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The Corporation continues to value reporting under the GRI Sustainability Reporting Guidelines. As an introduction to our approach to the G3 guidelines, we set out in the following discussions our environmental performance for 2006 according to the indicators outlined in this latest protocol set. The information supplements the management discussions on environmental stewardship in our Sustainability Report for 2006.
The adoption of the Climate Change Policy in 2006 commits the Corporation to a more stringent and broader reaching approach to managing our environmental impacts. The agenda is to be restorative rather than mitigating, to influence our contractors and suppliers for best practice exceeding compliance and to actively improve and implement internal initiatives that reduce our carbon emissions.
The internally developed Environmental Management System (EMS) provides the framework for managing our environmental impacts and is certified to the ISO 14001 standard. Under this system, targets for energy consumption, water usage, waste materials and effluents management and noise abatement have been consistently met.
With the introduction of the Policy, we are expanding management processes and systems to include the medium to long-term risks of climate change on our operations. We have recently identified and prioritised for action significant risks which include substantially increased electricity consumption to maintain indoor air quality controls, anticipated increased utilities charges for water, gas and electricity resources, flood damage from storm surges, faster deterioration of the built infrastructure due to rising sea levels and the increasing possibility of pandemic illnesses propagated by the warmer climate. From 2007, mitigating actions are underway that encompass existing operations (principally energy consumption) and the investigation of new options for planned rail lines and properties.
Under the Policy we have also committed to extending our reach in environmental management through our business partners and suppliers. Internal initiatives controlled through our supply chain drive responsible procurement practices, partnering and inclusion of contractual targets beyond regulatory compliance.
To measure and monitor our costs and expenditures in managing environmental risk, we utilise a proprietary sustainability accounting system. This system tracks the financial expenditures incurred for our railway operations to manage our priority business risks, including environmental compliance. In 2006, a total of HKD 10.8 million was used to meet our targets set out for policy management and administration, for the Environmental Management System, for environmental performance and for noise controls.
Stakeholder engagement also influences how we manage our environmental impacts. The Sustainability Advisory Board, established specifically for managing biodiversity and other environmental issues for the Ngong Ping 360 project now serves as the model for assessing and managing impacts on planned rail projects, specifically the Western Island Line. Through early engagement and feedback from the community, we moved a planned station location to preserve the unique tree wall heritage site.
Under the Scheme of Control set out by the HKSAR Government, our supply of electricity is limited to two suppliers, neither of whom at present generates electricity of any significant amount from renewable resources. As a result, our GHG emissions are specific to our operations. We track emissions principally for CO2 content. Other emissions, such as NO2, SO2, air and ozone-depleting substances are not measured presently due to the insignificant amount produced from operations.
Improving energy efficiency is an ongoing business priority. Electricity, being our sole source of energy for operations, totalled 12.5% of our operating costs in 2006. We have identified that 95% of this consumption and the resulting carbon emissions are sourced from our operating rail network and managed properties.
Mitigation and controlling energy usage in these areas is implemented through a series of programmes that address the eco-efficiency of our built environments and performance optimisation in operations.
The Review Group of Energy Consumption and the Energy Management Working Group supervises energy management on the operating railway network. Through such programmes as energy optimisation combined with infrastructure improvements, equipment replacement and stringent controls of energy usage at stations and depots we continue to reduce the rates of consumption annually. For 2006, energy savings on the railway network was a significant HKD 43.1 million against budget of which $12M was a direct result of conscious energy saving initiatives. Compared with 2005, this is a $1.2M reduction in energy cost despite the full-year effect of the operation of the DRL, the Asia-World Expo extension and use of 8-car trains on the AEL. Measured in megawatt hours, this equals 3,458 mWh saved from the previous year’s total of 781,9000 mWh.
The significant indirect energy emissions are sourced in traction energy usage on the railway network. In 2006, 23% (0.52 kWh/train car km) of total traction energy used was saved through regenerative braking for the trains.
For our managed properties, a net savings of 1.46% (3,915,587 kWh) direct energy usage for the year was achieved mainly through a series of small, wide-ranging initiatives that focus on eco-efficiencies of buildings and the better management of customer-focused environmental programmes.
Throughout our property portfolio, energy audits are conducted annually to monitor progress and identify further areas of improvement for each of our managed properties. Stringent targets are set each year to improve efficiencies and reduce green house gas emissions.
Under the EMS and with voluntary adoption of the PAS 55-1 system, we commit to responsible lifecycle considerations in the use of materials in our operations. With our cradle to grave approach to asset management, we now look to design out potential waste at early stages of planning and development of rail projects and arrange through contractual means or through internal programmes responsible disposal or recycling.
In 2006, we recycled 100% of metals and spent oils. No spills or accidents involving hazardous waste occurred during the year. We also delivered 2 tonnes of rechargeable batteries from our railway operations to Korea for recycling.
Construction waste materials are principally sourced from our rail project and network extension activities. Through our partnering with contractors we set agreed targets for site waste reduction that exceed regulatory compliance. Further incentives are now under consideration in which our Pay for Safety cash incentives scheme will serve as the model for a responsible waste management programme in anticipation of new rail projects. In 2006, construction waste was substantially reduced due to demands in site work. A total of 1,353 tonnes of construction waste were disposed of at landfill compared to the previous year’s 5,665 tonnes.
Recent years’ improved monitoring and management of water usage at stations and depots has produced significant efficiency improvements in consumption against targets. Effluent discharges are monitored quarterly at 158 discharge points to ensure broad reaching full compliance to licence requirements.
All water used in our railway operations, mainly train and station cleaning, is treated through an on-site primary treatment by sedimentation and to remove oil and grease, after which it is discharged to government treatment centres. In 2006, we met all requirements under our effluent discharge license.
The Corporation does not have in place a measurement programme for recycled water, but rather addresses the issue of saving fresh water usage where appropriate. We currently use grey water wash from the depots to clean streets and water plants. We use station cleaning equipment that saves on water usage and under our energy audits, we continually monitor and upgrade equipment in our managed properties to maximise fresh water efficiencies.
Specific to our operations are the environmental issues of air quality in our stations and properties and noise control on our rail lines. We employ self-initiated requirements to monitor and measure performance in these areas. Air quality is tracked regularly at all stations and commercial properties against internal KPIs that exceed both suggested Clean Air Charter targets and the voluntary Government standards. We have maintained 100% achievement over the last few years to our targets. Again this year we are in full compliance with the EPD Air Quality Guideline for Air-Conditioned Passenger Transport Interchanges both in the management of indoor air quality and the technical compliance to C02 standards.
As we operate within a dense urban environment, the regulation of noise pollution from our rail lines is strictly regulated. We closely co-operate with government departments to monitor noise levels along rail routes and on project sites. Under our performance KPIs we respond to all public complaints within 72 hours and report to responsible parties on the nature and any remedial actions taken. We have maintained a zero prosecutions record for noise since before 2000.
Environmental Management by Design
Completion of the recent tourist related rail projects has established new benchmarks in designing and developing projects that utilise the natural environment as a priority resource when planning, designing and developing our projects. The award winning Sunny Bay Station on the Disneyland Resort Line maximises natural light and air flows in station design while using lightweight and recyclable fabric for the roof cover. The NP360 cable car introduced biodiversity management. Under the guidance of the Sustainability Advisory Board, parkland areas were handled and restored under the strategy to seek Green Globe status for the ongoing operations. Our contracted operator now manages this status. In future projects, biodiversity will be of less significance to our environmental strategy as projects will build underground stations and rail lines which have little if any impact on protected land areas.
In our property developments we have established a master plan in development which addresses environmental best practice at the urban design level. Tseung Kwan O Area 86 in Hong Kong and the Shenzhen Metro Line 4 in mainland China both incorporate this planning strategy to create modern communities that integrate the natural environment as a focal design element. Partnering developers for our tendered properties must now incorporate and utilise as mandatory the environmental guidelines under the HK-BEAM Society.
The Corporation is in the business of mass transit and provides the most environmentally friendly alternative in public transport for Hong Kong. We offer to all employees a pass for free use of the system and after one year of employment this privilege extends to family members for MTR travel passes.