A study of the impact of effective sustainability reporting on investment decisions of people in Hong Kong

The 2008 financial crisis has changed the game

43

28 25

0

10

20

30

40

50

60

70

80

90

100

%

TOP 3 PERFORMING LISTED COMPANIES IN TERMS OF CSR

SUN HUNG KAI PROPERTIES

HSBC HONG KONG CHINA AND GAS COMPANY

42% pay more attention to

companies’ CSR efforts today

compared to before the

2008 financial crisis

…people paying more attention post-2008

People want to invest in

companies with effective

sustainability programmes

People’s investment decisions are being influenced

88% of Hong

Kong investors

say that a

company’s

sustainability

efforts would

affect their

investment

decision

88%

12%

Unlikely / Very unlikely

Likely / Very likely

…and women appear to be more influenced than men

75% more women than men say their investment decision would be influenced by a company’s sustainability efforts

…although it still follows after the fundamentals

…people still want business and stock performance

Business Performance

Stock Market Performance

Business Strategy

Corporate social responsibility (sustainability)

Investor relations

77%

76%

48%

22%

20%

…but even business performance is associated with

CSR

86% Likely / Very Likely

86% of respondents

believe that companies with effective CSR programs deliver better business performance

Not all factors are equal

…there is variance in perceived importance of sustainability

elements

Operating practices cited as the

most important component of CSR/Sustainability programmes followed by

environmental protection

Operating practices

Environmental protection

Workplace quality

Community involvement

The Hong Kong Stock

Exchange plans to raise the

level of some recommended

disclosures in the

Environmental, Social and

Governance Reporting Guide

to comply or explain by 2015.

Why now?

Standards to consider

Getting started

Core components

Workplace quality

Environmental protection

Operating practices

Community involvement

Social (Labour practices/ human rights)

Environmental

Social (Product responsibility)

Social (Impacts on society)

• Working conditions • Health & Safety • Development & Training • Labour standards

• Emissions • Use of resources • Environment & natural resources

• Supply chain • Product responsibility • Anti-corruption

• Community involvement

• Employment • Occupational health & safety • Education & training • Child labour / forced labour

• Emissions / Effluents & waste • Materials / Energy / Water • Products & Services

• Supplier assessment (Environmental / Labour practices / Human rights / Impacts on society)

• Customer health & safety / Customer privacy • Anti-corruption

• Local communities

HKSE ESG Guidelines GRI G4 Guidelines

Helpful tips for companies

Map out what is material/relevant to your organisation

• Understand what aspects of your business have an impact

• Social, environmental, economic

• Positive, negative

• Actual, potential

• Direct, indirect

• Short term, long term

• Understand your boundaries – where do these impacts occur

• Internal, external

• Far reaching, localised

Map out what is material/relevant to your organisation

Engage and educate functions across the business

of project rationale

• You will need support

• data collection

• affecting change and improvements

• CEO/COO/CFO email to key personnel, impressing the importance

• Town-hall meeting with key personnel to explain the initiative, why it is important and the impact on the organization

• Issue guidelines on what to consider

Review reporting of peer organisations

• Approach • How do they establish

materiality

• What is their process

• How are they affecting improvements

• What they consider material

• How are they presenting the content

Start early

• Some information will need to be analyzed

• There can be a lot of information to gather from a number of divisions, teams and individuals

• All the information needs to then be compiled

• This all then needs packaging up into a coherent report

6 m

on

ths

to o

ne

yea

r

Start realistically

• Don’t overwhelm/scare-off the teams and individuals that need to contribute

• Don’t make the initiative so unwieldy it never reaches completion

• Ensure you are going to be able to demonstrate year on year improvements

• Remain consistent

• Ensure continuity

ESG Report

Put benchmarks in place that enable and drive year on year improvements

• Try to identify metrics against which you can demonstrate improvement. Examples

• Workplace incidents

• Carbon emissions

• Waste volume

• Water usage

• Economic impact from community initiatives

Six tips for companies looking to benefit

1. Review the reporting of peer organisations

2. Map out what is material/relevant to your organization

3. Engage and educate functions across the business of project rationale

4. Start as early as possible

5. Start realistically

6. Put benchmarks in place that enable and drive year on year improvements

THANK YOU

Respondents Demographic Breakdown

S1-4