Gore's message

At an ACCA event in Hong Kong last month, Al Gore, the leading global campaigner on climate change, ethics and sustainability, urged further developments in sustainability reporting. John Church reports

It was an ambitious and unambiguous announcement of intent. On one evening, ACCA managed to gather together almost 400 heavyweights of Hong Kong business and government to give a simple message – our eyes have turned to you, to Asia.

Environmental crusader and former US Vice President, Al Gore (right), was the means for getting the city’s attention, and the turnout proved beyond doubt he had succeeded.

Guests at the speech included: Secretary for Financial Services and the Treasury, Professor KC Chan; Secretary for the Environment, Edward Yau; and Director of Audit, Benjamin Tang.

British Consul-General, Stephen Bradley, and the heads of the Hong Kong, Australian, Canadian and British Chambers of Commerce also attended, as did leading academics from Hong Kong and elsewhere in Asia. Business heavyweights included: PCCW chairman, Richard Li; MTR Corporation chairman, Sir CK Chow; Hang Seng Bank executive director, Patrick Chan; and Bank of China executive director, Raymond Lee.

Everyone had showed up to hear him speak, and the man who has almost singled-handedly provoked a global rethink on environmental perspectives did not let his audience down.

There was explanation of how factors like population, technology and short-term thinking within business, politics and media had led us to a point of crisis. Examples of recent extreme global climactic events served to drive home the point. And there was a dire warning that the window of opportunity for change is closing – perhaps 10 years remain before the damage to our atmosphere from carbon emissions becomes irreversible.

There was a challenge to business, civil and political leaders, and to each member present, that a new moral and ethical responsibility was necessary to recognise the inert but unquestionable value of saving the Earth’s environment. And also, along with praise, a gauntlet of sorts thrown down to ACCA and other organisations to push the recalcitrants and laggards with continued dedication to groundbreaking global developments in ethics and sustainability reporting (SR).

Hong Kong businessmen are not renowned for thinking far beyond the bottom line, but the most common adjectives used to describe Gore’s speech that Thursday evening at the Conrad Hotel in Admiralty were ‘convincing’, ‘passionate’ and ‘genuine’.

‘I thought he was a very powerful speaker – very convincing,’ said Treasury Secretary Chan. ‘One point he made is a good one – that you measure what you value. If you want to make any change you have to get to the grass roots. We have to get popular support, to wake up and cause a tipping point, as he said. And therein lies the value of accounting methods – by having transparency you actually create a public awareness and, therefore, a pressure onto political leaders. I think that message came out well.’

‘The issue obviously is whether or not this is just a fad or if this is going to be ongoing,’ said Raymond Lee.

‘With Hong Kong being such a commercially oriented place, too often profitability comes first. To make corporate responsibility a common thing for Hong Kong companies, we’ll have to work very hard.’

Stephen Bradley acknowledged that Hong Kong businesspeople were the leading investors across the rest of China, ‘and China, as the fastest growing largest economy in the world, must be on board with these issues if we’re going to improve the declining situation that we’re all in’.

To that end was the ACCA’s second volley to push home its message of intent to focus its resources on lifting Asia’s collective performance on transparency, disclosure and environmental responsibility.

ACCA coincided the event with the release of a new discussion paper with the hope that its findings will drive home the message for companies in Hong Kong, Asia and globally to improve considerably their reporting on the impacts their operations and products have on climate change.

The report, Improving Climate Change Reporting by ACCA and the FTSE Group, assesses the performance of 42 UK companies that are renowned as leading environmental reporters, and is a must-read for commercial and government interests elsewhere.

The significance of ACCA’s efforts to convince Hong Kong of its place in the SR equation becomes apparent with the need to gain an important toehold in a major contributor to climate change – China.

‘Al Gore pointed to the fundamental importance of China as the fastest growing major economy, but one which has real issues in terms of its own environmental impact,’ said Allen Blewitt, ACCA’s chief executive. ‘There are a whole series of aspects of sustainability reporting that are probably behind the rest of the world in the Asia Pacific region. If you put aside the environment, on the social side working hours and human rights – in those areas the region has got some catching up to do. But the biggest challenge is definitely to improve the standard of environmental reporting. I think the social aspects will follow, but the environmental reporting is the most immediate impact.’

Blewitt described the ‘twin poles of China and India’ as nations it was essential to embed with SR.

‘India is a completely different challenge to China but, using Hong Kong as a hub, we would hope to extend SR influence into China.

‘In Hong Kong you’ve mostly got service-based companies. They all have an interest in manufacturing on the other side of the border and, to me, the interesting thing will be whether they try and translate their commitment to the companies in which they have a shareholding.

‘But the big challenge will be China’s state-owned enterprises. As they move to listing, they will have to confront Western concepts of corporate governance and SR, and there will be a huge shift for them to move into that environment.

‘India, superficially, would look easier, but India has been resistant to a lot of external pressure.

‘The Chinese have been much more open-minded and we’ve been working with the Chinese Government, with the CICPA [Chinese Institute of Certified Public Accountants], with the State Owned Enterprises Commission and with universities to give best practice transfer to the next generation of accountants – and we’ve found China much more amendable to new ideas.

‘The China Business Council on Sustainable Development recognised two years ago that, if China was to thrive in the next 50 years, sustainable development had to become a priority. So, from the very top they are setting priorities. I have no doubt there is central government commitment, but the real challenge is implementation at the provincial level.’

ACCA’s strategies focus on public awareness, recognition and education.

Its well established sustainability awards programmes are key to both publicising ethics and SR and recognising champions of industry who honestly and openly disclose their environmental footprints with the aim of reducing impact and improving their performance.

ACCA also has just under 300,000 students around the world participating in its accounting syllabus this year, which now embraces new training with professionalism and ethics at its core. The new exams will take place in December.

While ACCA hopes its latest report stimulates interest, Blewitt emphasised that Asia should not be using the UK model, or the report, as a benchmark here.

‘We’ve got to accept that this is an emerging area of reporting and we allow a period of experimentation, and it may be we need a slightly different approach in Hong Kong, China and this region,’ he said.

‘That’s part of the global movement – all in the same direction, but I wouldn’t want to impose a UK approach on top of a market that’s in a different stage of development.

‘One of the good things we can do moving forward is to say let’s have the top 20 companies in this region, and produce a similar paper looking at what they have been doing and what challenges they’re facing.’

For the man who is largely responsible for the report, ACCA’s executive director – technical, Roger Adams, lies the final word on Hong Kong’s significant ethics and SR event.

‘For me the main thing was that Al Gore presented a particular challenge,’ Adams said. ‘Now whether that’s something that ACCA on its own can respond to in terms of research, or whether it’s something we have to sit down with government and others to do more about the general issues that he raised with us – about carbon trading regimes and the way in which prices are reflected, and the assets and liabilities created as a result of the introduction of trading schemes, to the extent they’re properly dealt with by accounting standards and properly reflected in financial statements – those are the things we’ll be looking at in the next six months in response to his challenge.

‘I’m speaking in May 2008 at the SR awards in Sydney. This could be something I’d like to return to then and say, “this is what we’ve done”, or “these are the things we’ve set in motion in response”.’

At the end of the day, Gore’s words of inspiration and insight lasted about an hour. But the real battle to win the hearts and minds of Asia for a sustainable future is only just beginning.

Gore resonates in Hong Kong

‘This movement is gaining momentum, not least by people observing the strange climate patterns occurring in the last couple of years. Al Gore’s message that we must do something about it now, and that it is everyone’s responsibility, is a very clear message.’
Sir CK Chow, Chief Executive Officer, MTR Corporation

‘Sustainability reporting in China has a long way to go. It’s in its infancy, but it’s interesting with the approach of the Beijing Olympics that China at a government level is beginning to report more openly on the environment. Whether that will rub off at the corporate level will be interesting to see.’
Kenneth McKelvie, Chairman – China, Deloitte Touche Tohmatsu

‘This sort of debate wasn’t even on the agenda five years ago. Now it is, partly out of necessity and partly out of local debate.’
Mark Wilson, President and Chief Operating Officer, American International Assurance Company Ltd

‘The issue of climate change has shot to the top of the world agenda. Hong Kong businesspeople are the leading investors across the rest of China, and China, as the fastest growing largest economy in the world, must be on board with these issues if we’re going to improve the declining situation that we’re all in.’
Stephen Bradley, Consul-General, British Consulate-General, Hong Kong

‘We have an environmental issue here in Hong Kong. It’s important for all of us and we need to be better informed. In future, the most successful companies are going to be those that have proper environmental policies, proper diversity inclusion policies, proper staff engagement policies.’
Peter Sullivan, Executive Director and Chief Executive Officer, Standard Chartered Bank (Hong Kong)

‘I believe we need to start thinking about things in a new way. Hong Kong companies need events like this tremendously.’
Dr Lily Chiang, Chairman, Hong Kong General Chamber of Commerce

‘Hong Kong is an international city and we need new insight, and that’s why we need the likes of Al Gore to come and share his views.’
Professor Simon Ho, Dean, School of Business, Hong Kong Baptist University