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Understanding ESG / Treasury & Capital Markets
Covid compels companies to compete for coveted ESG recognitions
The Asset reveals the leading corporates in the region who have made ESG principles a core part of their activity
Asset Benchmark Research 6 Dec 2021

As Omicron infects news headlines with more gloom, The Asset is delighted to provide an upbeat change of tone in announcing the winners of the annual Environment, Social and Governance (ESG) awards. For two decades, Asset Benchmark Research has been analyzing how transparently and ethically Asian corporates are run and how they choose to contribute to broader society. In the past few years, standards have improved dramatically. 2021 has been no exception.

Indeed, with a health crisis not seen in more than a century, the standout ESG companies whipped into action, particularly aware of their obligations to employees. A feature in Asia is the preponderance of family-led companies. Several took matters into their own remit from facilitating work-from-home arrangements to offering testing and vaccinations for staff at the height of the Covid crisis to help governments respond to the emergency.

Six companies stand out as recipients of the Jade award: Chunghwa Telecom, Fubon Financial Holding, Kasikornbank, Kerry Logistics Network, New World Development and Yuanta Financial Holdings. The common theme of Jade awardees is that they show a commitment to ESG from the board through to stakeholders. ESG practices are no window dressing; they are embedded and extensive. In the words of one of the editors, who interviewed board directors of Jade contenders: “ESG is in their DNA”. The range of actions endorsed by the boards of Jade companies include using their purchasing power to encourage suppliers to adhere to ESG standards through to incorporating ESG performance into the KPIs of the chairperson and CEO.

A further 25 companies were awarded Platinum, 16 Gold and 9 Titanium. Each of the companies merits praise for dealing with difficult challenges, not least during the pandemic. To meet meaningful ESG targets, companies must invest in new systems, technologies and processes, thus adding pressure to the bottom line. In times of adversity, it is hard to maintain the commitment.

In some jurisdictions, the regulators are a key driver to improve. Increasingly, investors and other stakeholders are forcing change. The results can be impressive: lower energy and water usage, more recycling, better working conditions, and broader benefits to communities.

Take Taiwan as an example. As an export-oriented economy, companies have been thriving to fulfill the demand and requirements from international clients as well as institutional investors. ESG is among the most important topics. As a result, the ESG awareness and performance of Taiwanese companies have been particularly notable.

In the meantime, the regulatory environment in Taiwan is also pushing for better ESG disclosure and performance. The financial industry is one of the most competitive sectors when it comes to rolling out new ESG initiatives in Taiwan. This is partly because those who are able to record good scores in ESG tend to get more support from the regulators, particularly in areas such as acquiring licenses for innovative businesses and products.

We are also seeing Chinese companies speed up their ESG journey with the country’s 2060 carbon-neutrality goal. In the words of one CEO, ‘E’ dwarfs other metrics. These companies previously focus more on quality control and regulatory compliance when it comes to evaluating their suppliers. This year, Chinese companies participating in the awards are providing The Asset their Supplier Code of Conduct, and many of them have already incorporated various ESG concerns such as environmental conservation, workplace safety, labour protection and anti-bribery and corruption.

As we move forward from COP26 (26th United Nations Climate Change Conference of the Parties) meeting in Glasgow, there will be greater emphasis on companies to better craft their ESG strategy and provide granular data to both investors and regulators. With the drive towards the harmonization of ESG disclosure standards spearheaded by the International Sustainability Standards Board, expect more companies particularly in Asia to continue to refine the way they report their sustainability activities and how they are helping their respective jurisdictions achieve their net-zero carbon emission targets.

To view the list of The Asset ESG Corporate Awards winners please click here.

For more information on The Asset ESG Corporate Awards please click here.

Shantini Nair
Shantini Nair
director, senior investment specialist
HSBC Asset Management
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