Environmental guide to have far-reaching effect
The Hong Kong stock exchange has been looking into ways to introduce the Environment, Social and Governance Guide (ESG) as part of the integrated reporting by listed companies. The guide has been increasingly adopted worldwide.
Integrated reporting refers to the representation of a company's performance in terms of financial and non-financial results, such as disclosure of social and environmental performances. If adopted, this will have a far-reaching effect on the local power supply sector.
While the impact of its business activities on the environment is inevitable, the power supply sector should strive to minimise the effect in a proactive and positive manner, says April Chan, company secretary of CLP Holdings.
'The environment aspect of the ESG reporting is a challenge for all companies, not just power supply companies, in their corporate governance and compliance,' Chan says.
In addition to its annual report, CLP issues a sustainability report, copies of which are sent to shareholders.
In 2002, CLP released its value framework, outlining the company's visions, values and commitment to responsible environmental management and to the responsible use and conservation of natural resources.
A manifesto on air quality and climate change has also been released. In 2007, the company issued the CLP Climate Vision 2050 to state its commitment to reduce carbon emissions in phases to the ultimate goal of 0.2 kilogram of CO2 per kilowatt hour in 2050 from 0.84 kilogram in 2007.
'It represents a 75 per cent reduction. Because we will continue to provide reliable electricity supply to our customers, this calls for a total of change in our business approach. In addition to the use of cleaner, ultra-low sulphur coal, we have expanded the use of other fuels, such as gas and renewable energy,' Chan says.
A host of publications have been issued to enhance public understanding of CLP's continuing commitment to the reduction of carbon intensity. 'We have also published the book Our Journey to A Low Carbon Energy Future, which provides updates on the milestones achieved since 2007,' she says.
CLP is recognised for reporting beyond compliance. 'We exceed the requirements of the listing rules in our annual report,' she says. 'We have a code for securities transactions by directors, senior management and specified individuals. This is an extension of the model code in the listing rules in Hong Kong. We also publish the remuneration of senior management and directors.
'We also have a set of continuous disclosure obligation procedures available on our website, which covers the current practices monitoring the business development and potentially price-sensitive information and the communication of such information to our shareholders and other stakeholders.
'These procedures are circulated among all managers so that they understand they have the obligation to provide such information to the senior management. This also provides guidelines on how and when they should make disclosure decisions.'
Last year, CLP made further progress in the evolution of its corporate governance practices, developing a group-level risk management framework to enhance integration of present risk management practices.