Sustainability Report 2012

Contents

Introduction ...................................................................................................... 3

Environment ..................................................................................................... 5

Environmental Policy .......................................................................................5

Environmental Achievements 2012 .................................................................. 5

Environmental Plan for 2013 ..........................................................................10

Occupational Health and Safety.....................................................................13

Occupational Health and Safety Policy ..........................................................13

OH&S Initiatives in 2012 ................................................................................13

OH&S Plan for 2013 ......................................................................................16

Organisational Development ..........................................................................18

WE Project Initiatives in 2012 ........................................................................18

WE Project for 2013 .......................................................................................19

Corporate Social Responsibility .....................................................................21

CSR Initiatives in 2012 ...................................................................................21

CSR Plan for 2013 .........................................................................................23

Sustainable Purchase & Supply Chain Engagement .....................................25

Sustainable Purchase & Supply Chain Engagement Action Plan 2013 .........26

Attachment 1 ..................................................................................................28

Clean Air Charter - Commitment of CPCS ......................................................................... 28

Attachment 2 ..................................................................................................30

Occupational Health and Safety Policy ............................................................................... 30

Attachment 3 ..................................................................................................32

Business Partnerships Policy .............................................................................................. 32

2

Introduction

CPCS recognize the significant impact that catering operations can have on the

environment. As a responsible airline caterer, we undertake to ensure that our

activities comply with environmental regulations; we also ensure that our facilities

meet all the standards as set by the International Air Transport Association (IATA)

and the Hazard Analysis and Critical Control Points (HACCP) concept developed

and administered by the International Flight Catering Association (IFCA) /

International Flight Safety Association (IFSA).

In 2012, we continued to play a significant role in providing healthy and

sustainable food solutions to our customers. We reviewed our green targets

periodically to ensure it aligns with the company‟s sustainability goals.

Green targets highlights:

1. Energy and carbon: Minimize energy consumption through efficient

administration, equipment selection, usage and disposal, food storage,

preparation and cooking.

2. Waste: Where there is unavoidable food waste that we are unable to reuse, it

will be collected daily and sent to a local farm for making animal feed. In

addition, we ensure that dry waste (e.g. cardboard, paper, metal, plastic,

glass, etc.) is also being recycled.

3. Procurement: Make procurement decisions that take into account social and

environmental factors whilst achieving best value for money, by selecting and

engaging with suppliers. Provide healthy and sustainable options for our

customers. Use fish from sustainable sources and avoid using unsustainable

seafood.

4. Staff education and communication: Enhancing staff awareness through

environmental activities and awareness campaigns.

In our journey of business excellence, we are committed to increasing our

stakeholder value. Our vision to be the most valued catering service partner in

Asia; we focus on quality and creativity to support our customers in achieving their

ultimate goals. This Sustainability Report provides an overview of Cathay Pacific

Catering Service (H.K.) Limited‟s initiatives with regards to the environment,

occupational health and safety, employees, communities and sustainable

purchase plan during 2012. It also outlines our targets for 2013.

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Environment

Environmental Policy

CPCS is environmentally responsible by minimising the impact on the

environment whilst conducting its business.

Environmental Achievements 2012

One of the environmental priorities at CPCS is to encourage the creation of a

„Green‟ work-place. We proactively look for ways to reduce energy

consumptions, carbon footprints and encourage our staff to take part in

environmental activities. Summarised below is a review of the highlights of

actions achieved in 2012.

1. Installation of Plastic Curtain

1,000 square meter Outbound cold rooms

has been installed with plastic curtain to

reduce energy consumption by 1~2 0C and

reduces 20 tons of carbon emission.

2. Using Gas As Boilers Fuel

Using gas as boiler fuel instead of diesel can reduce 1,600 tons carbon dioxide

emission annually.

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3. Reducing Food Waste

Reducing food waste is one of the biggest challenges for an in-flight catering

facility. Apart from donating leftovers and end cuts to a local pig farm, selling end

cuts of fruits to suppliers in previous years helps reducing food waste to

some extent. In 2011, we have joined a recycling program with Airport Authority

to extend our food waste donation of our canteen leftovers and fruit peels to a

local recycler to further process the waste to fish feed.

4. Recycling of Glass Bottles

Other than aluminum cans, plastic cups and bottles, returned empty wine

bottles are also collected for the purpose of recycling. All wine bottles are

recycled into environmental bricks.

5. Ecological Tour

Two events were organised for staff and families in 2012. One was a Hiking and

Fishing activities held in April at Tung Lung Island and High Island. We had fun

with fishing and also enjoyed the sight of natural scene. It was a great opportunity

to admire the famous “Toad-liked stone” which is naturally formed and the ancient

stone carve.

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Another event was held in September. It was a Kam Pok “BiciLine” Eco-Tour

organized for staff and families to visit Kam Tin and Pok Wai. It was also a great

opportunity for staff to experience and understand the ancestral culture and its

natural resources.

6. Energy Saving Logo Design Competition

An Energy Saving Logo Design Competition was held in October and the

objective of this campaign is to create staff awareness on energy saving and

water saving.

Below is one of the winner‟s design.

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7. Environmental Awards and Participation

CPCS is committed to the 4Rs of waste management - Reduce, Re-use,

Recycle and Replace evidenced by our achievement of the Class of

Excellence Wastewi$e Label.

CPCS devotes considerable effort to adopt best practices for protecting the

environment by continuous participation in environmental practices such as:

1) Clean Air Charter - Certification 2009. Organised by

Hong Kong General Chamber of Commerce

2) Earth Hour - organized by WWF

3) WasteWi$e Label 2011 / 2012 (Class of Excellence) -

organised by Hong Kong Awards for Environmental

Excellence.

4) ISO 14001 accreditation since 1996

- certified by DNV.

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5) CPCS has joined the Hong Kong Airport Authority Carbon Reduction Pledge

to reduce airport-wide carbon emissions by 25% per workload unit by 2015

from 2008 levels.

6) Indoor Air Quality Scheme - Class of Good

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Environmental Plan for 2013

1. Air quality Improvement

CPCS will continue to commit to Clear Air Charter actions by

Purchasing of high-loaders equipped with Euro 5 or higher emission control

standards and

Conducting cleaning of the entire air ventilation system in the company on

a regular basis and

Assessing the air quality of offices on a yearly basis in accordance with the

Indoor Air Quality requirements.

2. Cold Room Condenser Replacement

CPCS replaced 6% cold room condensers to improve heat exchange efficiency

and energy saving and will continue to replace 54% aging condenser by first

quarter 2014. 60 tons of CO2 emission will be reduced per annum.

3. LED lightings Instalment

CPCS installed 449 LED light tubes instead of

T8 light tubes on 1/F new ware wash area. 29

Tons of CO2 is reduced per annum.

9 Watt LED exit light is used to replace 40 Watt tungsten light bulb for the cold

room exit light electricity saving. 21,700 kWh electricity is reduced per

annum.

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4. Company Logo Turning Off

The lit company logos are turned off at 1 am everyday to reduce 15,390 kWh

electricity per annum.

5. Temperature Control

The temperature at offices, changing rooms, canteen and warehouse is set at

1-20 C higher to reduce electricity consumption.

6. Collection of Recyclable Materials

CPCS is studying the feasibility of donating inbound food items to food bank.

7. Environmental Awareness

To raise staff awareness on environmental issues, visits to organic farms and

eco-tours will be arranged in Autumn/Winter. „Green Living Tips‟ on saving

natural resources will also be posted onto notice boards and computer

wallpaper.

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Occupational Health and Safety

OH&S Policy

The OH & S Policy will be carried out at all areas at CPCS in a manner that

safeguards the health and safety of all our stakeholders wherever practicable.

Occupational Health & Safety Initiatives in 2012

1) In-house Stretching Exercise

We have started to do a stretching exercise in the Dishing and Tray Setting

sections of Production Department in early September 2012, which help to reduce

the number of sprain injury. The stretching exercises are scheduled at 07:00 and

16:00 in Dishing, 08:00, 09:00 and 17:00 in Tray Set for all staff before they start

their shift with a duration of 15 minutes. In late August, our Safety Team provided

training for a group of supervisors who will then be leading their team to do the

stretching exercise. The exercise is an easy one from head to waist and all

colleagues are happy with it.

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2) Safety Message Broadcasting System

In October 2012, one-minute safety message was broadcasted in the Production

area every hour with the purpose of reminding staff on preventing injury in working

area. For sample, if item is too heavy for you to handle alone, ask your colleague

to help you.

3) Safety Quiz Program

Safety Quiz Program was conducted with the Airport Authority in June 2012 and

10 of our operation colleagues have been awarded with souvenir.

4) Safety Guarding Enhancement

For the purpose of enhancing the safety level

of machinery, additional safety guard has been installed on some machines.

For example: additional guarding on the cutlery machine to avoid roll-in hazard.

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5) Safety Awards

Four colleagues in Operations Department

have received awards in the Safety

Recognition Award 2012/2013 organized by

the Airport Authority (AA). Moreover, AA also

represented Corporate Safety Performance

Award to CPCS in the ceremony for our outstanding safety performance.

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Occupational Health & Safety Plans in 2013

In addition to the above initiatives, the Safety Team will collaborate with relevant

departments to arrange the following activities in 2013:

1) Stretching exercise extension program

Apart from implementing stretching exercise at Dishing and Tray Setting sections,

we will extend it to more sections in Production Department to reduce possible

injury.

2) Safety Observation Award

A safety promotion program will take place to encourage and reward colleagues

who have performed safety working procedures at work and have prevented

accidents or injuries from happening

3) Ramp Safety Campaign

Enhance colleagues‟ safety driving awareness in the ramp area.

4) Enhance accident analysis with line departments

Comprehensive analysis on industrial accidents will be shared with departments.

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Organisational Development

WE Project Initiatives in 2012

In order to prepare people and rejuvenate the company culture to face

accelerating internal and external challenges, CPCS launched the

Organisation Development (OD) Project in 2010 and named it as “We Excel

Project”. The programme was implemented across the entire organisation in a

systematic approach to improve organisational effectiveness.

The programme:

Features the CPCS vision, mission and values (VMV) that drive

organisation behaviour,

Sets clear business direction, guides leadership and strategy and

Prescribes our culture and identity.

Below is a brief summary of the OD initiatives launched in 2012

(1) Communication

(2) CPCS‟ Values Promotion

(3) Staff Alignment Survey.

1. Communication / Team Building

Team Building workshop

“Teamwork” is one of the core values of CPCS and also the prime focus

of people and organisation development. A companywide team building

workshop was officially kicked off in the end 2011 preparing our focus

for the following year on “teamwork”. Over 1,300 colleagues participated

in the workshop.

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Focus Groups

Six Focus Group sessions were conducted to collect feedback from

colleagues on two themes: “teamwork” and “work process

improvement”.

2. CPCS’ Values Promotion

The Champion Group organised activities to promote our values:

Caring/Respect/Excellence/Adaptability/Teamwork/Ethics. The varieties of the

activities ranged from management team serving colleagues in the canteen

(Manager Service Day) and CPCS arranged cross departmental familiarisation

visits for 50 colleagues. In addition, CPCS conducted a game called

“Teamwork! Sure Win!” to promote the value “teamwork”.

3. Staff Alignment Survey

CPCS conducted its second staff alignment survey in October to collect

colleagues‟ feedback so that the company can take appropriate actions to

address the colleagues‟ concerns.

WE Project Plan for 2013

Building on the foundation laid in 2012, the focus of “WE Project” will be to identify

our competitive advantages with the main theme to promote one of our values:

“teamwork”.

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Corporate Social Responsibility

CPCS fosters good relationship with the community where we are in and

support its total growth with respect to people‟s culture and heritage.

CPCS has been awarded as a Caring Company since 2004.

CSR Initiatives in 2012

1. Community Service

CPCS‟ volunteer team was formed in 2005.

Currently, we have 60 members coming from different departments.

Our focus is to care and serve our neighbours in Tung Chung.

In 2012, the team participated in the Healthy Walk and Elderly Day Celebration

Function organized by the NGO of Tung Chung for deprived families and senior

living in Tung Chung.

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2. Cash and Food Donation/Sponsorship

We encourage colleagues to extend our care to those in need through making

donations and gifts.

In 2012, CPCS and staff members made proceeds/food donations to the following

institutes/events:

- HK Community Chest

- ORBIS

- UNICEF

- People‟s Food Bank

- Hong Kong Sheng Kung Hui Integrated Services

- Charity Golf Day

- HK Grand Prix Pedal Kart Race

- Ngong Ping 360 Charity Walk

- Airport visits of rehabilitation schools

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CSR Plan for 2013

In 2013, we will continuously work with NGOs in Tung Chung to provide volunteer

services in the community. In order to encourage colleagues to embrace the

caring culture, we will recruit more members to join the volunteer team to

participate in the community activities. We are committed to building a connected

community through care and love.

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Sustainable Purchase & Supply Chain Engagement

CPCS preaches to our supply chain on our conviction in sustainable

development. We favour suppliers who champion our sustainable

development principles.

Initiatives in 2012 and onwards

1. Research on Sustainable Seafood

Our purchasing team has been continuing to work with WWF to search for eligible

sources of sustainable seafood at viable costs. Initially, sources of haddock have

been found developable. We will continue to work on that.

2. Sourcing Environmental Products

The team has worked with CX to source biodegradable plastic wrapping film for

magazine wrapping. We were studying the film quality and verifying the

bio-degradability of the film.

3. Strengthen Customers’Buy-in for Sustainable Food Policy

The Swire Group issued the Sustainable Food Policy in Dec 2011. The policy

requires all operating companies to rule out the 7 unsustainable foods identified

in the policy, both for internal company functions and for business. Therefore, we

pro-actively plead to our airline customers to stay away from these 7

unsustainable food materials and offered them with attractive dish options as

alternatives.

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Action Plan for 2013

1. Renew Corporate Social Responsibility Code of Conduct for

Suppliers

We are renewing our Supplier Corporate Social Responsibility Code of Conduct

adopted in 2008. The goal is to make the coverage of our Code of Conduct

more comprehensive, and to encourage our supply chain not just to meet all

legal requirements, but also to exceed them.

2. Sourcing For Sustainable Products for Airline Customers

The price gap between the sustainable products and the standard products

remains significant. We will continue to communicate this to our supply chain, in

an effort to get their support to find us commercially viable options which we can

promote to our customers.

3. Promote Sustainable Products via our e-Shop business

With the prospects that the upscale pricing level of sustainable products will not

lower significantly shortly, we will strategically increase our focus on our e-shop

channels for the products, since our e-shop channel targets the high-end market

in which we believe is more open-minded to sustainable product options.

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Attachment 1

Clean Air Charter - the commitment of CPCS

1. Operate by a recognised world class standard on emission of air pollutants,

even if it is not required to do so here.

Commitment of CPCS: Diesel used by high-loaders and boilers are the

major sources of direct emissions produced by CPCS. Currently, all the

new high-loaders purchased comply with Euro 5 standard. All trucks

undergo regular checks to ensure the engine is operating normally to

prevent incomplete burning of fuel. Emissions from CPCS‟ boilers are

monitored to ensure the combustion is normal. CPCS only uses ultra-low

sulphur diesel.

2. Use continuous emission monitors (CEMs) at significant sources.

Commitment of CPCS: The exhaust fumes of high-loaders are being

checked during maintenance.

3. Publish information on energy and fuel use, as well as total emissions of air

pollutants annually and timely, if emissions are significant.

Commitment of CPCS: Our fuel consumption is reported in one of the

data that is being collected in CPCS including our sister companies in our

current EHS data collection regime.

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4. Undertake to adopt energy-efficient measures in their operations.

Commitment of CPCS: A number of projects have been done to reduce

energy consumption as well as fuel needed for our operations.

5. Share air quality of business with others.

Commitment of CPCS: We will share this information through CPCS

Annual Environmental Report.

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Attachment 2

Occupational Health and Safety Policy

The OH & S Policy will be carried out at all areas at CPCS in a manner that

safeguards the health and safety of all our stakeholders wherever practicable.

We will comply with applicable Hong Kong legislation as well as other

requirements to which the Company subscribes; every effort will be made to

achieve continuous performance improvement throughout our

operations.

OH&S considerations are integrated into the Company‟s business

processes and are given due weight with other business considerations.

The Management will provide full support to the Safety Committee in the

implementation of OH&S policies, rules and practices that are reasonably

practicable with emphasis on risk identification, risk assessment and risk

control.

We will have systems in place to educate and train employees regarding

their responsibilities in relation to OH&S. Line managers are responsible for

ensuring that employees and associates are competent in and aware of all

applicable OH & S practices.

We require all sub-contractors and suppliers working within our premises to

observe our safety practices.

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The SD Committee, which is chaired by our Chief Executive Officer, provides

management support as well as adequate financial and physical resources in

the implementation of this policy.

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Attachment 3

Business Partnerships Policy

CPCS preaches to our supply chain on our conviction in sustainable

development. We favour suppliers who champion our sustainable

development policy.

1. We identify the first layer key suppliers and communicate to them our

sustainable development policy and request for cooperation.

2. We conduct a survey to the first layer key suppliers on their compliance and

willingness to comply with our sustainable development policy.

3. We reflect the policy requirements in the supplier audits.

4. We evaluate the current performance of the first layer key suppliers as

reflected in the supplier audits and survey exercise.

5. Based on the evaluation results, we consider taking appropriate actions

accordingly.

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