“We did not inherit the Earth from our ancestors, but have only borrowed it from our children” – Native American proverb
“What gets measured gets done” – business maxim
WHAT IS THIS ABOUT?
HKEX is holding a Public Consultation that “seeks views and comments on the proposed ‘Environmental, Social and Governance Reporting Guide’ (the “ESG Guide”) for issuers [companies] listed in Hong Kong”.
WHY IS THIS IMPORTANT?
If you are reading this, you are probably already aware of the seriousness of the environmental problems facing us all. As enlightened consumers, we cannot solve these problems on our own. Government and corporations must do their part. Through the Public Consultation process, we as citizens must make our voices heard and demand that they do their part. Democracy and civic society is like a muscle, if we don’t use it, it will shrivel up. If we do not participate when given the opportunity, we cannot complain, “government only listens to business”.
According to the HKEX “a company is taken to be responsible for its impact on society and the environment. A company should operate in a sustainable manner and create long-term value for shareholders and other stakeholders by integrating sustainable practices into its operations.” We could not agree more.
WHAT IS THE HKEX PROPOSING THAT WE DISAGREE WITH?
The HKEX is proposing to make environmental reporting VOLUNTARY because they believe it is “premature” at this time to make it compulsory. However, they give no reason why it is premature other than “many issuers may not consider ESG performance and reporting a priority”. Any elementary school teacher can tell you that if you make homework voluntary, it will certainly not be a priority for the students. This is completely circular logic.
WHAT ARE WE PROPOSING?
Demand COMPULSORY reporting or at a minimum raising the level from voluntary to “obligation to comply or explain” why they are not complying with the reporting requirement.
WHAT CAN YOU DO?
If you agree that environmental and social responsibility reporting needs to be compulsory, please copy and resend the following before 9 April 2012:
Email to: firstname.lastname@example.org
Subject: Consultation Paper on ESG Reporting Guide
Dear Sir or Madam,
Please see below, my comment on the Consultation Paper on ESG Reporting:
Question 1: Should the ESG Guide be a recommended best practice appended to the Listing Rules?
Reasons and alternative views: The ESG Guide should be mandatory, or at least having the level of obligation to “comply or explain”.
As disclosed in the Stock Exchange Reports on Implementation of Code on Corporate Governance Practices published in September 2010, of the 132 issuers reviewed, only 3 (2.2%) disclosed full details of their compliance with all recommended best practices. This indicates that most listed issuers are unwilling to disclose their compliance with recommended best practices given that the disclosure obligation is not mandatory.
As we all know the world is under great pressure in terms of the need to protect the environmental and mitigate climate change, therefore ESG reporting by listed companies is definitely as important as Corporate governance reporting. It is not appropriate for either the Exchange or listed issuers to give a lower priority to the ESG Guide.
ONE LAST NOTE
In a free society, I can choose whether or not to buy a product or service. Through the introduction of the MPF scheme, the government has forced us all to buy financial products and services regardless whether we want them or not. We may not be able to change this, but we can demand that these financial products and services, at a minimum, accord with our own values of social and environmental responsibility.
Please take 30 seconds to send this. It can make a difference.
2 thoughts on “30 Seconds Can Make a Difference”
Done! Let’s give pressure to those money-minded listed companies, to do something to protect our environment!