Reporting and forecasting climate-related risks with Airport Authority Hong Kong
In an era of rising temperatures and sea-levels, validating and continuing to enhance the resilience of one of the world’s busiest airports is critical.
Built on reclaimed land on the island of Chek Lap Kok, Hong Kong International Airport opened in 1998 with a mission to maintain Hong Kong’s status as the leading international aviation hub and a key engine of economic and social growth. In an era of rising temperatures and sea-levels, validating and continuing to enhance the resilience of one of the world’s busiest airports is critical.
We’ve been supporting Airport Authority Hong Kong (AAHK) proactively manage the physical risks of climate change and embed climate resilience across its assets and operations. Based on published climate change projections, we conducted a Climate Risk Study evaluating different risk scenarios associated with climate change. This covered all infrastructure related to the airport, including a preliminary review of independent assets such as power and transport networks through engagement, and involved consulting with 20 AAHK departments as well as key external stakeholders.
Setting a TCFD Statement precedent
A key finding of our study was that AAHK had already embedded climate considerations into the planning and design of critical assets, but it required a structure for reporting and forecasting climate-related risks that typically lie outside traditional risk analysis. The Task Force on Climate-Related Financial Disclosures (TCFD) provided an effective structure for AAHK.
Of the available climate reporting guidelines and initiatives to enhance disclosure and mitigation of climate-related financial risk, the Task Force on Climate-Related Financial Disclosures (TCFD), created by the G20’s Financial Stability Board in 2015, has risen to the fore as a go-to framework for financial climate risk, and Hong Kong International Airport has become one of the first airports in Asia to publish a TCFD Statement, setting precedence for other airports and demonstrating AAHK’s commitment to its Greenest Airport pledge.
The TCFD offers extensive guidance on recommended disclosures in the areas of governance, strategy, risk management, metrics and targets, as well as principles for effective disclosure and advice on assessing resilience across a range of scenarios. While businesses can use such guidelines to understand the kind of things they need to report, deciding what is material and how to accomplish meaningful climate risk disclosure remain big challenges for individual organizations. However, this is where the real value lies.
Taking action
As published in its TCFD statement, AAHK has undertaken a number of actions as a direct result of our report. These include continuing systematic reviews of business continuity protocols, reviewing the implications of extreme heat and humidity events on staff performance and welfare and updating Personal Protective Equipment policy, undertaking a review of the lightning protection system following lightning events, and continuing regular monitoring and inspections of sea level gauge and drainage systems. We also helped AAHK decide on a system for engaging with other critical asset owners to review system resilience through the development of a Climate Adaptation and Resilience Plan which was endorsed at the senior management level.
Reducing Airport Authority Hong Kong's carbon footprint
Our study also assessed the potential impacts associated with the transition to a low-carbon economy, including those related to the construction of the Three-Runway System and the impacts of carbon pricing on flight volumes and costs across the aviation sector. Complementing the actions AAHK has in place to manage the physical risks of climate change, AAHK also has implemented many initiatives to reduce its carbon footprint. These efforts are driven by the organization’s airport wide carbon reduction program and its 2050 Net Zero Carbon target. Initiatives include, establishing a systemic approach to monitor compliance with local and international standards and treaties and working with airlines seeking to use sustainable aviation fuel. Further examples are outlined in its TCFD statement.
Securing confidence and delivering results
To ease uptake of the report’s findings across the organization – with the ultimate aim of making Hong Kong International Airport more climate resilient — we engaged senior management through a cross-disciplinary steering committee, meeting regularly with C-suite executives. This assisted with internal engagement, ensured confidence in the project’s findings, and meant that at each key project milestone, the deliverables were endorsed.