Cathay Pacific Airways Ltd

###### GOVERNANCE\n\nThe Cathay Pacific Group is committed to ensuring that its affairs are conducted in accordance with high ethical standards. This reflects our belief that, in the achievement of our long-term objectives, it is imperative to act with probity, transparency and accountability.\n\n[Our governance practices are described in detail in the Corporate Governance Report section of our 2020 Annual Report.](https://www.cathaypacific.com/content/dam/cx/about-us/investor-relations/interim-annual-reports/en/2020_cx_annual_report_en.pdf)\n\n###### Board statement on sustainable development\n\nThe Board is ultimately accountable for sustainable development\nstrategy and performance at Cathay Pacific. It is supported in\nits duties by three governance bodies that steer the Group's\napproach in sustainability matters under the leadership of the\nChairman. They are the Sustainable Development Committee\n(SDC), Sustainable Development Steering Group (SDSG), and the\nClimate Actions Steering Group (CASG). In addition, the Board\nRisk Committee oversees assessment of environmentai, social\n\nand governance risks among other risks and implementation of\nrelated board decisions.\n\nThe Board responsibilities include reviewing the Group's\nmaterial sustainability topics and approving sustainable\ndevelopment related strategy, targets, actions and policies.\nThe Board also reviews and signs off the annual Sustainable\nDevelopment Report.\n\n###### Board of Directors\n\n###### Sustainable Development Committee (SDC)\n\n|Board of D ustainable Developm|irectors ent Committee (SDC)|\n|---|---|\n|||\n\n###### Sustainable Development Steering Group Climate Actions Steering Group (SDSG) (CASG)\n\n Figure 1 Sustainable Development Governance Structure\n\n--NEW-PAGE--\n\n###### The Sustainable Development Committee (SDC)\n\nChaired by the Chief Executive Officer, the SDC consists\nof four Executive Directors and four other members of our\nsenior management team. The SDC was established by and\nreceives its authority from the Board to evaluate and approve\nsustainable development strategy, policy, target setting, and\ninvestment in major initiatives. It sets the tone for a corporate\nculture focused on sustainable development. Meeting regularly\nduring the year, its duties include evaluating and prioritising\nthe Group's material sustainable development topics. It\ncommunicates these and the materiality process to the Board\nin addition to providing biannual progress updates. In this way,\nsustainability is integrated into business planning, budgeting\nand risk management, and forms an integral part of the Group's\nbusiness strategy.\n\n###### The Sustainable Development Steering Group (SDSG) and Climate Actions Steering Group (CASG)\n\nBoth SDSG and CASG were established by and report to\nthe Sustainable Development Committee. Both Steering\nGroups are chaired by the Director Customer and comprise\nDepartment Heads that represent a wide range of functions\nacross the company.\n\nThe SDSG covers a range of sustainable development topics\nincluding biodiversity, sustainability in operations, human\ntrafficking, and modern slavery. The CASG was newly set\nup in 2020 to strengthen our governance in climate change\nmitigation. It is tasked with ensuring that the Group's approved\nclimate change strategy, targets, and commitment are executed\nas planned. These Steering Groups evaluate and provide\nrecommendations on sustainable development policy, initiatives\nand targets that require SDC approval and Board review.\n\nDetails of how material sustainability topics are managed within\nthe Group are contained within this report. Further information\non risk management is provided in the rest of this chapter. Our\ngovernance practices are described in detail in the Corporate\n[Governance Report section of our 2020 Annual Report.](https://www.cathaypacific.com/content/dam/cx/about-us/investor-relations/interim-annual-reports/en/2020_cx_annual_report_en.pdf)\n\n###### Code of Conduct\nThe Cathay Pacific Group enforces the highest standards\nof corporate governance and best practices in accordance\n[with our Code of Conduct (the "Code"). The Code sets out our](https://www.cathaypacific.com/content/dam/focal-point/cx/about-us/responsible-business/cx-code-of-conduct-2019.pdf)\nprinciples for acting responsibly in the course of achieving our\ncommercial success. The Code applies to all employees of\nCathay Pacific and its subsidiaries, and includes issues related\nto business ethics, conflicts of interest, procurement, insider\ntrading, lobbying, bribery, environment, health and safety, and\nrespect in the workplace.

### 1.4 Roles and Responsibilities

Our management team is responsible for implementing this policy, overseen by the Board of Directors, who are ultimately accountable for the Group's sustainable development strategy and performance. Three governance bodies support the Board in steering the Group's approach to sustainability matters. The Sustainability Leadership Group (SLG) is chaired by the Chief Executive Officer and reports to the Board regularly on sustainability strategy and issues. SLG is supported by the Climate Change Action Group (CCAG), and the Materials & Wastes Action Group (MWAG) on strategy development, target setting, and implementation. In addition, the Board Risk Committee oversees assessment of Environmental, Social, Governance (ESG) risks among other risks and implementation of related decisions. [...] ### 2.2 Governance

- The establishment of the Sustainability Leadership Group (SLG) ensures effective oversight of sustainable development within the Board. The Group Sustainability Department has been formed in support of execution of approved Sustainable Development Policy, strategy, and initiatives for meeting approved targets. The SLG will be supported by multiple taskforces. They are tasked with specific aspects of our priorities in sustainable development, and report into the SLG.

- We take appropriate action when the industry association position is notably weaker, or conflicts with our own stance on climate change. This ensures that our commitment to sustainability leadership remains unwavering, and we actively contribute to leading positive change within our industry. [...] - The establishment of the Sustainability Leadership Group (SLG) ensures effective oversight of climate change affairs within the Board. The Group Sustainability Department has been formed in support of execution of approved climate change policy, strategy, and initiatives for meeting approved targets.

Both SDSG and CASG are established by and report to the SDC. Both Steering Groups are chaired by the Chief Financial Officer and comprise Department Heads that represent a wide range of functions across the company. The SDSG covers a range of sustainable development topics including materials and waste, biodiversity, human trafficking and modern slavery. The CASG has been set up to strengthen our governance in climate change. Both Steering Groups are tasked with ensuring that the Group's approved strategy, targets, and commitment are executed as planned. They also serve as platforms to evaluate and provide recommendations on sustainable development and climate change policy, initiatives and targets that require the SDC's approval and the Board's review."
"The Sustainable Development Committee (SDC) Chaired by the Chief Executive Officer, the SDC consists of four Executive Directors and three other members of our management team. The SDC is established by and receives its authority from the Board to evaluate and approve sustainable development strategy, policies, target setting, and investment in major initiatives. Meeting at least three times a year, its duties also include evaluating and prioritising the Group's material sustainable development topics. The SDC then reports the materiality process, management of sustainability and climate-related issues and the progress made towards key KPI to the Board. In this way, sustainability is integrated into business planning, budgeting and risk management, and forms an integral part of the Group's business strategy. Climate change is a standing agenda item in SDC meetings, where the latest progress updates are reviewed, and the strategic direction and target setting is discussed and decided upon. In 2023, the SDC conducted two additional sessions, one focusing on understanding the global supply-demand dynamics of SAF and another one delving into the cost implications and Cathay's strategic response to these dynamics. [...] Climate Actions Steering Group (CASG) The CASG is established by and reports to the SDC. It is chaired by the Chief Financial Officer and comprises Department Heads that represent a wide range of functions across the Group. The CASG has been set up to strengthen our governance in climate change mitigation. It is tasked with ensuring that the Group's approved climate change strategy, targets, and commitment are executed as planned. The CASG evaluates and provides recommendations on climate change policy, initiatives and targets that require SDC approval and Board review.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]Climate change has been a major focus of Cathay Pacific where the Board is ultimately accountable for our climate-related strategy and performance. We rely on our sustainability governance committees, as described in C1, to ensure engagement activities are consistent with our overall climate strategy. Amongst the three committees, both the Sustainable Development Committee (SDC) and the Climate Actions Steering Group (CASG) are dedicated to a range of climate issues, including climate engagement activities across business divisions and geographies to ensure they are consistent with our climate strategy and represent the best interests of the company.

Climate change is a standing agenda item in the SDC meetings, where relevant progress updates will be reviewed and the strategic direction and target setting will be discussed and decided upon. Specific responsibilities with regards to climate-related impact are handled by different teams and committees with updates provided to the SDC.

CASG is responsible for evaluating and providing recommendations on climate-related policies, targets and initiatives as well as ensuring climate-related commitments made will be executed as planned. Various taskforces under CASG were set up, including the Sustainable Aviation Fuel (SAF) taskforce which focuses on the development and adoption of SAF within the airline. Such taskforces are led by the Climate Change & Sustainable Aviation Fuel Manager, who is responsible for bringing in relevant business units to carry out the agreed plan.

Engagement activities, our positions, and direction are discussed, reviewed and approved at CASG / SDC to ensure that they are in line with the company policy and climate change commitment.