Climate change: Budget, stakeholder engagement are 'main challenges for Hong Kong firms'

The availability of financial support and engagement with stakeholders are the top decarbonisation challenges faced by Hong Kong firms even as they report substantial reductions in harmful emissions, according to signatories to the Business Environment Council's net-zero carbon charter.

The main barriers identified by signatories to the business group's initiative to decarbonise the sector were the availability of a dedicated budget for emissions reduction activities, energy efficiency and low-carbon product research and development, as well as engagement with employees and tenants, according to key findings from a progress report for 2023 released on Thursday.

"The key challenges and factors identified by our charter signatories in the decarbonisation process underscore the significant barriers companies are facing in their sustainability efforts," Simon Ng, chief executive officer of the BEC, said in an interview.

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"These findings make it clear that decarbonisation is an immense undertaking requiring a holistic approach. The business community needs access to sufficient funding, strong internal alignment, and effective stakeholder engagement to meet their climate goals."

The BEC's charter aims to inspire a collective effort among businesses and organisations, urging them to commit to achieving a net-zero carbon future as part of Hong Kong's broader decarbonisation initiative.

Signatories report their progress and contributions to the BEC using a standardised form every year. This allows the BEC to compile data into an annual progress report.

There are currently 75 charter signatories, including the Airport Authority Hong Kong, Gammon Construction, electricity provider CLP Holdings and Spare-It, a green technology start-up, according to the BEC.

Almost three quarters of the signatories are large corporations with over 200 employees, while the remainder are small and medium-sized enterprises.

Some 41 per cent of the signatories are in the property and construction sectors, followed by 10 per cent in industrial transportation and 8 per cent in commercial and professional services.

"The availability of dedicated budgets for emissions reduction, energy efficiency, and low-carbon research and development emerged as the most critical determinants for achieving net-zero targets," said Ng.

"Apart from financial support, our charter signatories also stressed the vital importance of internal engagement across all levels because decarbonisation is an organisational endeavour that requires sustained commitment and collaboration of all staff members.

"Engaging external stakeholders also poses a major hurdle as companies must navigate the technical, financial, and strategic challenges of the net-zero transition while coordinating efforts with partners throughout their value chain."

Signatories to BEC's charter have reported significant reductions in their emissions over the past year.

Some 43 per cent of them saw their direct emissions from owned or controlled sources, known as scope 1 emisssions, fall by an average of 18 per cent compared to the previous year, with the biggest reduction being 97 per cent.

Seven out of 10 reported a fall in their indirect emissions from the generation of bought energy, known as scope 2, of 15 per cent on average.

Of the 45 per cent of signatories that had set reduction targets for scope 3 emissions - those from upstream and downstream activities in their value chains - just over half reported a drop compared to the previous year averaging 23 per cent.

"Looking ahead, it is clear that cross-sector collective action will be essential to overcoming these challenges. Only by working together can we marshal the resources, expertise and influence needed to drive the transformative changes towards a sustainable future," said Ng.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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