FHKI’s first “ESG for SMEs Forum” was held successfully;
survey revealed over 80% of industrial companies adopted or planned to adopt
ESG enhancement initiatives, but SMEs lack ESG knowledge

Today, Federation of Hong Kong Industries (“FHKI”) organised the first-ever “ESG for SMEs Forum 2022” and released its first ESG survey that targeted industrial sector. It was the first flagship event since FHKI’s Environment, Social, Governance (“ESG”) Committee was established. The Forum, conducted in hybrid mode with over 400 participants, gathered political and business elites to exchange on the implications of global decarbonisation goals, regulatory approaches and ESG business trends, with an aim to deepen industry’s understanding of opportunities and challenges brought by ESG and equip themselves to enhance competitiveness.

The Forum’s Guest-of-honour, Mr Paul Chan, Financial Secretary of the HKSAR Government, said in his keynote speech, “ESG has become an important indicator to evaluate business performance and brought a positive impact on brand image. In fact, companies taking up environmental responsibility such as introducing energy-saving and carbon-reduction equipment can enhance their competitiveness. The Government is committed to propelling green and sustainable finance in various ways, including infrastructure, market development and standard fixing. We have made some progress as the issuance of green bonds has reached record high. We can facilitate green and low-carbon development in the Mainland, Greater Bay Area and other Asian regions.”

FHKI Chairman Dr Sunny Chai said, “In view of growing public concern over climate change and sustainability, governments around the world set decarbonisation goals and implement ESG legal regulation with increasingly high standards. To meet up with the soaring expectation from stakeholders, investors and customers, ESG has become an indispensable part of business operation for every company. FHKI vows to make ESG progression as a long-term goal and adopt a multipronged approach through capacity building, knowledge exchange, talent cultivation and fostering businesses’ cooperation, to enhance ESG capability for industrial sector.

Ms Katherine Ng, Head of Policy and Secretariat Services of the Listing Division, Hong Kong Exchange and Clearing Ltd (“HKEX”) said in her keynote speech, “At HKEX, we see ourselves as a change agent in global markets promoting ESG awareness, enhanced regulations and high standards of responsible corporate governance by advocating for and introducing strong ESG disclosures. We will continue to provide guidance and assistance to the market, helping companies build their own sustainability strategies and implement change for real impact.” HKEX is this event’s venue sponsor.

The Forum consisted of three sessions. The first session “Plenary – Global ESG Outlook: How should SMEs assess impact to their businesses”, covered global ESG priorities and themes. The panellists discussed how SMEs can leverage Hong Kong's strengths to enhance competitiveness with regards to varying carbon markets and ESG standards across different countries. The second session “E Track – Pioneering Green Manufacturing and Circular Economy in SMEs” focused on the collaboration between the Government and business community to work together to propel ESG and sustainability in different advanced economies including Hong Kong and Singapore. The third session “S+G Track – Integrating Social Responsibility and Good Governance into SME’s Business Model” explored the good practices and challenges of manufacturing SMEs in implementing ESG. The speakers highlighted how SMEs can make use of data and green finance to manage their ESG investments.

Survey revealed high participation of industrial enterprises; employees’ knowledge and lack of systematic methods are key challenges

FHKI conducted its first ESG survey that sampled 110 companies on their current ESG practice and future expectation in mid-August. The survey revealed that more than 80% of SMEs have adopted or plan to adopt ESG enhancement initiatives. The majority of the respondents see decarbonisation goals set by the Mainland (72.4%) and Hong Kong (65.4%) will bring positive impact to their businesses in coming three to five years.

The survey showed that companies’ ESG priority areas are product quality and safety, occupational health and safety and energy efficiency. The key ESG focus for SMEs is on Governance (G) but their understanding of ESG is far from sufficient. For companies that have adopted or plan to adopt ESG enhancement initiatives, “existing staff does not have knowledge or expertise to drive ESG changes” (66%) and “lack of systematic methods to prove the business return and benefits of ESG investments” (60%) are their major challenges.

Ms Clara Chan, FHKI Executive Deputy Chairman and Chairman of ESG Committee, said, “It is encouraging to see many industrial enterprises would like to invest more in ESG management as revealed in the survey. However, SMEs reflect their concerns over challenges such as ESG’s cost efficiency, management system and models, human resources etc. We hope that the Government and the business community can work shoulder to shoulder to enhance enterprises’ ESG training and management to help stride towards low-carbon economy and sustainability.”

The survey results are released on FHKI’s website: https://bit.ly/3eU6CAi.Please refer to the attachments for photos and a full list of speakers. You are welcome to contact us to understand the survey and arrange an interview on ESG matters.

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Appendix 1: Full list of speakers

1.       Plenary – Global ESG Outlook: How should SMEs assess impact to their businesses

·         Dr Hon Stephen Wong
Legislative Council (Election Committee)

·         Ms Anita Mo
Chief Executive Officer, Hang Seng Indexes Company Ltd

·         Prof Ba Shu-song
Chief China Economist, Hong Kong Exchanges and Clearing Ltd

·         Mr Derek Yuen
Partner, Business Reporting and Sustainability, KPMG

2.       E Track – Pioneering Green Manufacturing and Circular Economy in SMEs

·         Dr Kenneth Leung
Assistant Director (Air Policy), Environmental Protection Department

·         Ms Melissa Tan
Chairwoman, Waste Management & Recycling Association of Singapore

·         Dr Ryohei Mori
Chief Executive Officer, Green Science Alliance Company Ltd

·         Dr Daniel Yip
Chairperson, Advisory Committee on Recycling Fund

3.       S+G Track – Integrating Social Responsibility and Good Governance into SME’s Business Model

·         Mr Herbert Chia
Venture Partner, Sequoia Capital China Fund

·         Mr Paul Tai
Regional Director, Mainetti (HK) Ltd

·         Mr King Lai
Group Executive Director & CFO, Leo Paper Group (Hong Kong) Ltd

·         Mr Aero Wong
Assistant General Manager, Commercial Banking Department, Bank of China (Hong Kong) Ltd

Appendix 2: Photos of the Forum

1.       FHKI Chairman Dr Sunny Chai delivered welcoming speech.

2.       Mr Paul Chan, Financial Secretary of the HKSAR Government, was the Guest-of-honour.

3.       Group Photo

4.       Ms Katherine Ng, HKEX Head of Policy and Secretariat Services of the Listing Division, delivered a keynote speech.

5.       Mr Jude Chow, FHKI Deputy Chairman, announced the results of ESG survey.

6.       The panel discussion of “Plenary – Global ESG Outlook: How should SMEs assess impact to their businesses”

7.       The panel discussion of “E Track – Pioneering Green Manufacturing and Circular Economy in SMEs”

8.       The panel discussion of “S+G Track – Integrating Social Responsibility and Good Governance into SME’s Business Model”

*Click here for high-resolution photos