Kerry Properties: Governance Improvements Lead ESG Outperformance

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Kerry Properties Limited is a Hong Kong-listed property business involved in the development, investment, and management of properties, along with the operation of hotels in China, Hong Kong, and overseas. Additional businesses include integrated logistics and international freight forwarding. An analysis of the company's environmental, social, and governance policies are as follows:


Environment


From an environmental perspective, the company scores reasonably, outperforming on the Resource Use Score front, but underperforming on the Environmental Innovation Score front.


For instance, it has implemented a resource reduction policy, which compares to the presence of a clear policy in the prior year. The company has implemented a water efficiency policy, with an energy efficiency policy implemented as well. This compares to the presence of a similar policy in the prior year.


Environmental policy areas the company is currently lacking include Water Efficiency Targets and Toxic Chemicals Reduction. Areas the company has addressed include Environmental Supply Chain Policy, Resource Reduction Targets, Energy Efficiency Targets, Energy Efficiency Targets, the setup of an Environment Management Team, Environment Management Training, and Environmental Materials Sourcing.


The company has also implemented renewable energy use, which compares to the lack of a clear policy in the prior year. The company has also notably implemented green buildings as well, which compares to the presence of a defined policy in this regard in the prior year.


In terms of its carbon footprint, the company's Estimated CO2 Equivalents Emission Total stands at 118,856 in the latest fiscal year, which compares to 118,166 in the prior year and 125,030 in the year before based on Reported CO2 Estimates.


Social


From a social standpoint, the company scores favorably, particularly outperforming on the Product Responsibility Score front, but underperforming on the Human Rights Score front.


For instance, it has implemented a health and safety policy, which compares to the presence of a clear policy in the prior year. The company has also implemented an Employee Health & Safety Policy, with a Supply Chain Health & Safety Policy not implemented as well. This compares to the lack of a similar policy in the prior year.


The company has produced an increase in Net Employment Creation. The Number of Employees from CSR reporting totals 3,541, relative to 3,214 in the prior year and 2,601 in the year before.


As of the latest fiscal year, there have not been Management Departures, while the prior year saw departures. Meanwhile, the company experienced no strikes this year, which compares to no strikes in the prior year.


Governance


From a governance standpoint, the company scores favorably, particularly outperforming on the CSR Strategy Score front, but underperforming on the Shareholders Score front.


The company has a Corporate Governance Board Committee, has a Nomination Board Committee, has an Audit Board Committee, and has a Compensation Board Committee. The company does have a Board Structure Policy and does have a Policy for Board Independence in place. The Board has held four meetings in the last fiscal year, which compares to 4 in the prior year. The Board size currently stands at seven members based on the latest annual/ESG report.


The Board has an average tenure of 11.7 years, which compares to 10.7 in the prior year. Board diversity stands at 14.3% for gender diversity but lacks cultural diversity.


The company has implemented a Policy for Executive Compensation Performance but has not linked Executive Compensation to ESG Performance. The company has implemented a Policy for Executive Retention, and has implemented a Succession Plan, and has implemented an External Consultants policy.


The company has implemented CEO-Chairman Separation and does have its CEO as a Board member. Its chairman is an ex-CEO. Board member term duration stands at three years. In total, senior executives' compensation has declined in the latest fiscal year, along with Board member compensation. Notably, the CEO compensation is not linked to total shareholder return. Meanwhile, executive compensation is not linked to long-term objectives. Sustainability compensation incentives have not been implemented. Thus far, there have not been any executive compensation controversies.


Sources:


https://www.kerryprops.com/en/post/csr-sustainability-overview


https://www.kerryprops.com/en/post/sustainability-report


https://www.csrhub.com/CSR_and_sustainability_information/Kerry-Properties-Limited

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