Climate change is a burning issue. Human activity is recognised as the main of climate change. The harmful act is burning fossil fuels that release large amounts of carbon dioxide and greenhouse gas and are trapped in the atmosphere. We never thought our presence would change our planet to such a level, though we hear it on the news daily. It is our time to learn how to minimise our impacts while making our living. Governmental, commercial, industrial, and individual. It is not only for us but also for the next generation. We would not want our next generation to live in a messy world.
For Hong Kong, Hong Kong’s Climate Action Plan 2030+ had issued to engage the business sector and community to combat climate change in full force and sets an ambitious target of carbon intensity reduction by 65% to 70% by 2030. In 2021, it developed to Hong Kongs Climate Action 2050, embracing four NetZero strategies—NetZero electricity generation, energy-saving and green buildings, green transport, and waste reduction.
While at the governance side, the Companies Ordinance requires Hong Kong companies to include descriptions of the company’s principal risks and uncertainties, environmental policies and performance in their directors’ reports for each financial year (for a public company). The company must comply with relevant laws and regulations that significantly impact the company. Just as importantly, a company’s relationships with its employees, customers and suppliers would substantially affect the company and on which its success depends.
Keeping up with the world trend of transparency, the Hong Kong Exchange has been part of the global movement to disclose ESG performance. The listing rule has been upgraded to requiring listed companies to make mandatory public disclosures about their ESG (Environmental, Social, Governance) performance and risk management on ESG report annually, starting from 2016.
In combating climate change, benchmarking is needed to evaluate progress and performance. Benchmarking requires data. Without data, performance cannot be quantified, and targets cannot be planned accordingly. Without a clear goal, policies and strategies cannot be formulated, let alone implemented.
The first is regarding the data. Scoping climate change-related data is complicated. Here below are examples of Greenhouse Gas emission scopes. Greenhouse Gas emission is one of the most significant contributors to climate change.
- Scope 1 Greenhouse Gas Emission: Direct emission data includes the stationary combustion sources (e.g., electricity, heat or steam generation), mobile combustion sources (e.g., motor vehicles and ships), and the use of refrigerants (e.g., HFC and PFC) and any other emission activities.
- Scope 2 Greenhouse Gas Emission: Energy indirect emission data, such as the electricity purchased from electricity suppliers and the gas purchased from the energy company, can be inputted and calculated through the system.
- Scope 3 Greenhouse Gas Emission: Throughout the supply chain, Indirect emission data like landfill gas generation, business travel, electricity consumption by freshwater and wastewater processing, paper consumption and other emission activities are suggested and included in the current system.
The following issue is that people face problems when compiling reports for their company, such as complicated Unit Conversion for non-ESG Background Colleagues. Emission Factors and Standard Requirements are constantly changed. Internally, staff are using different formats of data collection.
Hence, companies invested in ESG Dashboard that can handle Unit Conversion and emission factors and simplify data collection amongst group companies/subsidiaries. Because accuracy is essential as this will affect the decision-making. Imagine that you have the wrong data about electricity consumption and the incorrect action/remediation to the problems. In the long term, it’s becoming a substantial wrongful total energy consumption calculation. The dashboard can support companies handling complicated data collection, streamlining the process, and generating accurate ESG reports.
After all, In the context of a company reporting or investing, would you say ESG is an expense or a profit? This dilemma is like when your room cooler is broken, you go to the shop and have choices of 1) room cooler of old model which is not an energy-saving type, and 2) the room cooler granted with Energy Efficiency Label. The former is cheaper than the latter, but in the long run, the latter induces lower electricity bills. Which room cooler would you choose? On the technical side, we always perform a life cycle assessment – a cradle-to-grave analysis to assess impacts associated with a product from raw materials extraction to manufacturing, distribution and use. We consider all the stages of thinking if it’s “worth” making it. When we put this concept and practice into ESG reporting and investing, paying a bit more upfront on governance tool—the ESG dashboard, discovering the issues and controlling it through effective ESG data management. It will result in savings, enjoying lower operation and reputation costs, and costs to the environment.
By: ANewR Consulting Limited, a digital environmental consultant headquartered in Hong Kong since 2008. Our expertise has grown into the context of air and water qualities, noise, green building, waste management, and remediation. With extensive know-how in environmental planning and assessment, feasibility study and policy review, ecological design, monitoring, and audit (EM&A), ANewR has matured to be a leading management consultancy. Standing in the digital transformation reign, ANewR has participated in various environmental digital projects – interactive 3D visualisation, immersive automation virtual environment, Virtual reality, automation system, and monitoring platforms.
(Website: https://anewr.com, LinkedIn: ANewR Consulting Group, Twitter: ANewR – Everyday Newer,YouTube: https://www.youtube.com/channel/UCnpvmxnR9hbNxytSfBdfV8Q/videos)