2024 Sustainability Report

CONTENTS ABOUT THIS REPORT 2

Reporting Standard 2

Reporting Principles 2

Reporting Scope and Boundary 2

Reporting Period 3

Accessibility of the Report and Feedback 3

Board Approval 3

ABOUT CENTURY CITY 4

Our Businesses 4

Our Presence 5

OUR ESG APPROACH 7

Board Statement on ESG Matters 7

Our ESG Strategy 7

Corporate Governance 8

Sustainability Governance 8

Stakeholder Engagement 9

Materiality Assessment 10

ENVIRONMENTAL RESPONSIBILITY 12

Environmental Management 12

Environmental Targets 19

Our Response to Climate Change 22

Energy Efficiency and Emissions 31

Water Management 38

Waste Management 41

SOCIAL RESPONSIBILITY 45

Fostering Community Engagement 45

Youth Development 48

Health Enhancement 50

Social Inclusion 53

ECONOMIC RESPONSIBILITY 54

Caring for Our Employees 54

Caring for Our Customers 61

Supply Chain Management 65

Business Ethics 69

APPENDIX I - PERFORMANCE TABLES 71

Environmental Performance 71

Social Performance 77

APPENDIX II - THE STOCK EXCHANGE OF HONG KONG LIMITED'S ESG REPORTING CODE CONTENT INDEX 80

About This Report

‌Reporting Standard

This report has been prepared in accordance with the Environmental, Social and Governance Reporting Code (the "ESG Reporting Code", formerly named as the Environmental, Social and Governance Reporting Guide) in Appendix C2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") (the "Listing Rules").

Reporting Principles

The Group has adhered to the four fundamental reporting principles outlined in the ESG Reporting Code in the preparation of the report. These principles facilitate effective communication and informed decision making. The details are as follows:

Materiality: Stakeholder engagement and materiality assessment were conducted to identify material environmental, social and governance ("ESG") topics in our business operations. 20 material ESG topics were identified, which form the focus of this report.

Quantitative: In order to assess the performance of different environmental and social initiatives, environmental and social data were identified, collected and monitored.

Balance: This report would disclose both achievements and improvement plans in order to present an unbiased view on ESG performance.

Consistency: Consistent reporting methodologies are adopted to present an effective year-on-year performance comparison. Any changes in the methodologies and reporting scope are explained in remarks for stakeholders' reference.

Reporting Scope and Boundary

This is the ninth annual standalone Sustainability Report of Century City International Holdings Limited ("Century City" or the "Company", and together with its subsidiaries, the "Group" or the "Century City Group"). This report details the sustainability performance of ESG topics that are material to the Group's owned and managed properties and hotels in Hong Kong and includes the initiative highlights for the Group's business in Mainland China.

Reporting Period

Unless otherwise stated, this report presents the highlights of our progress and performance on material ESG topics for the period from 1 January 2024 to 31 December 2024 (the "reporting period").

Accessibility of the Report and Feedback

An electronic copy of this report can be accessed on Century City's website https://www.centurycity.com.hk. Should you have any enquiries about the report or opinions regarding Century City's ESG performance, please feel free to contact us via info@centurycity.com.hk.

Board Approval

This report was reviewed and approved by the Board of Directors of the Company (the "Board") on 28 April 2025.

About Century City

‌Our Businesses

Century City is the ultimate holding company of a listed conglomerate comprising a total of five listed entities in Hong Kong. Century City presently holds a controlling shareholding interest in Paliburg Holdings Limited ("Paliburg"), the principal subsidiary of Century City, and the core businesses of the Group are conducted through various subsidiaries of Paliburg. Paliburg holds a controlling shareholding interest in Regal Hotels International Holdings Limited ("Regal") which, in turn, holds a controlling interest in the issued units of Regal Real Estate Investment Trust ("Regal REIT"). Paliburg also owns, indirectly through P&R Holdings Limited ("P&R"), a 50:50 joint venture between Paliburg and Regal, a controlling shareholding interest in Cosmopolitan International Holdings Limited ("Cosmopolitan"). Apart from Century City, all of Paliburg, Regal, Regal REIT and Cosmopolitan are also listed on the Main Board of the Stock Exchange in Hong Kong.

Based in Hong Kong, the Group's major investments and business activities mainly consist of property development and investment, construction and building related businesses, hotel ownership, operation and management, and other businesses.

The Group's property development and investment businesses are mainly focused in Hong Kong and Mainland China. The Hong Kong projects are primarily undertaken by P&R. Regal itself also owns certain property projects in Hong Kong and overseas. In the meanwhile, Cosmopolitan mainly conducts property development in Mainland China.

The Group owns a portfolio of twelve hotels operating in Hong Kong, of which nine hotels are owned by Regal REIT. Apart from those nine hotels, Regala Skycity Hotel is wholly-owned and self-operated by Regal, while the iclub Mong Kok Hotel and the iclub AMTD Sheung Wan Hotel are wholly-owned and 50% owned by P&R, respectively. All of the Group's hotels are managed by Regal.

Our Presence

The Group's property and hotel projects are summarised below, the details of which are set out in Century City's Annual Report for 2024 (the "2024 Annual Report").

Property Development and Investment Business

Property Development and Investment in Hong Kong

Mount Regalia, Kau To, Sha Tin Domus and Casa Regalia, Yuen Long The Ascent, Sham Shui Po Regalia Bay, Stanley We Go MALL, Ma On Shan, Sha Tin The Queens, No.160 Queen's Road West

Residential Residential

Residential/Commercial Residential

Shopping mall

Residential/Commercial

Nos.9-19 Kam Wa Street, Shau Kei Wan Nos.291-293 and 301-303 Castle Peak Road, Cheung Sha Wan Nos.227-227C Hai Tan Street, Sham Shui Po

Residential/Commercial Residential/Commercial

Residential/Commercial

Property Development and Investment in Mainland China

Regal Cosmopolitan City in Chengdu (being completed in phases) Regal Renaissance in Tianjin (completed)

Composite development

Composite development

Hotel Business

Over the years, Regal has built an extensive presence in Hong Kong and Mainland China. Regal is operating and/or managing 12 hotels under the Regal, Regala and iclub by Regal brands in Hong Kong, nine of which are owned by Regal REIT.

As for overseas, Regal owns the Campus La Mola, located in Barcelona, Spain, which was leased to an independent third party for operation.

Regal Hotels in Hong Kong and Mainland China

Dezhou, Shandong Province

1. Regal Kangbo Hotel

   Shanghai, Shanghai City

2. Regal Jinfeng Hotel

3. Regal Plaza Hotel & Residence

Hong Kong

1. Regal Airport Hotel

2. Regal Hongkong Hotel

3. Regal Kowloon Hotel

4. Regal Oriental Hotel

5. Regal Riverside Hotel

6. Regala Skycity Hotel

7. iclub Fortress Hill Hotel

8. iclub To Kwa Wan Hotel

9. iclub Mong Kok Hotel

10. iclub Sheung Wan Hotel

11. iclub Wan Chai Hotel

12. iclub AMTD Sheung Wan Hotel

‌Our ESG Approach Board Statement on ESG Matters

The Board is responsible for the oversight of ESG matters of the Group's operations. The Board has responsibilities in guiding the development of Century City's ESG values, approaches, strategies and policies, in addition to reviewing the identification, evaluation and management of ESG-related issues (including ESG risks). The Board is also responsible for reviewing and monitoring the progress made against ESG-related goals and targets. The preparation of the Sustainability Report is delegated to the executive committee for balanced disclosure of ESG performance and compliance with all applicable Listing Rules.

Under the guidance of the Board, the Group identifies, assesses and prioritises the ESG topics and their importance to Century City and our stakeholders through engagement with internal and external stakeholders. ESG initiatives and measures are developed and implemented in accordance with the assessed materiality of various ESG topics and reported in the Sustainability Report. Please refer to "Stakeholder Engagement" section of this report for details of the stakeholder engagement process and the results of the materiality analysis.

Our ESG Strategy

Upholding the core values of sustainability, Century City is devoted to integrating sustainable considerations into our daily operations whenever possible.

Our Sustainability Core Values and Commitments:

• To build an outstanding, environmentally friendly and sustainable community

• To construct superior living space and warm and comfortable homes for our customers

• To create brand value for the enterprise, steady cash flow and room for long term value enhancement for investors

• To provide appropriate development platforms and professional training to nurture staff teams

  Corporate Governance

  Century City Group seeks to maintain a comprehensive and high-standard corporate governance system by strictly adhering to the Code Provisions in the Corporate Governance Code as set out in Appendix C1 of the Listing Rules. We adopt a rigid corporate governance structure under the leadership of the Board, in which the three board committees, namely the Audit Committee, the Remuneration Committee and the Nomination Committee, are responsible for performing various governance functions. The Board reviews the Group's management policies and practices on a regular basis to ensure strict compliance with the stipulated regulations. New policies and measures are implemented whenever necessary.

  For further information about our corporate governance and the Board of Directors, please refer to the Group's 2024 Annual Report.

  Sustainability Governance

  Century City recognises the importance of sustainability and places sustainability as one of the Group's core objectives. We balance our key stakeholders' interests with our common goals by consulting and sharing sustainability performance with them. The Group also targets to promote long term sustainable development by engaging various stakeholder groups, including but not limited to customers, business and community partners, suppliers and employees.

  To ensure effective sustainability management, a sustainability governance framework is established, with the Board of Directors overseeing the Group's sustainability performance. The Executive Directors, with the assistance of senior managers from key divisions, are delegated with responsibilities of implementing, monitoring and evaluating the performance of the Group's sustainability plans under three principal objectives, environmental, social and economic sustainability. The Executive Directors also evaluate, prioritise and manage the ESG topics identified to be material to the Group on a regular basis. The execution of sustainability plan will then be performed by different operating divisions of the Group, with the purpose of accomplishing the established goals and targets. The Group has established a set of environmental targets covering greenhouse gas ("GHG") emissions, energy efficiency, and waste recycling. The progress made against the environmental targets will be monitored by the Executive Directors and will be reported to the Board of Directors for review annually.

  Stakeholder Engagement

  With the aim to understand the views and needs of various stakeholder groups, the Group has established a number of transparent and diverse communication channels. We ensure their opinions are effectively gathered and well considered. Through regular communication and engagement exercises, the Group gathers and understands their expectations on our sustainability performance. The key engagement channels for each stakeholder group are listed as follows:

  Stakeholder Groups engaged Methods of Engagement

Internal Stakeholders External Stakeholders

Management ‧ Regular meetings

Industrial Associations ‧ Industry forums

Suppliers/Contractors/ Business Partners

• On-site assessment visits and meetings

• Owners committee meetings

• Regular meetings

Materiality Assessment

Century City regularly reviews the material ESG topics related to our business operations. The outcome of the stakeholder engagement exercises serves as the basis for the materiality assessment. The prioritisation of the material topics follows the principles defined in the ESG Reporting Code and the steps taken in our materiality assessment are summarised as follows:

IDENTIFYING ESG TOPICS

An independent consultant identified a broad range of ESG topics in Century City's business operations through conducting background reviews, stakeholder interviews, observations during site visits, documentation reviews, media reviews and peer analysis.

STEP 1

RANKING ESG TOPICS

Stakeholders ranked the identified sustainability issues from 1 (very little impact) to 6 (very large impact) based on their perceived importance to Century City's business operations.

STEP 2

VALIDATING RESULT

The result of the materiality assessment was reviewed by management and our Sustainability and Business Transformation Taskforce, and was then approved by management to ensure the topics align with the Group's strategy.

STEP 3

Based on the results of the materiality assessment, the following 20 ESG topics were considered material and were discussed in detail throughout this report:

Environmental

‧Energy Efficiency

‧GHG Emissions

‧Waste Management

‧Water and Effluent

‧Climate Adaptation and Mitigation

‧Biodiversity

Employee

‧Employee Benefits and Welfare

‧Employee Training and Development

‧Diversity and Equality

‧Labour Practices

‧Occupational Health and Safety

Operating Practices

‧Ethical and Transparent Business

‧Customer Privacy

‧Customer Satisfaction

‧Supply Chain and Sourcing

Management

Community

‧Community Investment and Engagement

Product and Service

‧Innovation

‧Health and Safety

‧Green Building

Economic

‧Responsible Investment and Financial Performance

Environmental Responsibility

‌The Group has consistently recognised the critical importance of effectively addressing and acknowledging the impact of climate change and other environmental risks on our operations. In response, we are committed to implementing strategies that mitigate these effects while fostering the development of a sustainable community. Building on our previous commitments, we remain dedicated to fulfilling our responsibilities in reducing environmental impacts and contributing to a greener future for all.

In strict accordance with the Environmental Protection Law of the People's Republic of China, as well as other national and local environmental protection laws, regulations, and design standards, the Group implements rigorous measures for the conservation of energy, land, water, and materials. These practices are maintained throughout the entire lifecycle of project development, construction, operation, and maintenance. Immediate actions will be taken to address any environmental concerns that arise, aiming to mitigate any adverse effects.

During the reporting period, Century Group demonstrated full adherence to all relevant laws and regulations1 on air and GHG emissions, water and land discharges, and the generation of hazardous and non-hazardous waste.

Environmental Management

Century City Group prioritises the effective execution of its environmental policy across all aspects of our business operations. To align our efforts with our core values, each subsidiary develops tailored management strategies that reflect our collective goals. The Group dedicates significant resources to improve energy efficiency, conserve water, and enhance waste management practices. By proactively identifying environmental risks, we are able to implement timely mitigation measures, using international standards to evaluate the environmental performance of our property portfolio. Additionally, we conduct regular reviews of our objectives and targets, ensuring they remain relevant and responsive to market expectations regarding sustainability. Through these efforts, the Group strives to fulfil our environmental commitments while promoting a culture of responsibility within the Group.

1 The environmental laws and regulations that might be significant to Century City include Environmental Protection Law of the People's Republic of China, Air Pollution Control Ordinance (Cap. 311 of the Laws of Hong Kong), Waste Disposal Ordinance (Cap. 354 of the Laws of Hong Kong), Water Pollution Ordinance (Cap. 358 of the Laws of Hong Kong) and Noise Control Ordinance (Cap. 400 of the Laws of Hong Kong).

Properties - Hong Kong

Paliburg's property development and management activities in Hong Kong come with a responsibility to the environment-one that Paliburg takes seriously. A dedicated team of directors, project managers, and senior staff has developed a robust environmental management framework, which serves as a cornerstone for its sustainable operations. This framework provides clear guidance, ensuring accountability and consistency across Paliburg. Paliburg regularly evaluates and monitors its environmental performance, not just to meet regulations but to foster a culture of openness and shared responsibility. From project managers to site agents, every team member is empowered to uphold environmental standards and contribute to green initiatives. This collective effort has been key to Paliburg's progress in reducing environmental harm and adapting to evolving challenges in sustainability.

Paliburg takes pride in maintaining high environmental standards across its construction and development projects. Paliburg has introduced strict measures to ensure consistency and compliance, while actively engaging with stakeholders to build sustainable communities. Regular communication with business partners helps its advocate for pollution reduction in everyday operations. By carrying out regular evaluations of its environmental performance, strategies, and objectives, Paliburg can pinpoint areas for enhancement and respond promptly. Paliburg collaborates with various organisations and professional bodies to ensure its policies are up to date and effective.

With sustainability at the forefront, Paliburg diligently assesses its performance and integrates eco-friendly practices into its project developments. From the early design and planning stages, Paliburg conducts thorough evaluations of the potential environmental impacts of its projects. Paliburg dedicates significant resources to ensure its operations are not only efficient but also aligned with sustainable practices. This dedication is reflected in Paliburg's achievement of the BEAM Plus Certification from the Hong Kong Green Building Council, which underscores Paliburg's focus on creating environmentally conscious developments.

Hotels

Regal Group is preparing a Environmental, Health and Safety Policy ("EHS Policy"), which is in development during the reporting period. This policy outlines strategic directions addressing a range of environmental topics, including climate change, resource management, energy consumption, water consumption, waste reduction, and the preservation of biodiversity and conservation efforts.

Since Regal's first sustainability campaign "We Love Our Planet" in 2012, Regal has remained fully committed to taking environmental factors into all aspects of its business. From energy-saving, emission reduction, pollution prevention and control to resource management and biodiversity protection, Regal integrates these practices for more sustainable and efficient operations. To promote environmental awareness in the workplace and in daily life, it engages employees and the public in nature conservation efforts. Regal also ensures its hotels strictly comply with all environment-related laws and regulations2 in the communities it operates.

ESBN Green Deal Badge

Since 2023, Regal has been awarded the ESCAP Sustainable Business Network ("ESBN") Green Deal Badge - Green. As a joint effort by the United Nations' Economic and Social Commission for Asia and the ESBN Asia-Pacific and Hashstacs Pte Ltd, the badge goes to businesses that have pledged to support sustainability by completing a self-assessment and disclosing data on emissions, resources consumption and management.

Regal is proud to be part of a broader effort to commit to sustainability and encourage businesses in the Asia-Pacific region to align operational strategies with ESG principles for sustainable development.

EarthCheck Certification

For the hotel operations in Hong Kong, Regal adopts a systematic approach and aligns its hotels with EarthCheck Certification standards, the world's leading sustainability benchmarking and certification service in the travel and tourism industry.

The EarthCheck standards align with global frameworks including the Intergovernmental Panel on Climate Change ("IPCC") Guidelines for National GHG Inventories, the World Business Council for Sustainable Development, GHG Protocol and a range of standards under the International Organization for Standardization ("ISO").

As one of the indicators of Regal's environmental management processes, Regal places great emphasis on its performance in this area, and has engaged the Global Tourism Advisory Group for independent third-party verification.

2 The laws and regulations that might be significant to the Group include Air Pollution Control Ordinance (Cap.311 of the Laws of Hong Kong), Waste Disposal Ordinance (Cap.354 of the Laws of Hong Kong) and Water Pollution Control Ordinance (Cap.358 of the Laws of Hong Kong). During the reporting period, the Group did not violate any laws and regulations related to air and GHG emissions, discharges into water and land and generation of hazardous and non-hazardous waste.

In recognition of Regal's environmental performance, Regal hotels were awarded the below certifications in 2024:

List of EarthCheck Certifications obtained during the reporting period:

EarthCheck Platinum Certification

Regal Airport Hotel Regala Hongkong Hotel Regal Kowloon Hotel Regal Oriental Hotel

Regal Riverside Hotel

EarthCheck Gold Certification

iclub Fortress Hill Hotel

iclub Sheung Wan Hotel iclub Wan Chai Hotel

EarthCheck Silver Certification

Regala Skycity Hotel iclub Mong Kok Hotel

iclub To Kwa Wan Hotel

iclub AMTD Sheung Wan Hotel

In the long run, Regal is committed to minimising negative environmental impacts and creating positive social impacts to its stakeholders. Regal's targeted "Platinum" certification for all five Initial Hotels have been achieved in 2024, and as the next step, the "Master" rating for all five initial Hotels is targeted to be achieved by 2038.

Case Study: Sustainable Building Designs

Regala Skycity Hotel, officially opened in 2023, incorporates sustainable features that minimise ecological footprint and promote environmental responsibility.

The building has been designed to reduce energy consumption by utilising natural light and ventilation.

One of the highlights of the hotel's design is the incorporation of vertical green walls across its façade. These walls not only enhance the building's aesthetic appeal but also mitigate the urban heat island effect by absorbing heat and releasing oxygen.

The swimming pool has been designed and constructed with a strong emphasis on environmental sustainability. Its filtration system recycles and treats the pool water using advanced technology that requires less energy than traditional swimming pools. Additionally, light-emitting diode ("LED") lighting and energy-efficient appliances are employed throughout the building to minimise energy consumption.

Properties - Mainland China

Cosmopolitan has group-wide environmental policies in place for all property development projects aimed at reducing environmental impacts while providing high-quality products and services.

In the Tianjin office, Cosmopolitan incorporates resource conservation in its daily operations. Before the commencement of any maintenance or construction work, Cosmopolitan coordinates with the property management and construction teams to manage water and electricity connections, metre readings, and provide guidelines for energy and water savings. After construction, Cosmopolitan took the water and electricity metre readings to ensure the consumption meets efficiency standards. If usage exceeds these standards, the construction unit is responsible for paying an additional fee based on the excess and must maintain low-energy operations. In Chengdu, its design and construction projects adhere to the Environmental Impact Assessment Report for the Century City Cultural and Creative Commercial Park of Zhifu Investment and Development (Chengdu) Co. Ltd, ensuring that Cosmopolitan reduces the environmental impacts of its activities. For example, we specify the use of oil fume purification equipment in its Heating, Ventilation, and Air Conditioning ("HVAC") construction and require that the processing of cooking fumes must comply with the current national standards when considering the design of air conditioning and ventilation systems.

Furthermore, Cosmopolitan is conducting a reforestation project in Urumqi, Xinjiang Uygur Autonomous Region, which involves reforesting and granting land for an area of approximately 7,600 mu, in compliance with the relevant local laws and policies. By the reporting period, Cosmopolitan has successfully reforested around 4,300 mu within the project site, following the relevant government regulations of Urumqi.

Cosmopolitan evaluates its performance and updates its policies regularly to align with changing regulations and industry standards, ensuring that Cosmopolitan meets its environmental objectives. To support this, Cosmopolitan works with property management to conduct inspections of residential, commercial and underground areas on a daily basis. These inspections monitor the usage of equipment and facilities, such as air conditioning, fire safety systems, tap water, and curtain walls. If any issues are found, property management quickly arranges for maintenance and control measures.

The following list summarises the Group's achievements in constructing and maintaining a green built environment for its property projects in Hong Kong:

Project Certifications

The Ascent BEAM Plus Final Gold

We Go MALL BEAM Plus Final Silver

Mount Regalia BEAM Plus Final Bronze

Regala Skycity Hotel BEAM Plus Final Gold

Environmental Targets

As a responsible company, Century City recognises the importance of aligning our business models with global environmental trends. We are committed to improving our performance in key environmental issues including GHG emissions, energy efficiency and waste reduction. To achieve this, we leverage historical environmental data, guidance from local government, as well as findings from internal control. We have set a series of quantitative targets over the short, medium and long term to drive progress. These targets are regularly reviewed and updated to ensure they align with our vision for a sustainable future.

Properties - Hong Kong

GHG Emissions Mid Term Reduce GHG emission intensity by 10%

by 2030 with 2018 as baseline year.

Energy Efficiency Mid Term Reduce energy intensity by 10% by

2030 with 2018 as baseline year.

Waste Long Term Maintain 100% hazardous waste recycling.

Achieved 29% reduction in GHG emission intensity in 2024 compared to 2018 as the baseline year.

Achieved 10% reduction in energy intensity in 2024 compared to 2018 as the baseline year.

Paliburg continues to monitor the progress of recycling.

Hotels

During the reporting period, Regal has reviewed and updated the environmental targets, as well as introduced a comprehensive set of ESG targets present below:

Properties - Mainland China

Key Aspects Targets Detail Status

GHG Emissions Short Term Have at least 10 parking spaces with

EV chargers in its current projects.

Reserved EV parking slots with 1,250 kVA chargers in the Chengdu Project.

Reduce GHG emissions of AB tower and its associate buildings, commercial street and residential

buildings in its Tianjin Project by 2% in 2025 using 2024 as baseline.

Mid Term Increase the number of parking spaces with electric vehicles ("EVs") chargers.

Energy Efficiency Short Term Reduce energy consumption intensity

by 2% in 2025 in Tianjin Project, using 2024 as baseline.

Water Short Term Reduce water consumption intensity by 1% in 2025 in Tianjin Project, using 2024 as baseline.

Waste Short Term Achieve 50% waste diversion rate and 50% waste recycling rate for residential buildings, commercial streets and AB tower and podium buildings in 2025.

Will continue to implement emissions reduction measures and monitor the carbon emissions of the Tianjin Project.

Will continue to increase parking spaces with EVs chargers.

Use of energy-saving office furniture and equipment. Restrict usage of office vehicles.

Will continue to implement transformation projects to reduce water consumption.

Centralised and collected wood and packaging cartons in the construction site to facilitate recycling by paper mills.

Scrap steels were collected and recycled by steel production enterprises.

Bricks were mainly used for backfilling of roadbeds.

Our Response to Climate Change Governance

Century City Group recognises that climate change presents a significant challenge to our hotel and property operations. As a result, managing climate-related risks has become a key priority in our environmental management strategy. We are dedicated to developing and implementing robust management approaches and action plans to enhance the climate adaptability and resilience across our operations. The Board is committed to taking actions to mitigate and adapt to the risks across the business units.

For more details on sustainability governance, please refer to the "Sustainability Governance" section of this report.

Strategy

The Group is committed to mitigating climate change impacts to the business and the environment.

To drive climate change awareness across the Century City Group, and to align actions with our organisational strategy, we have set environmental targets to work towards a net-zero economy, with supporting efforts highlighted in "Energy Efficiency and Emissions ", "Water Management", "Waste Management" sections of the report as some of the key themes.

Risk Management

We have identified climate-related risks and opportunities that could materially affect our business under the different scenarios, and they are outlined in this Risk Management section. The risk list was built through reviewing publications of international research organisations and peer companies. Risks identified are being reviewed regularly by Board members. During the reporting period, the Group has engaged a third-party consultant to conduct a climate-related assessment and understand climate-related risks and opportunities. Through green offerings and building management initiatives, the Group may leverage these opportunities to foster trust and credibility and strengthen stakeholder relationships. Further details on climate-related risk and the Group's risk management strategies are outlined in the next section.

Impacts to Material Physical and Transition Risks

Flooding

• Increased costs for repairs and maintenance

• Disrupted construction timelines and impacted guest satisfaction

Extreme Heat

• Increased wear and tear of building materials, infrastructure and hotel facilities

• Increased heat stress for construction workers, staff, and guests

• Increased energy consumption for cooling

• Higher operational costs for retrofitting or running cooling systems

Water Scarcity

•

•

Cyclones/Typhoons

Increased operational construction workers, staff, and guests Reduced demand for development projects and luxury services

• Increased risks of structural damage such as broken windows and roof leaks

• Higher likelihood of damage to machinery and tools, and inventory of raw and finished products

Policy and Legal

•

•

•

•

Stricter building regulations and net-zero targets may increase construction and retrofitting costs

Carbon pricing schemes and taxes (e.g. Carbon Pricing Schemes, Environmental Protection Tax) may increase operational costs3

China's dual carbon goals (i.e. peak carbon emissions before 2030 and achieve carbon neutrality by 2060) may increase costs for transitioning to cleaner energy sources

Alignment with Hong Kong's Climate Action Plan 2050 may require

investments in sustainable technologies and infrastructure

Market

•

•

Volatility in energy prices due to low-carbon transitions may lead to higher costs for utilities, heating and cooling in buildings

Shift in consumer preferences for sustainable and energy-efficient properties

may affect competitiveness

Reputation

• Increased drive to develop green buildings

• Higher expectations from guests may impact corporate image and loyalty

Climate-Related Scenario Analysis

This year, leveraging on findings from climate risk assessment in previous years, the Group engaged a third-party consultant to conduct a more in-depth assessment, including a climate-related scenario analysis to better understand the impacts of the climate risks and opportunities of our hotels as well as property management and development operations.

To support the Group in making informed decisions under different plausible climate futures and consider appropriate strategies to mitigate risks and leverage opportunities associated with climate change, two contrasting scenarios ("Turquoise Scenario" and "Brown Scenario") are constructed with reference to four publicly available pathways issued by the Intergovernmental Panel on Climate Change ("IPCC") and Network for Greening the Financial System ("NGFS"). The two contrasting scenarios are further adopted for climate scenario analysis across three time horizons. The table below illustrates the assessment framework and the four selected pathways:

3 The National Emissions Trading Scheme ("ETS") in China was launched in 2021 to reduce carbon emissions by capping annual CO2allowances for covered entities and enabling trading of emission permits. The Environmental Protection Tax was introduced in 2018, replacing a prior fee system, to tax enterprises discharging air/water/ solid waste pollutants and noise, with rates tied to pollution volume and local regulations. While the ETS sets a market-driven carbon price, the tax directly penalises conventional pollutants.

Assessment Framework

Scope of Properties: 2 composite developments in Mainland China and 12 hotels in Hong Kong

Time Horizons: Short Term: 2021-2040; Medium Term: 2041-2070; Long Term: 2071-2100

Climate Scenarios and Selected Pathways

Turquoise Scenario: A global mean temperature rise of 1.5°C to 2°C by 2100 Brown Scenario: A global mean temperature rise of above 3°C by 2100 Physical Risk Pathways: Shared Socio-Economic Pathway 1-2.6 ("SSP 1-2.6")

Shared Socio-Economic Pathway 5-8.5 ("SSP 5-8.5")

Transition Risk Pathways: Net Zero 2050

Current Policies

Pathways associated with climate-related physical risks

Pathways associated with climate-related transition risks

SSP1-2.64

A low-emissions pathway limiting warming to ~1.8°C by 2100. This scenario aligns with the Paris Agreement's 2°C target through rapid decarbonisation and sustainable development.

Net Zero 20506

This limits global warming to 1.5°C through immediate, stringent climate policies and rapid technological innovation, achieving net-zero CO2emissions by 2050. It requires sectoral transformations and carbon pricing to balance transition risks via coordinated decarbonisation.

SSP5-8.55

A very high-emissions pathway projecting

4.4°C warming by 2100. Considered a high-risk, fossil-fuel-intensive pathway, it exceeds Paris goals and involves catastrophic impacts such as significant habitat loss and extreme weather.

Current Policies7

This maintains climate measures that are currently implemented, leading to high emissions and 3°C+ warming. Transition risks escalate in the post-2030 as delayed action forces abrupt policy shifts. Limited negative emissions result in higher long term costs, contributing to instability in the financial system.

4, 5 Pathways adopted are from IPCC's sixth assessment report.

6, 7 Pathways adopted are from NGFS.

We use scenario analysis to better understand various physical and transition risks the Group may encounter under different global warming trajectories for selected assets across our portfolio. Exposure levels are ranked to determine which physical and transition risks will be selected for further analysis.

Physical risks

Asset-level modelling of the physical risks has been conducted. Historical data and projected climate variables, such as temperature and precipitation from suitable global climate models, and local meteorological data, were adopted to assess the potential implications to the Group under different climate scenarios. The data has allowed us to evaluate the exposure to specific assets and operations in the short, medium, and long term.

The project evaluates the 14 key assets in Mainland China and Hong Kong to ensure a holistic view of Century City's exposure to climate-related risks. By mapping projected climate changes to asset locations, we assessed overall risks by incorporating exposure to specific hazards, with charts illustrating the proportion of portfolio at different risk levels under contrasting scenarios below. Exposure is determined based on an indicative analysis in consideration of the severity and likelihood of the climate risks. More pertinent climate hazards identified in the assessment are flooding and extreme heat.

Water scarcity, extreme heat and flooding risks

Portfolio by Short Term Physical Risk Levels

SSP 1-2.6

Water Scarcity

SSP 5-8.5

SSP 1-2.6

Extreme Heat

SSP 5-8.5

SSP 1-2.6

Flooding

SSP 5-8.5

0%

10%

20%

30%

40%

50%

60%

70%

80%

90% 100%

Very Low Risk Low Risk Medium Risk High Risk Very High Risk

Portfolio by Medium Term Physical Risk Levels

Wat Scar

Extr Hea

Flo

0%

10%

20%

30%

40%

50%

60%

70%

80%

90% 100%

Very Low Risk Low Risk Medium Risk High Risk Very High Risk

Portfolio by Long Term Physical Risk Levels

W

Sc

Ex H

Fl

0%

10%

20%

30%

40%

50%

60%

70%

80%

90% 100%

Very Low Risk Low Risk Medium Risk High Risk Very High Risk

Typhoon risks

The severity of typhoons is expected to intensify with wind speed increasing. The frequency of these events may either decrease or remain constant under different projections from different models. It is noted that according to the IPCC, projections on typhoon risk is "inconclusive because of limited reliable simulations", and we will further explore the feasibility and reliability of conducting scenario analysis on typhoon risks based on the availability of relevant simulation models.

Transition risks

The transition risk scenarios incorporate policies, environmental, economic, social, and technology indicators and market trends. We seek to stress-test our business against several plausible future scenarios. The scenarios cover the short, medium, and long term, and include both global and region-specific (Hong Kong and Mainland China) indicators.

Overall, it is anticipated that there will be an increase in financial impacts on Century City's portfolio stemming from the identified transition and physical climate risks. Despite this, Century City has developed a set of climate adaptation and mitigation strategies to tackle the impacts from climate risks.

8, 9 Changes are gauged against baseline year 2020.

Mitigation and Adaptation Properties - Hong Kong

Paliburg has developed a series of climate adaptation plans to effectively manage and respond to both current and future climate change impacts. These plans are frequently communicated to employees to enhance their preparedness and awareness in responding to extreme weather events. Paliburg will integrate the mitigation and adaptation measures into its internal policies and procedures to strengthen its overall climate resilience.

Hotels

This year, Regal is compiling a comprehensive Climate Change Policy to communicate its commitment to adapting an environmental management system. Through improving the usage efficiency of nature resources and electricity, and mitigating climate change impact by managing climate change risks across its operations and value chain with global best practices, Regal is committed to protecting the environment and building its climate resilience to support the transition to a net-zero emissions economy.

Physical Risks

To mitigate the impacts of climate change, Regal has begun the replacement of traditional lighting with LED lights and diesel-powered equipment with natural gas or renewable energy sources since 2022. It is also actively exploring innovative energy-saving solutions that enhance building energy efficiency. It encourages the signing of performance-based contracts with specialist contractors to implement energy saving programmes in the hotels.

A series of climate adaptation plans and measures have been formulated in response to current and future climate change impacts.

Response plans covering events such as flooding, tropical cyclones and heavy downpours are communicated to employees to enhance their preparedness and awareness. Regal's Engineering Department also provides trainings to enhance Engineering staff in their capabilities in managing climate change events. Climate change adaptation devices have been installed to improve the adaptive capacity of the hotels. For instance, a flood gate is installed at Regal Airport Hotel to protect essential areas from flooding risks.

Flood Gate at Regal Airport Hotel

Transition Risks

Climate change is a global challenge with long term implications. From the two inaugural International Financial Reporting Standards published by the International Sustainability Standards Board to the Stock Exchange's consultation conclusion on climate-related disclosures, Regal is aware of investors' heightening expectations and regulatory requirements on climate-related disclosures, and the potential implications to its business.