Responsible supply chain management is critical to mitigating financial risk, maintaining business continuity, and protecting our reputation. It is integral to protecting and empowering workers in our supply chain and helping to ensure the sustainable availability of natural resources.

As a Group, we source from thousands of suppliers in countries across the globe. They provide goods and services including aircraft parts, fuel, food products, packaging materials, cleaning services, office supplies, and uniforms. We advocate inclusive, ethical and sustainable procurement practices. We aim to source all key materials responsibly and sustainably, in a way that does not degrade nature and ensures that the people who produce them are treated with dignity and respect. This is what our investors, those with whom we do business, and the communities in which we operate expect. Consumers are demanding responsible products and looking for supply chain transparency.

Sustainable Procurement Policy

Our Sustainable Procurement Policy references the sustainable procurement guidance in ISO 20400:2017. It requires our operating companies to establish a process to identify potential sustainability risks in their supply chains and develop a segmented approach to managing suppliers based on those risks.

Under the policy our operating companies should monitor the sustainability performance of their significant suppliers through a robust due diligence process on a regular basis. Where gaps are identified, an appropriate corrective action plan should be developed, and operating companies should reassess business relationships with those that refuse to take action.

The policy also requires our operating companies to integrate relevant sustainability considerations into supplier selection and retention. Preference should be given to suppliers that have ISO-certified management systems in place, and that can significantly contribute to helping the company achieve its sustainable development objectives. Preference should be given to products which do not adversely affect the environment, including on ecosystems and biodiversity, and that can help us reduce our environmental impact.

Supplier Code of Conduct (SCoC)

Our Supplier Code of Conduct (SCoC) sets out the Group’s requirements for responsible sourcing. It applies to all suppliers and contractors of all Group subsidiaries, associated, and joint venture companies. Suppliers are expected to cascade the SCoC’s requirements to their own suppliers such that they apply to multiple tiers in our supply chain.

The SCoC is based on the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work and the Ethical Trading Initiative (ETI) Base Code. It requires regulatory compliance, prohibits forced or child labour, and sets out our expectations on health and safety, environmental issues, compensation and working hours, human rights, subcontractor management, and ethics and reporting.

We monitor and assess compliance with the Code and other sustainability performance criteria. Where gaps are identified, we may require suppliers to undergo audits and to develop and adopt appropriate corrective action plans to ensure compliance, with a focus on those deemed high risk.

Grievance mechanisms are established. Individuals within our supply chain who suspect or have witnessed actual improprieties can raise concerns in confidence through either of our dedicated whistleblowing channels: directly to Internal Audit Department or through EthicsPoint, a third-party service provider. This sets out our expectation that suppliers should be prepared to be open and transparent in order to verify compliance with the SCoC.

Human Rights Policy

We conduct our businesses in a manner which respects the human rights and dignity of our employees, those employed in our supply chains and the communities in which we operate.

Our Human Rights Policy is informed by the International Bill of Human Rights and by the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work. The policy covers aspects of diversity and inclusion, health and safety, labour and employment practices (including issues related to child labour, forced labour, human trafficking and discrimination).

We comply with national laws where they conflict with human rights standards but still do our best to respect the latter. We seek to include in our agreements with suppliers and contractors, provisions which encourage them to adhere to our Human Rights Policy and we expect our business partners and third parties who deal on our behalf to adhere to its principles.

Sustainable supply chain management enables effective management of environmental and social risks in our supply chains, encourages innovation and strengthens relationships with our key suppliers. In addition to the Sustainable Procurement Policy, we are developing an internal, group-level framework to enhance our supplier ESG programme. This framework will offer additional guidance to our operating companies on strengthening supplier due diligence and managing supply chain ESG risks.

In 2024, we conducted a high-level assessment to evaluate the ESG risk exposure of high-spend suppliers across our operating companies. Using a credible third-party platform, the assessment considered suppliers’ geographical locations, sectors and commodities. The results will inform the further enhancement of our supplier ESG programme. A half-day workshop was also organised for procurement staff across the Group to equip them with practical tools for managing ESG-related risks in their supply chains and effectively engage their suppliers.

Swire Properties requires service providers to perform well in the areas of health and safety, the environment, procurement, management, and quality. It is standard practice to require that all suppliers in Hong Kong, Chinese Mainland, and Miami, U.S.A. comply with its SCoC. It has an e-Contractor List Management System in place which is integrated with its vendor requisition process in Hong Kong and the Chinese Mainland. For new suppliers to be included on the list of approved contractors, they must complete self-assessment questionnaires to confirm that they have appropriate policies and systems in place to comply with the SCoC. Suppliers that fail to comply fully with its SCoC risk termination of their contracts, subject to the contractual terms therein, and removal from its approved contractors list.

Swire Properties' Business Partner Sustainability Programme is a key initiative designed to allow effective implementation of its SCoC and improve supply chain data transparency, accuracy and reliability. The programme involves supplier screening, supply chain ESG assessment and continuous supplier development. In 2024, Swire Properties expanded its high-level ESG screening to include all active suppliers. High risk suppliers identified under the screening will be invited to fill in a self-assessment questionnaire. Suppliers’ ESG risk exposure levels will be adjusted based on the response to this questionnaire. If they are identified as high risk, the supplier will be invited to conduct a detailed ESG assessment when necessary. The assessed suppliers will gain in-depth insights into their strengths and areas for improvement, along with access to information on ESG best practices and valuable resources through an online e-learning platform.

All suppliers of Swire Coca-Cola’s critical materials and ingredients for beverages, packaging and any items with TCCC’s logo must comply with principles set out by TCCC, including TCCC’s Supplier Guiding Principles (SGP) and Principles for Sustainable Agriculture (PSA). The SGP is based on leading global supply chain sustainability practices, seeking to uphold fundamental principles of international human and workplace rights within our suppliers’ operations. Supplier compliance is verified by independent third-party audits arranged by TCCC. Approximately 260 suppliers were reviewed in 2024. The PSA provides detailed guidance on human and workplace rights, environmental and ecosystem management, animal welfare, farm management systems and transparency. By 2030, the farms that supply Swire Coca-Cola's key agricultural ingredients (sugar and corn) will meet the requirements of the PSA, as verified by third-party audits.

Swire Coca-Cola shares knowledge with other Coca-Cola bottlers in the Chinese Mainland to manage procurement better. This facilitates the identification and selection of suppliers who follow appropriate procurement principles. As part of the China Bottlers Procurement Consortium (CBPC), Swire Coca-Cola works with its suppliers in the Chinese Mainland to strive for a green and low-carbon end-to-end supply chain. Through a six-step engagement strategy, Swire Coca-Cola partners with its suppliers in the Chinese Mainland to enhance alignment on decarbonisation goals and offer tools for measuring and reducing carbon footprints.

HAECO identifies its critical suppliers based on volume and asks them to complete self-assessment surveys. It assesses their compliance with its requirements and engages with them based on their responses. This is done every two years. Critical supplier audits are conducted periodically when necessary.