The Asset ESG Corporate Awards - Setting the bar higher
The Asset ESG Awards, the defining recognition for companies’ adherence to ESG principles, release the top ranked companies for 2019
The Asset ESG Corporate Awards, the defining recognition for companies’ adherence to ESG principles, release the top ranked companies for 2019. Based on Asset Benchmark Research survey, this year’s rankings incorporate expanded sections on environmental and social responsibilities, in addition to corporate governance.
WHEN it comes to gender parity, Thailand takes the top prize. Together with Hong Kong and Taiwan, corporates from these three markets are setting the pace for environmental, social, governance (ESG) standards. In the region, the most admired corporates continue their forward march in integrating ESG principles into their business, a survey conducted by Asset Benchmark Research (ABR) reveals.
In this year’s ABR ESG rankings, the longest-running survey of its kind in the Asia-Pacific, B.Grimm Power, Kasikornbank and Bank of Ayudhya (Krungsri) stood out for the number of women board members. On average, more than 45% of their board directors are women. B.Grimm Power led the way with majority; five out eight of its board members or 62.5% are women.
This is a rarity. ABR’s survey also points out that more than 61% of the participating companies have either one or zero women board members. It is a work in progress. But companies such as Malaysia’s Sunway REIT Management, with 42.9% women on the board; Kasikornbank’s 38.9%; Kerry Logistics Network’s 37.5% and Krungsri’s 36.4%, are leading the charge in the region to redress the issue.
This year’s ABR survey of the best corporates in ESG incorporated revised and expanded sections on environmental and social accountability, in addition to corporate governance. The rankings therefore will reflect the more detailed review of companies’ adherence to safeguarding the environment in their operation and their social responsibility to the community at large.
Companies that topped the overall rankings sharing their commitment to embrace ESG include China Telecom, China Overseas Land and Investment from China; Li & Fung, Hang Lung Properties, Shui On Land, and Kerry Logistics Network from Hong Kong; Reliance Industries from India; BTS Group Holdings and Sunway REIT Management from Malaysia; Ayala Corp, SM Investments and BDO Unibank from the Philippines; Fubon Financial Holding, Chunghwa Telecom, CTBC Financial Holding, Cathay Financial Holding, and E.Sun Financial Holding from Taiwan; and PTT Public Co, Global Power Synergy, Bangchak Corp, PTT Global Chemical, and B.Grimm Power from Thailand.
Companies continue to make progress in the area of corporate governance. For example, 77% of the companies surveyed say the role of the chairman and CEO is separated, up from the 70% in 2018. Progress is also notable in the increased participation of independent non-executive directors (INED) in board committees. In the case of the remuneration committee, the proportion of companies who have INED is at 76.9% in 2019 from 73.4% in 2018.
Where room for improvement is most apparent is in the areas of environmental and social responsibility. When asked whether they use a third-party agency such as SA8000 for social certification, only 47% of the respondents said they do. Admittedly, part of the challenge is the lack of agencies that do provide these types of certification. As the focus shifts inevitably to ensuring a certain level of social responsibility, it is plausible that this number is likely to improve in the coming years.
On the other hand, with the advancements in documenting environmental compliance especially following the Paris Climate Accord in 2015, the number of companies that say they use third-party verification agencies is now at 79%. Still, much work remains to be undertaken.
The issue is that while a good number of ABR’s top ESG companies share their efforts on initiatives such as recycling waste water, paper, plastics and metals, water consumption and current level of GHG emission compared with the past year, few set annual targets. In the case of paper, only 11% of companies set targets; plastics and metals, only 6%. Less than one in three companies set annual targets for water consumption.
The Asset ESG Awards, now on its 20th year, will celebrate the winners of the 2019 annual ranking and The Asset Best CEO Awards on December 5 2019 at the Four Seasons in Hong Kong. Also at the dinner, the winners of the best initiatives in environmental responsibility, social responsibility, diversity and inclusion and innovation as well as the best investor relations teams will be revealed.
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