Paper Title
Business Sustainability: Its Time has Come
Abstract
This paper examines the progress toward business sustainability in the aftermath of the 2015 Hong Kong exchange requirements for disclosure of sustainability performance information. There are five dimensions of sustainability performance: Economic, Governance, Social, Ethical, and Environmental (EEGSE). The role of business corporations in our society has evolved from profit maximization to creating shareholder value and in recent years to create shared value to protect interests of all stakeholders including investors, creditors, employees, customers, suppliers, government, the environment, and society. In today’s business environment, global businesses are under close scrutiny and profound pressure from lawmakers, regulators, the investment community, and their various stakeholders to focus on sustainability measures and accept accountability and responsibility for the five EGSEE dimensions of their performance. Corporate performance is measured not only by the economic sustainability performance but also by a set of non-financial sustainability key performance indicators pertaining to environmental, social, governance, and ethical activities. We evaluate opportunities and challenges in implementing the 2015 Hong Kong “comply or explain” requirements for disclosure of the environmental, social and governance (ESG) sustainability information.
Business sustainability has been promoted for several decades as an integrated and holistic business model and strategic managementto focus on the achievement of all five ESGEE dimensions of sustainability performance in creating shared value for all stakeholders. Until the late 1990’s business sustainability disclosures have been largely voluntary. Finland was the first country to adopt a mandatory sustainability reporting law in 1997. Other countries adopting similar laws include, for example, Australia, Austria, Canada, Denmark, France, Germany, Malaysia, Netherlands, Sweden, and the United Kingdom. The Hong Kong Stock Exchange announced that an integrated sustainability and corporate governance reportingon ESG dimensions of sustainability performance is required for Hong Kong listed companies starting in 2015 and onwards. Standardized sustainability reporting and assurance guidelines are needed to accurately, completely, and reliably communicate all five EGSEE dimensions of sustainability performanceto all stakeholders. The Hong Kong experience in implementing ESG sustainability reporting requirements in 2015, 2016, 2017 provides a useful set of best practices for all business organizations in Asia and worldwide in moving toward a holistic and integrated sustainability reporting.
Keywords - Business Sustainability, Economic, Governance, Social, Ethical, and Environmental (EEGSE).