Posted on: 24.06.2016
Results Announcement on Oxfam’s ESG Transparency Survey
On Tuesday, Oxfam Hong Kong released the results of its Survey on the Hang Seng Index (HSI) Constituents’ Environmental, Social and Governance (ESG) to Hong Kong media via press conference. RepuTex was pleased to undertake the research for the project on behalf of Oxfam from October to December 2015.
The findings of the survey are now available in Chinese and English language within our joint RepuTex/Oxfam Research Report. The Report can be downloaded below, together with an Executive Summary prepared by Oxfam Hong Kong.
Research Methodology and Findings
RepuTex reviewed 50 companies’ publicly available information (e.g. annual reports and sustainability reports) and invited them to complete a questionnaire to provide additional information to verify their performance; 19 companies provided additional information. The survey covered four key areas: Corporate Governance, Environmental Impact, Social Impact and Workplace Practices. It was designed with reference to internationally recognised guidelines, including the Global Reporting Initiative (GRI) G4 Guidelines.
The survey found that of the 50 constituents, 32% (16 companies) were in the ‘unstable’ category. A further 42% (21 companies) fell into the ‘satisfactory’ category, while 26% (13 companies) were classified as ‘reliable’. The top three performers were Swire Pacific Ltd, MTR Corporation, and HSBC Holdings, while Kunlun Energy Company, Belle International Holdings and Tingyi Cayman Islands Holding Corporation were in the bottom three.
Companies performed poorest in the areas of Environmental Impact and Workplace Practices. Findings indicate that 44% (22 companies) had not established environmental management systems in line with international standards, or set emissions reduction targets and timelines, while 48% (24 companies) had not enforced equal employment opportunity policies. Next year, HKEx will raise its environmental KPI reporting standards to ‘comply or explain’. However, the survey revealed that the 50 HSI constituents did not perform well in the area, lacking transparency and urgently requiring improvements.
In the Social Impact category, 32% (16 companies) were unable to demonstrate adequate stakeholder engagement procedures, while 44% (22 companies) had not implemented policies to protect employees’ human rights in the chain of supply.
Companies indicated the strongest performance in the area of Corporate Governance; 68% (34 companies) fell into the ‘reliable’ category as it is mandatory to report on key issues regarding governance. This is somewhat indicative of the importance of enhancing standards in reporting, and the vital role authorities play in encouraging companies to improve.
Among the nine HSI sectors, the Information Technology sector outperformed all sectors, while both the consumer staples and consumer discretionary sectors performed the worst. The two lowest performing sectors hire more than 600,000 employees around the world and account for a total market capitalisation of HK$720 billion, however they fail to adequately protect the employment rights of their workers.
Summary & In-Depth Individual Company Information
RepuTex provides a range of ESG and reputation rating services, including individual company rating seals and performance benchmarking reports to organisations across the Asia Pacific region. Our reports can include analysis of performance against the Hang Seng Index universe, best practice benchmarks, or other sector peers nominated by the client. Fees apply. For more information, please contact Ms Martha Grossman, Director ESG Research at RepuTex: email@example.com