Business as usual in Hong Kong… But is change on the way?

Ellinor Haggebrink By Ellinor Häggebrink, Engagement Manager at GES

In October 2014, GES reported onsite from Hong Kong demonstrations against a proposed reform to the electoral system. The reform would give the Communist Party control over which candidates would be permitted to present themselves to the Hong Kong electorate, and was considered highly restrictive for the city’s level of autonomy of China. Re-visiting the city a few months after the protests ceased, life seems to have gone back to normal without any change. The demonstrations did not have any impact on the proposed reform or the political situation, and the companies GES engaged with say the business climate was not affected in any way. In my eyes, the companies seemed quite unbothered and uninterested in the protests, merely writing it off as a thing between students and the government, which had nothing to do with the corporate side.

However, not everything was “business as usual” in the city; one interesting take away from the engagement trip is a new initiative from the Hong Kong Stock Exchange, introducing an ESG Reporting Guide as a recommended practice. All listed companies are encouraged to start aligning their disclosure with the guidance containing 32 KPIs in relation to environmental, social and corporate governance issues, which eventually will take on a “comply or explain” status.

As most companies do not have much ESG reporting in place at this point, they are in the process of collecting data and preparing themselves internally to comply with the new regulations. I found that as the companies work on this they are very open to ESG input, which creates a good momentum for producing tangible engagement results in Hong Kong. In my opinion, most companies seem genuinely eager to learn how to better address ESG issues; not only due to the new requirements, but as part of a more holistic risk management and thereby also as a business opportunity. I look forward to seeing where this has led by the time I next visit Hong Kong.

 

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