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2015 and Beyond

Introduction

Our approach to corporate responsibility requires us to take a long-term view of our business, striving to meet both the current and future needs of our stakeholders. In this section of the report, we provide an introduction to our expectations for the future, including planned improvements to our current services, new railway projects in Hong Kong, property developments that are underway and new opportunities for expansion of our business in the Mainland of China, Europe and Australia.

Global Context

In 2014, about 54 per cent of the world’s population lived in urban areas, but this proportion is expected to increase to 66 per cent by 2050. According to a study published by the United Nations Department of Economic and Social Affairs (UN DESA) in 2014, the majority of population growth is expected to take place in and around the cities of Asia and Africa.

In this context, the UN points out that sustainable urbanisation — involving creation of appropriate urban infrastructure such as public transport and housing — will be key to continued economic and social development in many regions of our planet.

With the impacts of climate change being felt globally and in Hong Kong, and as a result of increased public attention on this issue following a high profile meeting of global leaders in September 2014, the demand for investment in sustainable public transport has never been more urgent.

Hong Kong is already recognised as a world leader in this regard. In a study published by the International Association of Public Transport (UITP) and management consultancy Arthur D Little, 66 cities were ranked according to their “mobility maturity and performance”. On a scale of 1 to 100, Hong Kong came out on top of the list. In particular, Hong Kong was cited for providing integrated travel services using multimodal mobility (Octopus) cards and a “clear, well-articulated mobility strategy that combines low transport-related emissions with a short average travel time to work.”

With our Vision to be a leading multinational company that connects and grows communities with caring service, our innovative Rail plus Property model and a strong performance record operating rail services in one of the most densely populated cities in the world, we believe that we are well placed to continue to succeed in the context of these global developments in future.

 

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World Urbanization Prospects, a revised study produced by the United Nations Department of Economic and Social Affairs (UN DESA) in 2014, notes that while there were ten mega-cities with 10 million inhabitants in 1990, there could be as many as 41 mega-cities of this size by 2030.

 
 

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Please download a copy of Future of Urban Mobility 2.0.

 

Links to Other Sections

Throughout this report, we have highlighted a number of challenges that have implications on how we strive to achieve our Vision and Mission.

Safety — As new joiners replace more experienced staff who are approaching retirement, we must address the safety risks that will inevitably arise in our workplaces. We must also respond to changing passenger demographics, especially an increase in the number of elderly passengers and visitors to Hong Kong who are not familiar with our network, that pose challenges for customer safety in future.

Financial Performance — We recognise that we must balance the expectations of shareholders to receive reasonable investment returns with the needs of other stakeholders to maintain train fares at affordable levels while investing in safe, comfortable and convenient journeys. We are concerned about the overall lack of greenfield development sites in Hong Kong because investment properties are a major source of income for our business. In order to ensure the continued success of our Rail plus Property model, we have set up an internal team to identify untapped opportunities within our existing portfolio of properties and stations.

Environment — Among other significant environmental challenges such as waste management, we are mitigating emissions of greenhouse gases that increase the threat of climate change by using energy and other resources more efficiently. We are also taking measures to identify and adapt to direct impacts from climate change on our business.

Corporate Governance — Learning from earlier mistakes and experiences, we made changes to our corporate governance in 2014 in order to become more transparent about implementation of network expansion projects. We recognise that we must hold ourselves accountable to stakeholders for other major opportunities to expand and develop our business in future.

Staff — As older members of our workforce prepare to retire, we are stepping up training and development opportunities to equip new joiners with the skills that they need to perform their duties. We are also working to strengthen our corporate culture in order to respond to the changing demands of our business and expectations of our stakeholders.

Community — We will continue to invest in the communities we serve, looking for innovative ways to increase engagement with our stakeholders and to work with community investment partners to support the development of a socially sustainable city in Hong Kong as well as other locations where we operate.

Customers — Continued growth of our patronage places increasing demands on our services. In addition to maintaining world-class levels of train service performance and relieving congestion on our network, we must address the needs of an aging population by improving barrier-free facilities in our trains, stations and properties.

Value Chain — We recognise our responsibility to encourage sustainable practices throughout our value chain, including our suppliers, contractors, tenants and passengers.