2006 was a milestone for climate science and research. The "Stern Review on the Economics of Climate Change" placed in stark clarity the cost and pitfalls of climate change and global warming, while urging a radical re-think of our approach towards carbon technology. The Review argues that the anticipated benefits of positively tackling climate change far outweigh the costs, and a strong economic case is presented for the business world to be acting upon it expeditiously.

For us, it is a continuing journey. Since announcing our first EHS goals and targets in 2003, we have achieved 90% of them. EHS practices have been integrated into our core business strategy and form part of our long term business goals. Two health, safety and environmental audits are now performed annually and 92 further corrective measures are in hand which address the company's more pressing concerns in the areas of energy usage, energy efficiency and greenhouse gas emissions, all of which would infer that we are on the right path. However, looking forward, there are still many more challenges to be met and improvements to be made.

A consequence of our Swire Group Environmental Conference held last year, has been the opening up of a dialogue on the global carbon market and an aspiration to benchmark ourselves against like-minded businesses. A key initiative of an equally far reaching nature is the intent to make additional inroads into reducing our environmental footprint and I look forward to reporting further on these initiatives, and the steps taken in next year's report.

Lastly, let me not overlook the arena of safety and health where we have achieved a high score of 89% in our 2006 independent safety audit. As ever, I am indebted to all management colleagues with responsibilities for safety and health issues for the strong and proactive approach that they are taking.

These are just some of the primary examples you will find in the report. I hope they illustrate our steadfast intentions and the distances traversed in pursuit of EHS excellence.

Keith G. Kerr
Chairman