III. The ESG duties of the Firms developed in Hong Kong and may become a world standard
ESG – another paradigm on ESG rekindled
“ It is Enterprise which build and improves the world’s possessions. .. If Enterprise is afoot, Wealth accumulates whatever may be happening to Thrift; and if Enterprise is asleep, Wealth decays, whatever Thrift may be doing.. ”
“Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes a bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done “
– John Maynard Keynes
We see Enterprises as a very important component of the modern economies with the key being whether the society can establish a virtuous cycle between its Firms and its Market and one main area we shall focus on is the global capital market which we see as a market where three principal entities (Enterprises; Individuals and Governments) meet and interact with three of them as both users and providers of capital.
Such ESG standard developed at Oxford and Hong Kong could well become a world standard..
We think such ESG standard are practical and executable and can be readily adopted by many companies in Hong Kong (both public and private) and we envisage that it could well become a world standard in the future and may constitute one contribution Hong Kong has made to the global capital markets and investing world.
ESG – another paradigm on ESG rekindled (cont’d)
We see ESG as increasingly important component for modern enterprises but our conception of ESG is more profound then the common conception of it. We see ESG as part and parcel of what we would see the virtuous cycle between the Firms and the Market and from which we derive an alternative definition of ESG.
We attempt to build our alternative definition of ESG at Oxford and Hong Kong, then spreading to the rest of the world, via Hong Kong and London and their enterprises which hopefully can be conducive to the creation of an alternative global capital market which can enrich and complement the existing one.
Our alternative paradigm on ESG : operational dimension
Our alternative paradigm on ESG has two versions. One is the practical version which is based on refinement of existing mainstream thoughts on the subject, with three sub-categories on each component of ESG.
For E, we shall refer to green assets; green operations and green innovations.
For S, we shall refer to social enjoyment; social investment; and social enlightenment.
For G, we shall refer to governance to all shareholders; governance to all staff; and governance to all the stakeholders in the industry.
ESG – i) Green Assets
By Green Assets, we mean those hard operating assets used by the Firms in their business process should match the green standard as much as possible.
Hence, for the property industry, it shall refer to mainly the buildings; for the aviation industry, it shall be mainly about the aircrafts; for the manufacturing industry, it shall be mainly about the plants; for the hotel industry , it should be mainly about the hotels etc.
ESG – ii) Green Operations
By Green Operations, we mean that the operating process of the business should meet the requirements related to the green and sustainability standard as much as possible.
This therefore shall include the procurement process; production process, sales and distribution process etc.
ESG – iii) Green Innovations
By Green Innovations, we mean all those innovations in the business process which would work towards enhancing the green and sustainability standard achieved by the business.
One example in the property industry would be about using ways to engage tenants and customers to be more green-oriented in mindsets and in all of their daily activities.
ESG – i) Social Enjoyment
By Social Enjoyment, we mean activities which would enhance the enjoyment that can bring to the society.
This is most obvious in the consumer industry where products of the Firms shall bring direct satisfaction to the customers
ESG – ii) Social Investment
By Social Investment, we mean activities which would help to enhance the future enjoyment and potential of the society.
This would include investments related to the training of the youth; breeding of talents and artists; the building of schools etc.
ESG – iii) Social Enlightenment
By Social Enlightenment, we mean activities which would help to enlighten the society.
This would include investments on activities which can enlighten the society such as bringing in innovative ideas and best practices from overseas; sponsorships related to art. history, philosophy etc.
ESG – i) Governance to all shareholders
By Governance to shareholders, we refer to responsibilities towards all shareholders whether it be the controlling families or the outside minority shareholders.
One main responsibility should be that of providing reasonable return to all providers of capital and one major hallmark would be the commitment to pay growing absolute dividends
ESG – ii) Governance to all staff
By Governance to staff, we refer to equal treatment for all staff irrespective of genders, race etc.. and the provision of a safe and equitable working environment to all staff.
One major hallmark would be attention paid to the safety and well-being of staff .
ESG – iii) Governance to the industry globally
By Governance to all stakeholders in the industry, we refer to practices and activities which would help to advance the potential of the entire industry as well as all entities which are part of the industry process.
One major hallmark would be activities which set the standard for the industry and would increase social recognition for the industry.
Our HK paradigm on ESG : philosophical dimension
Another dimension of our HK paradigm on ESG is about the philosophical dimension.
For E, we shall refer to economically responsible.
For S, we shall refer to socially responsible.
For G, we shall refer to globally responsible.
ESG – Economically Responsible
By Economically responsible, we refer to the striving for economic returns to provide to all shareholders and staff, subject to the boundaries set by the need to adhere to governance standards for shareholders; staff as well as the industry and society at large.
ESG – Socially Responsible
By Socially responsible, we refer to the striving for the betterment of the society, especially social enjoyment; social investment and social enlightenment.
ESG – Globally Responsible
By Globally responsible, we refer to be responsible to the environment and the industry globally, which shall include green assets; green operations; green innovations; and governance to the industry globally.