- 69% say their organisation's sustainability efforts are strongly or generally aligned with Hong Kong’s Climate Action Plan 2050
- Only 21% of organisations believe they are fully utilising technology to operate more sustainably
- Changes in the energy market and energy supply over the past 12 months have motivated only 16% of respondents to increase investment in digitalisation
A new study conducted by Business Environment Council (BEC), in collaboration with Schneider Electric, the leader in the digital transformation of energy management and automation, has found that given the maturing guidelines around sustainability and climate-related reporting, 84% of respondents believe sustainability is a core part of their organisation’s strategy and that their leadership teams care about sustainability and climate change.
“Organisations have started to acknowledge the importance of a sustainable business strategy and have committed to decarbonisation targets that align with government initiatives. However, it is shown that resources and planning towards the implementation of reduction measures are still insufficient. This leads to concerns from within the organisation that they will fall short of committed targets. BEC will take lead in working with its members and the wider business community, to foster the sustainability ecosystem, working with different partners to build capacity and encourage the adoption of innovative practices, resources, and planning to build a bright future together in a bid to strive towards the goal of carbon neutrality.” said Simon Ng, Chief Executive Officer of BEC.
“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 digitalise energy ecosystems. 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 digitisation and new technologies that are already available now to accelerate electrification, digitisation, and sustainability,” said Jonathan Chiu, President of Schneider Electric Hong Kong.
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 organisation'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 decarbonisation. Driving decarbonisation 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 decarbonisation, 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 decarbonisation.
Major sustainability changes in businesses are best achieved with the right mindset. 62% of respondents agree that changing longstanding business practices and organisational 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, organisations, and individuals to promote sustainable development.
Enhancing decarbonisation 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%).
Digitisation plays a crucial role in driving sustainable development
Just over one-fifth (21%) of respondents are fully utilising 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 organisations increased investment in digitisation in the past 12 months.
60% of participants considered digital analytics as adding the most value to organisations 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 will be 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.
An executive summary of the study report is available here.
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