CUHK Business Sustainability Indices reveal resilience amidst the pandemic and launches Global and Real Estate Indices
The Centre for Business Sustainability (CBS) of The Chinese University of Hong Kong’s (CUHK) Business School announced results of the Business Sustainability Indices (BSI) and the launch of Global Business Sustainability Index (Global BSI) and Real Estate Business Sustainability Index (REBSI) today (23 September).
Since its launch in 2015, the BSI offers a framework that supports companies in driving their sustainability strategy and promotes business practices that contribute to positive social and environmental impact. This year, the BSI examines the sustainability performance of 285 companies listed in Hong Kong, Taiwan, Shanghai and Shenzhen spanning 12 industries, based on their Environmental, Social, and Governance (ESG) and Corporate Social Responsibility (CSR) performance during 2019-2020 fiscal year (or 2020 calendar year). The BSI covers three geographical locations (the Greater China region, the Greater Bay Area and Hong Kong), as well as the hotel industry in the region.
Generally speaking, despite the impact of the pandemic, companies remained resilient in their sustainability endeavours and achieved an overall increase in BSI score (up by 10.62% YOY).
The assessment period saw the emergence of COVID-19. To cope with the unprecedented challenges sparked by the pandemic, many companies shifted their focus to the bottom line and strengthened their interactions with primary stakeholders, such as deploying flexible working arrangements for employees. However, the score for practice and impact decreased moderately (down by 8.02-11.62% in Hong Kong, Taiwan and Shanghai).
In Hong Kong, four companies (up from two YOY) achieved the highest rank (exemplar) and topped the chart of individual scores in the region during the assessment period. Comparatively more advanced in sustainability development, Hong Kong companies worked towards delivering social and environmental impact and translating business inputs into tangible social values.
The most significant improvement in overall score by location was recorded in Shenzhen (up by 30.19% YOY) and Shanghai (up by 17.72% YOY), accounted for largely by the positive response to the regulatory requirements. Among the score drivers, environmental practices increased by 29.07% and 13.18% in Shenzhen and Shanghai respectively, attributed mostly to the considerable reduction in operations during COVID-19, and thus, reducing negative impacts on the environment. While both cities are in the earlier stages of their pivot to sustainability and therefore starting off a lower base, the two cities are quickly catching up and narrowing the gap with Hong Kong and Taiwan.
On average, Taiwanese companies remained top performers (average BSI score: Taiwan 68.68, Hong Kong 59.65, Shanghai 43.04 and Shenzhen 34.80) and outshone in sustainability engagement and reporting, including extensively crafted CSR reports and comprehensive online disclosure.
Launch of Global BSI and Real Estate Industry BSI (REBSI) in 2023
The Global BSI includes companies in major stock markets around the world to enable companies with global influence to annually assess their CSR endeavours factoring a broad range of stakeholder groups. It covers blue-chip companies in major stock markets and recognises remarkable performance in sustainability. The data-driven approach will enable companies to seek continuous improvement in their ESG management in a systemic way for the benefits of the environment, business and society.
The REBSI is CBS’ second sector-based BSI alongside with the Hotel Business Sustainability Index (Hotel BSI), providing a holistic assessment of the listed real estate companies in the Greater China region. The constituent companies will include the properties and construction companies in major stock indices in the Greater China region, namely, the Hang Seng Index and the Hang Seng Stock Connect Hong Kong Greater Bay Area Index of the Hang Seng Index Company Limited, the FTSE TWSE Taiwan 50 Index of the Taiwan Stock Exchange Corporation (TWSE) and FTSE Group (FTSE), the SSE 50 Index of the Shanghai Stock Exchange, and top 50 constituents from the SZSE 100 index of the Shenzhen Stock Exchange in terms of their market capitalisation.
Professor Carlos Lo, Director of CBS, articulates the vision for the BSI as it further expands, “We hope the BSI will enable the global business community to thrive on their trajectory towards sustainability. We hope this will be an effective tool for organisations to transform CSR, ESG and SDGs into an integral part of their business which fuels their activities at all levels.”