Best Corporate Governance and ESG Awards
Celebrating its 50th Anniversary Year, the Hong Kong Institute of CPAs successfully concluded its Best Corporate Governance and ESG Awards 2023 (“the Awards”) with the presentation luncheon ceremony held at the JW Marriott Hotel on 29 November 2023
Guest of honour, Permanent Secretary for Financial Services and the Treasury (Financial Services), Ms. Salina Yan, presented the awards to the winners at the 2023 presentation ceremony (see the press release). These included the winners in the top category of awards, the Most Sustainable Companies/ Organizations (MSCO) Awards, as well as awardees in the separate categories for corporate governance (CG) and environmental, social and governance (ESG). The MSCO Awards focus on sustainability in its broadest sense and aim to identify listed companies and public sector/ not-for-profit organizations that give equal attention to their CG and ESG, and which are clearly integrating CG and ESG considerations into their values, strategies and operations.
In her speech, Ms. Yan said, “It is a rightful recognition of the achievements of all the awardees, for you have demonstrated clearly that doing good to the society and the environment also means doing good to your businesses. From a big picture point of view, concerted efforts by individual organisations to attain a high level of governance, embracing risk management and internal controls, can also help foster the credibility and resilience of our financial markets to weather changes and challenges.”
“Thanks to the hard work of our professionals and professional bodies like the HKICPA, regulators and stakeholders, we are seeing an increasingly robust and vibrant ESG ecosystem in Hong Kong”, she added.
President of the Institute and Chair of the judging panel, Ms. Loretta Fong, who also spoke at the event, said:
- “The Institute has been championing best practices in corporate governance in Hong Kong, through the Awards, for almost half of its existence. Our involvement in advocating high standards of environmental, social and governance practices is also long standing, as we first introduced the Sustainability and Social Responsibility Reporting Awards into the competition in 2011. Later, in 2021, we renamed and revamped the Awards, giving equal billing to CG and ESG; although I have to say that, increasingly, the star of the show these days seems to be ESG reporting.”
- Regarding the positives taken from this years Awards, Ms. Fong explained that clearer connections were being established between companies’ ESG vision, strategies and action plans; there was an increase in the disclosure of quantitative environmental KPIs, and more companies were integrating ESG-related risks, including climate-related risks, into their risk management and internal control framework. In addition, there was good coverage of stakeholder engagement processes and matrices.
- As for the “but”, she explained, that, for many companies, CG standards seemed to have plateaued. “That may be understandable, given that additional time and resources that need to be directed towards developing sustainability practices and reporting.” However, she added, “As the old song said about love and marriage, for the highest levels of CG and ESG performance …You can't have one without the other. Ultimately, strong CG underpins everything that a business does, so, in this regard, companies should continue to give adequate attention to issues like board diversity, independence and refreshment, among other CG best practices.”
The president also referred the recent report published by the Institute, ESG Assurance in Hong Kong 2023: An evolving landscape, which looked at all December-year-end listed companies. While the study found, overall, only a modest increase in the number of companies obtaining assurance on their ESG reporting, in contrast, for large companies, there was a very significant increase from around 20% in 2021, when the Institute conducted a similar study, to over 41% this time (see the accompanying press release). Obtaining independent assurance from a reputable service provider can, at one and the same time, help companies to strengthen their own internal systems and boost investor and stakeholder trust and confidence, and an increasing number of large companies seem to understand this.
The speakers expressed appreciation for the invaluable contributions of the judges, reviewers, the Institute’s management staff, and others involved in helping to ensure the success of the Awards. They also thanked the supporting organizations, many of which provided judges and reviewers, and a number of which also generously provided financial sponsorship. They also thanked the media sponsors of the Awards. All are recognized in the Judges’ Report.
The event was MC-ed by Mr. Adam Wong, who gave a brief overview of the Awards process before introducing the representatives from the winning companies and organizations, who went up to the stage to receive their trophies from the guest of honour and the Institute’s president.
The record number of 34 awardees this year includes 12 MSCO Awards’ winners. The Institute would like to congratulate CLP Holdings Limited, a platinum award winner in the Hang Seng Index category, which continued to set the benchmark for CG and ESG performance among listed companies in Hong Kong. Other platinum-award-winning listed companies were Prudential plc, in the large market capitalization category and The Hongkong and Shanghai Hotels, in the medium market capitalization category. In the public sector category, the Airport Authority Hong Kong also won an MSCO Award.
The full list of winners is contained in the Judges’ Report. There are also commentaries on the individual awardees, and other background information on the Awards.
Directors, chief financial officers and other senior representatives of the winning companies and organizations attended the Awards luncheon to receive their trophies, Visuals showing examples of the scope and presentation of information extracted from the annual and sustainability reports of the awardees were displayed during the presentation ceremony.
This was the 24th edition of the Awards, which were launched in 2000. Originally called the Best Corporate Governance Awards, the competition focused on CG disclosures. Awards for sustainability and social responsibility reporting were later introduced and the competition was revamped and renamed in 2021, with the introduction of the MSCO category of awards.
The Awards are among Hong Kong’s most prestigious business-related competitions, setting benchmarks of best practice in CG and ESG for listed companies and public sector organizations, and encouraging improvements in overall standards. They enjoy strong support from the government, financial market regulators, investor groups, the business and professional community and academia. They emphasize the need for organizations to be transparent and accountable and to engage shareholders, investors and other stakeholders, including the communities in which they operate. The objective is, ultimately, to support Hong Kong’s development as a major international financial and business centre, as the Institute is firmly of the view that espousing high standards of governance and sustainability, and expecting the same of businesses and public sector organizations, is all part of maintaining Hong Kong’s standing and reputation.
The focus of the Awards is on the voluntary adoption of standards of practices and disclosures that significantly exceed the minimum legal and regulatory requirements. While the immediate focus is information disclosed in annual reports and sustainability reports, of which over 200 of each were examined at the first stage of the 2023 Awards, ultimately, the judges and reviewers are trying to ascertain whether good CG and ESG are truly ingrained in the candidates’ DNA, and to identify companies and organizations that demonstrate a strong CG and ESG culture, and a commitment to long-term sustainable success. This being the case, where relevant, they will also take account of other public information, such as news information, that may provide further evidence of how individual companies and organizations are being run in practice.
