quality and reduce energy consumption, thereby lowering carbon emissions.
Estimated In 2020, we worked with Hong Kong Baptist Hospital to install the first integrated desiccant system for hospital
Project Category GHG reduction Project Progress
(tCO2e/yr) wards in Hong Kong. Having proved the greater effectiveness of these dehumidifiers over traditional versions, we
are planning to introduce them in mainland China, especially in hospitals and hotels.
Landfill Gas Utilisation 12,200 • In full operation in 2020
• Sent out 191TJ equivalent synthetic natural gas to town
In 2020, we extended our city-gas business in mainland China to 23 provinces, autonomous regions and
gas network in 2020
municipalities, and served approximately 31.81 million customer accounts. A new agreement was recently signed
Kitchen Waste Processing 5,900 • Officially commissioned in September 2020
with Shanghai Gas Company Limited (Shanghai Gas) to strengthen our business growth, profit potential and
assets size, and promote the long-term growth of the natural gas industry. Shanghai Gas is the major energy
(Waste to Energy) • Handled 92,000 tonnes of wastes in 2020
supplier to the city of Shanghai, with a share of more than 90 per cent of the local natural gas market.
Hydro-treated Vegetable Oil 259,000 • Officially commissioned in Q3 2020
(Waste to Energy) • Produced 88,000 tonnes of HVO in 2020 We are also expanding our own gas storage capacity on the mainland with the construction of a natural gas
• Received International Sustainability and Carbon storage facility in underground salt caverns in Jintan district, Changzhou city, Jiangsu province. Construction of
Certification for the fourth year this project is proceeding in phases. Total storage capacity will eventually reach 1.1 billion cubic metres, enabling
the Group to supplement gas supplies in eastern China during the peak winter period.
Agricultural Waste to Green 120,000 • In partial trial production and is expected to commence
Chemicals and Paper Pulp full-scale trial production in Q2 2021
• Expected to be commissioned in Q3 2021
In addition, we are developing a smart energy business One example is the research and development we HVO from Inedible Bio-grease
that includes solar photovoltaic power generation have been carrying out on biomass utilisation through
systems and energy storage facilities. Coupled with our wholly owned subsidiary, ECO Environmental In Zhangjiagang city, Jiangsu province, we established our first hydro-treated vegetable oil (HVO) plant for
the application of big data, artificial intelligence and Investments Limited (ECO), the business platform we converting inedible bio-grease feedstock into advanced biofuels with International Sustainability & Carbon
the Internet to enhance energy utilisation and dispatch founded 20 years ago for pursuing opportunities in new Certification (ISCC). These fuels offer a significant reduction in greenhouse gas (GHG) emissions as
efficiency, Towngas is helping to conserve energy and energy. It has developed proprietary technologies for compared with traditional fossil diesel. Construction of the plant’s second phase was completed in 2020,
reduce emissions, while also generating economic converting inedible bio-grease and agricultural waste into increasing total production capacity to 250,000 tonnes per year.
benefit. high-value products, which have been implemented in a
number of projects. In 2020, the HVO facility produced around 88,000 tonnes of HVO, of which 90 per cent was sold to
Development of New Energy and Europe. The production of HVO saved around 259,000 tonnes of carbon emissions. We are now exploring
Unconventional Energy Towngas will continue to invest resources on other markets such as North America for this product.
environmentally-friendly innovative technologies to
In the process of bringing about the transition to cleaner create a better future. We are also planning to
fuels, we have identified several opportunities that are put into trial production
playing an increasingly important role in our business sustainable aviation fuel
development. using biofuels in 2021.
High-value Products from Low-grade Feedstock Since our HVO processing

technology has proven to
Liquefied Natural Gas Ethylene Glycol and Methanol be so successful, we are
Conversion of coalbed Clean coal chemical plant in now exploring possible
methane in Shanxi Inner Mongolia sites for new plants in other
province areas.
Hydro-treated Vegetable Oil Natural gas

Upgrade of inedible waste oil Organic waste resource
in Zhangjiagang city utilisation in Suzhou city and
Tongling city
Cellulosic ethanol and/or green chemicals such as furfural and paper pulp
Conversion of agricultural waste in Hebei province
Organic Waste Resource Utilisation
We established our first organic waste resource utilisation project in Suzhou Industrial Park, Suzhou city, Jiangsu
province. Currently, this organic waste resource utilisation plant can process up to 500 tonnes daily of organic
wastes for conversion into natural gas. In 2020, it processed 92,000 tonnes of organic wastes from nearby
Utilisation of Agricultural Waste
catering businesses that helped our downstream customers to reduce 5,900 tonnes of carbon emissions. When
construction of the second phase of this plant is completed in 2021, daily processing capacity will increase to
Towngas has developed a new technology that utilises agricultural waste such as straws and corn cobs for the
800 tonnes.
production of cellulosic ethanol, an advanced biofuel, as well as paper pulp and furfural, a chemical that can be
used as a building block for renewable fuels. Two pilot projects in Hebei province, which will each process 240,000
Another food resource waste utilisation project is located in Tongling city, Anhui province with a daily processing
tonnes of agricultural waste annually, are expected to commence trial production in 2021.
capacity of 100 tonnes of food waste. When the second phase of this project goes into operation in 2021, the
plant’s food waste processing capacity will be doubled.
Feedstock for these plants is available in abundance as mainland China produces massive amounts of agricultural
waste each year, giving this renewable resource a valuable role to play in the replacement of non-renewable
Towngas is also exploring additional food waste treatment projects in other cities.
resources such as crude oil.
36 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 ENSURING HEALTH AND SAFETY 37
07 ENSURING HEALTH
AND SAFETY
The safety of all our stakeholders is of paramount importance to Towngas. Our

target is to achieve zero accidents among our staff and contractors and to continue
providing customers with a safe and reliable supply of energy, while also maintaining a
high standard of safety at our facilities.
In accordance with our commitment to safety, we organise occupational safety and

health (OSH) programmes for our staff and contractors. We also develop smart
appliances with safety features that address the needs of an ageing society and
introduce advanced technologies such as artificial intelligence (AI) and big data
analytics to further improve the safe operation of our network.
Occupational
Safety and Health
2020 Performance Highlights Future Actions and Targets
Established a dedicated taskforce to Keep zero accidents as our

implement comprehensive measures
Zero
accidents
target for health and safety
in response to COVID-19
Accident frequency rate (Hong Kong):

Employees: 0.32 Extend ISO 45001 certification to
Contractors: 0.25 subsidiaries
accidents per 100,000 man-hours
11,676 safety training hours

Organise Safety
Supervision
(Hong Kong)
Technique Workshops for
1,158,454 safety training hours
frontline supervisors
(mainland China)
Instill a safety culture among

our mainland employees
regular meetings of these committees. The details of Our accident frequency rate increased in 2020
Management our HSE management structure are available on our Progress because of a number of incidents in Hong Kong,
Approach corporate website. Areas including one in December 2020 when six employees
were injured in an industrial accident caused by a
Various reporting channels and promotion schemes, third-party gas pipe damage in Wan Chai. In order
We are committed to protecting our staff, contractors, such as our HSE Suggestion Scheme, Near-
Enhancing Safety to prevent the recurrence of a similar accident, a
customers and the general public against health and
miss Reporting Programme and Instant Messaging
Performance and Awareness thorough investigation was conducted to identify the
safety risks. This commitment and our approach root causes and key learnings from this case. Drawing
HSE Reporting Channel, have been set up so
to safety management are clearly outlined in our During the year, we continued to work ceaselessly to on what we learned, we conducted a comprehensive
that employees and contractors can report work-
Corporate Health, Safety and Environment improve our safety performance across Towngas. We review of the relevant operating procedures, as well
related hazards and near-miss cases for rectification
(HSE) Policy. carried out 168 safety/loss prevention inspections to as our emergency preparedness and response.
and improvement. To encourage reporting, we
ensure safety measures were in place and to maintain a We will advise our employees about the enhanced
Towngas aims for a record of zero accidents and fully reward workers who flag cases and provide procedures recommended in our review on handling
incentive schemes to contractors who demonstrate safe and healthy work environment.
complies with all relevant health and safety legislation. specific types of gas emergencies.
This goal is supported by an OSH management responsibility, awareness and a high level of safety
performance. In 2020, no fatalities occurred among our employees and
system, which is established in accordance with In 2020, we held a series of Seasonal Occupational
international standards such as ISO 45001. The contractors as a result of an accident.
Safety and Health Promotion training sessions.
system comprises a comprehensive register of risks Training and Awareness Provided every quarter, the training covers topics
to identify work-related hazards through risk analysis Since obtaining ISO 45001 certification in 2019, we
such as infectious disease control, prevention of
and risk evaluation, as well as control measures for A standard training procedure has been established have been assisting our subsidiaries, including ECO
heat stroke, and work stress management. When
continual improvement. In the event of an accident, that enables us to determine the needs of our workers and U-Tech Engineering Company Limited (U-tech),
we will conduct an investigation to determine the training programmes could not be taught in a face-to-
and assess their competence, knowledge and to become ISO certified. In 2020, both subsidiaries
cause and identify ways to prevent its recurrence face setting, as was the case during the COVID-19
ability to understand the hazards, risks and control successfully received certification.
under a hierarchy of control framework. pandemic, we made extensive use of electronic
measures associated with their work. platforms and webinars to deliver programme
The following graphics show the safety performance of
A Corporate Health and Safety Manual is also in place materials.
To help our staff and contractors deepen their our employees and contractors in Hong Kong in 2020.
to outline the framework of the OSH management
system, with standard operating procedures and understanding of our safety culture, we organise
Reportable Accidents1 We also organised a number of OSH programmes
detailed guidelines. These documents are regularly training courses, workshops and activities. A Towngas for contractors, including a training session and the
reviewed and updated to ensure our practices comply HSE and Caring Programme is also in place to 2020 Safe Foreman Award event, to promote accident
with the latest industrial practices and government provide mentorship and HSE training for new joiners. Accidents
Employees 18 prevention and OSH supervision.

regulations. Additionally, we make the Towngas Contractor Safety
Handbook available to our contractors and provide Contractors 11 Due to the COVID-19 pandemic, our annual joint
In mainland China, we have helped our joint venture free safety briefings to their staff operating in various
safety programme organised with our mainland China
(JV) partners to establish in-house corporate safety
JVs — the HSE Walk — was cancelled this year.
roles. Examples include safety for work above ground
1
Accidents that result in incapacity for more than three days
standards and provided guidelines for improving and in confined spaces, as well as excavation work
safety management. Nevertheless, we continued to help our mainland
close to our gas pipelines.
Accident Frequency Rate2 China operations catch up with currently recognised
Monitoring and Reporting OSH standards and standardise their OSH
In our training programmes and before a new project
Accident 2020 management.
begins, we inform workers about any associated Frequency Rate
The health and safety performance of the Company

safety and health concerns there might be and the Employees 0.32
is monitored by the Corporate Sustainability
Department as well as the Corporate Safety and
emergency handling procedures they should take. Contractors 0.25
Quality Management Steering Committee. We have Health and safety messages are disseminated
through communication channels such as Towngas Number of accidents per 100,000 man-hours
2
11 HSE Committees to provide opportunities for
two-way communication on safety and health issues. publications, emails and online library.
Management, supervisory staff, non-managerial
staff and contractors are invited to participate in the
To ensure our employees can enjoy a friendly, Preventive Measures measures to minimise the risk of infection included special
Enhancing Employee Wellbeing
suppor tive and stress-free work environment, arrangements for service staff visiting customer premises
We understand that the wellbeing of our employees, we provide free clinical medical services, fitness At Towngas premises, including corporate offices and gas in buildings with confirmed cases and guidelines advising
including their physical and mental health, is essential facilities and a mother care room in our North Point production plants, automatic body temperature scanners technicians to wear advanced PPE when providing services
for maintaining a happy and productive workforce. headquarters. In 2020, we replaced face-to-face were set up in order to detect potential cases of infection. at customers’ premises. Health seminars and educational
activities with online programmes, including home We also applied and distributed nano photocatalytic activities related to COVID-19 were also organised.
fitness classes with yoga and Pilates, cooking classes, long-acting disinfectant spray in our workplaces and
health tips and health talks by medical practitioners. high traffic areas, and developed our own ultraviolet-C Customer Protection
We also shouldered the cost of seasonal influenza disinfection device to sanitise areas such as conference
vaccinations for our staff. rooms and elevators. In many areas, we adjusted the floor While implementing measures to safeguard the health of our
layout, erected partitions to reduce face-to-face contact customers and staff, we continued to provide high quality
Unlike in past years, fewer activities for our staff and increase social distancing, and set up disinfection customer service in 2020. All Towngas Customer Centres
and their families were held in 2020 because of the stations. The fresh air flow rate of our headquarters in remained open and were treated with a nano photocatalytic
COVID-19 pandemic. These activities, which are North Point was also adjusted to maximum level. To avoid long-acting disinfectant spray. Although our maintenance and
designed to promote work-life balance and build team overcrowding, we implemented crowd control measures for checking services remained unchanged, we had to temporarily
spirit, will resume when COVID-19 subsides. our lifts and lift lobbies. Additionally, Quick Response (QR) suspend our on-site meter reading service and regular safety
codes were placed in meeting rooms to encourage staff to inspections (RSIs) during part of the year. Staff delivering
record their presence for contact tracing purposes. necessary on-site service were equipped with masks and
protective goggles,
Case Study
Protective Supplies and provided with
gloves and shoe
Safety during the COVID-19 pandemic We set up a Protective Equipment Procurement Response covers for use when
Team for sourcing sufficient stock of PPE supplies (e.g. n e c e s s a r y. S t a f f
Soon after the first appearance of the novel coronavirus surgical masks, hand sanitisers and face shields) for members were also
in December 2019, Towngas took immediate steps to our staff and contractors, and closely monitored existing required to clean
minimise the risk of infection among our staff, contractors, stocks to ensure a stable supply. their hands with an
customers and business partners. alcohol-based hand-
Care for Employees rub before and after
We also activated our Corporate Preparedness Plan for maintenance work.
Infectious Diseases and set up a taskforce to coordinate Flexible working hours, as well as team splitting and work-
our response. Top management held regular meetings from-home arrangements, were introduced to reinforce
to facilitate decision making and ensure the timely social distancing. All face-to-face contact by our staff on
implementation of COVID-19 measures. different shift operations was eliminated and virtual meetings
Given the rapid changes in the COVID-19 situation, we with internal and external parties were encouraged. Other
Our safety measures included the following: provided to our staff up-to-date information on the latest
pandemic developments and corresponding government
Effective Communication legislation, as well as infection control information through
various channels. These included the corporate intranet,
We issued new policies and guidelines that included Home webinars, posters, videos, emails, mobile text messages
Quarantine and COVID-19 Testing Requirements, Special and screensavers. Beyond this, we set up a 24-hour HSE
Work Arrangement, Health Declaration, Face Mask Wearing, hotline for staff to report or inquire about COVID-19 issues
and Personal Protective Equipment (PPE) guidelines. All and developed a smartphone app for consolidating and
were designed to provide clear guidance on actions to be delivering information on the pandemic.
taken to minimise the risk of infection.
Customer
Safety
To further improve our service efficiency, service
Progress quality and gas safety, we have been applying
Areas advanced technologies, such as a Drone Riser
Inspector and Long Range Camera with Laser
675,087 RSIs (Hong Kong) RSIs and
Continue to provide Protecting Customer Safety Methane Gun, to inspect the condition of gas
community safety talks service pipes and detect gas leakage. In 2020, we
Towngas proactively contacts customers in order also introduced a Riser Health Analytics System
Report
Customer-related emergency to raise awareness of potential gas safety problems researched and developed in-house that uses AI to
reports ↓35% in last 5 years before they occur. In 2020, we conducted 675,087 automatically analyse inspection videos and identify
smart sensors and
Develop
remote control systems RSIs and organised eight safety exhibitions. While the location and severity of corrosion in our gas
Launched ananti-scorch for cooking appliances accessed RSI services to individual customers’ service pipes. This AI system not only enhances
built-in hob to enhance premises were suspended for six months due to the operational efficiency and accuracy, but also
cooking safety
pandemic, RSIs on gas service pipes in the common reduces eye strain among our staff.
areas of buildings were carried out as usual. This
reflects Towngas’ commitment to ensure the safety Through these efforts, we have achieved a decline
Management of our customers in every way possible, even in in customer-related emergency reports.
Approach unfavourable circumstances.
As product and service safety are essential for our customers, we ensure every procedure is carried out
according to our internal guidelines, which also comply with laws and regulations. These guidelines cover the Customer-related Emergency Reports
installation, replacement and maintenance of gas appliances and gas meters as well as gas pipes and fittings 388
2016
installed for our customers. When developing new products, we follow strict safety and quality control systems
that govern the way we source raw materials, and produce and deliver end products. Our suppliers are also 2017 309
required to comply with our product safety requirements.
2018 267
Product • Gas appliances are equipped with innovative safety features such as anti-scorch
Development protection, timer controls and flame failure devices 2019 255
Quality • Compliance checks are conducted to ensure consistently high standards across all our 2020 252
Assurance product lines
• All gas appliances are tested according to rigorous quality control systems Towngas’ timely response to emergencies has
achieved a world-class standard of promptness.
Product • All gas appliances come with operating instructions on their safe and proper use
Labelling
Emergency Team’s average arrival time
Customer • RSIs are conducted to check all gas installations and external service risers, as well as to
Service test installation pipes Target 2020 Results
- every 18 months in Hong Kong
- every 12 to 24 months in mainland China
• 24-hour Emergency Hotline with a team dedicated to handling all gas emergency Arrived within
incidents and carrying out investigation Arrive on site
• Manual of Remedial Measures, with established remedial actions to ensure domestic gas within 21.57 minutes
appliances are safe for public use 25 minutes on average
Customer • Safety exhibitions and talks, customer surveys and focus groups, as well as Customer
Engagement Focus Team visits to raise safety awareness and understand customer needs
• Safety messages are also provided through leaflets, videos, posters and the corporate website
• Bi-monthly customer satisfaction surveys conducted by an independent research
company
Developing Safe Appliances Management

One of the trends we have identified is the ageing of
Approach
our population. In response to the safety concerns
of our elderly customers, we launched a new built-in Towngas adheres to well-established design, engineering and operating principles to maintain the safety of our
hob equipped with an exclusive anti-scorch protection facilities and equipment. By combining these principles with a rigorous maintenance regime, we are able to
feature, which is able to detect abnormal temperatures ensure our processes and assets are safe, reliable and in good working order.
and automatically shut off the appliance if it is
inadvertently left on. Our gas production plants and transmission and distribution network have all been certified to the ISO 55001
Asset Management standard. A Process Safety Management (PSM) system is also in place for our chemical
The Internet of Things (IoT) is another area we are plants in Hong Kong and mainland China, which allows us to identify and record critical hazards and develop
exploring for enhancing safety, including appliances measures to control and mitigate risks.
with a variety of smar t functions. For example,
customers can use their smartphone to monitor the Emergency and Crisis Management
status of an appliance remotely and shut it off in case
of an emergency, or receive an alert message if the Towngas has a robust Corporate Crisis Management Plan in place, with a three-tiered approach for recovering
condition of the appliance is unsafe, such as when a from an emergency situation in a timely and effective manner, while ensuring disruptions to the public are kept
flame is left on after leaving home or when appliances to a minimum.
have defects.
More smart features will be gradually introduced in other new appliances, such as hotplates, built-in hobs, Tier 1 Tier 2 Tier 3
range hoods and water heaters. Corporate Departmental Specific Emergency
Crisis Plan Emergency/Crisis Plan Procedures
Public Safety
Gas incidents reported by Upgrade, verify and maintain

the public per 10 km of the Safety Instrumented
gas pipes↓49% in last
Senior management Managers and Frontline staff take
System (SIS) of all major facilities deploys company key emergency appropriate action
five years (Hong Kong) with potential hazards resources, liaises personnel outline to tackle specific
with government general actions incident
authorities and to take during
Serious gas-related accidents Develop an in-house handles the media emergency
(mainland China) Hazard and Operability situations
↓84% in last five years (HAZOP) Studies
Talent Pool across
chemical plants Regular training exercises and drills on crisis management are conducted for staff for better emergency
preparedness. We also conduct regular table-top exercises to further enhance our management team’s ability to
No major incidents at our
handle emergency situations.
chemical plants (mainland China)
As a result of our efforts, serious gas-related accidents To build on the process risk assessment skills of our
Comprehensive Monitoring Progress have decreased 84 per cent in last five years. staff, we have been developing a HAZOP Studies
We continuously monitor our facilities in order to identify

Areas Talent Pool and organised a two-day HAZOP Practical
Serious gas-related accidents Tournament. A total of 26 staff members started
potential hazards and mitigate risks while looking for
Safety Performance the certification process and are expected to obtain
ways to make improvements. 2016 13
HAZOP Professional Certification by the China
Hong Kong 2017 8 Chemical Safety Association in 2021.
From our 24-hour Grid Control Centre at our North
Point headquarters in Hong Kong, we are able to Throughout the year, we conducted 141,427 trench
2018 10
monitor our network in real time. We also conduct a inspections at 8,866 active sites and surveyed Safer Operations through Technology
gas pipe leakage survey at least once a year and carry 6,662 km of pipeline in order to reduce gas incidents. 2019 8
out regular trench inspections of our gas pipes and At Towngas, harnessing new technology allows us to
Gas incidents reported by the public 2020 2 ensure our facilities are safe and operating properly, in
other facilities.
per 10 km of gas pipes keeping with our philosophy of “Growth = innovation x
In mainland China, the general managers of mainland 2016 0.180 New Energy implementation”.
utility business JVs conduct a safety inspection
2017 0.165
every month to identify and address any issues that In 2020, we conducted safety inspections for all our In 2020, we applied
may arise. Safety and risk management audits of 2018 0.145 chemical plants in mainland China that were either AI to monitor third party
our utility JV partners are conducted once every two in operation or under construction and organised six construction works near
years, while PSM audits for our chemical plants are
2019 0.117 safety audits of our ECO gas filling stations. our network to reduce
conducted annually. the risk of pipe damage.
2020 0.092
Three comprehensive safety inspection programmes The AI system can identify
In addition, regular safety and risk management In 2020, Towngas kept third party damage to its gas were specially organised across major JVs to assess heavy machinery that may
w o r k s h o p s a re o rg a n i s e d to i m p ro v e s a f e t y pipes to a relatively low level. The number of third COVID-19 safety measures, as well as lessons learned endanger our pipelines
management practices and safety awareness. party damage incidents in 2020 was seven. from the 2020 Beirut port explosion and other major and trigger visual and
incidents in mainland China. audio alarms at sites and
Community and Industrial Relations To reduce the risk of mechanical joint leakage and send alert messages or
corrosion, we decommissioned 17 km of aged metal By adhering to best practices in PSM, such as emails to our site staff for
We connect with stakeholders to enhance their pipes in our network. In addition, our replacement of following inherent safety designs and conducting in- instant follow-up.
safety awareness and build trust. We also work corroded risers project launched in 2019 is expected depth HAZOP studies and Bowtie Analysis, there were
closely with the government authorities to formulate to be completed by 2022. no major incidents at our chemical plants in 2020. For our pipeline asset records, we adopted an
strategic plans, such as a facilities utilisation i n n o v a t i v e p h o to g ra m m e t r y m e t h o d o l o g y. B y
framework and preventive maintenance index, to To enhance operational resilience, we renovated Training and Awareness taking photographic images on site, a three-
ensure optimal safety. and upgraded the back-up Corporate Crisis Control dimensional (3D) as-built model of the pipeline can
Centre and Grid Control Centre. In 2020, many training activities were moved online in be generated to record and store information on
In order to maintain a high standard of safety not just mainland China in response to the social distancing our pipeline assets accurately and efficiently. This
within Towngas but across the industry, we share our Mainland Utilities measures implemented during the pandemic. approach also eliminates tedious traditional manual
safety experience and standards with corporations, work.
contractors and professional organisations. In 2020, 37 safety and risk management audits were These included the e-learning platforms that we launched
undertaken; the safety performance of our JVs have been for self-learning and self-assessment by our staff. Web-
In mainland China, we have taken part in the steadily improving since the implementation of our audits. based Safety and Risk Management Workshops were
compilation and revision of relevant standards and also organised to share experiences on gas pipe
specifications on both the national and industry levels. During the pandemic, the general manager of each JV safety, PSM and good engineering practices. Other
We have also shared our experience to promote the increased safety inspections to twice a month and added online activities included a Gas Engineering Knowledge
development of the gas industry in mainland China. an item on “Special Inspection for the Prevention and Competition to enhance gas engineering knowledge
Control of COVID-19” to ensure all JVs were implemented and strengthen operational safety.
the specified sanitation and anti-viral measures.
48 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 PROTECTING THE ENVIRONMENT 49
08 PROTECTING
THE ENVIRONMENT
We are preparing for the growing challenge of climate change to create a more
sustainable future.
During the year, we continued to improve our climate resilience with ongoing physical
risk assessments to strengthen our emergency preparedness and modified our facilities
to withstand extreme weather and sea level rise. We also assessed how transition
risks could impact Towngas under various climate change scenarios and identified
opportunities that could help us develop a resilience strategy.
Environmental
Management
Management
Approach
Our Corporate Health, Safety and Environment (HSE) Policy outlines our approach for managing the
environmental impacts arising from our operations. It guides us in how we protect the environment, use resources,
reduce the emissions and waste we generate, and mitigate our impact on biodiversity. To supplement our HSE
Policy, we have established a Towngas Sustainable Purchasing Policy to ensure the use of environmentally
friendly products and services.
A Corporate Environmental Manual is also in place, setting out the standards, procedures and guidelines for
environmental protection of the Company. We also have a Green Office Practice Guide and Green Event Practical
Guide to provide guidance and improve environmental awareness among our staff.
In all of the jurisdictions where we operate, we fully comply with all regulatory requirements and benchmark our
operations against the highest international standards and codes of practice. Every new project we undertake will
begin with an environmental impact assessment (EIA), according to the local legal requirements.
In Hong Kong, our gas production facilities at Tai Po have been certified to the ISO 14001 standard since 1999 to
reduce our environmental impacts and drive continuous improvement. We have also been helping our joint ventures
(JVs) in mainland China achieve the same standard.
In mainland China, we visit the project sites of our

Monitoring and Reporting
Management JVs to understand their regional climate-related risks.
The Environmental, Social and Governance (ESG) Committee coordinates and steers our environmental initiatives Approach We also work closely with our JVs to prepare them
as well as monitors our environmental performance, with the support of the Environmental Working Committee and for adverse weather events by advising them on the
Corporate Sustainability Department. In addition, we have 12 Environmental Sub-committees and green ambassadors mitigation and resilience measures they can adopt and
As mentioned in our HSE Policy, we are committed to
from different functional departments. They support our mobilisation of resources and implementation of environmental by providing training on climate change awareness.
managing and minimising our climate change impact
projects and convey environmental messages to our stakeholders. Details of our ESG Committee and HSE and reducing air pollution.
management structure are available under the Managing ESG at Towngas section and our corporate website. Carbon Management
Our air emissions primarily result from the combustion
We conduct regular audits and inspections of our facilities to confirm compliance with all relevant environmental We are committed to continuously monitoring and
of fuels used to generate energy. These emissions,
standards and identify areas for improvement. In mainland China, we have been performing annual environmental reducing our direct and indirect GHG emissions.
which include carbon dioxide (CO2), nitrogen oxide
audits of our gas projects since 2011. The audits cover areas such as energy conservation, waste and Therefore, we have established Carbon Inventory
(NOx), sulphur oxide (SOx) and respirable suspended
wastewater management practices, as well as noise control measures. Accounting Procedures based on international
particulates (RSP), are controlled and monitored to
standards such as the GHG Protocol and local
ensure our plants comply with local regulations.
Engaging Stakeholders guidelines. In Hong Kong, GHG verifications aligned
with ISO 14064-1 are regularly conducted, which allow
We mitigate the impact of climate change by reducing
To raise awareness and build capacity, we organise training sessions, seminars, site visits and a range of other activities us to identify areas for continual improvement.
or avoiding greenhouse gas (GHG) emissions
with our stakeholders, including employees, contractors and customers. We also set aside funds dedicated to our and adapt by upgrading our infrastructure and
environmental protection initiatives and have set up a Green Creativity Fund to encourage innovative environmental To reduce emissions from our operations, we use low-
strengthening crisis management. Through these
initiatives put forward by our employees. carbon, renewable energy sources such as natural
measures, we believe we can become more resilient
gas and landfill gas, employ energy-efficient equipment
against the impact of climate change.
We also share knowledge, exchange ideas and seek partnerships with government authorities, industry practitioners, and improve our production processes. We also take
green groups and others so that we can remain up-to-date on issues of environmental concern and drive improvement. the responsibility of reducing GHG emissions on the
Climate Risks and Opportunities
customer side.
Climate Change Physical risks, such as rising temperatures and sea

and Air Quality levels, drought and extreme weather events, could Progress
have a negative effect on our operations. What’s more, Areas
transition risks, including policy changes, reputational
impact and shifts in market preferences, could also
We acknowledge the urgency of addressing climate
have a significant impact on our businesses. These
Hong Kong gas production carbon change and are taking every possible step to manage
Establish medium- to long-term risks, however, also come with opportunities arising
intensity was carbon reduction targets and reduce our climate risks while also identifying
from the development of new technologies, products
0.592 kg CO2e/unit of related business opportunities. Furthermore, we
town gas,↓23% as
and services associated with climate change.
closely monitor regional and international efforts
compared with 2005 Increase biogas usage towards decarbonisation. These include Hong Kong
In 2015, we commissioned a comprehensive climate
and mainland China’s goals of carbon neutrality,
risk assessment for our Hong Kong operations to
Supply waste heat from as well as the outcome of the 26th United Nations
First public utility in Hong Kong increase our resilience under extreme weather events.
Tai Po Gas Production Plant to a Climate Change Conference of the Parties (COP26) in
to be verified its carbon inventory neighbouring food factory It involved conducting corporate emergency table-
against ISO14064-1:2018 (Hong November 2021 to guide our low-carbon roadmap.
top exercises and establishing an adverse weather
Kong gas production) climate change
Advance our preparedness plan, which is reviewed regularly. We
risk assessment covering also review and update our climate-related risks on
Conducted a scenario long-term risks and opportunities at least an annual basis to ensure we are sufficiently
analysis on climate-related resilient against this emerging risk.
Keep abreast of the latest
transition risks and opportunities
carbon reduction policies
in Hong Kong and mainland China
at these facilities in 2020 as a follow-up measure. Scenario Development

Climate-related Financial Disclosures
These enhancements are designed to withstand the
worst case scenario (based on IPCC Representative In our assessment, we referenced the scenarios presented by the International Energy Agency’s (IEA) World
Many more stakeholders today, including investors,
Concentration Pathway 8.5) for flooding in this century. Energy Outlook 2019. We also factored in the pace of technological development and adoption, as well as the
are examining how companies are reducing their
stringency of new policy implementations, in order to identify four scenarios as shown in the table below:
climate impacts. At Towngas, our implementation of
We also renovated and upgraded the back-up
the Recommendations of the Task Force on
Corporate Crisis Control Centre to strengthen Towngas’
Climate-related Financial Disclosures (TCFD)
emergency preparedness against adverse weather. We Scenario Description
helps us become more climate resilient and increase
are also planning to initiate another in-depth physical
transparency for our stakeholders.
risk assessment to better understand climate risks. 1. Best of Both Worlds Similar to the IEA’s Sustainable Development Scenario (SDS).
(rise well below 2oC)
In 2019, we began a study on how to align ourselves
Bold emissions reduction targets are met through 1) new/alternative
with the Recommendations of the TCFD and carried out
technologies, 2) efficiency improvements, 3) government policies.
a gap analysis to examine Towngas’ current practices
against these recommendations. We have since
Demand for natural gas peaks around 2035. In 2040, renewables replace
disclosed relevant information according to the four coal as the main source of energy in mainland China: renewables (34%),
thematic areas outlined in the TCFD. coal (28%), oil (14%), natural gas (13%), nuclear (11%).
Governance 2. Marathon to Similar to IEA’s SDS, but with a less optimistic assumption for technological
• Managing ESG at Towngas Compliance development and adoption.
Governments take the lead and consider meeting climate and environmental
goals to be the highest priority in their policy making process. Consumer
Strategy choices are limited; business and industrial activities are taxed and regulated.
• Transitioning to a Low-carbon Climate Transition Risks
Future and Resilience
3. Climate is Business Similar to IEA’s Stated Policies Scenario (STEPS).
• Climate Change and Air Quality According to the Recommendations of the TCFD,
companies are advised to carry out a detailed analysis Governments take a back seat in climate and environmental policies.
Risk Management Carbon emissions slow down due to some uptake in renewables and
of various climate-related scenarios to determine their
• Climate Risks and Opportunities efficiency gains, but there is no peak in global energy-related carbon
risk exposure and stress test their climate resilience
• Risk Management emissions.
strategies under such scenarios.
During 2020, we conducted a comprehensive 4. Hothouse Earth Similar to IEA’s Current Policies Scenario (CPS).
Metrics and Targets
assessment of the transition risks and opportunities (rise of 4oC,
• Our Carbon Footprint business-as-usual Governments do not follow up on climate-related commitments; fossil fuel
across our energy-related businesses in Hong Kong
• Carbon Emissions along scenario) subsidies continue, hampering the uptake of renewable energy.
and mainland China under various climate scenarios.
　Our Value Chain
By deepening our understanding of how policy
Demand for natural gas increases by over 140% in 2040 as compared with
Climate Physical Risks and Resilience changes, developments in technology, reputational
2018. Coal continues as the main source of energy (46%) in 2040, followed
impacts and shifts in market preferences could have
by oil (20%), renewables (15%), natural gas (13%) and nuclear (6%).
We conduct ongoing physical risk assessments and a significant impact on our businesses, both positively
management exercises to ensure we will remain and negatively, we are able to develop plans to mitigate
resilient in years to come. In 2019, we conducted a risks and build resilience strategies.
study on flooding hazards related to sea level rises
that could affect critical facilities, including the switch
room, generator room and fuel tank room at our
North Point headquarters. Flood gates were installed
Impact Analysis and Strategic Resilience Policy and Legal Risk Market Risk Technology Risk Reputation Risk
By acknowledging the Best of Both Worlds and Marathon Medium to Medium to Long Term
to Compliance as possible scenarios towards a low-carbon
Short to Medium Term Long Term Long Term
2020-2030 2030-2040
economy, we have identified transition risks for Towngas 2025-2040 2025-2040
according to TCFD’s risk categorisations: market risk, • Hong Kong and mainland China’s 2050 and • Demand for natural gas increases • Replacing existing technologies • Shareholders are likely to divest
technology risk, policy and legal risk, and reputation risk. 2060 goals of carbon neutrality are expected in the short and medium term as a and processes leads to higher from fossil fuels.
The tables to the right summarises the potential risks and to accelerate the transition towards a low- transition fuel, and may drop over capital and operating costs.
carbon future; increasingly stringent climate the long term.
opportunities, impacts and resilience strategies for Towngas’ • Open and transparent
and environmental policies mean that carbon • Low or zero carbon technologies communication/disclosure on
portfolio across different time horizons. • Increasing risk that town gas and
intensive operations, products and services will natural gas will be replaced with are substituted for existing products issues of climate change will
be heavily regulated. low or zero carbon alternatives; and services, affecting our gas- benefit us in terms of increased
Although the study shows the resilience of our portfolio, there revenue from gas s al es wi l l related businesses. capital availability, especially for
are still areas of improvement in our portfolio and strategy. • This may have a negative financial impact increase in the short and medium Towngas’ green businesses.
term but may fall over the long • Development of waste-to-energy
To further enhance our climate resilience, Towngas will keep on Towngas (e.g. higher compliance costs, term. products and smart energy projects
up with policy developments and watch for any early warning reduced gas sales revenue).
present opportunities.
• Development of new products and
signals to ensure we are well prepared. We will also drive services will increase Towngas’
• Potential for revenue from low-carbon products
sustainability-related consumer education and brand messaging competitiveness, resulting in
and services (e.g. biofuels).
to communicate Towngas’ position in the transition to a low- increased revenues.
carbon economy, as well as develop a strategic plan with
investments in innovative green technology that helps us to
gradually transform into a sustainable energy company.
Align with government policies Reduce direct GHG Explore low-carbon business Support research and
Towngas’ emissions opportunities development (R&D)
Climate Resilience Mainland China’s environmental policies have been driving a faster Towngas has been focusing Diversification has helped Towngas Towngas has research and
uptake of natural gas to replace relatively more polluting forms of on reducing emissions from its gradually transform into a multi- development centres in
Roadmap fuel, especially coal, as a source of energy. operations by utilising low-carbon
sources of energy and improving
business corporation focused on
environmentally friendly energy
Shanghai city and Suzhou city,
where we are developing clean
Towngas is well positioned for the short and medium term, as energy efficiency. We will continue ventures, which reduces our exposure energy technologies, including
we have a large market share in Hong Kong and an expanding to explore opportunities for to transition risks. self-developed patented
gas network in mainland China for natural gas. We also support increasing the use of biogas in the technologies that are being
commercial and industrial customers to switch from coal/diesel to production of town gas. For example, Towngas is developing utilised in different projects.
natural gas/landfill gas. smart energy and waste-to-energy We are now applying these
For more details, please refer to businesses. technologies commercially,
We will continue to develop a portfolio of innovative projects in the Our Carbon Footprint section. which will contribute to our
areas such as energy storage, biofuels, distributed energy systems, For more details, please refer to the ongoing business growth.
and waste-to-energy projects to mitigate our risks in these markets. Supporting Customers with Low-
carbon Solutions section.
For more details, please refer to the Transitioning to a Low-carbon
Future section.
Fuel Mix for Town Gas Production 2020 Hong Kong Gas Production
Reducing Emissions in Cities Our Carbon Footprint
GHG Emissions
Today at Towngas, we make extensive use of low- 36% The Group’s largest source of carbon emissions is Scope 3 Scope 1 + 2
Naphtha
carbon/renewable energy sources. By switching Scope 1 emissions from fuel consumption in our (Other)
345 ktCO e 2
our town gas production feedstock from coal and

195 ktCO e
production processes. In 2020, the Group’s total
2
Outside
heavy oil to naphtha, natural gas and landfill gas, we carbon emissions (scope 1 and 2) were 1,406,000 Hong Kong
have significantly reduced air pollutants and GHG tCO2e, a similar level to that of last year. More details In Hong Kong
emissions in Hong Kong. Our air emissions have now 63% 1% can be found in the Key Statistics section.
fallen well below the regulatory limits (more details can Natural Gas Landfill Gas Scope 3
(Category 11)
be found in the Key Statistics section). Additional During the year, we conducted an internal carbon
1,486 ktCO e 2
information on clean gas production at Towngas is audit of the top six emitters in mainland China, during
available on our corporate website. which we reviewed their data integrity and discussed
As one of the pioneers in the use of landfill gas, the opportunities to reduce their carbon footprint. The Scope 1 emissions are direct emissions from owned or controlled
amount of landfill gas used in our town gas production sources.
2020 energy savings at our gas production plants1 lessons learned from this audit were shared with other
Scope 2 emissions are indirect emissions from the generation of
was 124,985 GJ in 2020. We remain committed to JVs to enhance the completeness and quality of their purchased energy.
Naphtha saved continually increasing the proportion of natural gas and data. We are now working on setting medium- to long- Scope 3 are all other indirect emissions that occur in the value
97,675 GJ biogas used. term reduction targets for both our Hong Kong and chain.
mainland China portfolios, in support of Hong Kong’s

Town gas saved In mainland China, we have been expanding our Supporting Customers with Low-carbon
2050 and mainland China’s 2060 goals of carbon
27,310 GJ city-gas network, which is replacing coal and hence neutrality. We also signed the Business Environment Solutions
reducing emissions. In 2020, we served approximately Council’s Low Carbon Charter to underscore our
1
Remarks: As compared with the data of a reference year before
implementing the respective environmental initiative. 31.81 million customer accounts. commitment to tackling climate change. To create a low-carbon future, we understand it is
important not only to reduce the GHG emissions
Hong Kong Gas Production generated within our operations, but also to reduce
Carbon Intensity them for customers. We have been supporting our
customers’ emission reduction efforts by expanding
Case Study the distribution of gas and promoting fuel conversion
The carbon intensity of our Hong Kong gas production
in 2020 was 0.592 kgCO2e per unit of town gas, to gas. We have also been developing low-carbon
which dropped 23 per cent as compared with our and energy efficient products, ranging from gas
Support for Hong Kong’s long-term decarbonisation
2005 baseline. Due to maintenance work at the appliances to advanced biofuels, and provide a smart
We installed photovoltaic (PV) systems at our Tai Po Northeast New Territories Landfill, we fell short of our energy service. To help our customers conserve town
Gas Production Plant, as well as at six of our offtake target to achieve a 30 per cent decrease in carbon gas, we provide the relevant information and energy
and pigging stations. The total power generated was intensity for 2020. We will, however, strive to meet this saving/green cooking tips via bill inserts, newsletters
over 180,000 kWh in 2020. The rooftop of Towngas’ target in future. and our Low Carbon Action! website.
North Point Headquarters and the second phase of
the offtake and pigging stations are scheduled for Carbon Emissions along Our Value Chain We shall also supply waste heat from our Tai Po
completion in early 2021. We are also incorporating Gas Production Plant to a neighbouring food factory
innovative technologies into the design of the second We understand that our emissions along the value in the form of hot water, which will help reduce the
phase installation, such as flexible panels to increase chain could be material and, in 2020, conducted a latter’s conventional energy consumption and carbon
the number of installation locations, sun trackers and comprehensive review of our Scope 3 emissions for emissions. This would reduce heat dissipation to the
bifacial solar panels to capture more solar energy. gas production in Hong Kong. The most significant surrounding environment, and thus lower the heat
After they are completed, our solar PV systems will contributions to Scope 3 emissions in our value chain island effect. This innovative environmental project will
ultimately generate more than 300,000 kWh of clean came from combustion of town gas (Category 11), be completed in 2022.
energy per annum. which accounted for over 70 per cent of the total
emissions of our gas production. For details, please refer to the Transitioning to a
Low-carbon Future section.
Resources Water and Effluents Progress

Management We make a concerted effort to use the water we
Areas
consume more efficiently in our operations. It is utilised as
2020 Performance Highlights Future Actions and Targets a raw material, for cooling and heating and for domestic Data of our energy and water consumption, as well
use in our offices, customer centres and natural gas as effluent and waste generation, can be found in
Obtain ISO 50001 stations. The water we consume comes mainly from local the Key Statistics section.
Electrical power consumption
Energy Management System municipal water suppliers; in mainland China, we also use
SAVE at Towngas’ North Point
Headquarters: ↓4.29%
50001
ENERGY certification and renew Building surface water in our water supply business. Effective Energy Management
Environmental Assessment Method
compared with 2019
(BEAM) Plus status for Towngas’ Water is discharged to municipal wastewater treatment Our cloud-based energy management system in
North Point Headquarters building plants or into the sea after it has been treated in Hong Kong enables us to monitor and analyse
117,822m3 water conserved
accordance with local regulations. Some of the water our power consumption automatically in order to
through the reverse osmosis
3rd reverse
Install the we consume is also recycled and reused. visualise usage patterns. The data obtained through
systems at Tai Po Gas Production
osmosis system at our Tai Po this system helps us to explore more energy saving
Plant
Gas Production Plant To conserve water, we employ new technologies opportunities.
and enhance production processes to reuse and
>1,600 tonnes of metal
recycle water. Surveys and inspections of our water In 2020, we implemented various energy saving
recovered under the Used Gas
pipe network are carried out to identify leakage. In projects at our North Point Headquarters building,
Appliance Recycling Programme
our offices and customer centres, we have installed including a freight lift system upgrade, chiller
water-saving devices such as dual flush toilets and optimisation, light-emitting diode (LED) lighting
automatic faucets. replacement and Building Management System
optimisation. The total energy intensity of our North
Our mainland China water supply and wastewater Point Headquarters building was 0.79GJ/m2.
treatment business, Hong Kong and China Water
Management
Limited, also hosts various activities, such as tours of
Approach its water plant facilities, to educate the public on the Electricity saved in 2020
need to protect and conserve water resources. at Towngas’ North Point
At Towngas, we make every effort to conserve natural resources in our production plants, distribution network SAVE Headquarters and
and office operations, and also encourage our contractors, suppliers and customers to do the same. Waste ENERGY Ma Tau Kok office:
Energy Our waste management approach is underpinned by

20,796 GJ
Remarks: As compared with the data of a reference year before
the “5R” principle of Replace, Reduce, Reuse, Recover implementing the respective environmental initiative.
Our buildings and other physical assets are designed to make the most efficient use of the energy we and Recycle, not only within our operations but also for
consume. Our North Point Headquarters building has attained green building standards such as BEAM Plus, our customers. We strive to reduce both the hazardous
while our data centres in Hong Kong and mainland China are Leadership in Energy and Environmental Design and non-hazardous waste we generate, and reuse or We plan to achieve ISO 50001
(LEED) certified. recycle whenever possible. energy management system
50001 certification as well as BEAM
To help our residential customers save energy, we have developed a wide range of energy-efficient In Hong Kong, the excavated materials and waste Plus 2.0 certification for our
appliances with eco-friendly features and add new models every year to our product range of more than generated during construction and pipeline works North Point Headquarters
200 appliance models. All eligible water heaters and cooking appliances bear the Electrical and Mechanical are managed through the Government-regulated trip building in 2021.
Services Department’s Voluntary Energy Labelling Scheme label in Hong Kong, to assist end users in making ticket system for proper disposal. All chemical waste
smart buying decisions. is properly stored and disposed by a waste collector
licensed by the Environmental Protection Department
and in compliance with the Waste Disposal Ordinance.
disposable umbrella bags. The food waste

Responsible Water Management Progress
composter at our North Point Headquarters was
Biodiversity
At our Tai Po Gas Production Plant, we use a reverse
also widely used during the COVID-19 pandemic, Areas
when more employees regularly had lunch in the
osmosis system that helped us conserve 117,822
building.
cubic metres of water in 2020. The installation of a Management Our biodiversity efforts across the Group have been
third reverse osmosis plant at Tai Po to replace the
I n o u r p i p e l i n e w o r k , w e e m p l o y t re n c h l e s s Approach ongoing.
remaining water treatment system and further reduce
technology to significantly reduce the amount of
effluent will be completed in early 2021. To minimise the need for digging on public roads,
waste generated. Hazardous waste such as metal In alignment with our HSE Policy, we make a strong effort
to limit our impact on biodiversity, since our gas processing we continued to adopt trenchless technology during
chemical drums, plastic chemical drums, spent
All effluent from our town gas production plants is pipeline construction and maintenance works to reduce
catalysts and used polyethylene (PE) pipes are either and distribution operations can disturb the land and wildlife
processed in compliance with existing regulatory the environmental impact of excavation. We also make
recycled or reused. habitats.
discharge standards. In 2020, there were no use of Glass-In-Gas (GIG) and Glass-Along-Gas (GAG)
reportable effluent spills in any of our operations. technology to install optical fibre within gas pipes
Waste Reduction for Customers In mitigation, we follow four principles:
to reduce road work or to lay telecommunications
In mainland China, we have adopted the Zero Liquid pipelines simultaneously with gas pipes.
To help customers reduce waste, we have been Avoid Areas Rich in Biodiversity
Discharge system at our hydro-treated vegetable oil
offering a Used Gas Appliance Recycling Programme
(HVO) production facility in Zhangjiagang city, which We avoid areas rich in biodiversity in the To prevent gas leakage, we use specialised
since 2003. Through this programme, unwanted planning stage of our projects. We will carry
processes all effluent so that water can be reused technology and our own pipeworks and fittings that
appliances are collected from customer premises out a site-specific EIA, in accordance with
and recycled. local governmental requirements, to address make our gas network accident rate among the
and sold to recycling contractors, with all proceeds the impacts of development on wildlife and
lowest in the world.
going towards environmental activities carried out ecosystems.
Enhanced Waste Management
within the Company or by our contractors and other
We also follow environmentally responsible forest
green partners. In 2020, we recovered over 1,600
Towngas has received a Wastewi$e Certificate at the Mitigate our Impacts through management practices by using Forest Stewardship
tonnes of metal from used gas appliances, bringing
Excellence Level for the past 19 consecutive years, Innovation Council (FSC) approved timber.
the total amount of metal we have recovered since
with more than 30 waste reduction and recycling
2003 to around 20,000 tonnes. We take preventive and corrective measures
targets completed to date. to minimise the possible impact of our works, We continued to sponsor The Green Earth’s five-
including construction work, effluent discharge, year Plantation Enrichment Project, which aims at
As a company with more than 1.94 million customer and pipeline maintenance, on habitats and
We c o n t i n u e d to c o l l e c t increasing biodiversity in country parks. We also
accounts in Hong Kong, we understand that our gas species of flora and fauna.
more than 20 types of have an organic farm in Yuen Long as well as a
bills use a significant amount of paper. To reduce
waste for reuse/recycling rooftop organic farm at our North Point Headquarters
paper consumption, we have been encouraging Use Mitigation and Offset Measures
throughout the year in Hong to promote the biodiversity benefits of organic
customers to switch to our eBilling service. during Construction
Kong a n d o rg a n i s e d farming.
v a r i o u s p r o g ra m m e s We implement a variety of mitigation and offset
measures for our construction activities, which
t o e n c o u ra g e w a s te
help to reduce pollution and the loss of topsoil.
reduction and foster a
We also coordinate with local government
recycling culture among bodies to preserve the greenery around our
our staff. In 2020, we industrial sites and stations.
collected coffee grounds
and beverage cartons for
recycling, and organised Promote Biodiversity Awareness
a seminar on reducing
We organise activities, such as visits to
organic farms and eco tours, for employees
and customers.
62 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 CONTRIBUTING TO STAKEHOLDERS 63
09 CONTRIBUTING TO
STAKEHOLDERS
In our role as a socially responsible company, we contribute to the betterment of

society and create value for our stakeholders. Within our own operations, we are
responding to the challenge of an ageing population by developing a sustainable talent
pipeline through the expansion of our recruitment efforts to attract young people to
the gas industry and the provision of training to our staff. We also develop community
programmes for the elderly.
In the process of digital transformation, we adopt new technologies to deliver training,

enhance our operational performance, create new products and services, and manage
our suppliers.
Our
Workforce
new training
Launched Continue to broaden/expand our
programmes to build a recruitment practices and engage
succession pipeline for our expanding the younger generation to create
business in mainland China a sustainable talent
pipeline
Developed various channels and
platforms to attract young new training
Develop
talent to the gas industry programmes to transform
our businesses and succession
planning
Total new recruits:
203 (Hong Kong)
Continue to upgrade and
1,493 (outside Hong Kong)
increase training facilities to meet
future training needs
Average training hours per

employee: 17.5 (Hong Kong)
e-learning
Introduced
platforms to promote online
training/continued learning
during the pandemic
Our employees are also guaranteed freedom of

Management Attracting and Retaining Staff
association in the workplace and may join the
Approach We have developed and instituted a wide range of
organisations and professional bodies of their choice.
Members of associations are also allowed to participate
employment practices, including family-friendly policies
in association activities during working hours, reflecting
We are committed to providing an inclusive and and competitive remuneration packages well above
the high degree of freedom they enjoy at Towngas.
rewarding work environment that leads to high the regulatory minimum, in order to make Towngas a
engagement and enables our staff to grow and rewarding and attractive place to work.
Although Hong Kong has no regulatory requirement
develop their potential in their careers with us.
Benefits for full-time employees include maternity and with regard to collective bargaining, we consult our staff
paternity leave, medical and dental insurance, group life on a range of employment issues through our internal
All human resources matters at Towngas are overseen
insurance, town gas allowances, education allowances communication channels. We send a formal notice at
by our Corporate Human Resources Department and
and performance-based bonuses in Hong Kong. We least two to four weeks ahead of time to all employees Apart from technical and engineering subjects as well as
handled according to the Towngas Human Resources
also provide a maternity allowance and counselling when significant operational changes are about to non-technical subjects such as leadership development
Policy Manual and Employee Handbook. We comply
for managing emotional issues. Subject to eligibility, be implemented. In mainland China, we comply with and interpersonal skills, we also identify emerging areas,
with local laws and regulations in relation to recruitment
the children of our staff can take advantage of an applicable legal obligations concerning freedom of such as innovation, digitalisation and climate change, to
and promotion, compensation and dismissal, working
education allowance and scholarship for attending association and collective bargaining. help staff develop new skills or refresh their knowledge.
hours, rest periods, equal opportunity, diversity, anti-
discrimination, and the provision of other benefits and overseas exchange programmes and local universities. To equip potential employees with management skills
To help our staff balance their work and family While the labour unions of our joint ventures (JVs) have and build a sustainable leadership pipeline, we offer a
welfare.
responsibilities, we have established a variety of family- not entered into any collective bargaining agreements, variety of career advancement programmes. Delivery
friendly practices. These include flexible working hours we continue to maintain open communication with channels include classroom training, e-learning, Virtual
Our Code of Conduct outlines the expectations we
and special provisions for taking time off for family union representatives on staff-related matters. Reality (VR) training, frontline attachments, workshops
set on our people, their responsibilities and all relevant
policies and procedures our employees should follow reasons, such as marriage, compassionate and casual and site visits.
in their everyday work duties, including behaving leave. Training and Development
ethically in their business practices, promoting equal We also encourage our employees to supplement
Our remuneration packages are periodically reviewed Training our people and developing their skills and their development through external courses, seminars,
opportunities and eliminating acts of discrimination. Any
and adjusted according to trends in the labour market. competencies are essential for our long-term success visits and conferences, according to identified training
employee found to be in violation of the Towngas Code
as a company. needs. Subsidies are provided for staff who pursue
of Conduct, Equal Opportunities Policy or relevant
The retirement benefits we offer include the defined further education related to their job duties, according
ordinance will be subject to disciplinary action.
contribution schemes and Mandatory Provident Fund Training and development programmes, including to the Towngas Human Resources Policy Manual.
schemes in Hong Kong. In mainland China, staff competency and skills based courses, are organised
In managing our people, we take a systematic approach
participate in social security plans organised by the and delivered internally through our Learning &
that spans their entire career lifecycle at Towngas.
relevant municipal and provincial governments. Development function and the Towngas Engineering
Academy (TEA) in Hong Kong. We also have
Attraction
We also collaborate with various education institutions five training bases in mainland China, as well as
to provide training programmes that not only create partnerships with education institutions.
Retention Recruitment a pipeline of future workers for Towngas, but also
contribute to the dissemination of gas knowledge and Our training begins with our new joiners, who during
advancement of the gas industry. their orientation with us become familiarised with
Towngas, our corporate culture, policies and business
Talent Employee Engagement processes. Recognising that individual employees
Management
Inclusion Engagement have different learning needs, we identify and provide
We recognise that close communication with our a wide range of training and development opportunities
staff is critical for maintaining a harmonious and for our general and technical staff as well as our
Development productive work environment. To keep our employees management colleagues.
engaged and informed, we provide multiple two-way
communication channels.
in gas engineering at the City

Diversity, Equal Opportunity and Non-discrimination
University of Hong Kong and
for the Professional Diploma
We firmly believe in promoting equal opportunities and eliminating discrimination in all aspects of our employment
in Gas Engineering with the
practices. We adhere to the anti-discrimination ordinances of all the jurisdictions where we operate, including
Vocational Training Council
recruitment, remuneration, compensation and benefits, promotions, transfers, training, and termination. We have (VTC). The courses had a
absolutely no tolerance for employment discrimination on the basis of age, gender, sexual orientation, race, colour, total enrolment of around 100
religious or political beliefs, marital status, ethnic background or social origin. students in 2020.
We value diversity within our ranks and make a strong effort to attract women to our industry as well to develop and We also provided university
retain them. Additionally, we are proactive with respect to providing employment opportunities and support for people students with internship
with disabilities and older workers. opportunities to obtain work
experience with Towngas. A
In support of a harmonious workplace, we have established procedures and a fair and independent process for total of 70 summer interns and
investigating complaints about discrimination, with assurance that the confidentiality of all parties will be respected. 25 Co-op Trainees were hired
during the year.
Progress
TEA is one of the founding members of the Corporate In order to build our brand as a preferred employer
Areas Tech Academy Network (CTAN), whose aim is to through social media, a Facebook page called
consolidate the industry’s attempts to develop Towngas People was launched during the year to
In 2020, we enhanced our medical benefits and launched flexible work hours to provide more flexibility and
a sustainable and skilled professional/technical host news about Towngas, our employees, as well as
better work-life balance for our employees in Hong Kong. In mainland China, the Company provided additional
workforce in Hong Kong. During the year, a Vocational recruitment activities to attract potential candidates.
insurance coverage related to the coronavirus outbreak.
and Professional Education and Training (VPET)
Promotion Competition was held, in which secondary
Developing a Sustainable Talent Pipeline Employee Distribution,
school students were invited to come up with creative
New Recruitment and Turnover Rate
ideas on how to attract young people to VPET and
To build a sustainable talent pipeline, we continued to organise talent development programmes for different
become skilled workers or professionals. TEA also
staff levels:
participated in the E&M Go! activity for apprentices
who recently joined the industry through Towngas Number of Employees
and other organisations to promote the electrical and (Hong Kong)
• Towngas Leadership Competencies
>10 years Acceleration Programme
mechanical industry.
Female 545 Male 1,950
of work experience
Other student engagement activities include the Career
in a Nutshell programme and Club Youngas, which
• Young Towngas
5-10 years Leadership Competencies offer career related activities to bridge the gap between
Number of Employees
(Outside Hong Kong)
of work experience Acceleration Programme study and work. Due to the pandemic, activities were
moved online, published in the member newsletter Female 16,191 Male 34,876
• Apprenticeship Training and carried out through other media in order to sustain
Entry level Schemes our relationships with the students. We also offered
Total New Recruits
• Graduate Trainee Programme summer internships for Club Youngas members to
introduce them to the workplace. Hong Kong 203 Outside
Hong Kong 1,493
In collaboration with The University of Hong Kong,
We are also making an effort to raise young people’s awareness of the gas industry and to build the Towngas
we co-organised a first year gas engineering Average Turnover Rate (%)
brand with the objective of attracting potential recruits.
elective course in 2020 as part of a master’s
degree in mechanical engineering. Additionally, Hong Kong 5.0 Outside
Hong Kong 2.0
there was a second intake for an elective course
continue instilling the essence of MasterCraft culture

Innovative Training Approaches Diversity, Equal Opportunity and Non-Discrimination
in these technicians, we uploaded innovative tools
developed by colleagues on our MasterCraft
In 2020, we launched new e-learning platforms in As an equal opportunity employer, we value diversity at the workplace and support anti-discrimination and the fair
Culture website, prepared m-learning courseware
Hong Kong and mainland China which allow learning treatment of all staff. In 2020, there were no incidents of discrimination reported at Towngas.
and organised a MasterCraft Christmas e-card design
to take place through a computer or mobile device.
competition.
Many training programmes were conducted through
video conferencing or online courses uploaded on
We also held special training in 2020 on dealing
the e-learning platforms, which was particularly useful Empowering
with the economic downturn due to COVID-19, with
during the pandemic. Over 350 courses are currently Male : Female Women
talks designed to reinforce positive thinking and find
offered on these platforms, covering topics including 3.6 : 1
inspiration. Another programme, which was especially The nature of our business is such that our workforce has traditionally
engineering, customer service, safety risks and human (Hong Kong)
relevant during COVID-19, focused on professional tilted towards male employees. We are attempting to redress this
resources. More than 17,000 people participated in 2.2 : 1
and personal challenges faced by managers in a imbalance by taking steps to attract more women to our industry. We
the course for over 215,000 learning hours in 2020. (Outside Hong Kong)
changing world. will continue to make a strong effort to hire, develop and retain women
For frontline staff, contractors and apprentices, within our ranks.
m-learning courseware on refresher training was
specifically prepared to ensure their competencies
when face-to-face training could not be held. To
Hiring the
Disabled
New Training Programmes
13 People We seek to employ the disabled and are working with four non-
• Potential General Managers Programme: • Graduate Trainee Programme for Mainland with disabilities hired
governmental organisations (NGOs) in Hong Kong to support disability
a programme designed to attract talent with Utility Businesses: a 12-month attachment with
hiring. Special facilities for accommodating people with disabilities
management potential to our mainland utility our businesses in mainland China. The objective of in our workplace include automatic doors, adjustable office desks
businesses. After rotating attachments in Hong this programme is to build a succession pipeline for and washrooms for wheelchair users. We have also implemented
Kong and various business units, our expanding businesses in specialised emergency evacuation procedures and improvements
regional offices or JVs in mainland mainland China. Four trainees to the fire alarm system. In 2020, we had 13 people with disabilities
China, the participants will become were recruited. working in various roles, including a customer service officer and an
general managers in our mainland assistant engineer.
utility businesses.
• Towngas Management Programme (TMP): • The NewGen Programme: the first-of-its-kind

Offered Rehiring Retired Employees/
a programme to enhance the management skills of
our team leaders and managers. It covers 27 topics,
cross-corporate talent development programme
c o - o r g a n i s e d b y To w n g a s , N e w W o r l d
6 internships Hiring Older Workers
including business skills, leadership and execution. Development Company Limited, Fung Group and Recognising that older workers have knowledge and skills that are
The first series was launched in McDonald’s Hong Kong. This valuable to Towngas, we approach employees nearing retirement to
mainland China and attended by programme helps young see if they are willing to continue working after retirement age. We also
645 participants, of which 43 will professionals become more support the Post-50 Internship Programme organised by the Employees
become trainers for similar intrapreneurial, innovative, Retraining Board and offered six internship opportunities. Three
programmes in their JVs. TMP inquisitive and impactful candidates of the group were hired as permanent part-time assistants
was extended to Hong Kong in through a series of workshops, because of their outstanding performance.
2020. visits and business case
presentations.
Customers
incident scenarios that would have a severe impact on

Responsible Communication
2020 Performance Highlights Future Actions and Targets our business processes. In the event of a suspected
cyberattack, our Cyber Security Committee will trigger the The wide range of communication channels we
Set up a team of Develop policies and processes incident response process, contain the data leakage and provide allows customers to access information on our
departmental data to enhance and streamline then contact the Cyber Security Centre of the Hong Kong products and services in a quick and efficient manner.
protection coordinators data protection Police Force and other security experts. We also conduct These channels also enable us to collect customer
to enhance the effectiveness of the measures regular phishing simulations targeting our employees to feedback and better understand their needs.
Privacy Management Programme heighten their awareness of cyber security risks.
Further develop the existing The key to customer privacy is our employees. If our Online platforms, customer
Service quality efficiency: 9.0* Privacy Management centres, and 24-hour
employees lack the necessary awareness, mishandle
Exceeded target Programme Customer Service Hotline
customer information or are unaware of cyber security
For customers to make enquiries, manage their accounts
risks, the potential for a customer information leakage and make appointments for maintenance and installation
Courteous and friendly incident can be high. To avert this possibility, we have
Continue to explore the needs of
attitude: 8.98* undertaken various initiatives, including seminar training
our customers to launch
Exceeded target and the provision of information security tips. We also
new products/services Customer satisfaction
host an annual Information Security Week to keep surveys
* Our target was to exceed a score of 8.5 out of 10
employees up-to-date on personal data protection Conducted bi-monthly by an independent company, with
matters as well as cyber security knowledge. low score cases followed up to ensure remedial actions
are taken
Management Aside from reviewing strategies on handling personal Quality Management and
Approach data, the Data Privacy Standing Committee focuses Customer Service
on managing potential data breaches. If a data breach
Customer surveys and
We are committed to providing our customers with does occur, the Committee will conduct an interim Total Quality Management (TQM) motivates employees focus groups
a safe, reliable supply of energy and the caring, assessment on the risk of harm and decide whether in their pursuit of excellence, according to the three To learn about customers’ views on and experience with new
competent and efficient service they expect. Various the incident will be escalated to top management pillars of Courtesy, Craftsmanship and Integrity. products or services
internal policies, programmes and targets are in place to for their attention. The Committee will also suggest
ensure customers receive excellent service. solutions for resolving the incident. Our Superior Quality Service (SQS) programme has
helped us build our customer-centric culture and
Cyber security has also become a key concern of sparked innovative ideas across Hong Kong and Customer Focus Team
Customer Privacy and Cyber Security
stakeholders. To mitigate the risks of data leakages mainland China. Implemented in 1992, the SQS Visits to housing estates to collect customer comments and
and maintain the trust of our customers, we make programme is held under a different theme each year to handle any potential issues such as gas safety, bill payments
At Towngas, we understand the importance of it possible to wipe the data contained in all mobile and gas appliances
encourage staff to initiate new projects that help improve
customer privacy and take every step necessary to devices carried by our gas technicians and other our operations, save costs or generate new revenue. A growing number of customers are becoming
protect our customers’ data in all our communications frontline staff remotely, in case these devices are lost. aware of the positive and negative environmental
with them. To that end, we have established a We also isolate sensitive information from our customer We also have a Towngas Service Pledge as part of and social impacts of the products and services
Privacy Policy Statement that sets out our relationship management system, in order to minimise our commitment to provide a safe and reliable supply they consume. For this reason, we make every effort
standards for handling customer information. the possibility of hacking incidents. of gas to our customers as well as friendly, competent to ensure our marketing materials are accurate and
and efficient service. To ensure our customers are based on substantiated information. We also follow
The Company’s Data Privacy Standing Committee To guard against cyberattacks, we have commissioned receiving the highest standard of service, we are fair and responsible communication practices and
reviews strategies for handling personal data and, a third-party consultant to monitor cyber incidents continuously working towards improving our service remain committed to ensuring that our marketing and
together with the Data Protection Officer and the around the clock. Five response playbooks covering the and setting higher targets. communication materials comply with all relevant
Departmental Data Protection Coordinators, deals with top five cyber security incidents have been prepared, government regulations and industry guidelines. In
In addition, we organise various training exercises addition to our marketing materials, customers can also
personal data situations. Every department is required with actionable, consistent processes developed
and activities to enhance customer service quality, access information on Towngas’ products and services
to make a declaration to the Company about any data for responding to and recovering from various cyber
such as our Three Courtesies (manners, etiquette and through our websites, leaflets, social platforms, and
protection matters that might have arisen during the year.
politeness) culture in Hong Kong and mainland China. other publications.
To further improve our service efficiency and quality, we Improving Accessibility for All
Progress have been applying advanced technologies in various
We are committed to improving access to our products
Areas areas, including our maintenance works and handling
of customer enquiries. Since the launch of our online and services for all customer groups in Hong Kong.
Improving our Customer Services virtual assistant Tinny in 2018, accuracy in responding
to customer enquiries has been improving as a result
Our SQS programme continued to be a highlight of our corporate philosophy of “Growth = innovation x of machine learning and big data. To date, Tinny has
implementation”. Over the past 28 years, our employees have completed over 1,700 SQS projects, which have handled over 115,000 enquiries. Ethnic Minorities
helped to raise customer satisfaction levels and save approximately HK$584 million. Our customer service hotline is available in English,
Providing an Affordable and Cantonese, Putonghua, Tagalog and Indonesian
In our Towngas Service Pledge, we set quantitative targets across six key performance areas, which are updated Reliable Energy Supply
Visually impaired
annually. In 2020, all our targets were achieved.
Our town gas supply reliability remained at the high Bills and gas appliances with Braille instructions are
level of over 99.99 per cent during the year. provided to assist those who are visually impaired
In 2020, Towngas complied with all regulatory requirements and received no substantiated customer complaints
about any data loss or breaches of data privacy in Hong Kong. No incidents of non-compliance were reported Disabled
In large part, this was made possible by our dual feed
with respect to regulations and/or voluntary codes concerning product and service information and labelling, or of natural gas and naphtha that reduces our reliance on Wheelchair access is provided in customer centres
our marketing communications. We have an internal procedure that requires an acknowledgement of customer a single fuel source to make town gas. Disadvantaged Groups
complaints within three working days and a formal reply letter to be provided within two weeks. The 13 cases of
Towngas Concession Schemes are available to
customer complaints received during the year were investigated thoroughly and resolved. Regular meetings are To keep our gas supply functioning at a highly reliable
people in need
also conducted to review complaints received with senior management. level, we have modified our gas production plants so
that they are capable of handling increases in gas In 2020, over 45,000 households
demand. We also installed a backup export gas line at
2020 Towngas Service Pledge benefited from concessions
our Tai Po Gas Production Plant. What’s more, we plan
Results Results
to upgrade the consoles at the Tai Po Gas Production totalling HK$26 million.
Plant in order to enhance cyber security and plant
Reliability Speed and Convenience
control system reliability.
• Uninterrupted gas supply (over 99.99%) 99.99% • Customer Service Hotline: Calls answered 96.10%
within 4 rings
• In case of supply interruption on account
of maintenance or engineering work: 100% • Connect or disconnect gas supply within 100% Community
1 working day
Customer notification 3 days in advance
• Restoration of gas supply within 12

• Deposit refunded at Customer Centres: 100%
hours: 99.99% 2 hours after disconnection of gas supply#
Service Quality
Safety
Develop a systematic process of
• Emergency teams arrive within 25 Arrived
• Efficiency* 9.0 Donated HK$7.9 million
community investment
minutes
in 21.57 towards community activities
• Courteous and friendly attitude* (from collecting feedback to making
minutes on 8.98
decisions)
average
Volunteer service hours:
Appointments
Handling Suggestions 16,633 (Hong Kong) NGO Continue supporting NGOs
• Availability of maintenance and installation 1.21
• Written comments or suggestions: Reply 100% 714,300 (Mainland utility and identifying community
within 3 working days
services within 2 working days working days businesses) programmes that benefit society
#
To enjoy this service, residential customers are advised to inform
• Resolution, or a statement of how and when 100%
us of their requests for refunds at the time of making cap- the matter will be resolved, within 2 weeks Love on Delivery programme
off service appointment and the maximum refund amount is
HK$2,000. distributed 30,000 fresh food
* Our target was to exceed a score of 8.5 out of 10
packs to 1,000 underprivileged
families
For more details on our customer service performance results and 2021 targets, please refer to our corporate
website.
Management Community Health and Wellness

Approach As an extension of our warm and caring culture and in response to the issues associated with an ageing society,
we are focusing more on programmes for people in need and the elderly.
As a caring, socially responsible company, Towngas believes in contributing to the communities we serve and
creating long-lasting value for society.
In 2020, it was much more challenging to take our activities into the community because of the COVID-19
pandemic. Social distancing hindered us from providing our services at a time when the underprivileged needed
To understand the needs of the local communities in which we operate, we engage in ongoing conversations
it most. Many community activities were cancelled, postponed or changed to an online format in order to prevent
with NGOs and government officials to identify appropriate programmes. One of our major outreach vehicles
the spread of the coronavirus.
in Hong Kong for promoting stronger links with the
community is our District Council Focus Team. Community
Health and Despite the challenges of the year, we were able to raise a total of HK$260,000 through our internal Mad Dog
It liaises directly with all District Councillors
Wellness Café fund-raising programme, which was established to improve the living standards of the elderly and people
and works with them and other local
with disabilities. Funds raised during the campaign were used to purchase air purifiers, in addition to the electric
representatives to prioritise needs and
washlets and thermo ventilators donated in past years, in order to maintain good airflow in elderly care homes.
formulate effective solutions that make the
The A total of 75 air purifiers were donated to more than 50 care homes during this year’s campaign.
greatest possible impact. Environment
Our community initiatives focus on three

areas covering many of the social issues 2020 Community Activities (Hong Kong)
faced by the communities in which we operate Youth
Activity Objective Progress
(please refer to the diagram on the right).
Development
Love on Delivery To assist families with decreased 30,000 fresh food packs were
In addition to providing financial aid and in-kind contributions, we also express our encouragement and Programme income as a result of job loss or distributed to 1,000 families
support for our employees to get involved in community and voluntary work in line with our Code of Conduct. underemployment since the outbreak
The Towngas Volunteer Service Team and Towngas Customer Volunteer Team further extend our connections of COVID-19
with the community by enabling our staff, their families and customers to become involved in meaningful
community activities. Soup to Warm the To show our care for the elderly and 47,180 servings of soup
Heart Campaign, people in need distributed
We also participate in lectures, seminars and conferences on topics such as sustainability, safety, climate
Rice Dumplings for
change, water conservation and career development. Through these activities, we are able to share our
the Community and 154,300 rice dumplings donated
management expertise with the public as well as our professional and technical knowledge. This, in turn,
Mooncakes for the
promotes awareness of these issues and encourages greater collaboration on resolving the environmental,
social and governance (ESG) challenges we face. Community 130,500 mooncakes delivered
Farming for Charity To donate vegetables to people in 3,570 catties of vegetables

Progress need through volunteer work on an donated to 7,140 people in need
organic farm
Areas
In 2020, the Towngas Volunteer Service Team in Hong Kong had 785 staff members while Towngas Customer In mainland China, we organise a Rice Dumplings for the
Volunteer Team had 241 customers registered. A total of 16,633 volunteer service hours were contributed for Community programme similar to the annual event we hold in
347,526 beneficiaries. Hong Kong. In 2020, more than 80 project companies within
the Group participated in this programme to wrap and distribute
We are also developing a formal mechanism for collecting feedback from local communities and creating a more than 30,000 rice dumplings for welfare groups and people
process that enables us to better review the feedback we collect on our volunteer services as the basis for future in need. Festive gifts valued at over RMB300,000 were also
decision-making. handed out at the same time, benefiting close to 7,900 people.
Case Study
Supporting people during COVID-19 Love on Delivery Programme
As a socially responsible company, we met the challenge of COVID-19 by extending our caring culture from inside In partnership with the Christian Family Service Centre (CFSC), we
Towngas to focus on external stakeholders. Our response was to explore new and different ways of supporting those in launched the Love on Delivery programme to assist families with
need in the community. decreased income as a result of job loss or underemployment since
the outbreak of COVID-19. A total of 30,000 fresh food packs were
Photocatalytic Disinfectant Spray for Restaurants
distributed to 1,000 families who needed immediate help with daily
necessities and food expenses.
To assist food and beverage (F&B) businesses affected
by the pandemic, we offered to apply nano photocatalytic
A new Facebook page, Love on Delivery, was also launched to
long-acting disinfectant spray and distributed bottle-size
organise online activities, share gas safety tips and cooking videos
nanospray free of charge. This was done not only to curb
to further connect with these families. Through this channel, instead
the spread of the novel coronavirus but also to strengthen
of meeting beneficiaries in person, Towngas volunteers were able to
the public’s confidence in the hygiene of these businesses
transform into volunteers online (VOL) to help those in need under the
and show our support to the catering industry. During the
“new normal”.
programme, we distributed tens of thousands of bottles of
nanospray free of charge to businesses ranging in size from
small street-side diners to large F&B chains in the city.
Supporting F&B and the Economy

Programme
With this programme, our aim was to help revive the

restaurant and catering sector, which has been suffering
tremendously because of the pandemic, as well as
the economy as a whole. The campaign included an
online shopping loyalty programme to give away food
and beverage coupons to encourage public support for New Job Opportunities for the Unemployed
the catering industry and create a positive impact in the
community. Also offered was an interest-free kitchen To assist those who have recently become
equipment rental and purchase scheme to make it easier unemployed, Towngas provided short-term
for those interested to join the catering industry. job placements during the year as part of our
Unemployment Suppor t Programme. New
openings were created and nearly 60 people
were hired under the programme, which aims
to alleviate economic pressures on job-seekers
during this difficult time. It also helped to enrich
their work experience for their future career
development. Upon the completion of their
temporary employment with us, we offered a
one-year contract to selected candidates.
and Chongqing. This programme was extended

Youth Development
in 2020 to Chongqing city and Qingyuan city, Supplier
In 2019 Towngas joined St. James’ Settlement to
Guangdong province. We also built Towngas China Relationship
Charity Libraries and refurbished school facilities.
organise the Green Flame Project – Upcycling for a
Greener Home programme to instil the principle of 2020 Performance Highlights Future Actions and Targets
turning waste into treasure in the next generation. The Environment
Eight outstanding participating students were awarded Assessed over 170 major Work with suppliers to improve their
through the programme in 2020 and went on a three- Towngas held the Towngas Governors Beautification
suppliers in Hong Kong and mainland ESG performance
day local educational tour sponsored by Towngas to Project, in which gas governors throughout the city
China on their CSR performance
broaden their horizons and learn about gas unitisation were decorated with artwork depicting the theme of
in the two major local theme parks in Hong Kong. innovation and green living. A total of 23 gas governors
Promote the ISO 45001
were decorated across the city. Life-cycle Costing
Extended
standard among our suppliers
(LCC) methodology from
To promote public awareness of and support for vehicle purchases to light-emitting
used clothes recycling, we launched a programme in diode (LED) lighting
2020 with Friends of the Earth (HK), the Used Clothes
Recycling Bin Design Competition for primary and
secondary school students in Hong Kong. More than
Management
400 works of art were received from students.
Approach
Towngas also supported a parent-child reading
campaign to communicate the importance of green
We are committed to building long-term business relationships with partners and suppliers for our mutual benefit
living to the younger generation. Towngas collaborated
and prosperity. The Towngas Purchasing Policy ensures that our suppliers can participate in a fair, equitable
with parent-child reading expert Auntie Choi to create
and competitive market. Five key principles have been established as the foundation of responsible supply chain
a cartoon series, the Towngas x Auntie Choi Reading
We also supported activities such as Project YOL management at Towngas. Details of the principles can be found in the graph below.
(Youth Opinion Leader), organised by the Chinese
Journey , which explores environmental protection in
daily life. The four-part series is now available online.
YMCA of Hong Kong to teach media production
Supply Chain Assessment
skills to students from underprivileged families. Staff
from Towngas were among the interviewees who
When selecting suppliers,
shared their insights on sustainability. Examples of the
we consider a wide range
students’ video production work are available online. To offer equal To treat suppliers
of criteria, including a
opportunities to equally and fairly
company ’s background, all suppliers
In 2020, TEA launched its first YouTube channel
featuring career and STEM-related videos as a quality, price, delivery of
learning platform for young people to acquire soft service and corporate
skills and gas knowledge. Other STEM educational social responsibility (CSR)
materials focusing on gas knowledge and safety will performance. Preference is
also be produced for students. given to companies holding
To support green To promote strong
related ISO certificates and
procurement buyer-seller
In mainland China, the Gentle Breeze Movement other documents pertaining practices relationships
was launched in 2013 to improve the learning to quality. An annual review
environment in schools across the country. To date, is conducted to ensure
the Group has donated educational materials worth suppliers on the approved
over RMB4.3 million to 42 schools in the provinces/
list are per forming at a
autonomous regions of Jiangxi, Anhui, Jiangsu, To encourage suppliers to contribute to
satisfactory level.
Shandong, Guizhou, Shaanxi, Liaoning, Guangdong, continuous improvement
Hubei, Fujian, Inner Mongolia, Sichuan, Heilongjiang
Managing Environmental and Social Risks Building a Sustainable Supply Chain

Sustainable Procurement
Progress
The CSR Code of Practice for Suppliers sets out Our Towngas Sustainable Purchasing Policy Areas How we manage our sustainable supply chain involves
the CSR requirements every Towngas supplier must spells out the environmental considerations that should
the complete supply chain life-cycle, from product
follow. They are assessed on their CSR performance be taken into account in every purchasing decision, Supplier Performance and Engagement
design to disposal. We have been sourcing more
according to the following criteria: including the process of procuring services and
sustainable products such as feedstock (natural gas
evaluating product specifications.
In 2020, over 90 per cent of our key suppliers in and landfill gas), pipelines for town gas/natural gas
Hong Kong and mainland utilities (based on total distribution, and environmentally friendly office supplies
We are one of the founding members of the purchase value) completed a CSR self-assessment. and equipment, including energy-efficient lighting and
Sustainable Procurement Charter launched by the It found that no key suppliers had a significant Forest Stewardship Council (FSC) certified products.
Green Council, and our procurement decisions and negative impact, actual or potential, on our business
Business
Ethics processes are in compliance with the ISO 20400 ethics or environmental, human rights and labour We also work closely with our suppliers to develop
Sustainable Procurement Guidance as verified by the practices during the year. We will continue to monitor efficient delivery of gas appliances, affix energy
British Standard Institution (BSI). Making reference to our suppliers and ensure their activities have no
Environmental Workplace
labels to water heaters and reduce the use of plastic
ISO 20400, we have adopted the Life-cycle Costing negative environmental or social impacts.
Undertakings Operations packaging, among other considerations. Additionally,
(LCC) methodology to ensure that the products and
we provide support for the recycling industry through
services we purchase achieve value for money, with Requirements on our suppliers have also been
the long-term partnerships we have established with
the lowest negative environmental impact and most tightened, and they are now obligated to provide
recyclers at EcoPark in Hong Kong.
positive social results. The total costs of the goods and relevant certifications on ISO standards such as
services we procure are estimated over their lifespan, ISO 9001 and ISO 14001 on the e-Tendering
During the year, LCC methodology was extended
Community Marketplace
rather than just their capital costs. We also take into System (eTS) platform when they register as our
Contact Activities from vehicle purchases to light-emitting diode (LED)
consideration future costs such as energy use and vendors. The agreed specifications of the products
lighting. We will continue to extend this method to other
maintenance costs. and/or services are written into their legally binding
categories of products and services for further savings
contract agreements with us. We also plan to
Apart from a self-assessment survey to understand encourage more suppliers to obtain ISO 14001 in other procurement categories.
Training in sustainable procurement is provided to our
how suppliers align with our CSR Code of Practice and to promote ISO 45001 certifications as we will
procurement staff in order to build up their capabilities
for Suppliers, selected key suppliers are evaluated eventually include these standards in our tender To ensure that our staff are familiar with the new
and knowledge in this area.
through site visits. Additionally, they are provided with assessment process. ISO 20400 standard, we organised a Sustainable
improvement plans in the spirit of working together to Procurement Awareness sharing session for all
Supplier Engagement
identify opportunities for improving ESG performance. In 2020, we held our Online Joint Purchase Supplier purchasing staff in Hong Kong in 2020.
Management Meeting in mainland China to keep our
We treat our suppliers as partners and regularly
At Towngas, we are committed to following 6S 1 major suppliers updated on our group standards, We will continue to work closely with our suppliers to
engage them in pursuit of our shared values for
management principles for a safe and efficient quality management experiences, and new system ensure that they are adopting sustainable business
sustainable development. To that end, we maintain
workplace. We also promote 6S practices among applications. practices and will help them comply with our
continuous dialogue with our suppliers and invite them
our suppliers and support those who follow this sustainable procurement policy.
to participate in forums, seminars and site visits so
methodology for improving efficiency, productivity and
we can benchmark their performance and share best
product quality, as well as reducing the risk of industrial In our Hong Kong operation, Suppliers’ profile by geographical
practices.
accidents. over 80% of our suppliers * have location (Hong Kong business)
1
6S refers to the Japanese words Seiri , Seiton , Seiso , Seiketsu ,
Shitsuke (which mean Sort, Set in order, Shine, Standardise,
achieved ISO 14001 certification.
Hong Kong 89.1%
Sustain) and Safety
over 80%
Mainland China 3.1%
Others 7.8%
*Based on total purchase value of product and material
82 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 STRENGTHENING CORPORATE GOVERNANCE 83
10 STRENGTHENING CORPORATE
GOVERNANCE
A high standard of corporate governance is a signal to stakeholders, including investors,

that a company is well managed, ethical and transparent. At Towngas, we maintain
corporate policies and guidelines to ensure good corporate governance, with relevant
whistleblowing channels in place for reporting improprieties. We have also implemented
a robust risk management framework in preparation for any contingency in the ever-
changing business environment.
To embed our corporate culture of integrity and ethics into the mindset of our staff,
we provide comprehensive mandatory training for all new joiners, as well as regular
refresher training and promotion campaigns to ensure their knowledge is up-to-date.
Reinforced our culture of Launch diversified campaigns for all

integrity and launched levels of employees to reinforce our
e-learning modules to further corporate culture of Courtesy,
promote business ethics Craftsmanship and
Integrity
effectiveness
Ensured the
business ethics
Promote
of our risk management and compliance by regularly
framework by continuously reviewing relevant policies and
mitigating risks that may have a
guidelines, and carrying out training
significant impact on our business
and internal audits
Review the effectiveness of

RISK
our risk management
framework to keep abreast of
management
the changing business environment

of fraud, irregularity, misconduct or malpractice, with

Corporate Risk Ethical zero tolerance for any case of corruption or related
Governance Management Business malpractice.
Reporting and Monitoring

Management Management Management
Approach Approach Approach We have a Whistleblowing Policy that encourages
employees and stakeholders to raise concerns
At Towngas, the high standard of corporate about any misconduct, malpractice or irregularity,
We consider risk governance to be among our top At Towngas, we comply fully with all local laws and
governance that we maintain helps to assure particularly in relation to violations of our Code of
priorities at Towngas and have established a robust regulations in every jurisdiction where we operate.
shareholders that their rights and interests are Conduct or our business ethics and principles. It
system of risk management and internal control.
well protected. For other stakeholders, including provides a formal channel and guidance on reporting
This contributes to our future success and helps Our reputation as a trusted service provider and
customers, employees, suppliers and members of possible improprieties. We also have a dedicated
to increase our value to key stakeholders over the business partner depends on our staff operating
the community, our adherence to good corporate panel for dealing with such cases, while staff
long term. ethically and with integrity. The Code of Conduct
governance principles and practices is a clear grievances are handled by the Corporate Human
of the Group provides guidelines on how to handle
demonstration of our commitment to fulfilling our Resources Department. A summary of reported
Our risk management process covers all business issues related to equal opportunity, fair practice,
social responsibilities. whistleblowing cases is sent to the Board Audit and
units in the organisation and concerns all our freedom of association, whistleblowing, conflicts of
Risk Committee twice annually.
people. As an ongoing process, risk management interest and corruption. All staff members are expected
The Board of Directors of Towngas (the Board) is the has become an intrinsic aspect of our day-to- to adhere fully to the principles set out in the Code of
Group’s highest governing body. It is responsible for Training and Awareness
day operations and part of the culture at Towngas. Conduct and will be subject to disciplinary action if
enforcing corporate governance and risk management The Board has the overall responsibility to oversee they contravene those principles. We also require our
through effective internal controls that enhance Training in anti-corruption and the Code of Conduct
risk management and evaluate and determine the suppliers to maintain an equally high standard of ethics
transparency and accountability. is mandatory for all staff, and is included in our
nature and extent of the risks it is willing to take as stipulated in our CSR Code of Practice for
induction course when they first join the Company.
in a manner consistent with its strategic business Suppliers.
All employees are required to confirm on an annual
Progress drivers. To ensure proper risk reporting channels are
basis that they have read and understood the Code
in place, the Group Risk Management Committee Prevention of Bribery, Extortion,
Areas recommends the risks and corresponding controls
of Conduct, which includes our anti-bribery practices;
Fraud and Money Laundering
directors also receive such relevant materials.
to the Executive Risk Management Committee and
As at 31 December 2020, the Board comprised nine reports them to the Board for its endorsement.
members: three executive directors and six non- According to the Prevention of Bribery Ordinance, We promote the Code of Conduct, as well as our
executive directors, three of whom are independent. Towngas is a public body. We therefore insist that Whistleblowing Policy, among our staff and refresh their
The Board is ultimately accountable for the Group’s
Progress our staff and business partners adhere to both the understanding of its principles on a regular basis to
activities, strategies and financial performance. For Areas letter and the spirit of the law during the course of ensure business practices remain compliant.
details about the Board, its composition, operation business. All our employees are strictly forbidden
from giving or accepting bribes and must never Prevention of
and committees, please refer to our corporate As part of our ongoing risk management efforts,
offer an advantage to, or ask for an advantage from, Anti-competitive Practices
website or our Annual Report 2020. the Board reviewed the effectiveness of our risk
customers, suppliers, contractors, regulators and
management framework, as well as key risks
legislators, authorities or other business partners. In our Code of Conduct, we set out our commitment
impacting our business and their corresponding
to comply with the laws and regulations pertaining to
controls, during the bi-annual risk assessment.
The Code of Conduct and an Anti-fraud Policy anti-competitive practices, in line with the Company’s
For further information about risk management at
promote integrity as a core company value. Both help nine core values. The Code also provides guidance
Towngas, please refer to our Annual Report
us to continuously enhance our anti-fraud controls for all staff on understanding the requirements and
2020.
and organisational behaviour to be consistent with importance of compliance, as well as the disciplinary
our ethical culture. Under the Code of Conduct and action and possible liabilities they will be subject to in
Anti-fraud Policy, we are committed to preventing, cases of non-compliance.
detecting and reporting any actual or suspected case
Additionally, we closely monitor the Competition from harm or loss. To reduce security risks, we Following the relevant successful drawing and short
Ordinance and report to the management on any have implemented appropriate security measures. film competitions held in Hong Kong last year, we
Employees
developments that could have a significant impact Security surveys and audits are conducted to assess printed the award-winning drawings on stationery and
on Towngas. possible threats or risks to our major facilities. We • Employment practices1 No reportable cases
distributed them to all employees of the Company
also work with governments and our partners to to raise awareness of the need for ethical behaviour
Protecting Intellectual Property Rights safeguard our assets and provide our employees at work and in everyday life. We also broadcast
and contractors with a secure work environment. the award-winning short films on Towngas’ internal
Customers
All employees must respect, and not infringe, communication channels.
copyrighted work and comply with all applicable While our security team does its utmost to protect • Customer privacy No reportable cases
laws and regulations. We also require our suppliers our people and physical assets, it must also respect In mainland China, we organised training based
• Product and service information
to respect intellectual property. In any case of human rights in the discharge of its duties. We and labelling, and marketing No reportable cases on our Total Quality Management (TQM) theme
infringement of intellectual property rights by our ensure that all security personnel are kept abreast of information of overcoming challenges, which showed how
suppliers, they will have the responsibility to defend legislation concerning human rights and the rule of employees can live up to a culture of Courtesy,
and indemnify Towngas. law and that they treat people in an appropriate and Craftsmanship and Integrity even in difficult times. In
respectful manner. New security personnel receive The Environment addition to the training we provided, we organised
Respect for Human Rights training in anti-corruption and non-discrimination a short film competition to share best practice
during their induction and are required to comply No reportable cases case studies on the principles of our Courtesy,
Prevention of Child Labour or with our Code of Conduct. Craftsmanship and Integrity culture to overcome
1
Employment practices related to compensation and dismissal,
Forced Labour recruitment and promotion, working hours, rest periods, equal challenges at work.
Progress opportunity, diversity, anti-discrimination, and other benefits
and welfare.
In accordance with our adherence to human rights The issue of human rights was a concern raised by
principles, we strictly prohibit child labour and
Areas our stakeholders. We are examining ways to prevent
Promoting an Ethical Culture
forced labour in our operations. To ensure we are and mitigate any human rights violations. We will also
legally compliant with local laws and regulations Legal Compliance In 2020, we provided 156 hours of anti-corruption look at the training needs of our workers so that they
in our recruitment, we check applicants’ identity training for our employees and reinforced our culture are better equipped to address any human rights
including, but not limited to, their age and eligibility of integrity. Due to the COVID-19 pandemic, we issues that might arise in the course of their work.
Towngas complies with all major local laws and
for employment. We also ensure that employees replaced our face-to-face teaching sessions with
regulations, as the basic requirement for how we
are given rest days and are compensated for any e-learning modules on topics such as integrity and
operate.
overtime work, as required by local regulators. anti-fraud.
We have extended the concept of fair labour Business ethics

throughout our entire supply chain and require our
suppliers to comply with our policies on child labour • Anti-corruption No reportable cases
and forced labour, as stipulated in our CSR Code of • Anti-competitive behaviour No reportable cases
Practice for Suppliers. Child labour and forced labour
• Labour standards No reportable cases
are two of our critical assessment criteria when we (child and forced labour)
conduct an on-site corporate social responsibility
(CSR) audit of our suppliers. For more details, please
refer to the Supplier Relationship section. Health and Safety
Security • Occupational health and safety No reportable cases
• Customers and the public No reportable cases

Towngas is committed to minimising potential
security threats to the Company’s facilities and its
employees. We have a Corporate Security Policy in
place to protect employees and company assets
88 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 DATA AND REPORTING 89
11 DATA AND
REPORTING
For more information on the ESG performance of Balance: This ESG Report aims to provide a balanced Your Feedback
Approach to Reporting
our mainland operations – including case studies presentation of the Group’s ESG management
and key performance indicators – please refer to the approach and performance during the Reporting The full version of this report is published on the
Towngas China Company Limited’s Environmental, Period. In particular, we have presented the content Towngas website and the website of SEHK.
Towngas is an organisation that listens and responds to
Social and Governance Report 2020 and Hong of this report to reflect the impacts of the validated
stakeholders’ concerns, including but not limited to the
Kong and China Water Limited’s Corporate Social material ESG issues that have been identified as well We welcome comments on this report, as well as any
social and environmental challenges we face.
Responsibility Report 2020. as our initiatives and efforts to address these impacts. opinions on our future ESG strategy. We invite you
to provide your feedback on our ESG performance
We have been reporting on our environmental, social
Reporting Guidelines Consistency: Consistent methodologies are employed and reporting methods by completing the online
and governance (ESG) performance on an annual
for a meaningful comparison, using year-on-year data. questionnaire or emailing us at cad@towngas.
basis for over a decade. In this report, we cover our
This report was prepared in accordance with the Where our methodologies have changed, these are com .
approach to ESG, which is based on our Towngas
Global Reporting Initiative (GRI) Standards: Core noted in the Key Statistics section.
ESG Framework, disclose our achievements in five key
Option, with reference to the GRI G4 Oil and Gas
areas, and acknowledge where further improvements
Sector Disclosures. It also fulfils the mandatory Independent Verification
can be made.
disclosure requirements and “comply or explain”
provisions of the latest ESG Reporting Guide (ESG This report has been verified by an independent
For this year’s report, we have established a more
Guide) under Appendix 27 to the Rules Governing the third party, Hong Kong Quality Assurance Agency, to
formal structure for easier reading. It includes a
Listing of Securities on The Stock Exchange of Hong ensure its accuracy and completeness, and to verify its
management approach (commitment, policies,
Kong Limited (SEHK). adherence to the reporting guidelines. Please refer to
systems and practices) and progress areas (key
the Verification Statement.
initiatives, focus areas, targets and performance, and
Please refer to the GRI Content Index and the ESG
future plans).
Guide Content Index for more details. Acknowledgement
Reporting Scope and Boundary
Reporting Principles Compiling this report was made possible with
the support of the Towngas ESG Committee, the
This report examines the material topics that arose at
In developing the report content, we have adhered to senior management of the Company, and our many
Towngas and its subsidiaries (the Group) during the
the principles of the GRI Standards and ESG Guide, departments. We are sincerely grateful to everyone
period from 1 January 2020 to 31 December 2020,
including but not limited to the following: who contributed their time, knowledge and insights
unless otherwise stated.
towards the preparation of this report. We also thank
Materiality: A description of our materiality assessment our staff, partners, customers and other stakeholders
Information on our ESG performance covers the
process can be found in the Materiality who share our vision of enhanced business
principal activities of the Group, which include the
Assessment section. It outlines the way we identify, sustainability.
production, distribution and marketing of gas, water
prioritise and validate material topics, including how we
supply and emerging environmentally friendly energy
take key stakeholders’ views into account.
businesses in Hong Kong and mainland China. Our
financial performance is discussed in the Creating
Quantitative: The details of how we quantify our data,
Business Opportunities section, while more
including standards, methodologies, assumptions
comprehensive information on our financial data and
and conversion factors, can be found in the Key
businesses is available in the Annual Report 2020.
Statistics section.
Key Statistics Employees
Unit 2020 2019 2018 2017 2016

This section presents an overview of the 2020 key performance of the Group, with a focus on economic, safety, Total Headcount
environmental, employee and social aspects. These quantitative data have been selected in accordance with the
Hong Kong gas business Number 2,130 2,096 2,052 2,022 2,019
GRI Standards, the ESG Guide of SEHK, and other key performance indicators.
All Hong Kong staff 1
Economic Performance Full-time Number 2,495 2,474 2,418 2,388 2,392
Part-time Number 140 118 112 94 116
Unit 2020 2019 2018 2017 2016 By gender
Operating Male Number 1,950 1,943 1,908 1,877 1,887
Customers (Hong Kong gas business) Million 1.94 1.93 1.91 1.88 1.86 Female Number 545 531 510 511 505
Customers (City-gas business) Million 31.8 29.8 27.5 25.4 23.1 Ratio of male to female – Senior management Ratio 3.1:1 3.3:1 3.4:1 3.4:1 3.4:1
Customers (Water business) Million 2.53 2.38 2.24 1.24 1.19 Ratio of male to female – Middle management Ratio 3.0:1 3.1:1 3.0:1 3.0:1 3.2:1
Town gas sales (Hong Kong) Million MJ 27,947 28,712 29,550 29,049 28,814 Ratio of male to female – General staff Ratio 4.2:1 4.3:1 4.5:1 4.4:1 4.3:1
Gas sales (Mainland China) Billion m3 26.9 25.6 23.0 19.5 17.1 By age group
Water sales (Mainland China) Million tonnes 917 926 610 467 455 ≤25 Number 147 139 124 123 126
Financial 26-35 Number 465 444 400 395 372
Revenue HK$ million 40,927 40,628 39,073 32,477 28,557 36-45 Number 480 486 496 475 487
Manpower costs HK$ million 3,284 3,485 3,295 3,035 2,955 46-55 Number 750 787 823 861 909
Capital expenditure HK$ million 7,295 7,053 6,746 6,141 6,257 ≥56 Number 653 618 575 534 498
Taxation HK$ million 1,713 2,290 1,908 1,750 1,576 By employee category
Dividends HK$ million 6,220 5,924 5,385 4,896 4,451
Senior management Number 267 265 251 236 239
Profit attributable to shareholders HK$ million 6,007 6,966 9,313 8,225 7,341
Middle management Number 918 925 889 843 831
General staff Number 1,310 1,284 1,278 1,309 1,322
Hong Kong
Safety Performance Turnover Rate
Unit 2020 2019 2018 2017 2016 Average turnover of workforce (Hong Kong gas business) % 3.9 5.7 6.8 5.7 5.8
Employees 1 Average turnover of workforce (all Hong Kong staff) % 5.0 5.7 8.7 6.4 6.7
By gender
Accidents – all industrial injuries Number 21 12 10 10 13
Reportable accidents Number 18 9 7 10 12 Male % 4.2 4.6 7.0 5.6 6.0
Accident frequency rate Number of accidents 0.32 0.18 0.15 0.15 0.19 Female % 7.6 9.8 15.1 9.3 9.0
per 100,000 man-hours By age group
Occupational diseases rate Number of incidents 0 0 0 0 0 ≤25 % 4.9 12.2 16.2 19.3 21.3
per 100,000 man-hours 26-35 % 9.2 10.9 20.4 13.0 14.8
Accident incidence rate Number of reportable 6.1 3.1 2.4 3.4 4.1
accidents per 1,000 36-45 % 4.3 7.3 9.9 7.1 6.1
employees 46-55 % 2.7 2.5 4.4 2.6 3.4
Traffic accident injury rate Number of traffic accident 1.46 1.05 2.31 2.31 3.36 ≥56 % 5.0 3.7 4.1 4.1 3.4
injuries per 100 vehicles
Industrial injury man-days lost Number of man-days 386 244 201 496 576
Fatal accidents Number 0 0 0 0 0
Contractors
Reportable accidents Number 11 6 9 12 N/A
Fatal accidents Number 0 0 0 0 N/A
Accident frequency rate Number of accidents 0.25 0.14 0.22 0.30 N/A
per 100,000 man-hours
1. A revised scope was adopted in 2016. The scope includes the employees of companies with business in Hong Kong (i.e. Towngas, Towngas Enterprise
1. Towngas employees and the employees of its subsidiaries only. Limited, ECO Stations, TGT and U-Tech). The figures have been adjusted accordingly.
Unit 2020 2019 2018 2017 2016 Environmental Performance

New Recruitment
Unit 2020 2019 2018 2017 2016
Total Number 203 250 270 198 200
Energy Consumption 1
By gender
Male Number 141 173 194 148 144 Towngas Headquarters
Female Number 62 77 76 50 56 Electricity GJ 19,384 20,252 20,350 20,921 21,383
By age group Town gas GJ 1,392 2,258 2,104 2,020 2,217
Gas production process
≤25 Number 50 51 44 53 56
Indirect: Electricity GJ 165,304 164,242 148,134 137,142 150,251
26-35 Number 72 102 95 74 71 Direct: Naphtha GJ 665,811 720,641 671,808 628,760 616,538
36-45 Number 39 52 79 42 34 Natural gas GJ 5,178,927 5,383,668 5,287,475 5,033,398 5,069,673
46-55 Number 19 27 33 15 22 Synthetic natural gas and landfill GJ 124,985 42,038 325,950 584,126 481,963
≥56 Number 23 18 19 14 17 gas
Percentage of Staff Who Underwent Performance and Career Reviews Town gas GJ 175,038 172,701 172,617 160,011 168,086
Diesel GJ 1,300 1,537 1,480 1,373 1,365
Total % 84.6 82.8 83.4 85.2 85.6 Total energy consumption GJ 6,487,876 6,544,810 6,607,464 6,484,827 6,311,365
By gender Vehicle fleet 2
Male % 85.9 83.9 84.5 86.4 87.1 Unleaded petrol GJ 8,797 10,231 11,500 12,679 14,518
Diesel GJ 11,810 12,017 11,429 11,316 10,172
Female % 80.0 78.9 79.0 80.8 79.8
By employee category Packaging Material Use
Senior management % 83.1 79.6 80.5 85.2 82.0 Carton Tonnes 842 946 942 889 822
Middle management % 91.4 89.4 89.8 82.9 92.4 Wood Tonnes 15.5 17.7 19.8 18 29
General staff % 80.2 78.7 79.4 80.2 81.9 Plastic Tonnes 1.41 0.88 0.45 0.7 0.9
Emissions
Training Hours 1
Carbon Dioxide (CO2) Daily average in metric 884 912 928 915 907
Total Hours 51,865 65,679 82,996 27,907 15,753 tonnes (Metric tonnes (11.90) (11.90) (11.70) (11.64) (11.55)
per million MJ of town gas)
Average (per employee) Hours 17.5 22.4 28.6 10.5 6.6
Nitrogen Oxides (NOx) Daily average in kg (kg 298 308 317 311 314
Anti-corruption Hours 156.4 4,649.2 661.5 187.8 200 per million MJ of town gas) (4.0) (4.00) (4.00) (4.00) (4.00)
Sulphur Oxides (SOx) Daily average in kg (kg 1.0 1.0 1.4 1.9 1.4
By gender (Average training hours and percentage of employees who received training) per million MJ of town gas) (0.01) (0.01) (0.02) (0.02) (0.02)
Greenhouse gases Tonnes CO2e 344,549 357,060 347,489 329,741 333,841
Male Hours 19.1 25.6 31.2 11.2 5.8 (production equipment)3
(%) (63.4) (93.7) (88.9) (53.3) (43.3)
Water Consumption and Discharge (Gas Production)4
Female Hours 12.4 12.3 20.2 7.8 9.6
(%) (58.0) (87.1) (82.3) (61.5) (70.3) Water consumption m3 982,034 995,239 988,981 1,094,363 1,162,611
(m3 per million MJ of (35.9) (35.3) (34.0) (38.1) (40.5)
town gas)
By employee category (Average training hours and percentage of employees who received training)
Total wastewater discharged Daily average in m3 (m3 270 306 308 319 321
Senior management Hours (%) 7.4 9.8 17.1 5.9 9.5 per million MJ of town gas) (3.50) (3.90) (3.90) (4.10) (4.10)
Treated wastewater discharged to Daily average in m3 37 45 52 62 79
(73.5) (85.0) (85.0) (50.0) (73.2)
marine water bodies
Middle management Hours (%) 8.3 13.7 22.9 7.9 10.7
Wastewater discharged to sewage Daily average in m3 232 261 257 258 241
(70.4) (96.8) (89.8) (60.1) (63.4)
General staff Hours (%) 25.3 30.5 34.3 13.2 3.5
(54.6) (90.7) (86.3) (53.0) (35.6)
1. The following conversion factors are used to standardise the units to gigajoules (GJ): Town gas (0.048GJ/unit), electricity (0.0036GJ/kWh), petrol (0.033GJ/
L), diesel (0.036GJ/L). The conversion of naphtha and landfill gas to energy is calculated by multiplying individual monthly fuel volumetric data by their
corresponding monthly average calorific value.
2. Tankers and ECO Aviation Fuel Services (EAFS) vehicles are excluded.
3. GHG inventory covers seven types of GHGs specified in the Kyoto Protocol. The global warming potential rates were from the IPCC Fifth Assessment Report
(2014).
Emission factors of GHG emissions due to electricity consumption are obtained from two local electricity companies, while other emission factors were
obtained from local governments and authorities, or other recognised sources.
1. From 2018, the figures included all training sessions conducted by internal departments and external organisations. Prior to 2018, the figures included training Scope 1 GHG emissions were adjusted to reflect the biogenic nature of landfill gas and its associated carbon emissions during use.
sessions mainly conducted by the Corporate Human Resources Department and Towngas Engineering Academy, while other training hours, such as HSE and 4. All water is freshwater purchased and distributed by the HKSAR Water Supplies Department. All wastewater handling procedures comply with the local
its related CPD, were reported separately. regulations.
Unit 2020 2019 2018 2017 2016 Outside Hong Kong

Waste Management Safety Performance1
Non-hazardous waste
Unit 2020 2019 2018 2017 2016
Non-hazardous waste landfilled1 Tonnes 169.0 179.4 173.2 176.9 150.4
Non-hazardous waste recycled2 Tonnes 135.4 179.5 236.3 199.4 125.7 Safety training Hour 1,158,454 864,759 836,813 979,628 906,691
Hazardous waste 3 Serious gas-related accidents Number 2 8 10 8 13
Chemical waste generated Daily average in kg (kg 145 238 38 193 167 Fatal accidents Number 0 0 0 2 2
per million MJ of town gas) (2.00) (3.10) (0.50) (2.50) (2.10) Industrial injury man-days lost Number of man-days 955 1,265 1,667 2,153 3,654
Spent catalyst collected for metal Tonnes 0 27.4 9.1 11.4 18.5
recovery Environmental Performance2
Spent lube oil recycled Tonnes 44 64.5 3.4 44.8 45.6
Others Unit 2020 2019 2018 2017 2016
Scrap metal recycled – from used gas Tonnes 1,626 1,678 1,785 1,803 1,218 Energy and Water Consumption3
appliances
Diesel GJ 85,499 101,709 79,479 71,848 82,204
Scrap metal recycled – from Tonnes 62 82 153 92 34
construction and maintenance of Natural gas GJ 473,302 396,348 320,536 324,522 465,110
plant and pipelines Unleaded petrol GJ 101,924 105,700 103,980 74,936 68,430
Polyethylene (PE) pipes recycled Tonnes 24.1 22.5 25.8 24.8 30.9 Electricity GJ 2,726,131 2,696,294 2,155,279 1,600,126 1,567,187
Gas appliances polyfoam packaging Tonnes 1.10 1.38 1.50 1.46 1.56 Others GJ 10,464,435 10,590,575 9,591,164 9,104,091 9,737,518
materials avoided Water m3 5,234,424 4,827,702 4,204,432 4,078,327 3,731,565
Social Performance Emissions
Total Greenhouse gases (GHG)4 Tonnes CO2e 1,406,000 1,439,000 1,262,000 1,245,000 1,233,000
Customer Service 4
Scope 1 emissions 5
Tonnes CO2e 818,000 843,000 807,000 822,000 834,000
Scope 2 emissions6 Tonnes CO2e 588,000 596,000 455,000 423,000 399,000
Unit 2020 2019 2018 2017 2016
Nitrogen oxides (NOx) 7
Tonnes 223.7 296.1 223.7 123.7 149.8
Customer compliments Number 5,814 5,924 5,912 5,637 # 6,474 #
Sulphur dioxides (SO2) 7
Tonnes 258.0 422.0 392.9 89.2 98.4
Customer complaints Number 13 7 12 8# 12 #
Respirable suspended particulates (PM10) Tonnes8
2.34 2.99 2.35 0.31 0.27
#
The data have been adjusted to include written records only
Effluent and Waste9
Community Involvement Hazardous waste (Solid) Tonnes 1,006 1,099 1,125 1,026 1,134
Hazardous waste (Liquid) Litres 86,645 46,192 39,131 42,857 28,600
Unit 2020 2019 2018 2017 2016 Non-hazardous waste (Solid) Tonnes 252,542 239,050 215,425 202,047 220,180
Charitable donations made by HK$ million 7.9 7.2 4.8 5.1 7.1 Non-hazardous waste (Liquid) Litres 45,683 50,427 54,912 69,999 65,677
the Group Wastewater discharged to sewage m3 1,204,411 1,355,985 1,090,574 1,847,850 2,088,830
Employees participating in Number 785 799 909 852 830
voluntary services
Voluntary service hours Hours 16,633 87,557 91,628 86,455 75,588 1. Employees only. The scope includes mainland utility businesses, new energy and diversified businesses that are majority owned by Towngas.
2. The scope includes mainland utility businesses, new energy and diversified businesses that are majority owned by Towngas.
(including employees and customers) 3. The following conversion factors are used to standardise the units to gigajoules (GJ): electricity (0.0036GJ/kWh), petrol (0.033GJ/L), diesel (0.036GJ/L) and
natural gas (0.04GJ/m 3).
Beneficiaries Number 347,526 593,131 709,766 655,876 488,755 4. The reported GHG emission data cover the operations within (around 30%) and outside Hong Kong (around 70%). Data are consolidated on an equity basis.
GHG emissions inventory covers seven types of GHGs specified in the Kyoto Protocol. The global warming potential rates were from the IPCC Fifth
Assessment Report (2014).
1. “Non-hazardous waste landfilled” refers to the refuse, wood pallets and construction waste collected from Towngas Headquarters and the Tai Po Gas Regional grid emission factors were used for GHG emissions due to electricity consumption, while other emission factors were obtained from local
Production Plant. governments and authorities, or other recognised sources.
2. “Non-hazardous waste recycled” refers to the plastics, papers, paper cartons and metals collected and delivered to recycling contractors. Apart from these 5. Scope 1 emissions – Direct emissions including fuel consumption of production plants, vehicle fleets etc.
waste categories, we also recycle other non-hazardous waste, such as used red packets and cartridges, on a regular basis. Scope 1 GHG emissions were adjusted to reflect the biogenic nature of landfill gas and its associated carbon emissions during use.
3. All chemical waste handling procedures comply with the Waste Disposal Ordinance (Cap. 354) of the Laws of Hong Kong. We also collect other 6. Scope 2 emissions – Electricity consumption of production plants, offices, customer centres, gas refilling stations, data centres, etc.
hazardous waste, such as rechargeable batteries, fluorescent tubes and obsolete electronic products, and deliver them to licensed recyclers on a regular 7. From fuel combustion and vehicle emissions.
basis. 8. From vehicle emissions.
4. Written records are included. 9. All hazardous waste and wastewater handling procedures comply with the national regulations.
Employees1 Unit 2020 2019 2018 2017 2016

New Recruitment
Unit 2020 2019 2018 2017 2016
Total Number 1,493 2,736 3,558 1,196 1,853
Total Headcounts
By gender
Employees Number 51,074 50,352 49,489 46,772 46,803 Male Number 1,123 1,864 2,418 910 1,352
By employment types Female Number 370 872 1,140 286 501
Full-time Number 51,067 50,342 49,478 46,758 46,789 By age group
Part-time Number 7 10 11 14 14 ≤25 Number 392 766 1,186 216 320
By gender 26-35 Number 735 1,201 1,743 513 766
Male Number 34,876 34,069 33,331 31,386 31,945 36-45 Number 281 590 487 285 465
Female Number 16,191 16,273 16,147 15,372 14,844 46-55 Number 73 152 121 155 260
By age group ≥56 Number 12 27 21 27 42
≤25 Number 3,809 3,989 4,065 4,114 4,656
26-35 Number 18,181 16,574 16,733 16,527 16,468 Social Performance
36-45 Number 14,858 15,151 15,024 14,249 13,964
46-55 Number 11,876 12,225 11,572 10,124 9,961 Community Involvement
≥56 Number 2,343 2,403 2,084 1,744 1,740
By employee category Unit 2020 2019 2018 2017 2016
Senior management Number 1,082 1,003 1,002 971 929 Employees participating in Number 11,176 11,487 11,154 8,013 9,016
Middle management Number 5,013 5,750 5,074 4,506 4,485 voluntary services
General staff Number 44,972 43,589 43,402 41,281 41,375 (Mainland utility businesses)
Voluntary service hours Hours 714,300 264,440 238,000 135,154 93,701
Turnover Rate (Mainland utility businesses)
Average turnover % 2.0 2.8 4.1 4.1 2.3
By gender
Male % 2.1 2.9 4.8 4.7 2.5
Female % 1.7 2.6 2.5 2.8 1.9
By age group
≤25 % 4.5 6.2 7.7 4.6 3.5
26-35 % 2.9 4.0 7.2 6.4 2.7
36-45 % 1.5 2.1 2.0 2.5 1.9
46-55 % 0.7 1.3 0.8 2.3 1.7
≥56 % 0.8 1.3 2.6 3.5 1.8
1. Includes all people employed by the Group, its subsidiaries, associates and joint ventures outside Hong Kong.
98 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 GRI & ESG CONTENT INDEX 99
12 GRI & ESG

CONTENT INDEX
GRI Standards/ Disclosures Cross Reference/ External
Global Reporting Initiative (GRI) Content Index
Material Topics Information Assurance
This report was compiled in accordance with the Core Option of the GRI Standards, and with reference to the GRI Ethics and 102-16 Values, principles, standards, Our ESG Approach (p.14-15) •
Integrity and norms of behaviour
G4 Oil and Gas Sector Disclosures.
Governance 102-18 Governance structure Board Statement (p.3) •
GRI Standards/ Disclosures Cross Reference/ External Our ESG Approach (p.18)
Material Topics Information Assurance Strengthening Corporate Governance
102: General Disclosures 2016 (p.83-84)
Organisational 102-1 Name of the organisation Our ESG Approach (p.14) • Stakeholder 102-40 List of stakeholder groups Our ESG Approach (p.19) •
Profile 102-2 Activities, brands, products, Creating Business Opportunities • Engagement 102-41 Collective bargaining Contributing to Stakeholders (p.64-65) •
and services (p.28-29) agreements
Appendices (p.112) 102-42 Identifying and selecting Our ESG Approach (p.19) •
102-3 Location of headquarters Creating Business Opportunities • stakeholders
(p.28) 102-43 Approach to stakeholder Our ESG Approach (p.19-23) •
102-4 Location of operations Creating Business Opportunities • engagement
(p.30) 102-44 Key topics and concerns raised Our ESG Approach (p.23) •
102-5 Ownership and legal form Creating Business Opportunities •
(p.28) Reporting 102-45 Entities included in the Data and Reporting (p.88-89) •
102-6 Markets served Creating Business Opportunities • Practice consolidated financial Annual Report: Independent Auditor’s
(p.28-30) statements Report (p.85-91)
102-7 Scale of the organisation Creating Business Opportunities • 102-46 Defining report content and Our ESG Approach (p.20-22) •
(p.28-30) topic boundaries Data and Reporting (p.88)
Contributing to Stakeholders (p.67)
102-47 List of material topics Our ESG Approach (p.21-22) •
Key Statistics (p.90, 91, 96)
102-8 Information on employees and Key Statistic (p.91-92, 96-97) • 102-48 Restatements of information Key Statistics (p.90-97) •
other workers 102-49 Changes in reporting Our ESG Approach (p.20-22) •
102-9 Supply chain Contributing to Stakeholders (p.79-81) • Data and Reporting (p.88)
102-10 Significant changes to the Creating Business Opportunities • 102-50 Reporting period Data and Reporting (p.88) •
organisation and its supply (p.26-35) 102-51 Date of most recent report ESG Report 2019, •
chain Contributing to Stakeholders (p.81)
published in April 2020
Data and Reporting (p.88-89)
102-52 Reporting cycle Annual •
102-11 Precautionary Principle or Strengthening Corporate Governance •
approach (p.84) 102-53 Contact point for questions Data and Reporting (p.89) •
102-12 External initiatives Appendices (p.113) • regarding the report
102-13 Membership of associations Appendices (p.113) • 102-54 Claims of reporting in Data and Reporting (p.88) •
accordance with the GRI
Strategy 102-14 Statement from senior Managing Director’s Message (p.5-7) •
decision-maker Standards
102-15 Key impacts, risks and Our ESG Approach (p.14-25) • 102-55 GRI content index GRI Content Index (p.98-105) •
opportunities Creating Business Opportunities 102-56 External assurance Verification Statement (p.115) •
(p.26-35)
Protecting the Environment (p.52-55)
GRI Standards/ Disclosures Cross Reference/ External GRI Standards/ Disclosures Cross Reference/ External
Material Topics Information Assurance Material Topics Information Assurance
200: Economic 300: Environmental
201: Economic 103 Management approach Creating Business Opportunities • 301: Materials 103 Management approach Protecting the Environment (p.49-50) •
Performance (p.27-35) 2016 Towngas Sustainable
2016 Annual Report – Chairmen’s Purchasing Policy
Statement (p.6-13) 301-1 Materials used by weight or Key Statistics (p.93-95) •
201-1 Direct economic value Creating Business Opportunities • volume
generated and distributed (p.31)
301-2 Recycled input materials used Protecting the Environment (p.56) •
Annual Report – Report of the
Directors (p.64-71) 302: Energy 103 Management approach Our ESG Approach (p.21-22) •
201-2 Financial implications and other Protecting the Environment (p.52-55) • 2016 Protecting the Environment (p.49, 58)
risks and opportunities due to Annual Report – Risk Factor (p.56-57) Green Building
climate change
302-1 Energy consumption within the Key Statistics (p.93-95) •
201-4 Financial assistance received Annual Report – Notes to the Financial •
organisation
from government statements
302-4 Reduction of energy Protecting the Environment (p.56-59) •
202: Market 103 Management approach Creating Business Opportunities • consumption Green Building
Presence (p.27-29) 302-5 Reductions in energy Protecting the Environment (p.56-59) •
2016 202-1 Ratios of standard entry level In 2020, all standard entry level wages • requirements of products and
wage by gender compared to fulfilled the regulatory requirement. services
local minimum wage G4-OG3 Total amount of renewable Creating Business Opportunities •
energy generated by source (p.33-35)
204: 103 Management approach Contributing to Stakeholders (p.79-80) •
Protecting the Environment (p.56-57)
Procurement 204-1 Proportion of spending on local Contributing to Stakeholders (p.79-81) •
Practices suppliers
303: Water 103 Management approach Our ESG Approach (p.21-22) •
2016
and Effluents Protecting the Environment (p.49, 59)
205: Anti- 103 Management approach Our ESG Approach (p.21-22) • 2018 Green Building
corruption Strengthening Corporate Governance 303-1 Interactions with water as a Protecting the Environment •
2016 (p.85) shared resource (p.49, 59-60)
Corporate Governance 303-2 Management of water Protecting the Environment •
205-3 Confirmed incidents of Strengthening Corporate Governance • discharge-related impacts (p.49, 59-60)
corruption and actions taken (p.86) 303-3 Water withdrawal Key Statistics (p.93, 95) •
303-4 Water discharge Key Statistics (p.93, 95) •
206: Anti- 103 Management approach Our ESG Approach (p.21-22) •
competitive Strengthening Corporate Governance 304: 103 Management approach Protecting the Environment (p.49, 61) •
Behaviour (p.85)
Biodiversity
2016 206-1 Legal actions for anti- Strengthening Corporate Governance •
2016
competitive behaviour, anti- (p.86)
trust, and monopoly practices
305: 103 Management approach Our ESG Approach (p.21-22) • 308: Supplier 103 Management approach Our ESG Approach (p.21-22) •
Emissions Protecting the Environment (p.49-55) Environmental Contributing to Stakeholders (p.79-80)
2016 Carbon Management Assessment 308-2 Negative environmental impacts Contributing to Stakeholders (p.80-81) •
305-1 Direct (Scope 1) GHG Protecting the Environment (p.57) • 2016 in the supply chain and actions
taken
emissions Key Statistics (p.93, 95)
305-2 Energy indirect (Scope 2) Protecting the Environment (p.57) • 400: Social
GHG emissions Key Statistics (p.93, 95)
401: 103 Management approach Our ESG Approach (p.21-22) •
305-4 GHG emissions intensity Protecting the Environment (p.57) •
Employment Contributing to Stakeholders (p.64)
305-5 Reduction of GHG emissions Protecting the Environment (p.50-57) •
2016 401-1 New employee hires and Contributing to Stakeholders (p.67) •
305-7 NOx, SOx, and other significant Key Statistics (p.93, 95) • employee turnover Key Statistics (p.91-92, 96-97)
air emissions 401-2 Benefits provided to full- Contributing to Stakeholders •
time employees that are not (p.64, 66)
306: Effluent 103 Management approach Our ESG Approach (p.21-22) •
provided to temporary or part-
and Waste Protecting the Environment (p.49, 59)
time employees
2016 Waste Management
306-1 Water discharge by quality and Key Statistics (p.93, 95) • 402: Labour/ 103 Management approach Our ESG Approach (p.21-22) •
destination Management Contributing to Stakeholders (p.64-65)
306-2 Waste by type and disposal Key Statistics (p.94-95) • Relations 2016 402-1 Minimum notice periods Contributing to Stakeholders (p.64-65) •
method regarding operational changes
306-3 Significant spills Protecting the Environment (p.60) •
403: 103 Management approach Our ESG Approach (p.21-22) •
306-4 Transport of hazardous waste Key Statistics (p.94-95) • Occupational Ensuring Health and Safety (p.38)
306-5 Water bodies affected by water No water bodies are significantly • Health and HSE Policy
discharges and/or runoff affected by our Hong Kong operation. Safety 2018 403-1 Occupational health and safety Ensuring Health and Safety (p.38) •
management system
Products and G4-OG5 Volume and disposal of Key Statistics (p.93, 95) •
403-2 Hazard identification, risk Ensuring Health and Safety (p.38, 42) •
Services formation or produced water In 2020, our Hong Kong operation assessment, and incident
did not involve formation or produced investigation
water. 403-3 Occupational health services Ensuring Health and Safety (p.37-41) •
G4-OG7 Amount of drilling waste In 2020, our Hong Kong operation did • 403-4 Worker participation, Ensuring Health and Safety (p.38) •
(drill mud and cuttings) and not involve drilling waste. consultation, and
strategies for treatment and communication on occupational
disposal health and safety
G4-OG8 Benzene, lead and sulfur The composition of town gas is • 403-5 Worker training on occupational Ensuring Health and Safety (p.38-39) •
content in fuels regulated by the Environmental health and safety
Protection Department, and the 403-6 Promotion of worker health Ensuring Health and Safety (p.40-41) •
403-7 Prevention and mitigation of Ensuring Health and Safety (p.38-41) •
benzene, lead and sulfur contents did
occupational health and safety
not exceed the permitted levels during
impacts directly linked by
the reporting period.
business relationships
307: 103 Management approach Protecting the Environment (p.49) • 403-8 Workers covered by an Ensuring Health and Safety (p.37-39) •
Environmental 307-1 Non-compliance with Strengthening Corporate Governance • occupational health and safety
management system
Compliance environmental laws and (p.87)
403-9 Work-related injuries Ensuring Health and Safety (p.37, 39) •
2016 regulations
Key Statistics (p.90, 95)
404: Training 103 Management approach Our ESG Approach (p.21-22) • 409: Forced 103 Management approach Our ESG Approach (p.21-22) •
and Education Contributing to Stakeholders (p.65) or Compulsory Contributing to Stakeholders (p.64)
2016 404-1 Average hours of training per Key Statistics (p.92) • Labour 2016 Strengthening Corporate Governance
year per employee (p.86)
404-2 Programmes for upgrading Contributing to Stakeholders (p.68) • 409-1 Operations and suppliers at Contributing to Stakeholders •
employee skills and transition significant risk for incidents of (p.80-81)
assistance programmes forced or compulsory labour Strengthening Corporate Governance
404-3 Percentage of employees Key Statistics (p.92) • (p.86)
receiving regular performance 410: Security 103 Management approach Our ESG Approach (p.21-22) •
and career development Practices 2016 Strengthening Corporate Governance
reviews (p.86)
410-1 Security personnel trained Strengthening Corporate Governance •
405: Diversity 103 Management approach Our ESG Approach (p.21-22) • (p.86)
in human rights policies or
and Equal Contributing to Stakeholders procedures
Opportunity (p.64, 68, 69)
2016 405-1 Diversity of Governance Bodies Key Statistics (p.91-92, 96) • 412: Human 103 Management approach Our ESG Approach (p.21-22) •
and Employees Rights Strengthening Corporate Governance
Assessment (p.86)
406: Non- 103 Management approach Our ESG Approach (p.21-22) • 2016 412-2 Employee training on human Strengthening Corporate Governance •
Discrimination Contributing to Stakeholders rights policies or procedures (p.87)
2016 (p.64, 66, 69)
406-1 Incidents of discrimination and Contributing to Stakeholders (p.69) • 413: Local 103 Management approach Ensuring Health and Safety (p.44-46) •
Communities Contributing to Stakeholders (p.74)
corrective actions taken
2016 District Council Focus Team
407: Freedom 103 Management approach Contributing to Stakeholders (p.65) • Social Projects
of Association Strengthening Corporate Governance Towngas Concession Schemes
and Collective (p.85) 413-1 Operations with local Contributing to Stakeholders (p.74-78) •
community engagement,
Bargaining
impact assessments and
2016
development programmes
408: Child 103 Management approach Our ESG Approach (p.21-22) • 413-2 Operations with significant Ensuring Health and Safety (p.44-47) •
Labour 2016 Contributing to Stakeholders (p.64) actual and potential negative
Strengthening Corporate Governance impacts on local communities
(p.86) G4-OG11 Number of sites that have been In 2020, our Hong Kong operation did •
408-1 Operations and suppliers at Contributing to Stakeholders (p.80-81) • decommissioned and sites that not involve such sites.
are in the process of being
significant risk for incidents of Strengthening Corporate Governance
(p.86) decommissioned
child labour
414: Supplier 103 Management approach Our ESG Approach (p.21-22) • 419: 103 Management approach Our ESG Approach (p.21-22) •
Social Contributing to Stakeholders (p.79-81) Socioeconomic Ensuring Health and Safety (p.38)
Assessment 414-2 Negative social impacts in the Contributing to Stakeholders (p.79-81) • Compliance Contributing to Stakeholders (p.64)
2016 supply chain and actions taken
2016 Strengthening Corporate Governance
416: Customer 103 Management approach Our ESG Approach (p.21-22) • (p.84-86)
Health and Ensuring Health and Safety (p.42) 419-1 Non-compliance with laws and Strengthening Corporate Governance •
Safety 2016 Contributing to Stakeholders (p.70-71) regulations in the social and (p.86-87)
Customer Safety economic area
Public Safety
416-1 Assessment of the health and Ensuring Health and Safety (p.42-47) • Emergency 103 Management approach Our ESG Approach (p.21-22) •
safety impacts of product and Preparedness Ensuring Health and Safety
service categories (p.38, 45-46)
416-2 Incidents of non-compliance Strengthening Corporate Governance • Public Safety
concerning the health and (p.86)
safety impacts of products and Asset Integrity 103 Management approach Our ESG Approach (p.21-22) •
services and Process Ensuring Health and Safety
Safety (p.38, 45-46)
417: Marketing 103 Management approach Our ESG Approach (p.21-22) •
Network Safety
and Labelling Contributing to Stakeholders (p.71)
2016 417-2 Incidents of non-compliance Contributing to Stakeholders (p.72) • G4-OG13 Number of process safety Ensuring Health and Safety (p.46-47) •
concerning product and service Strengthening Corporate Governance events, by business activity
information and labelling (p.87)
Fossil Fuel 103 Management approach Creating Business Opportunities •
417-3 Incidents of non-compliance Contributing to Stakeholders (p.72) •
concerning marketing Strengthening Corporate Governance Substitutes (p.33-35)
communications (p.87) Protecting the Environment (p.56-57)
Landfill Gas
418: Customer 103 Management approach Our ESG Approach (p.21-22) •
G4-OG14 Volume of biofuels produced Creating Business Opportunities •
Privacy 2016 Contributing to Stakeholders (p.38)
and purchased meeting (p.33-35)
Privacy Policy Statement
sustainability criteria Protecting the Environment (p.56-57)
418-1 Substantiated complaints Contributing to Stakeholders (p.72) •
concerning breaches of
customer privacy and losses of
customer data
Environmental, Social and Governance Aspects General Disclosures and KPIs Cross Reference/Information
Reporting Guide (ESG Guide) Content Index A3 General Policies on minimising the issuer’s significant Protecting the Environment
The Disclosure impact on the environment and natural resources (p.49, 51, 58-59, 61)
This Report was in compliance with the mandatory disclosure requirements and “comply or explain” provisions of Environment HSE Policy
the latest ESG Guide of The Stock Exchange of Hong Kong Limited. and Natural
A3.1 Description of the significant impacts of activities Protecting the Environment (p.50-61)
Resources
on the environment and natural resources and
Aspects General Disclosures and KPIs Cross Reference/Information
actions taken to manage them
A. Environmental
A4 General Policies on identification and mitigation of Protecting the Environment
A1 General Information on: Protecting the Environment (p.49-50) Climate Disclosure significant climate-related issues which have (p.49, 51)
Emissions Disclosure (a) the policies; and Strengthening Corporate Change impacted, and those which may impact, the issuer HSE Policy
(b) compliance with relevant laws and regulations Governance (p.88)
A4.1 Description of the significant climate-related Protecting the Environment (p.51-57)
that have a significant impact on the issuer HSE Policy
relating to air and greenhouse gas emissions, issues which have impacted, and those which
Carbon Management
discharges into water and land, and generation may impact, the issuer, and the actions taken to
of hazardous and non-hazardous waste manage them
A1.1 The types of emissions and respective emissions Key Statistics (p.93-95)
data B. Social
A1.2 Direct (Scope 1) and energy indirect (Scope 2) Protecting the Environment (p.57) Employment and Labour Practices
greenhouse gas emissions (in tonnes) and, where Key Statistics (p.93, 95)
B1 General Information on: Contributing to Stakeholders
appropriate, intensity
Employment Disclosure (a) the policies; and (p.64-66)
A1.3 Total hazardous waste produced (in tonnes), and, Key Statistics (p.94-95)
where appropriate, intensity (b) compliance with relevant laws and regulations Strengthening Corporate
A1.4 Total non-hazardous waste produced (in tonnes), Key Statistics (p.94-95) that have a significant impact on the issuer Governance (p.87)
and, where appropriate, intensity relating to compensation and dismissal,
A1.5 Description of emission target(s) set and steps Protecting the Environment (p.50-59) recruitment and promotion, working hours,
taken to achieve them rest periods, equal opportunity, diversity, anti-
A1.6 Description of how hazardous and non– Protecting the Environment (p.59-60) discrimination, and other benefits and welfare
hazardous wastes are handled, and a description Waste Management B1.1 Total workforce by gender, employment type, age Contributing to Stakeholders (p.67)
of reduction target(s) set and steps taken to group and geographical region Key Statistics (p.91, 96)
achieve them B1.2 Employee turnover rate by gender, age group and Contributing to Stakeholders (p.67)
A2 General Policies on the efficient use of resources, including Protecting the Environment geographical region Key Statistics (p.91, 96)
Use of Disclosure energy, water and other raw materials (p.49, 58-59) B2 General Information on: Ensuring Health and Safety (p.38)
Resources HSE Policy Health and Disclosure (a) the policies; and Strengthening Corporate
Green Building Safety (b) compliance with relevant laws and regulations Governance (p.86)
A2.1 Direct and/or indirect energy consumption by type Key Statistics (p.59, 93, 95)
that have a significant impact on the HSE Policy
in total and intensity
A2.2 Water consumption in total and intensity Key Statistics (p.93, 95) issuer relating to providing a safe working
A2.3 Description of energy use efficiency target(s) set Protecting the Environment (p.58-59) environment and protecting employees from
and steps taken to achieve them occupational hazards
A2.4 Description of whether there is any issue in Protecting the Environment (p.58-60) B2.1 Number and rate of work-related fatalities occurred Key Statistics (p.90, 95)
sourcing water that is fit for purpose, water in each of the past three years including the
efficiency target(s) set and steps taken to achieve reporting year
them B2.2 Lost days due to work injury Key Statistics (p.90, 95)
A2.5 Total packaging material used for finished Key Statistics (p.93) B2.3 Description of occupational health and safety Ensuring Health and Safety (p.39-41)
products (in tonnes), if appropriate, with reference measures adopted, how they are implemented
to per unit produced and monitored
Aspects General Disclosures and KPIs Cross Reference/Information Aspects General Disclosures and KPIs Cross Reference/Information
B3 General Policies on improving employees’ knowledge and Contributing to Stakeholders (p.64- B6 General Information on: Ensuring Health and Safety (p.38)
Development Disclosure skills for discharging duties at work 65) Product Disclosure (a) the policies; and Contributing to Stakeholders
and Training Description of training activities Responsibility (b) compliance with relevant laws and regulations (p.70-71)
B3.1 Percentage of employees trained by gender and Key Statistics (p.92) that have a significant impact on the issuer Strengthening Corporate
relating to health and safety, advertising, Governance (p.86-87)
employee category
labelling and privacy matters relating to Customer Safety
B3.2 Average training hours completed per employee Key Statistics (p.92)
products and services provided and methods Privacy Policy Statement
by gender and employee category
of redress Service Pledge
B4 General Information on: Contributing to Stakeholders (p.64) B6.1 Percentage of total products sold or shipped No relevant case was recorded.
Labour Disclosure (a) the policies; and Strengthening Corporate subject to recalls for safety and health reasons
Standards (b) compliance with relevant laws and regulations Governance (p.86) B6.2 Number of products and service related Contributing to Stakeholders (p.72)
that have a significant impact on the issuer complaints received and how they are dealt with Service Pledge
B6.3 Description of practices relating to observing and Strengthening Corporate
relating to preventing child and forced labour
protecting intellectual property rights Governance (p.86)
B4.1 Description of measures to review employment Strengthening Corporate
Code of Conduct
practices to avoid child and forced labour Governance (p.86)
B6.4 Description of quality assurance process and Ensuring Health and Safety (p.42-47)
B4.2 Description of steps taken to eliminate such Strengthening Corporate
recall procedures Total Solution Services
practices when discovered Governance (p.86) B6.5 Description of consumer data protection and privacy Contributing to Stakeholders
Operating Practices policies, how they are implemented and monitored (p.85-86)
Privacy Policy Statement
B5 General Policies on managing environmental and social Contributing to Stakeholders
Supply Chain Disclosure risks of the supply chain (p.79-80) B7 General Information on: Strengthening Corporate
Management Strengthening Corporate Anti- Disclosure (a) the policies; and Governance (p.86)
Governance (p.86-87) corruption (b) compliance with relevant laws and regulations Corporate Governance
CSR Code of Practice for that have a significant impact on the issuer
Suppliers relating to bribery, extortion, fraud and money
laundering
B5.1 Number of suppliers by geographical region Contributing to Stakeholders (p.81)
B7.1 Number of concluded legal cases regarding Strengthening Corporate
B5.2 Description of practices relating to engaging Contributing to Stakeholders
corrupt practices brought against the issuer or its Governance (p.85)
suppliers, number of suppliers where the practices (p.80-81)
employees during the reporting period and the
are being implemented and how they are
outcomes of the cases
implemented and monitored B7.2 Description of preventive measures and whistle- Strengthening Corporate
B5.3 Description of practices used to identify Contributing to Stakeholders blowing procedures, how they are implemented Governance (p.85)
environmental and social risks along the supply (p.80-81) and monitored Whistleblowing Policy
chain, and how they are implemented and B7.3 Description of anti-corruption training provided to Strengthening Corporate
monitored directors and staff Governance (p.74)
B5.4 Description of practices used to promote Contributing to Stakeholders (p.81)
environmentally preferable products and services Community
when selecting suppliers, and how they are
B8 General Policies on community engagement to understand Contributing to Stakeholders (p.74)
implemented and monitored Community Disclosure the needs of the communities where the issuer Social Projects
Investment operates and to ensure its activities take into Code of Conduct
consideration the communities’ interests
B8.1 Focus areas of contribution Contributing to Stakeholders (p.74)
B8.2 Resources contributed to the focus area Contributing to Stakeholders
(p.74-78)
Key Statistics (p.94, 97)
112 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 APPENDICES 113
13 Appendices

Appendix II: Memberships in Associations
Appendix I: Our Roles and Services
Hong Kong Gas Business Hong Kong and Mainland China

The Hong Kong and China Gas • Gas production and distribution • Association of Engineering Professionals in Society Ltd.
Company Limited • Marketing and sale of gas and gas appliances • British Chamber of Commerce in Hong Kong
• Comprehensive after-sales services • Business Environment Council Ltd.
Towngas Engineering Academy • Technical and professional training
• China Gas Association (Beijing)
• Employers’ Federation of Hong Kong
Quality Testing Services Limited • Appliance and polyethylene (PE) joint testing and gas meter calibration
• Federation of Hong Kong Industries
Mainland Utility Businesses • Green Cross Group
Hong Kong & China Gas Investment • Management of Towngas investments in mainland China • Hong Kong Association of Energy Engineers
Limited • Hong Kong Bakery and Confectionery Association Ltd.
Hong Kong and China Water Limited • Management of water business investments in mainland China
• Hong Kong Computer Society
• Hong Kong General Chamber of Commerce
Towngas China Company Limited • Focus on piped city-gas projects in mainland China
• Hong Kong Green Building Council
Towngas Engineering Academy • Technical and professional training • Hong Kong Green Finance Association
New Energy Business • Hong Kong Institute of Human Resources Management
ECO Environmental Investments • Liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed
• Hong Kong Institute of Marketing
Limited natural gas (CNG) filling stations in Hong Kong and mainland China
• Hong Kong Management Association
• Construction and operation of ECO Aviation Fuel Facility (EAFF) in Hong Kong
• Hong Kong Quality Management Association
• Exploration, research, development and utilisation of new and
• Hong Kong Retail Management Association
environmentally friendly energy sources, such as coalbed methane, coal-
• Hong Kong Waste Management Association
based chemical projects, tar oil and biomass activities
• Institution of Fire Engineers (Hong Kong Branch)
• Infrastructure and logistics projects in mainland China
• The Chamber of Hong Kong Listed Companies
• An oil exploration and production project in Thailand
• The Chinese General Chamber of Commerce
• The Chinese Manufacturers’ Association of Hong Kong
Diversified Businesses
• The Goods Vehicle Fleet Owners Association Ltd.
GH-Fusion Corporation Limited • Manufacture and supply of polyethylene (PE) products and equipment for • The Green Council
(a joint venture with British Fusion Group) gas and water piping systems • The Hong Kong Advertisers’ Association
G-Tech Piping System (Zhongshan) • Manufacture of quality polyethylene (PE) piping • The Institute of Purchasing & Supply of Hong Kong
Company Limited • World Wide Fund for Nature Hong Kong
Towngas Telecommunications • Provision of telecommunications infrastructure and quality network
Company Limited solutions in Hong Kong and mainland China International
U-Tech Engineering Company Limited • Specialises in a variety of projects, including building services, liquefied • Institution of Gas Engineers and Managers (IGEM)
petroleum gas projects, civil works, waterworks and other pipeline • International Gas Union (IGU)
infrastructure projects • World Energy Council
• World LP Gas Association
P-Tech Engineering Company Limited • Plant design and construction
• Planning and operation of landfill gas utilisation projects in Hong Kong
M-Tech Metering Solutions • Development and supply of smart metering solutions for the gas industry
Company Limited
S-Tech Technology Holding Limited • Product development, solution implementation and system integration
• Provision of cloud computing solutions and other information technology
products as well as consulting services to companies
114 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 VERIFICATION STATEMENT 115
Appendix III: External Environmental,

14 Verification Statement

Social and Governance Charters and Initiatives
Charters and Initiatives Issuing Bodies

Corporate Governance VERIFICATION STATEMENT
Companies Ordinance, Chapter 622 of the laws of Hong Kong The Government of the Hong Kong Special Scope of Verification
Securities and Futures Ordinance, Chapter 571 of the laws of Administrative Region Hong Kong Quality Assurance Agency (“HKQAA”) has been commissioned by The Hong Kong and China
Hong Kong Gas Company Limited (“Towngas”) to undertake an independent verification for its Environmental,
Social and Governance (“ESG”) Report 2020 (“the Report”). The scope of HKQAA’s verification covers
Corporate Governance Code and Corporate Governance The Stock Exchange of Hong Kong Limited the information on ESG performance of Towngas businesses both in Hong Kong and outside Hong Kong
for the period from 1st January 2020 to 31st December 2020.
Report, Appendix 14 to the Listing Rules
Environmental, Social and Governance Reporting Guide, The aim of this verification is to provide a reasonable assurance on the reliability of the report contents.
Appendix 27 to the Listing Rules The Report has been prepared in accordance with the Global Reporting Initiative (“GRI”) Standards:
Core option and with reference to the GRI G4 Oil and Gas Sector Disclosures. It also fulfils the mandatory
Environment disclosure requirements and “comply or explain” provisions of the Environmental, Social and
Carbon Footprint Repository for Listed Company in Hong Kong Environment Bureau Governance Reporting Guide (“ESG Guide”), under Appendix 27 to the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited.
Carbon Reduction Charter: Carbon Audit • Green Partners
Hong Kong Green Organisation Environmental Campaign Committee Level of Assurance and Methodology
The process applied in this verification was referring to the International Standard on Assurance
IAQwi$e Label
Engagements 3000 (Revised), Assurance Engagements Other Than Audits or Reviews of Historical
Wastewi$e Label Financial Information issued by the International Auditing and Assurance Standards Board. Our evidence
gathering process was designed to obtain a reasonable level of assurance for devising the verification
“Let’s save 10L Water” Campaign Water Supplies Department
conclusion.
Sustainable Procurement Charter Green Council In order to understand the process that Towngas adopted to ascertain the key ESG issues and impacts,
the Report compilation process was discussed including stakeholder engagement and materiality
Hong Kong Zero Carbon Partnership The University of Hong Kong assessment processes. Also, system and process for collecting, collating and reporting ESG performance
data were verified. Our verification procedure covered reviewing relevant documentation, interviewing
CarbonCare®ESG Label (Level 4) CarbonCare InnoLab responsible personnel with accountability for preparing the Report and verifying the selected samples
Innovation Partner of CarbonCare Open Innovation Lab of data and information used for preparing the Report. Raw data and supporting evidence of the
selected samples were also thoroughly examined during the verification process.
Green Bottle Charter The Green Earth
Independence
Hong Kong Green Shop Alliance The Hong Kong Green Building Council Towngas is responsible for the collection and presentation of the information presented in the Report.
HKQAA does not involve in calculating, compiling, or in the development of the Report. Our verification
Occupational Health and Safety
activities are independent from Towngas.
Safety Charter Occupational Safety and Health Council
Conclusion
International Safe Workplace Program
On the basis of our verification results and in accordance with the verification procedures undertaken,
Charter on Preferential Appointment of OSH Star Enterprises it is the opinion of the HKQAA’s verification team that:
Joyful@Healthy Workplace Charter  The Report has been prepared in accordance with the GRI Standards: Core option and with
reference to the GRI G4 Oil and Gas Sector Disclosures, also it fulfills the ESG Guide for disclosure;
Social Responsibility  The Report illustrates Towngas ESG performance, covering all material and relevant aspects in a
balanced, comparable, clear and timely manner; and
Barrier-free Company The Hong Kong Council of Social Service  The data and information disclosed in the Report are reliable and complete.
Talent-Wise Employment Charter and Inclusive Organisations Labour and Welfare Bureau
HKQAA confirmed that the selected information and data of Towngas stated in the Report has been
Recognition Scheme prepared and presented in a fair manner, in all material aspects. In conclusion, the ESG performance
disclosed in the Report is appropriate to the sustainability context and materiality of Towngas.
Signed on behalf of Hong Kong Quality Assurance Agency
Connie Sham
Head of Audit
March 2021
The Hong Kong and China Gas Company Limited
香港中華煤氣有限公司
YOUR FEEDBACK
If you have any questions or feedback, we would very much like to hear
from you. Please fill in the online questionnaire or contact us:
Corporate Sustainability Department

The Hong Kong and China Gas Company Limited
Address 21st Floor, 363 Java Road, North Point, Hong Kong
Fax (852) 2590 6344
Email [email protected]
Website www.towngas.com

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Environmental, Social

and Governance Report

05 operations, the ESG Committee has been established.

08 • Contributing to Stakeholders, and matters. Updates on ESG related policies, initiatives,

14 integrating relevant risks and opportunities into our key

Response to COVID-19 home arrangements. As a result of these and other

and embrace the new

Alfred Chan Wing-kin

03 BUILDING A BRIGHTER FUTURE

Protecting the Environment

Climate Change Resources

• Serious gas-related accidents (mainland China)

Major Corporate Awards and Recognitions in 2020

05 OUR ESG APPROACH

Creating Business Ensuring Health

Supporting the Sustainable Development Goals

Ensure availability and sustainable management of

Potential Impacts Actions Taken/Achievement Potential Impacts Actions Taken/Achievement

Potential Impacts Actions Taken/Achievement

Managing ESG at Towngas Stakeholder Engagement

Towngas 2020 Materiality Matrix

20. Employer-employee relations

21. Training and development Our Response

27. Supplier environmental and social assessment

32. Future-proof workforce*

33. Supply security and reliability* Pandemic Our Response

Key Innovation Projects

We also introduced a new device which was invented to upgrade the

Towngas Hall of Innovation

Growth of Our Business

>1.94 million 31.81 million approximately

>250,000 units >800,000 units Data centres:

Water sales: 7 in Hong Kong and mainland China,

Business Coverage in 2020 Financial Analysis

Inner Mongolia Beijing

Provincial natural gas pipeline networks Sichuan

Green Financing Transitioning to a Low-carbon Future

Estimated Amount and

Kitchen Waste Processing Suzhou city, 55% RMB220 23.0 24.0

High-value Products from Low-grade Feedstock Since our HVO processing

Hydro-treated Vegetable Oil Natural gas

The safety of all our stakeholders is of paramount importance to Towngas. Our

In accordance with our commitment to safety, we organise occupational safety and

2020 Performance Highlights Future Actions and Targets

Established a dedicated taskforce to Keep zero accidents as our

Accident frequency rate (Hong Kong):

11,676 safety training hours

Instill a safety culture among

Employees 18 prevention and OSH supervision.

The health and safety performance of the Company

Developing Safe Appliances Management

2020 Performance Highlights Future Actions and Targets

Gas incidents reported by Upgrade, verify and maintain

We continuously monitor our facilities in order to identify

In mainland China, we visit the project sites of our

Climate Change Physical risks, such as rising temperatures and sea

at these facilities in 2020 as a follow-up measure. Scenario Development

our town gas production feedstock from coal and

mainland China portfolios, in support of Hong Kong’s

Resources Water and Effluents Progress