HKQAA – HSBC CSR Index

2011 Benchmarking Results

and Research Findings

The Story Can Be Told in Another

Way

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PROLOGUE

“The universe is made of stories, not atoms.” -

Muriel Rukeyser

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17th Century

Adam Smith – Wealth of Nations (1776)

“It is not from the benevolence of the

butcher, the brewer, or the baker that we

expect our dinner, but from their regard to

their own interest”

The needs and desires of society could

best be met by the unfettered interaction of

individuals and organizations in the

marketplace. Marketplace participant must

act honestly and justly towards each others

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18th Century

Charles Dickens gave us Scrooge,

Oliver Twist and Mrs. Jellyby

Within a class-based society, those bourn

of privilege had a moral obligation to “serve

the greater good – there is virtue in

individual acts of charity”

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19th Century

Andrew Carnegie – Gospel of Wealth

(1899)

the charity principle required more

fortunate members of society to assist its

less fortunate members, including the

unemployed, the disabled, the sick, and

the elderly

the stewardship principle required

businesses and wealthy individuals to

see themselves as the stewards, or

caretakers, of their property

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20th Century

Howard Bowen - Father of Corporate

Social Responsibility – Social

Responsibility of Businessmen (1953)

“the obligations of businessmen to

pursue those policies, to make those

decisions, or to follow those lines of

action which are desirable in terms of the

objectives and values of our society”

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20th Century

Milton Friedman – Capitalism and Freedom

(1970) “There is one and only one social responsibility of

business, to use its resources and engage in activities

designed to increase its profits, so long as it stays within

the rules of the game which is to say engages in open

and free competition without deception or fraud.”

Corporations suffered a backlash against

their widespread exploitation Labour movement

Civil Right Movement

Consumerism

Environmentalism

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21st Century

John Elkington – Cannibal with

Forks (1997)

Triple Bottom Line Principle

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PART ONE

HKQAA-HSBC CSR Advocate

Index

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HKQAA-HSBC CSR

Advocate Index

23 organizations participated in

2011

The HKQAA-HSBC CSR Index

in 2011 was 4.62, which was

higher than 4.57 in 2010 and

4.53 in 2009

4.43

4.50

4.53

4.59

4.61

4.80

4.87

4.44

4.59

4.50

4.73

4.56

4.79

4.77

4.35

4.40

4.29

4.65

4.52

4.61

4.70

3.50 4.00 4.50 5.00

The Environment

Community Involvement and

Development

Fair Operating Practices

Human Rights

Organisational Governance

Consumer Issues

Labour Practices

Average Score of CSR Seven Core Subjects

Average score in 2009

Average score in 2010

Average score in 2011

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Labor Practices scored the highest amongst

the 7 core subjects because of the high

scoring in occupational health and safety

programs and employability improvement

programs

Community Involvement and Development

scored one of the lowest due to varying

performance among the participating

organizations in heritage conservation and

skills development in supply chain

In general, score of the core subjects was

increased except Human Rights, the

Environment and Community Involvement &

Development

HKQAA-HSBC CSR

Advocate Index

4.43

4.50

4.53

4.59

4.61

4.80

4.87

4.44

4.59

4.50

4.73

4.56

4.79

4.77

4.35

4.40

4.29

4.65

4.52

4.61

4.70

3.50 4.00 4.50 5.00

The Environment

Community Involvement and

Development

Fair Operating Practices

Human Rights

Organisational Governance

Consumer Issues

Labour Practices

Average Score of CSR Seven Core Subjects

Average score in 2009

Average score in 2010

Average score in 2011

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Efforts in promoting environmental-caring culture and waste reduction e.g. food waste recycling were shown

Improvement actions were identified under Fair Operating Practices including incorporation of CSR criteria in sourcing and procurement

HKQAA-HSBC CSR

Advocate Index

4.43

4.50

4.53

4.59

4.61

4.80

4.87

4.44

4.59

4.50

4.73

4.56

4.79

4.77

4.35

4.40

4.29

4.65

4.52

4.61

4.70

3.50 4.00 4.50 5.00

The Environment

Community Involvement and

Development

Fair Operating Practices

Human Rights

Organisational Governance

Consumer Issues

Labour Practices

Average Score of CSR Seven Core Subjects

Average score in 2009

Average score in 2010

Average score in 2011

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Carbon & Energy Management

Advocate Sub-Index

The average score of Carbon & Energy Management Advocate Sub-Index was 4.29, it is comparatively lower than the average score of all 7 core subjects of HKQAA-CSR Advocate Index

Compared to other CSR practices, there were more organizations still in the early stages of development in this sub-index

15 4 2 1 1

12 7 3 1

17 3 2 1

15 4 3 1

10 6 5 2

0 1 2 3 4 5 6 Score

Carbon & Energy Management Advocate Sub-Index

Organization should demonstrate its commitment via policy, strategy, improvement objectives & targets, resources allocation, etc. to support the energy management system and to continually improve its effectiveness.

Organization should develop record and maintain an energy review and establish an energy baseline.

Organization should establish criteria for effective operation and maintenance of significant energy uses.

Organization should consider energy performance improvement opportunities in the design of new, modified and renovated facilities, equipment, systems and processes, and support the purchase of energy efficient products and services.

Organization should implement measures to reduce Greenhouse Gases (GHG) emissions associated with its activities, products and services.

PART TWO

HKQAA 100 CSR Index

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Hong Kong 100 CSR Index

100 companies were selected from 14 industrial sectors, including 55 public listed companies, 33 private companies, 7 public bodies and 5 governmental departments. The 14 industrial sectors were:

Catering

Construction and Engineering

Conglomerate

Education

Financial

Government

Manufacturing

Property Development and Property

Management

Public Body

Public Services

Retail

Telecommunication

Hotel and Tourism

Trading and Logistics

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The Hong Kong 100 CSR Index in 2011 was 67, while in 2010 and 2009 were 66 and 63 respectively

Education sector scored the highest because of their transparency to disclose performance in The Environment, Fair Operating Practice, and Community Involvement and Development

Manufacturing sector scored the lowest again in 2011 due to limited disclosure of Complaint and Dispute Handling Program and Stakeholder Engagement Program

The average score of Public Services, Telecommunication, Corporation, Financial, and Construction and Engineering sectors was decreased

Hong Kong

100 CSR Index

43

49

58

59

63

66

66

67

71

73

73

79

83

89

40

56

52

53

58

63

60

74

78

70

68

81

89

88

33

36

50

45

48

60

54

72

68

66

66

79

87

89

0 20 40 60 80 100

Manufacturing

Construction & Engineering

Catering

Retail

Public Body

Property and Property Management

Tourism and Hotels

Financial

Telecommunication

Government

Trading and Logistics

Corporation

Public Services

Education

Average Score of Respective Sectors

Average Score 2009

Average Score 2010

Average Score 2011

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High degree of transparency in “Integration of CSR in Organizational Policy” and “Disclosure of Social Performance”

Low degree of transparency in “Complaint and Dispute Handling Program” and “Disclosure of Human Rights Issue”

The average score of “Supporting to Education or Culture Development” increased significantly while the average score of “Disclosure of Human Rights Issue” decreased remarkably

Hong Kong

100 CSR Index

23

40

49

59

64

64

64

70

76

77

77

84

84

85

87

87

34

57

52

70

68

60

63

65

86

69

72

66

80

82

89

77

21

49

49

73

63

60

51

56

77

73

69

62

82

72

86

67

0 20 40 60 80 100

Complaint and Dispute Handling Program

Disclosure of Human Rights Issue

Consumer Education

Stakeholder Engagement Program

Sustainable Resource Usage Management Program

Climate Change Mitigation Program

Promotion of CSR in the Sphere of Influence

Occupational Health and Safety Management Program

Contribution to the community development

Disclosure of Environmental Performance

Pollution Prevention Program

Supporting to Education or Culture Development

Corporate Governance Program

Staff Development and Training

Disclosure of Social Performance

Integration of CSR in organizational policy

Average Score of Respective CSR Disclosure Indicators

Average Score 2009

Average Score 2010

Average Score 2011

Research of Effectiveness of CSR

Advocate Index

Out of those 36 participated advocates, we particularly track the

performance of 6 advocates which participated the HKQAA-HSBC

CSR Advocate Index in 2009 and 2010

The selected companies are:

- Alliance Construction Materials Limited

- Fuji Xerox (Hong Kong) Limited

- Housing Department

- Tsuen Lee Metals and Plastics Toys Company Limited

- Canon Hong Kong Company Limited

- Leo Paper Group

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Research of Effectiveness of CSR

Advocate Index

Feedback from interview with the top management of the selected

advocates are categorized into 7 CSR Core Subjects

The 7 CSR Core Subjects are:

- Organisational Governance

- Human Rights

- Labour Practices

- The Environment

- Consumer Issues

- Fair Operating Practices

- Community Involvement and Development

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EPILOGUE

“The time is always right to do what is right”

- Martin Luther King, Jr.

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Fact cannot be ignored…

Growing demand side

1946 2.2 billion

1972 3.6 billion

2009 6.8 billion

2035 8.5 billion

2050 9.2 billion

Shrinking supply

side

“Normally, large, aggressive, predatory mammals are rare –

humans have broken this rule”

Colin Tudge, 2005

The “(im)perfect storm”

Source: CSA March 2009

“We believe that the leading global companies of 2020 will be those that provide goods and services and reach new customers in ways that address the world‟s major challenges – including poverty, climate change, resource depletion, globalization, and demographic shifts. If action to address such issues is to be substantial and sustainable, it must also be profitable. Our major contribution to society will therefore come through our core business, rather than through our philanthropic programs. We see shareholder value as a measure of how successfully we deliver value to society, rather than as an end in itself. “

“Always do right; this will gratify some

people and astonish the rest”

- Mark Twain

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I want to be a writer…by Wayne Visser

„I want to be a writer, Mom. Is there a secret trick?‟

„The trick, my girl, is just to write. To write through thin and thick.

„But what if I get writer‟s block. What if the page stays empty?

„Then write about what‟s in your head, You‟ll find that there is plenty‟

„But what if it‟s not good enough. And rambles like a letter?‟

„What‟s good is in the reader‟s eye. Besides, you‟ll just get better‟

„I want to be a writer, Mom. But my friends might not agree

„When you wake up and want to write. A writer you will be‟

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Your CSR Stories Can Be Told in

Another Way!!!!

22nd, 23rd, 24th, 25th,………centuries

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