By Pan Jingyi, Principal Writer, China Business Knowledge@CUHK
The ESG revolution has taken the business world by storm, and across the globe, companies are increasingly seeking to improve their environmental, social and governance performance. As an international business and finance hub, Hong Kong is at the forefront of this drive to make business practices more sustainable.
It is with this in mind that representatives from three three top performers in the 7th Hong Kong Business Sustainability Index (HKBSI) were invited to share their experiences and approaches to integrating ESG into their business strategies at a panel discussion moderated by Kalok Chan, Wei Lun Professor of Finance and Chairman of the Department of Finance at The Chinese University of Hong Kong (CUHK) Business School, and which was held by as part of Business Sustainability Conference 2022. The full-day event was organized by the Centre for Business Sustainability at CUHK Business School in September.
Turning Waste into Energy
Kicking off the sharing, Daniel Fung, Head of Strategy & Innovation and Commercial – Hong Kong Utilities at Hong Kong and China Gas (as known as Towngas) says the energy supplier has made reducing its carbon footprint one of its highest priorities. “In the previous 15 years, we have been able to reduce our carbon emissions by 23 percent and they now only account for less than 1 percent of total carbon emissions in Hong Kong,” he says, adding that the company has replaced the heavily-polluting coal and heavy oil as feedstock for its gas products supplied to consumers, to natural gas and landfill gas, ultimately yielding a cleaner gas which burns more efficiently. “We may sell less gas with more efficient applications, but this is not important; we must make sure this is sustainable,” Mr. Fung emphasises.
Mr. Fung notes that the company also collaborates with Alice Ho Miu Ling Nethersole Hospital to turn waste into energy. Specifically, the company built a system there which uses flue gas and residual heat from the hospital’s landfill gas generator to generate steam and hot water for disinfection, laundry, and other uses. Beyond local projects, Towngas also engages in a number of sustainability-themed investments in mainland China, such as ventures related to water supply, urban waste treatment and utilisation, and new energy exploration and utilisation. Mr. Fung says that the company supplies natural gas to 40 million households in more than 300 mainland cities.
Supporting Green Ideas
On the other hand, companies in the financial services industry are also seeking to contribute to efforts to improve sustainability. Jenny Hui, Head of Syndicated Finance, Sustainable Finance and Corporate Advisory Department at Hang Seng Bank, notes that the company seeks to increasingly integrate ESG into all aspects of its operations. For example, Ms. Hui says the bank provides sustainable financing to help support clients seeking to improve their ESG focus, and Hang Seng has set up a US$200 million fund to support innovative and clean-tech companies. “We have sustainable finance products such as green loans and sustainability linked loans, and we cover all of our corporate clients from SME (small and medium enterprise) to large corporations,” she says, adding that the bank actively provides valuable advice to its corporate customers, particularly SMEs, which have less resources and require more support, who are seeking to tweak their operations with a view to improving their ESG footprint.
Apart from providing financial support for the community’s transition to a low-carbon economy, Hang Seng also seeks to reduce its own carbon emissions. For instance, Ms. Hui says the bank completed the installation of 138 solar panels in September 2021 on the roof of one of its office buildings in the city, and the company has reduced greenhouse gas emissions by 27 percent as of June this year.
Valuing People and Community
The third and final member of the panel discussion was Johnny Yu, Advisor to Chairman at Henderson Land, who mused on incorporating ESG into the company’s operations. “How do we promote a sustainable city in Hong Kong, and how do we actually embrace innovation for a sustainable future?” asks Mr. Yu. Besides environment-related measures such as using more sustainable materials during the building construction process and providing adequate electric vehicle charging facilities within its commercial and residential buildings, Mr. Yu stresses that Henderson Land seeks to act in a way that shows it genuinely cares about people and the community.
Showcasing this commitment, he notes that Henderson Land has been working with the government and NGOs to build transitional housing. By doing so, the company helps alleviate the hardship faced by families living in adverse conditions and waiting for public housing. “The transitional housing projects, for which the land was provided by the group, applied the Modular Integrated Construction (MiC) technology, which reduces waste, reduces noise, and makes it easy to assemble and dismantle the units,” Mr. Yu adds.
Community is one of the important pillars of its ESG strategy. Henderson Land has been proactively promoting Hong Kong’s sports development over the years. Established in 2018 with donations from the Lee Shau Kee Foundation, the Henderson Land Commendation Scheme for Elite Athletes has given away nearly HK$39 million in cash incentives to Hong Kong athletes, including the winning athletes at the Tokyo 2020 Olympic Games, the Tokyo 2020 Paralympic Games and the 14th National Games of the People’s Republic of China. “We want to create value and foster social well-being,” Mr. Yu says.
The Role of Technology
Rounding out the discussion, Prof. Chan notes the prevalent use of data and technology has become critical nowadays in the pursuit of sustainability. He asked the three panelists to share how their companies contribute to technology innovation and how technology helps them to realise sustainable development.
To drive new technologies and innovations, Towngas’s Mr. Fung says the company launched a global competition in 2021, with US$1 million as its top prize, to identify new innovative energy technologies. Participants were encouraged to submit entries related to fields such as renewable energy, hydrogen and fuel cell technology, as well as energy storage and conversion, with the most promising proposals receiving funding opportunities and resources to bring their ideas to fruition.
Lastly, Mr. Yu from Henderson Land notes that the company has launched an industry-first Landlord-Individual-Tenant ESG Partnership Programme at The Henderson — the Group’s up-and-coming flagship commercial development in the city’s Central district. Crucial ESG data will be provided to its tenants to help them determine the best ESG strategy and to enable them to compile their ESG sustainability assessments and ESG reporting disclosures. “We would like to work together with tenants and their employees to reduce carbon emissions, and to provide high-tech solutions for rental clients to ensure a safe and sustainable future for all,” says Mr. Yu.
This article was originally published on China Business Knowledge in 15 Dec 2022.