The coveted Best Corporate Governance and ESG Awards were presented to 29 Hong Kong companies and organizations for their exemplary performance in these two areas, as well as their outstanding commitment to long-term, sustainable success.
Organized by the Hong Kong Institute of Certified Public Accountants (HKICPA), the Best Corporate Governance and ESG Awards (formerly known as Best Corporate Governance Awards) is one of Hong Kong’s most prestigious business-related competitions. This year, in response to the rising demands for environmental, social and governance (ESG) reporting in both the public and private sectors, the Awards was revamped and renamed to recognize firms that demonstrate excellence in both corporate governance (CG) and ESG practices.
“Building back better and sustainability have become mainstream considerations,” observes Mr Raymond Cheng, HKICPA immediate past president and chairman of the judging panel. “The world has agreed to take meaningful action to tackle climate change. Substantive ESG reporting is becoming more common.”
“For companies to achieve long-term success and be able to face the economic, environmental and social challenges ahead, boards need to have effective oversight of governance and ESG matters, and companies need to incorporate ESG considerations into their vision and operations, including strategies, investments, risk management and stakeholder engagement,” Cheng continues.
The aims of the revamped Awards are threefold – to encourage companies to focus on integrating both CG and ESG into their strategy and operations; to establish benchmarks of overall sustainability, CG and ESG best practice in Hong Kong; and to prompt more companies to refer to those benchmarks and improve their own sustainability, CG and ESG standards.
New Most Sustainable Companies/Organizations category
Overall, the Awards judges applauded various areas of good practices and disclosures. In the ESG sphere, there were better explanations of ESG governance structures and clearer linkages between companies’ vision, strategies and action plans. The quality of information on stakeholder engagement and how stakeholder concerns are being addressed has also improved.
A major focus of the competition was the Most Sustainable Companies/Organizations Awards (MSCO Awards), a newly introduced top category of awards. Reflecting ‘sustainability’ in its broadest sense, the inaugural MSCO Awards were bestowed upon 10 companies and organizations that have performed to an exceptionally high standard in both CG and ESG, and are taking steps to integrate these two key aspects into their vision, strategy and operations.
“We are pleased to see that the judges were able to identify a number of winners of the new MSCO awards. Most of these are familiar names that have been continuing to strengthen their CG and ESG practices and disclosures,” notes Ms Loren Tang, chair of the 2021 Awards Organizing Committee.
However, no diamond awards were given as the judges believe that there are still areas where more needs to be done to fully integrate CG and ESG. This includes speeding up the process of board refreshment and establishing quantitative key performance indicators for different ESG initiatives.
Recommendations for improving CG and ESG
Looking ahead, the judges hope to see more evidence that companies are treating CG and ESG as key issues on boards’ agendas. They also expect additional information on how companies are setting, monitoring, and periodically reassessing their ESG targets and key performance indicators, and whether and how directors and senior management remuneration is tied to these.
At the same time, the judges observed that the majority of companies do not seem to share their quantitative performance targets to help them track progress towards achieving economic, environmental and social goals. They also found many disclosures to be quite boilerplate, and urged companies to provide more insightful information on the scope, findings and recommendations of board evaluations.
With regards to CG practices, the Institute suggests companies with long-serving independent non-executive directors (INEDs) appoint a lead INED to engage more with stakeholders and report on the work done by INEDs during the year. This would give investors and other stakeholders more confidence that the company is taking on board their concerns.
Other areas of improvement include enhancing board diversity, offering greater transparency of the processes around the nomination, selection and resignation of directors, and providing disclosure of cross-directorships. The Institute also expressed that more information about the process and findings of internal control reviews would be welcomed.
Best Corporate Governance and ESG Awards 2021 - Winner List
Most Sustainable Companies/Organizations Awards 2021:
Hang Seng Index Category
Platinum CLP Holdings Limited
Gold Hong Kong Exchanges and Clearing Limited
Special Mention Link Real Estate Investment Trust
Non-Hang Seng Index (Large Market Capitalization) Category
Platinum Prudential PLC
Gold Standard Chartered PLC
Non-Hang Seng Index (Medium Market Capitalization) Category
Platinum The Hongkong and Shanghai Hotels, Limited
Gold Hysan Development Company Limited
Special Mention Pacific Basin Shipping Limited
H-share Companies and Other Mainland Enterprises Category
Gold Lenovo Group Limited
Public Sector/Not-for-profit (Large) Category
Gold Airport Authority Hong Kong
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CG Awards 2021:
Hang Seng Index Category
Special Mention AAC Technologies Holdings Inc.
Special Mention AIA Group Limited*
Non-Hang Seng Index (Large Market Capitalization) Category
Awardee Chow Tai Fook Jewellery Group Limited
Special Mention HKT Trust and HKT Limited*
Non-Hang Seng Index (Small Market Capitalization) Category
Special Mention Convenience Retail Asia Limited
H-share Companies and Other Mainland Enterprises Category
Special Mention China Power International Development Limited
Public Sector/Not-for-profit (Large) Category
Awardee Securities and Futures Commission
Public Sector/Not-for-profit (Small-and-Medium-size) Category
Special Mention Mandatory Provident Fund Schemes Authority
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ESG Awards 2021:
Hang Seng Index Category
Special Mention The Hong Kong and China Gas Company Limited
Non-Hang Seng Index (Large Market Capitalization) Category
Awardee Swire Properties Limited
Special Mention Manulife Financial Corporation^
Special Mention Sino Land Company Limited*
Non-Hang Seng Index (Medium Market Capitalization) Category
Special Mention Hang Lung Group Limited
Special Mention VTech Holdings Limited
Non-Hang Seng Index (Small Market Capitalization) Category
Special Mention China Everbright Greentech Limited
Special Mention China Everbright Water Limited*
H-share Companies and Other Mainland Enterprises Category
Special Mention China Resources Power Holdings Company Limited*
Public Sector/Not-for-profit (Large) Category
Awardee Drainage Services Department
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Commendation on Website Corporate Governance Information 2021:
Tsim Sha Tsui Properties Limited*
* New awardee
^ First-time winner of one of the main awards
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(From left) Ms Loren Tang, chair of the 2021 Awards Organizing Committee, Mr Raymond Cheng, HKICPA immediate past president and chairman of the judging panel, and Mr Patrick Rozario, chairman of the Awards'' review panel
Tang notes that companies need to do more to integrate their corporate governance and ESG
29 Hong Kong companies and organizations received HKICPA''s Best Corporate Governance and ESG Awards 2021
