BDO ESG Awards reward companies for their dedication to sustainability
- CLP Holdings, Cathay Pacific and Lenovo among winners for both overall ESG initiatives and reporting
- ESG Report of the Year shared by Nameson Holdings, Zhou Hei Ya International and China Resources Pharmaceutical Group
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Following its successful inauguration in 2018, global accountancy network BDO announced its second ESG Awards on February 20 at a ceremony at the Grand Hyatt Hong Kong.
Created to recognise excellence in long-term environmental, social and corporate governance (ESG) strategies and reporting, the ESG Award is presented to Hong Kong-listed companies with large, middle and small market capitalisation as well as GEM organisations.
Since ethics and social responsibility became a factor in both institutional and individual investment decisions in the mid-20th century, ESG has become the primary metric for measuring a business’ sustainability and ethical impact on its financial performance.
As non-financial information becomes more crucial for investors when considering risk factors in all sectors, demand for reporting also increases.
“ESG reporting essentially influences a company’s competitive positioning,” Ricky Cheng, director and head of risk advisory at BDO, said. “This gives a strong reason for companies to attempt to communicate the ESG strategies, management approaches and achievements or difficulties in which investors are more interested, in a more transparent, interactive and informative way.”
Clement Chan, managing director of assurance at BDO in Hong Kong, said: “We believe companies have come to appreciate the value of ESG reporting and are therefore putting time and resources to incorporate sustainability elements in their business models and value chain, which in return brings new business opportunities to them.”
Of the three tiers of ESG practices, innovative and proactive operational policies regarding the environment are clearest. Policies can include climate change mitigation by avoiding the use of fossil fuels, sustainable resource and supply chain management, and the use of carbon neutral and environmentally responsible products, common with hotel and restaurant operators. Tsui Wah Holdings, one of the Best in ESG winners in the Small Market Capitalisation category, for example, has committed to operating low-emission kitchens and green purchasing in its food sourcing.
Social concerns can often relate to diversity and inclusion policy in hiring, human rights and consumer protections (particularly in the financial industries, where predatory lending can be a problem), employee health and welfare, and brands that shirk animal testing.
Corporate governance relates to balanced management structures that control corruption and effective and equitable labour relations. A poor showing on any factor can now have a negative impact on a business’ profitability, values and public image.
This year’s BDO ESG Awards were handed out in three categories: the Best in ESG Award, the Best in Reporting Award and the ESG Report of the Year Award. Nominees were selected based on criteria set down by BDO in Hong Kong – which include environmental, labour and safety law compliance, and corporate practices among other factors – using more rigid reporting evaluation standards for 2019.
Shortlisted companies integrated trackable policy and performance into their planning. New for 2019 was the ESG Report of the Year for newly listed companies, shared by China Resources Pharmaceutical Group, knitwear manufacturer Nameson Holdings and food supplier Zhou Hei Ya International.
Among the night’s awardees for both overall ESG initiatives as well as reporting were power supplier CLP Holdings, airline Cathay Pacific, technology giant Lenovo, clothier Esprit Holdings and developer and shipping services provider Shun Tak Holdings, which, in addition to its environmental awareness programmes, is active in community development and diversity and inclusion initiatives.
“We teamed up with NGOs to organise tutoring for minority students and provided venues for NGOs to host events to raise awareness for autism and musical concerts: these are all in accordance with ESG criteria,” Amy Chak, director of group human resources at Shun Tak, said.
“We recognise the demands of our stakeholders, so we will be even more transparent and more active in understanding their needs and in promoting environmental and community awareness among our employees.”
Restaurant operator and management firm 1957 & Co., which was recognised in the GEM category for Best in ESG, Best in Reporting and ESG Report of the Year, maintains strict standards for food quality and sources eco-friendly farmed fish and vegetables exposed to minimal pesticides. It also provides restaurants with materials and equipment that are energy-efficient and leave a low carbon footprint.
“Our key to success and ESG values are inseparable,” Paul Kwok, CEO of 1957 & Co., said. “We work hard in providing an ideal working environment and training for our employees, being environmentally friendly, managing waste and conserving energy. So we are extremely honoured to receive the awards.”
Johnson Kong, managing director – non-assurance of BDO Hong Kong, hinted at a bright ESG reporting future.
He said: “Moving forward, BDO will remain committed as a keen advocate for continuous enhancements in ESG and ESG reporting standards of Hong Kong-listed companies towards international standards, so that the city can stay competitive in global markets.”