Annual Report 2021

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT (CONTINUED) China Merchants China Direct Investments Limited Annual Report 2021 77 ENVIRONMENTAL PROTECTION (CONTINUED) Environmental Impact Management (continued) Water Consumption (continued) 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. During the Reporting period, we have considered the water conservation policy for selection of rental offices to attain Target 6. 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 resilient 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 weighing 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.