A study conducted by Business Environment Council (BEC), in collaboration with Schneider Electric, has found that given the maturing guidelines around sustainability and climate-related reporting, 84% of respondents believe sustainability is a core part of their organization’s strategy and that their leadership teams care about sustainability and climate change.
“Organizations have started to acknowledge the importance of a sustainable business strategy and have committed to decarbonization targets that align with government initiatives,” said Simon Ng, Chief Executive Officer of BEC.
“However, it is shown that resources and planning towards the implementation of reduction measures are still insufficient. This leads to concerns from within the organization that they will fall short of committed targets.”
“Climate change has become a major part of global risks, affecting every industry and market, and disrupting economies. An urgency to accelerate sustainability is here for corporates to take action, enhance energy efficiency, electrify, and digitalize energy ecosystems,” said Jonathan Chiu, President of Schneider Electric Hong Kong.
“With energy demand globally anticipated to grow three-fold in the next 30 years, technology can be the enabler to tackle sustainability and energy challenges globally, and we hope that businesses will also find the value of digitization and new technologies that are already available now to accelerate electrification, digitization, and sustainability.”
The survey also revealed the following:
Hong Kong businesses are on the right track for the sustainable journey
The Hong Kong’s Climate Action Plan 2050 has been well received by Hong Kong businesses since it was launched in October 2021, with 69% of respondents saying their organization’s sustainability efforts are strongly or generally aligned with it, which is the same for net zero commitments.
On the other hand, 50% of respondents believe their company is strongly or generally aligned with Science Based Targets (SBT).
Another topic covered in the survey relates to decarbonization. Driving decarbonization is no longer just about brand image. It is one of the most certain paths to creating innovation for companies seeking a competitive edge, and to bring business opportunities.
The motivators for decarbonization, however, differ among Hong Kong businesses. With 50% citing Brand Perception as a motivator, 49% expressing Business Opportunity, and 46% saying Government Regulations play an important part in driving decarbonization.
Major sustainability changes in businesses are best achieved with the right mindset. 62% of respondents agree that changing longstanding business practices and organizational mindsets, is one of the top energy and sustainability challenges faced in the past 12 months, followed by 55% believing striking a balance between realistic and aspirational targets and 41% stating access to accurate data and information to guide efforts as the other top challenges.
A sustainable mindset at all levels is an ambitious goal, as it comprises so many elements, including principles, values, and beliefs. It is important to have a joint effort of governments, organizations, and individuals to promote sustainable development.
Enhancing decarbonization ambition to SBT
The study shows that 6 out of 10 respondents are from companies that have committed publicly to reducing carbon emissions. In December 2021, HKEX launched the Practical Net-Zero Guide for Business to help companies in developing a pathway to net-zero, by introducing the strategies of climate mitigation and outcomes same as the SBT initiative. Less than a quarter (24%) have established SBT, which means more efforts are needed to accelerate the net-zero journey.
Businesses across relevant sectors will be mandated to share information in line with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) by 2025. This implies a sense of urgency for companies to identify and report their climate-related risks.
This survey finds that the top energy and resources supply risks that respondents are concerned about are, carbon or energy regulations (69%), cost and risk management in a volatile market (53%), and power supply reliability (36%).
Digitization plays a crucial role in driving sustainable development
Just over one-fifth (21%) of respondents are fully utilizing new technologies and technology solutions to operate more sustainably. Among them, 69% are listed companies or their subsidiaries, and 28% are from the energy and utilities sector. This implies other sectors need to leverage and take advantage of technology to drive sustainability. In addition, only 16% of respondents cited their organizations increased investment in digitization in the past 12 months.
60% of participants considered digital analytics as adding the most value to organizations in monitoring their sustainability performance and 73% believe that improving operation efficiency, productivity, or reliability added the most value. In the process to lower their carbon footprint, 52% of respondents have pursued digital solutions in the past 12 months.
The study was conducted from August to September 2022 based on a survey of 205 business leaders and professionals, and three focus group discussions centering on specific environmental topics. The findings are published in a report titled “Building a Greener and Smarter Hong Kong” to provide a deeper understanding of the current perceptions of sustainability or Environmental, Social, and Governance (ESG) and the level of preparedness in moving towards Hong Kong’s carbon neutrality before 2050.
