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Post briefing materials:
Summary
In his presentation, Mr James Muir of Environmental Resources Management (ERM) gave a brief introduction on Hang Seng Index companies that have started their own reporting system on sustainability. Amongst these companies, six of them are already included in the DJSI and FTSE4Good. Muir said that the three of the key drivers for these companies starting sustainability reporting included brand building, higher scoring in bids for Government tenders, and assurance to their high standard clients.
However, The Hang Seng Index (HSI) currently comprises 33 constituent stocks, 18 of these companies still did not have Environmental Reporting systems in place, not to mention sustainability reporting, said Muir.
He said that Hong Kong companies have a comparatively lower level of reporting compare to the DJSI and FTSE4Good companies. Many of the companies say that they do not find investors in Hong Kong are interested in sustainable issues. Currently, the driving force comes from the senior management rather than external parties, he said.
During a long and lively question and answer session, a professional from Mass Transit Rail Corp (MTRC) in Hong Kong, one of Hong Kong’s only sustainability reporters, asked Muir to compare Hong Kong with other Asian countries, like Korean, Taiwan, Singapore and Japan, on SRI report. James showed a slide reflected that Hong Kong companies actually far lag behind their counterparts in Japan, Malaysia and Australia. The MTRC professional commented that MTR had not received any feedback either from shareholders or the general public on their sustainability reports, highlighting again the lack of external forces driving reporting in Hong Kong..
A professional from Hong Kong & China Gas commented that the lack of incentives from the government and the regulators made Hong Kong companies lag far behind their counterparts in other countries. Using Hong Kong & China Gas as an example, she added that the company had put lots of time and effort into sustainability reporting but so far it did not seem to have had any impact on share price.
A representative from the Hong Kong Council of Social Services (HKCSS), who is also on the Stakeholder Council of the Global Reporting Initiative, stressed the importance of government support. She said that for many years the Japanese government had encouraged companies to set sustainability reporting as a critical item on the business agenda. This was the main reason why Japanese companies were more proactive in sustainability reporting, she said.
Peter Wong, another member of the GRI stakeholder council, added that the Japan Ministry of Finance had actually force the listed companies to comply with the ISO 14000 standard. Compared with European countries, environmental law of Asian countries is not at the same stage. Asian companies do not yet feel any emergency for sustainability reporting, he said.
To sum up, most of the contributors agreed that pressure from regulators would be the most important driving force for the companies to have better sustainability reporting. However, acknowledgement from investors would create a market force that further encourages the companies to improve their reporting quality. Peter Wong emphasized that it is critical to establish an international standard for all companies to comply with. Perhaps GRI is one of the answers.
Useful Links:
ACCA Sustainability Website
GRI Website
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