Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 74 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT (CONTINUED) ENVIRONMENTAL PROTECTION (CONTINUED) Environmental Impact Management (continued) Water Consumption The Company and Investment Manager operate in a sub-leased office and the source of water and its supply are controlled and managed by the office’s management. Hence, there is no designated water meter to monitor the water usage of the office. However, we recognise water being an important natural resource and measures are taken to keep the consumption of water to minimal. For example, we encourage employees to conserve all resources including water in order to reasonably avoid water wastage. The water source is from Hong Kong Water Supply Department and it poses no sourcing and issues or risks to our operations. The Company and the Investment Manager have set the following target: Target 6 To consider the water conservation policy and measures adopted by the buildings as one of the selection criteria for new rental offices by 2021. A series of considerations will be taken into account when selecting new rental offices; for example, if the landlord has been: ‧ implementing efficient water system design with a smart function of leakage detection; ‧ collecting used water for cooling purposes, floor cleaning and yard washing; and ‧ turning off the water supply system at night and on holidays. Climate Change Significant climate-related issues may have impacts on the Company’s investment returns. It is recognised that these risks have to be timely identified and measures should be in place to mitigate these climate-related risks brought by extreme weather conditions. Hence, climate change policy is in place to provide guidelines for the Company and the Investment Manager to identify and mitigate these risks and potential impacts to the Company and shareholders. Furthermore, the policy also provides guidelines for the management to build adaptive capacity for the Company to be resilience to climate events. Climate-related issues such as risks in regulatory change may lead to the devaluation of the assets held by the Company. These potential stranded assets may be energy related, which could lead to unpredicted fluctuation in the Company’s value. Therefore, climate-related issues and trends are considered when making significant business and investment decisions after weighting its costs and benefits. For example, climate risks should be considered before adding the new investment choice to the Company’s portfolio. Our climate change policy also contains guidance to climate risks identification, mitigation and adaptation to help build resilience to these potential climate events.