hkqaa - hsbc csr index 2011 report csr index 2011 report...1.5 the initiation of the hkqaa - hsbc...

HKQAA - HSBC CSR Index

2011 Report

November 2011

Jointly initiated by:

All Rights Reserved of 62

Table of Contents Page

Executive Summary 4

Part One - Introduction 13

1.1 About the Hong Kong Quality Assurance Agency (HKQAA) 13

1.2 About The Hongkong and Shanghai Banking Corporation Limited (HSBC) 14

1.3 About ISO 26000 Guidance on Social Responsibility 14

1.4 Recent Trends in Social Responsibility 15

1.5 The Initiation of the HKQAA - HSBC CSR Index 16

Part Two – HKQAA - HSBC CSR Index – Hong Kong CSR Advocate Index 17

2.1 The Hong Kong CSR Advocate Index 17

2.2 The Forty-five CSR Practices 17

2.3 Scoring Approach 22

2.4 Benchmarking Process 24

2.5 Information Security and Confidentiality 24

2.6 Quality Assurance 24

2.7 The Participating Organisations 25

2.8 Summary and Recommendations 26

2.8.1 Seven Core Subjects and the Trends 26

2.8.2 Comparing Private and Public Listed Companies 30

2.8.3 Comparing the Manufacturing, Service and Construction Sectors 31

2.8.4 Highest Average Score Identified in Particular CSR Practices 31

2.8.5 Lowest Average Score Identified in Particular CSR Practices 32

2.8.6 Organisational Governance 33

2.8.7 Human Rights 34

2.8.8 Labour Practices 34

2.8.9 The Environment 36

2.8.10 Fair Operating Practices 37

2.8.11 Consumer Issues 38

2.8.12 Community Involvement and Development 40

2.8.13 Carbon & Energy Management Advocate Sub-Index 41


Table of Contents (continued) Page

Part Three – HKQAA - HSBC CSR Index – Hong Kong 100 CSR Index 42

3.1 The Hong Kong 100 CSR Index 42

3.2 CSR Disclosure Indicators 42

3.3 Methodology 43

3.4 Information Security and Confidentiality 43

3.5 Quality Assurance 44

3.6 The Selected 100 Companies from 14 Industrial Sectors 44

3.7 Summary and Recommendations 45

3.8 Detailed Findings for Respective Sectors 46

Part Four – HKQAA - HSBC CSR Index – Research on Effectiveness of

the CSR Advocate Index

52

4.1 Research on Effectiveness of the CSR Advocate Index 52

4.2 Methodology 52

4.3 The 6 Selected Advocates from 36 HKQAA - HSBC CSR Advocates 53

4.4 Summary of Findings 53

4.5 Detailed Findings of the Chosen Advocates 54

4.6 Conclusion 62


Executive Summary

The Hong Kong Quality Assurance Agency (HKQAA) has always been the advocate for

promoting environmental management, sustainability and corporate social responsibility

(CSR). The Hongkong and Shanghai Banking Corporation Limited (HSBC) is a leading global

financial services organisation that is committed to promoting CSR in society. With the

mission of enhancing Hong Kong organisations’ competitiveness and commitment towards

sustainability, the HKQAA cooperated with HSBC to launch the HKQAA - HSBC CSR Index.

The HKQAA - HSBC CSR Index consists of two series of indices, namely, the Hong Kong

CSR Advocate Index and the Hong Kong 100 CSR Index. 2009 is the base year for analysis.

Hong Kong CSR Advocate Index

The Hong Kong CSR Advocate Index is an annual voluntary benchmarking project in which

25 organisations participated in the pilot programme in 2009, 27 participated in 2010 and 23

participated in 2011. The project aims to promote the application of the ISO 26000 Guidance

and help the participating organisations learn of their CSR maturity.

The guidance of ISO 26000 was consolidated into forty-five recommended CSR practices

under seven core subjects. There are five scoring categories which represent the level of

maturity of respective CSR practices as follows: 1 - Starting Phase; 2 - Forming Phase; 3 -

Implementing Phase; 4 - Confirming Phase; and 5 - Improving Phase.

HKQAA professionals conducted on-site verification to i) interview representatives of the

participating organisations to review the system setting; ii) validate the factual evidence of the

implementation practices; and iii) confirm the scores of the respective forty-five CSR

practices based on the defined scoring criteria.

Furthermore, an additional “Carbon & Energy Management Advocate Sub-Index” under the

umbrella of the HKQAA - HSBC CSR Advocate Index 2011 has been added with the aim of

providing more specific and in-depth analysis and opinions of Advocates’ performance

related to carbon and energy management which has become rather imperative locally and

globally. Such enrichment of the Index provides a new perspective for enhancing the publicity

of the Index as a whole.


In summary, the Hong Kong CSR Advocate Index, which represents the overall average

score of the participating organisations, was 4.62, 4.57 and 4.53 in 2011, 2010 and 2009

respectively, bearing in mind that the organisations participating this year are slightly different

from those of the previous years. The average scores of the seven core subjects for the two

years are summarised in the chart below. As illustrated, the scores rose slightly this year

demonstrating an improvement in the overall performance of CSR.

The scores also indicated that organisations have generally implemented mature systems to

manage CSR-related issues. At the same time, some new joiners capitalised on the

characteristics of the Index to benchmark their performance against the trends so as to

facilitate the promotion of CSR culture within their organisations. The overall results

demonstrated that the importance of CSR has been gradually recognised. Some good

practices are outlined in this report.

4.43

4.50

4.53

4.59

4.61

4.80

4.87

4.44

4.59

4.50

4.73

4.56

4.79

4.77

4.35

4.40

4.29

4.65

4.52

4.61

4.70

3.50 4.00 4.50 5.00

The Environment

Community Involvement and

Development

Fair Operating Practices

Human Rights

Organisational Governance

Consumer Issues

Labour Practices

Average Score of CSR Seven Core Subjects

Average score in 2009



As revealed from the scores, Labour Practices and Consumer Issues are the subjects that

most organisations have effective mechanisms by which to address the recommended

practices.


Labour Practices

Labour Practices scored highest among the seven core subjects. Participating organisations

in general were showing great concern for labour needs, such as occupational health and

safety, staff development, training and labour relations, etc. In response to legal requirements,

it was observed that some participating organisations conducted engagement meetings with

their staff members to discuss the new wage and salary arrangements. Meetings with

vendors, suppliers and sub-contractors were arranged by the participating organisations to

communicate the Minimum Wage Law. Some of the participating organisations carried out

measures to ensure compliance with the Minimum Wage Law such as including the

development of a Code of Conduct for suppliers and contractors. Furthermore, it was evident

that skill-enhancing and learning programmes were provided for the staff members by the

participating organisations.

Consumer Issues

Similar to previous years, addressing consumers’ expectations and needs has always been a

major focus of those participating organisations. It was observed that most organisations

exerted extensive effort on the development of innovative products introducing the use of

socially- and environmentally-beneficial materials and adoption of cleaner and greener

production methods. Participating organisations are actively enhancing consumers’

awareness of sustainable consumption by providing instructions and education to consumers.

Consumer engagement programmes were established in some organisations as consumers

currently require higher responsiveness on social responsibility issues. Among the

participating organisations, having a ISO 9001 certified quality management system

seemingly is an effective tool for ensuring customer satisfaction and managing complaints.


The performance of Organisational Governance has been steadily maintained. Systematic

procedures are in place to govern the business operations in almost all participating

organisations. Two-way stakeholder communication mechanisms were well-developed and

exercised. The participating organisations continue to scrutinise the compliance status of the

applicable laws and regulations as well as relevant international norms. Codes of conduct or

ethics and staff manuals were developed in which organisational standards are defined.

Nevertheless, it was observed that disclosure of organisations’ policies, decisions and

activities for which they are accountable, including the known and likely impacts on society

and the environment as yet still has room for improvement.


Human Rights

The participating organisations were well aware of the discrimination issues. Well-established

systems are in place to prevent engagement of child labour or forced labour. Some of the

participating organisations provide working opportunities for vulnerable groups and minorities.

Various communication channels with stakeholders regarding human rights issues were

established by the participating organisations. However, systematic risk assessment for

evaluating the potential impact of abuse of human rights resulting from supply chain

performance as well as internal operations was not generally conducted.


Compared to the results of previous years, more participating organisations raised the issues

of fair competition. Some of them employed legal consultants to evaluate the organisation’s

existing operating practices in order to prevent the engagement of anti-competitive behaviour.

Some have established plans to prepare for the upcoming Competition Law. It was evident

that sourcing of fair trade products, raw materials and engaging accredited fair trade

companies and social enterprises were practiced in some participating organisations.

Meanwhile, participating organisations continue to implement programmes to pursue

corruption prevention and protection of property rights.

Community Involvement and Development

The participating organisations have shown continuous efforts in supporting the community

and volunteerism. Philanthropy is the common approach towards community development.

Programmes are implemented by the participating organisations to provide care and

assistance to the vulnerable groups. Promotion of healthy lifestyles is being emphasised by

most of the participating organisations. Heritage conservation and community skills

development are the areas that can be further strengthened. Some participating

organisations have committed to infrastructure development in the areas where they operate.

The Environment

The Environment is an area in which the participating organisations generally performed well.

Most of the participating organisations incorporate environmental considerations in their

organisation’s policy and strategy. Some participating organisations implement campaigns

and measures to enhance energy performance and reduction of greenhouse gases. It was

observed that some of the participating organisations conducted surveys to gather

stakeholder feedback with respect to their environmental performance. Internal training

programmes on environmental protection are regularly arranged by some of the participating

organisations. However, a systematic approach to managing greenhouse gas emissions was

not widely adopted.


Carbon & Energy Management Advocate Sub-Index

The overall average score of the Carbon and Energy Management Sub-Index is 4.29 out of 5.

Despite the participating organisations giving a good performance in The Environment, the

overall result of the Carbon & Energy Management Advocate Sub-Index indicated that the

maturity level of the participating organisations varied from organisation to organisation. It

was observed that a few pioneers implemented advanced programmes to enhance energy

performance.

Most of the participating organisations have established criteria for effective operation and

maintenance of significant energy use. 22 out of 23 organisations have conducted an energy

review to measure the energy use of their operational processes. Most of the participating

organisations consider energy performance improvement opportunities while developing new

projects. However, coverage of energy sources can be further extended and definition of

energy baselines is recommended for future comparisons of performance. Almost half of the

participating organisations implement measures to reduce Greenhouse Gas (GHG)

emissions associated with their activities, products and services.


Hong Kong 100 CSR Index – Executive Summary

The Hong Kong 100 CSR Index is a research project regarding organisations’ disclosure of

CSR issues. One hundred organisations from 14 sectors in Hong Kong were selected for

analysis. The project aims to outline the CSR behaviour of Hong Kong organisations by

studying the CSR disclosures made by the sampled organisations. With reference to ISO

26000, a set of 16 CSR indicators was developed to study and quantify the CSR disclosures

made by the sampled organisations. The research is conducted on a yearly basis.

The research is based on the CSR disclosures made by the selected organisations, which

includes their websites, policies, reports and other publicly available information. A score of

“1” will be assigned if an organisation has implemented activities and practices in relation to a

CSR Disclosure Indicator. On the contrary, a score of “0” will be assigned if such relevant

activities are not found in the organisations’ disclosed information. The proportion of “1”,

scores which indicates the presence of relevant activities and practices, out of the 16 CSR

Disclosure Indicators will form the Index.

In summary, the Hong Kong 100 CSR Index in 2011 is 67, while that in 2010 and 2009 were

66 and 63 respectively. It shows that the level of CSR disclosure among various sectors

remains stable but with slight improvement. The Education sector has continued to

demonstrate a high degree of transparency for CSR programmes. Manufacturing sectors

generally provide only limited information about their CSR programmes.

It is worth noting that significant improvement has been found in the integration of CSR into

organisational policy and it has the highest score among the 16 indicators. This demonstrates

that organisations’ commitments to CSR and awareness of CSR are increasing. Many of the

organisations have implemented corporate governance programmes to ensure sufficient

control over the operations.

Like last year, most organisations are proactive in disclosing their social performance,

specifically their involvement in the community. This indicator has the highest score among

the 16 indicators again in 2011. Support and participation in voluntary services and

community development are common ways for organisations to demonstrate their CSR

commitment. Significant improvement has also been found in supporting educational or

cultural development in which the score has increased from 66 in 2010 to 84 in 2011.

Meanwhile, these organisations may consider enhancing their disclosures about complaints

and dispute handling, consumer education and human rights issues, which are ranked low in

this research.


More than 80% of the selected

organisations have disclosed their staff

development and training programmes;

particularly training that develops

employees’ workplace skills. However,

higher transparency of the

programmes about enhancing staff’s

well-being, such as workplace safety

and healthy living, is recommended.

The organisations, in general, have

well-established environmental policies

or have implemented pollution

prevention and recycling programmes.

They have also paid more attention to

climate change and sustainable

resource management. More

environmentally friendly production

practices are chosen and adopted

when compared to 2009 and 2010. However, achievement of these energy-efficient

programmes was not common. Organisations are advised to establish energy management

systems as a tool to facilitate quantification and communication of their achievements on

energy performance. Therefore, organisations are advised to establish energy management

policy as a tool to enhance transparency and quantify their reduction targets of carbon

emissions.

Similar to the previous two years, the disclosure on Consumer Issues remains at a low level,

in which there are only 49 organisations disclosing their performance to Consumer Education

and 23 organisations disclosing their dedication to Complaint and Dispute Handling

Programme. It is important to note that with the rising concern for consumer rights in our

community, people will tend to consume goods and services provided by organisations which

have high transparency in addressing and responding to Consumer Issues.

The detailed analysis of the HKQAA - HBSC CSR Index will be uploaded onto the HKQAA

website by the end of 2011.

22

40

49

61

64

64

64

70

76

77

77

84

84

85

87

87

34

57

52

70

68

60

63

65

86

69

72

66

80

82

89

77

21

49

49

73

63

60

51

56

77

73

69

62

82

72

86

67

0 20 40 60 80 100

Complaint and Dispute Handling Programme

Disclosure of Human Rights Issues

Consumer Education

Stakeholder Engagement Programme

Sustainable Resource Usage Management

Programme

Climate Change Mitigation Programme

Promotion of CSR in the Sphere of Influence

Occupational Health and Safety Management

Programme

Contribution to Community Development

Disclosure of Environmental Performance

Pollution Prevention Programme

Supporting Educational or Cultural Development

Corporate Governance Programme

Staff Development and Training

Disclosure of Social Performance

Integration of CSR in organisational policy

Average Score of Respective

CSR Disclosure Indicators

Average Score 2009

Average Score 2010

Average Score 2011


Research on Effectiveness of the CSR Advocate Index – Executive Summary

The Research on Effectiveness of the CSR Advocate Index aims to find out how participation

in the HKQAA - HSBC CSR Advocate Index can benefit the organisation. Out of the 36

participating advocates in 2009 - 2010, we selected six from different backgrounds (such as

government body, private limited company, listed advocates and multinationals). All of them

have implemented measures of corporate social responsibility for 12 to 18 months since their

enrolment in the HKQAA - HSBC CSR Advocate Index. The research is based on the

feedback from interviews with the top management at the selected advocates.

In summary, all of the chosen advocates have been benefited from participation in the

HKQAA - HSBC CSR Advocate Index. For Organisational Governance, most advocates

enhanced the corporate management tools for their staff, including internal guidelines,

policies and procedures on avoiding conflicts of interest, anti-corruption, etc. and as a result

reduced the risk of corporate governance. They agree that corporate governance has

become more systematic and that operational efficiency has been improved along with an

improvement in organisational governance. Channels for mutual communication and

feedback were improved while protection and management of business confidentiality was

also strengthened.

For Human Rights, one of the advocates indicated that it has effectively avoided sexual,

racial and all other kinds of discrimination in the workplace. The ability of staff to handle

disputes and issues involving minorities has also improved.

For Labour Practices, most of the advocates state that the staff turnover rate has been

dropping since the execution of CSR policies. There is an improvement of goodwill and

advocate reputation and it is reflected in the advantages gained in recruitment of staff. Staff

morale, sense of belonging and sense of responsibility have significantly increased. Job

satisfaction of staff was enhanced which resulted in an improvement in productivity.

For The Environment, almost all advocates have benefited from the reduction of energy costs

and carbon emissions. Some of the advocates agree that the sense of environmental

protection of workers has been improved and that they are more aware of energy saving and

efficient use of resources in production. Some found that more new clients are attracted to

consume their products and services.


For Fair Operating Practices, an advocate indicated that by developing a fair, open

competition platform for its vendors, suppliers and sub-contractors, it attracts more bids on its

contracts, and as a result lowers the overall costs of projects.

For Consumer Issues, advocates agree that participation in the HKQAA - HSBC CSR

Advocate Index and other kinds of CSR measures has brought a positive image and

enhanced the public’s understanding of advocates’ efforts in CSR. For most of the advocates,

complaints about products and services from clients have decreased significantly, customer

satisfaction has been significantly improved, and the brand and reputation of the advocate

have improved.

For Community Involvement and Development, one of the advocates mentioned that the

efforts on environmental conservation work have attracted the attention of its staff, customers,

suppliers and the general public on environmental protection and natural species

conservation.


Part One – Introduction

1.1 About the Hong Kong Quality Assurance Agency (HKQAA)

The Hong Kong Quality Assurance Agency (HKQAA), a non-profit independent Conformity

Assessment Body (CAB), was established by the Hong Kong Government Industry

Department in 1989. Our mission is to promote management excellence to the industry and

to deliver world-class, value-added assessment, certification, benchmarking, verification and

training services.

To keep pace with the global direction and the changes in customer needs, the HKQAA is

relentless in exploring new opportunities for serving the market. In the past 20 years, not only

have we increased the number of certificates significantly, but we have also strengthened the

credibility of our services. The HKQAA holds many accreditations for auditing Quality,

Environmental, Occupational Health & Safety, and Information Security management

systems, including accreditations from UKAS (UK), HKAS (Hong Kong) and CNAS (China).

For ethical auditing, we are accredited by SAAS for SA 8000, which is recognised by BSCI

and WRAP, among others, and we are approved for social auditing by Tesco (UK).

With over 4,000 certificates spanning various industries and accounting for more than 50% of

the market share, the HKQAA is a leading CAB in Hong Kong, serving client organisations in

Hong Kong, China, and other Asian countries. The headquarters of the HKQAA is located in

Hong Kong. We also have offices in Beijing, Guangzhou, Shanghai and Suzhou, as well as a

representative office in the United States.

The Agency has been an advocate for promoting environmental management, sustainability

and corporate social responsibility (CSR) over the past decade. A few years ago, we started

to provide professional verification services for carbon emissions for major public utilities in

Hong Kong. We also invited the Global Reporting Initiatives (GRI) and the Chairman of ISO

Working Group of ISO 26000, Dr Jorge E. R. Cajazeira, to Hong Kong to bring in the latest

information about the international development of sustainability and CSR.


1.2 About The Hongkong and Shanghai Banking Corporation Limited (HSBC)

The Hongkong and Shanghai Banking Corporation Limited is a founding and a principal

member of the HSBC Group which, with around 8,000 offices in 87 countries and territories

and assets of US$2,418 billion as of 30 June 2010, is one of the world’s largest banking and

financial services organisations.

The importance of running a sustainable business for the long term has been highlighted by

the global financial crisis. At HSBC, a sustainable business means achieving profits for its

shareholders, underpinned by good governance, long-lasting customer relationships, and

highly committed staff delivering the corporate strategy and managing the social and

environmental impact of the business.

The partnership with the HKQAA in developing the HKQAA - HSBC CSR Index is another

important demonstration of HSBC’s commitment to promoting better corporate and

organisational sustainability in the society.

1.3 About ISO 26000 Guidance on Social Responsibility

ISO 26000 Guidance on Social Responsibility is an international standard developed by the

ISO Technical Management Board Working Group on Social Responsibility. Experts from

more than 90 countries and 40 international or broadly-based regional organisations have

contributed to developing this new international standard. The ISO 26000 was officially

released as an International Standard on 1 November 2010. This international standard

provides complete guidance for all types of organisations on the understanding and

implementation of important issues related to social responsibility. There are seven core

subjects, namely, organisational governance, human rights, labour practices, the

environment, fair operating practices, consumer issues and community involvement and

development.


1.4 Latest Trend in Social Responsibility

Under the trend of globalisation, there is an increasing concern about the responsibility for

labour practices, environmental, consumer and other public issues. Organisations, including

private companies, government and non-government organisations need to be more aware

of their impact on the whole society, since their stakeholders are very much concerned about

their performance towards society and the environment. After the economic crisis in 2008, the

measurement of organisational performance is no longer confined to their profitability, but

also to their commitment and implementation of various principles of social responsibility,

such as transparency, accountability, ethical behaviour, respect for stakeholder interests,

respect for the rule of law and respect for human rights. Economic, social and environmental

performance are the three bottom lines and metrics used to measure the organisation’s ability

to continue operating successfully.

As quoted by Ms Vivian Lau, Deputy Director-General of Trade and Industry, at the HKQAA

Symposium 2008, “The launching of the CSR Index in today’s Symposium is most timely, as

CSR becomes a growing concern of local and overseas buyers and brands. In creating

economic prosperity, enterprises increasingly need to rethink their social responsibility

alongside their business activities. This CSR Index, should I say, is instrumental in enhancing

the competitiveness of Hong Kong enterprises.”

The social responsibility performance has become a major factor influencing an

organisation’s reputation, as well as its ability to attract and retain staff members, customers

and investors.


1.5 The Initiation of the HKQAA - HSBC CSR Index

Bearing the mission of enhancing Hong Kong organisations’ competitiveness and

commitment towards sustainability, the HKQAA cooperates with HSBC to launch the Index.

As stated by Dr Jorge E. R. Cajazeira, Chairman of ISO WG on Social Responsibility,

regarding the launching of the HKQAA - HSBC CSR Index, “I was very impressed by the joint

HKQAA - HSBC initiative for the CSR Index. I believe that the application of this methodology

will help promote the principles and guidelines of the future ISO 26000 standards, without

violating the intent of the standards that it should not be used for certification purposes”. The

index aims to establish a level playing field for promoting the application of ISO 26000. It is

designed with reference to the ISO 26000 Guidance on Social Responsibility in order to help

organisations enhance their CSR performance. We believe that this project is able to benefit

various stakeholders in our society.

The HKQAA - HSBC CSR Index consists of two series of Indices, namely, the Hong Kong

CSR Advocate Index and the Hong Kong 100 CSR Index. 2009 is the base year for future

analysis.


Part Two

The HKQAA - HSBC CSR Index – Hong Kong CSR Advocate Index

2.1 The Hong Kong CSR Advocate Index

The Hong Kong CSR Advocate Index is an annual voluntary benchmarking project. It aims to

promote the application of the ISO 26000:2010 Guidance and help the participating

organisations determine their CSR system maturity. With reference to ISO 26000:2010, a set

of CSR practices and scoring criteria were developed to measure the organisations’ system

maturity in CSR performance. For reasons of confidentiality, scoring of the participating

organisations will not be presented to the general public. Nevertheless, the HKQAA is

pleased to share the conclusive analysis of 2011 about the CSR core subjects, as well as a

comparison between private and public listed organisations and a benchmarking of the

manufacturing, service and construction sectors in this report.

2.2 The Forty-Five CSR Practices

The criteria of the Hong Kong CSR Advocate Index were developed based on the guidance

and principles provided by ISO 26000:2010. The guidance of ISO 26000:2010 was

consolidated into forty-five recommended CSR practices under seven core subjects as

shown below:

CSR Core Subjects

Recommended CSR Practices

OG1 Organisation should set its direction by making social responsibility an integral part of its policies, strategies and operations.

OG2 Organisation should establish programmes to raise awareness and build competency in social responsibility in the organisation.


OG3 Organisation should be aware of applicable laws and regulations, as well as informing those within the organisation responsible for observing these laws and regulations to ensure that they are observed.


OG4 Organisation should disclose its policies, decisions and activities about their known and likely impacts on society and the environment.

OG5 Organisation should define its standards of ethical behaviour with reference to available international norms.

OG6 Organisation should develop governance structures that help to promote ethical conduct within the organisation and in its interactions with others.

OG7 Organisation should establish a two-way communication mechanism for stakeholder interests, as well as assisting in identifying areas of agreement and disagreement and negotiating to resolve possible conflicts.

HR1 Organisation should prevent the abuse of human rights resulting from the actions of any entities or persons whose activities are significantly linked to those of the organisation.

HR2 Organisation should establish a transparent and independent governance structure to ensure that no party can interfere with the fair conduct of a particular grievance process.

HR3 Organisation should provide stakeholders with channels to freely express their views, even in situations of disagreement with organisational decisions.

HR4 Organisation should ensure that it does not discriminate against employees, partners, customers, stakeholders, members and anyone else that the organisation has any contact with or can influence.

Human Rights

HR5 Organisation should ensure no engagement with forced labour or child labour.


LP1 Organisation should encourage the organisations in its supply chain to meet legal labour requirements.

LP2 Organisation should ensure that the conditions of its work comply with national laws and regulations.

LP3 Organisation should establish dialogue with staff members to establish healthy labour-management relations.

LP4 Organisation should implement measures to protect employees from health risks and adopt an occupational environment that meets the physiological and psychological needs of employees.

LP5 Organisation should promote an occupational health and safety culture for employees and contractors.

Labour Practices

LP6 Organisation should implement programmes to increase the capacity and employability of employees.

EN1 Organisation should implement measures to prevent pollution and minimise waste.

EN2 Organisation should promote an environmental-caring culture to employees and contractors.

EN3 Organisation should implement resource efficiency measures to reduce its use of energy, water and other materials.

EN4 Organisation should implement measures to reduce Greenhouse Gas (GHG) emissions associated with its activities, products and services.

EN4.1 Organisation should demonstrate its commitment via policy, strategy, improvement objectives and targets, resource allocation, etc. to support the energy management system and to continually improve its effectiveness.

EN4.2 Organisation should develop, record and maintain an energy review and establish an energy baseline.

The

Environment

EN4.3 Organisation should establish criteria for effective operation and maintenance of significant energy use.


EN4.4 Organisation should consider energy performance improvement opportunities in the design of new, modified and renovated facilities, equipment, systems and processes, and support the purchase of energy efficient products and services.

EN4.5 Organisation should implement measures to reduce Greenhouse Gas (GHG) emissions associated with its activities, products and services.

EN5 Organisation should identify potentially adverse impacts on the ecosystem and take measures to eliminate or minimise these impacts.

FO1 Organisation should develop and implement programmes to prevent corruption.

FO2 Organisation should prevent engaging in anti-competitive behaviour.

FO3 Organisation should incorporate social, ethical, environmental and gender equality criteria in its purchasing, distributing and contracting policies.

Fair

Operating

Practices

FO4 Organisation should develop and implement programmes to protect property rights.

CI1 Organisation should ensure no unfair or misleading marketing and information is delivered to customers or consumers.

CI2 Organisation should ensure that consumers are aware of their rights and responsibilities when products and services are delivered.

CI3 Organisation should ensure that its products and services will not be inherently harmful to consumers' health.

CI4 Organisation shall provide customers with socially and environmentally beneficial products and services that are able to reduce respective adverse impacts throughout their lifecycle.

Consumer

Issues

CI5 Organisation should review complaints and take action to prevent recurrence.


CI6 Organisation should implement measures to resolve disputes and enhance customer satisfaction.

CI7 Organisation should implement measures to protect consumers’ data and privacy.

CI8 Organisation should educate customers or consumers in order to enhance their understanding of the product and awareness of sustainable consumption.

CID1 Organisation should help to conserve and protect heritage, especially where the organisation's operation has an impact on it.

CID2 Organisation should contribute to programmes that provide assistance or other necessities to vulnerable and low-income groups.

CID3 Organisation should participate in skills development for the organisations in its supply chain in the community in which they operate.

CID4 Organisation should encourage healthy lifestyles in the community.

Community

Involvement

and

Development

CID5 Organisation should contribute to the development of the community in which they operate.


2.3 Scoring Approach

The following scoring approach is applied to evaluate the organisation’s system maturity in its

CSR performance. There are five scoring categories representing the level of maturity of the

recommended CSR practices: 1 - Starting Phase; 2 - Forming Phase; 3 - Implementing

Phase; 4 - Confirming Phase; and 5 - Improving Phase.

HKQAA professionals conducted on-site verification to i) interview the representatives of the

participating organisations to review the system settings; ii) validate the factual evidence of

the implementation practices; and iii) confirm the scores of the respective forty-five CSR

practices based on the defined scoring criteria*. The detailed scoring criteria of the forty-five

CSR practices have been defined in the HKQAA - HSBC Scoring Handbook.

Scoring Category General Scoring Criteria

1 – Starting Phase Organisation does not take steps to develop programmes or control measures to realise the recommended practice.

2 – Forming Phase

(i) The programmes or control measures are under development; or

(ii) The programmes or control measures have been

established but without full implementation; or (iii) The programmes or control measures are implemented

on an ad-hoc basis that lack advance planning.

3 – Implementing Phase

Organisation has established programmes or control measures to realise the recommended practice. The programmes or control measures have been fully implemented with advance planning.


4 – Confirming Phase

Organisation has established programmes or control measures to realise the recommended practice. The programmes or control measures have been fully implemented with advance planning. Information gathering or risk analysis is conducted to gather relevant information to confirm the effectiveness of the implemented practice. Stakeholders are invited to engage in the programmes.

5 – Improving Phase

Organisation has established programmes or control measures to realise the recommended practice. The programme or control measures have been fully implemented with advance planning. Information gathering or risk analysis is conducted to gather relevant information to confirm the effectiveness of the implemented practice. Stakeholders are invited to engage in the programmes. There is a review of the implemented programmes for identifying improvement areas.

* The average score of each subject is calculated based on the “round down” averages (to

two significant figures) of the participating organisations.


2.4 Benchmarking Process

Step 1: Self-evaluation

The participating organisation conducted a self-evaluation based on the scoring criteria for

the 40 recommended CSR practices using a self-assessment scoring sheet with supporting

evidence for HKQAA’s review and comments.

Step 2: On-site Verification

The HKQAA conducted an on-site verification of the objective evidence, reached an

agreement with the participating organisation about the scores for individual recommended

CSR practices and communicated with the organisation’s representative to identify further

improvement areas.

Step 3: Verification Reporting

The HKQAA prepared a report to confirm the scores for the 45 recommended CSR practices

and provided recommendations for improving the organisation’s systems to pursue better

CSR performance.

Step 4: Benchmarking Reporting

The scores for individual organisations were analysed. Based on the analysis, the HKQAA

prepared a report to benchmark the organisation’s scores against other participating

organisations.

2.5 Information Security and Confidentiality

All of the information collected in the verification exercise, including the agreed scores of

those recommended CSR practices, was stored in the HKQAA’s dedicated computer system

and the HKQAA has kept it strictly confidential. Comprehensive information security

procedures were implemented to protect the information related to the participating

organisations.

2.6 Quality Assurance

Internal quality assurance procedures were implemented to ensure quality of the verification,

research and analysis processes.


2.7 Participating Organisations

Twenty-three organisations including educational institutions, government departments,

private and public listed companies from the manufacturing, construction and service sectors

participated in the programme in 2011, namely:

- Alliance Construction Materials Limited

- Amoy Food Limited

- Analogue Group of Companies

- Cafe De Coral Holdings Limited

- Canon Hong Kong Company Limited

- Chun Lee Engineering Co. Ltd

- Driltech Ground Engineering Limited

- EGL Tours Company Limited

- Fuji Xerox (Hong Kong) Limited

- Hang Seng School of Commerce and Hang

Seng Management Colleague Limited

- Housing Department

- Jumbo Orient Contracting Limited

- Leo Paper Group (Hong Kong) Ltd

- Modern Terminals Limited

- MSDI Limited

- MTR Corporation Limited

- SOCAM Development

- Shun Yuen Construction Company Limited

- The Link Management Limited

- The Marketing Store Worldwide (Asia)

Limited

- Tim Lee Construction Company Limited

- Tong Kee Engineering Limited

- Tsuen Lee Metals and Plastics Toys

Company Limited

Distribution of the Participating Organisations

The participating organisations comprise 16

private companies, five public listed

companies (or their subsidiary companies)

and two government departments or

educational institutions.

Out of the 23 participating organisations, nine

companies are from the Service Sector, eight

companies from the Construction or

Engineering Services Sector, four from the

Manufacturing Sector, one of them is an

Education Provider and one of them is a

Government Department.


2.8 Summary and Recommendations

2.8.1 Seven Core Subjects and the Trends

Labour Practices

Labour Practices has been the best performing indicator in the 2011 Index.

Participating organisations in general

were showing great concern for labour

needs, such as occupational health and

safety, staff training and development,

labour relations, etc. The participating organisations had high

awareness of the Minimum Wage Law

which has been a legal requirement in

Hong Kong since 1 May 2011. In

response to legal requirements, some

participating organisations conducted

engagement meetings with their staff

members to discuss the new wage and

salary arrangements. Meetings with

vendors, suppliers and sub-contractors

were arranged by the participating

organisations to communicate the

Minimum Wage Law.

Some of the participating organisations carried out measures to ensure compliance with the

Minimum Wage Law including the development of a Code of Conduct for suppliers and

sub-contractors. Furthermore, skill-enhancing and learning programmes were given to staff

members by the participating organisations.

4.96

5.00

4.83

4.83

4.87

4.74

4.96

4.69

4.81

4.81

4.81

4.52

4.76

4.68

4.72

4.68

4.92

4.44

3.0 3.5 4.0 4.5 5.0

LP6

LP5

LP4

LP3

LP2

LP1

Average Score for

Labour Practices





Human Rights

Well-established systems are in place to

prevent engagement of child labour or

forced labour. Some of the participating

organisations provide working

opportunities for vulnerable groups and

minorities. Various communication

channels with stakeholders regarding

human rights issues were established by

the participating organisations.

Similar to previous years, the participating

organisations were well aware of the

discrimination issues. However, systematic

risk assessment for evaluating the

potential impact of abuse of human rights

resulting from supply chain performance

was not generally conducted.

Consumer Issues

Despite the fact that scores of this

indicator decreased when compared to

2010, continuous effort has been exerted

by the participating organisations to

address consumers’ need. Participating

organisations deployed extensive

resources for the development of

innovative products introducing the use of

socially- and environmentally-beneficial

materials and adoption of cleaner and

greener production methods. Participating

organisations are actively enhancing

consumer awareness of sustainable

consumption by providing instructions and

education to consumers.

Among the participating organisations,

establishing an ISO 9001 certified quality

management system seemingly is an

effective tool for ensuring customer satisfaction and managing complaints. In practical

operation, the participating organisations enhanced customer satisfaction by means of

implementing complaint handling procedures, improving product testing and quality control

procedures, developing regular customer engagement meetings, etc.

4.91

4.74

4.78

4.65

3.87

4.93

4.67

4.85

4.81

4.41

4.84

4.44

4.88

4.64

4.44

3.0 3.5 4.0 4.5 5.0

HR5

HR4

HR3

HR2

HR1

Average Score for

Human Rights




4.70

4.61

4.83

4.96

4.78

4.87

4.91

4.74

4.69

4.70

4.81

4.96

4.74

4.78

4.85

4.81

4.28

4.72

4.80

4.96

4.30

4.57

4.64

4.60

3.0 3.5 4.0 4.5 5.0

CI8

CI7

CI6

CI5

CI4

CI3

CI2

CI1

Average Score for

Consumer Issues






This year, more participating organisations

were sourcing fair trade products, raw

materials and engaging accredited fair trade

companies and social enterprises.

Meanwhile, participating organisations

continue to implement programmes to

pursue corruption prevention and protection

of property rights.

Compared to the results of previous years,

more participating organisations were

aware of the issues of fair competition.

Some of them employed legal consultants

to evaluate the organisation’s existing

operating practices in order to prevent their

engagement in anti-competitive behaviour.

Some have established plans to prepare for

the upcoming Competition Law. Some

participating organisations incorporated

social, ethical, environmental and gender equality criteria in supplier and contractor contracts.

The Environment

Most of the participating organisations have

implemented environmental management

systems in accordance with the ISO 14001

requirements so as to manage

environmental issues systematically.

Programmes, guidelines, policies and

systems were developed to minimise waste,

reduce resource consumption and prevent

pollution.

Some organisations implemented

campaigns and measures to enhance

energy performance and reduction of

greenhouse gases. Some also conducted

surveys to gather stakeholder feedback

with respect to their environmental

performance. Internal training programmes

on “Green Offices” were arranged by some

participating organisations. However, a systematic approach to managing greenhouse gas

emissions was not found to be widely adopted in 2011.

4.61

4.35

4.35

4.83

4.59

4.19

4.58

4.61

4.64

4.08

4.00

4.44

3.0 3.5 4.0 4.5 5.0

FOP4

FOP3

FOP2

FOP1

Average Score for





4.70

4.04

4.30

4.35

4.78

4.43

3.96

4.56

4.54

4.70

4.09

3.80

4.48

4.56

4.80

3.0 3.5 4.0 4.5 5.0

EN5

EN4

EN3

EN2

EN1

Average Score for

The Environment






The performance of this core subject

has been maintained steadily. Social

responsibility has become an integral

part of the participating organisations’

policies, strategies and operations.

Systematic procedures are in place to

govern the business operations in

almost all participating organisations.

Two-way stakeholder communication

mechanisms were well-developed and

exercised. However, not all

organisations have a practice of

disclosing their CSR policies and

performance. Governance structures,

including CSR steering committees for

the execution of CSR awareness

programmes, were formed in most of

the participating organisations.

The participating organisations

continue to scrutinise the compliance

status of the applicable laws and

regulations, as well as relevant international norms. Codes of conduct or ethics and staff

manuals were developed in which organisations’ standards are defined.

Nevertheless, similar to last year, structural CSR training programmes were not apparent in

most of the participating organisations. Disclosure of organisations’ policies, decisions and

activities for which they are accountable, including the known and likely impacts on the

society and environment, as yet still has room for improvement.

4.78

4.61

4.70

4.39

4.78

4.43

4.57

4.85

4.44

4.56

4.41

4.63

4.37

4.63

4.72

4.56

4.52

4.16

4.72

4.20

4.76

3.0 3.5 4.0 4.5 5.0

OG7

OG6

OG5

OG4

OG3

OG2

OG1

Average Score for







The participating organisations have

shown continuous efforts in supporting the

community and volunteerism. Philanthropy

is the common approach towards

community development. Programmes

were implemented by the participating

organisations to provide care and

assistance to the vulnerable groups.

Promotion of healthy lifestyles is being

emphasised by most of the participating

organisations.

Heritage conservation and community

skills development are the areas that can

be further strengthened. Some

participating organisations committed to

infrastructure development in the areas where they operate. Donations and fund-raising

activities were also noticed among the participating organisations.

2.8.2 Comparing Private and Public Listed Companies

Similar to the results of 2009 and 2010,

among the participating organisations,

CSR performance of the public-listed

companies is relatively more mature than

that of the private companies, particularly

in aspects related to Organisational

Governance, Fair Operating Practices,

The Environment and Community

Involvement and Development. It is

explanatory that the notion of CSR has

been well-addressed in the public-listed

companies over many years.

Moreover, the maturity of the practices

related to Human Rights, Labour Practices

and Consumer Issues are comparable.

4.61

4.52

4.39

4.74

4.22

4.56

4.74

4.48

4.74

4.44

4.36

4.56

4.32

4.6

4.17

3.0 3.5 4.0 4.5 5.0

CID5

CID4

CID3

CID2

CID1

Average Score for Community

Involvement and Development




4.90

4.84

4.69

4.60

4.83

4.70

4.93

4.4

4.8

4.53

4.38

4.86

4.53

4.49

3.0 3.5 4.0 4.5 5.0

Community Involvement

and Development

Consumer Issues


The Environment

Labour Practices

Human Rights

Organisational

Governance

Average Score of CSR Seven Core Subjects

for Private and Public Listed Companies

Private Companies - Average Score in 2011

Public Listed Companies - Average Score in 2011


2.8.3 Comparing the Manufacturing, Service and Construction Sectors

As indicated, participating organisations

from the Manufacturing Sector attained

higher maturity levels than the other

sectors in 2011.

The average scores of the Manufacturing

and Service Sectors are very similar. The

participating organisations from the

Manufacturing Sector on average scored

highest in six core subjects except

Organisational Governance while

participating organisations from the

Construction Sector appeared the least

mature. In particular were the average

scores of Consumer Issues, Labour

Practices, Organisational Governance and

Fair Operating Practices.

2.8.4 Highest Average Score Identified in Particular CSR Practices

Most of the CSR practices under the

scope of Labour Practices and Consumer

Issues achieved a mature level. All

participating organisations were

successfully promoting an occupational

health and safety culture within the

organisation and contractors. Similar to

the results of 2010, the participating

organisations are mature in addressing

customer complaints and taking positive

actions to prevent a recurrence. They

demonstrated mature mechanisms in

preventing child labour or forced labour

and executing programmes to increase

the capacity and employability of

employees.

More participating organisations are deploying resources to ensure their products and

services will not be inherently harmful to consumers' health, and to inform consumers about

their rights and responsibilities when products and services are delivered.

4.91

4.91

4.96

4.96

5.00

3.0 3.5 4.0 4.5 5.0

(HR5) Organisation should ensure no engagement

with forced labour and child labour.

(CO2) Organisation should ensure that consumers are

aware of their rights and responsibilities when

products and services are delivered.

(LP6) Organisation should implement programme to

increase the capacity and employability of

employees.

(CO5) Organisation should review complaints and

take action to prevent recurrence.

(LP5) Organisation should promote the occupational

health and safety culture to employees and

subcontractors.

Highest Average Score Identified

in Particular CSR Practices

Average Score of

CSR Seven Core Subjects

4.43

4.50

4.53

4.59

4.61

4.80

4.87

4.44

4.59

4.50

4.73

4.56

4.79

4.77

4.35

4.40

4.29

4.65

4.52

4.61

4.70

3.00 3.50 4.00 4.50 5.00

The Environment

Community

Involvement and

Development

Fair Operating

Practices

Human Rights

Organisational

Governance

Consumer Issues

Labour Practices





2.8.5 Lowest Average Score Identified in Particular CSR Practices

The performance of Community

Involvement and Development is

comparatively less mature than other

core subjects in 2011, particularly in

areas related to conservation and

heritage protection and skill

development in the supply chain.

Reducing greenhouse gas emissions is

also relatively less mature among the 45

practices of the Index. As this is

seemingly one of the most critical issues

around the world, further enhancement

has become imperative. Preventing the

potential for abuse of human rights

resulting from the performance of the

supply chain should also be addressed

to a higher degree.

3.87

4.04

4.22

4.30

4.35

4.35

4.35

3.0 3.5 4.0 4.5 5.0

(HR1) Organisation should prevent the potential for

abuse of human rights resulting from the actions of

others entities or persons whose activities are

significantly linked to those of the organisation.

(EN4) Organisation should implement measures to

reduce greenhouse gases (GHG) emissions associated

with its activities, products and services.

(CID1) Organisation should help conserve and protect

heritage, especially where the organisation's operations

have an impact on it.

(EN3) Organisation should implement resource

efficiency measures to reduce its use of energy, water

and other materials.

(EN2) Organisation should promote the environmental

caring culture to employees and subcontractors.

(FOP2) Organisation should prevent engaging in anti-

competitive behaviour.

(FOP3) Organisation should incorporate social, ethical,

environmental and gender equality criteria, in its

purchasing, distribution and contracting policies.

Lowest Average Score Identified

in Particular CSR Practices


2.8.6 Organisational Governance


81

73

31

83

51

71

1931

14

13

19

12

17

15

1 2 3 4 5 6

Score

Organisation should set its direction by making social responsibility an integral partof its policies, strategies and operations.

Organisation should establish programs to raise awareness and build competencyin social responsibility in the organization.

Organisation should be aware of applicable laws and regulations, as well asinforming those within the organization responsible for observing these laws andregulations to ensure that they are observed.

Organisation should disclose its policies, decisions and activities about theirknown and likely impacts on society and the environment.

Organisation should define its standards of ethical behavior with reference toavailable international norms.

Organisation should develop governance structures that help to promote ethicalconduct within the organization and in its interactions with others.

Organisation should establish a two-way communication mechanism overstakeholders’ interests, as well as assisting in identifying areas of agreement anddisagreement and in negotiation to resolve possible conflicts.

Number of participated organizations in each cluster

The participating organisations in general were aware of the potential CSR impacts that

would affect their business performance. Most of them have taken steps to address

applicable laws and regulations and communicate with those who are responsible for

observing these laws and regulations so as to ensure compliance. Similar to 2009 and

2010, many of the participating organisations established a two-way communication

process with their stakeholders.

The maturity of all participating organisations reached at least the implementation phase

(score 3). Some participating organisations were increasing their pace moving forward by

establishing programmes for raising awareness and building competency for social

responsibility in the organisation. They were also committed to disclosing the

organisation’s policies, decisions and activities for which it is responsible, including the

known and likely impacts on society and the environment.

Good Practices Observed

Some organisations developed Corporate Social Responsibility guidelines and

handbooks for their staff. A CSR Committee was formed and conducted regular reviews

of the organisations’ CSR performance. Items such as compliance of law, achievement of

CSR objectives, etc. were reviewed during management meetings. Systematic risk

management processes were developed in some participating organisations to facilitate

evaluation of the impact of particular issues including prevention of forced labour,

occupational health and safety, complaint handling procedures, community investment,

etc. Most of the participating organisations seek continuous improvement opportunities

by conducting self-assessments and attaining external awards or certifications such as

ISO9001, ISO14000, etc..


2.8.7 Human Rights

Human Rights

3146

1661

1931

1841

212

1 2 3 4 5 6

Score

Organisation should prevent the abuse of human rights resulting from theactions of any entities or persons whose activities are significantly linked tothose of the organization.

Organisation should establish a transparent and independent governancestructure to ensure that no party can interfere with the fair conduct of aparticular grievance process.

Organisation should provide stakeholders with channels to freely express theirviews, even in situations of disagreement with organizational decisions.

Organisation should ensure that it does not discriminate against employees,partners, customers, stakeholders, members and anyone else that theorganization has any contact with or can influence.

Organisation should ensure no engagement with forced labor and child labor.

As revealed by the analysis, almost all of the participating organisations were

endeavouring to avoid engagement of forced labour and child labour in their businesses.

Most of them have been providing stakeholders with channels to freely express their

views even in situations where disagreement with organisational decisions occurred.

The average scores in this issue are comparatively higher. This may be due to the

stringent legal system in Hong Kong in such regards. Companies in Hong Kong tend to

be law-complying. However, systematic risk assessment for evaluating the potential

impact on abuse of human rights resulting from supply chain performance was not

generally conducted.


Few organisations performed systematic risk analysis of human rights impact on their

operations as a whole (including the activities in the supply chain). Well-established

systems were in place to prevent engagement of child labour or forced labour. Some of

the participating organisations provide working opportunities to the vulnerable groups and

minorities by outsourcing the production works to these groups. Various communication

channels with stakeholders regarding human rights issues were widely established.


2.8.8 Labour Practices

Labour Practices

41

3

21

21

221

18

20

20

20

23

1 2 3 4 5 6

Score

Organisation should encourage the organizations in its supply chain tomeet labor legal requirement.

Organisation should ensure that the conditions of its work comply withnational laws and regulations.

Organisation should establish dialogue with staff members toestablish healthy labor-management relations.

Organisation should implement measures to protect employees fromhealth risks and adapt an occupational environment that meets thephysiological and psychological needs of employees.

Organisation should promote an occupational health and safetyculture to employees and contractors.

Organisation should implement programs to increase the capacity andemployability of employees.

Most of the organisations are equipped with a well-structured system for managing

issues related to Labour Practices. All of the participating organisations are actively

promoting an occupational health and safety culture to employees and contractors. Many

of them have implemented programmes to increase the capacity and employability of

employees. Participating organisations maintained continuous dialogue with staff

members for establishing a healthy labour-management relationship.

In 2011, participating organisations are paying more attention to the conditions of work to

ensure compliance with national laws and regulations. One of the reasons is that a

Minimum Wage Law has been in effect in Hong Kong since 1 May 2011. However, similar

to previous years, supply chain management is still an area that has room for further

enhancement.


In response to legal requirements, some of the participating organisations conducted

engagement meetings with their staff members to discuss the new wage and salary

arrangements. Meetings with vendors, suppliers and sub-contractors were arranged by

the participating organisations to communicate the Minimum Wage Law and to ensure its

implementation. Some of the participating organisations carried out measures to ensure

compliance with the Minimum Wage Law including the development of a Code of

Conduct for suppliers and contractors. In addition, skill-enhancing and learning

programmes were provided to staff by the participating organisations.


2.8.9 The Environment

The Environment

185

815

716

9833

1751

1 2 3 4 5 6

Score

Organisation should implement measures to prevent pollution andminimize waste.

Organisation should promote an environmental-caring culture toemployees and contractors.

Organisation should implement resource efficiency measures to reduce itsuse of energy, water and other materials.

Organisation should implement measures to reduce Greenhouse Gases(GHG) emissions associated with its activities, products and services.

Organisation should identify potential adverse impacts on the ecosystemand take measures to eliminate or minimize these impacts.

It has been observed that the environment has become a major topic in corporate

policies and strategies. More participating organisations implement campaigns and

measures to encourage energy savings as well as reduce the emission of greenhouse

gases. Some of them conducted surveys to gather stakeholder feedback on

organisations and arrange internal training programmes on “Green Offices”.

However, greenhouse gas reduction needs more attention, though more participating

organisations have conducted carbon and energy audits to quantify the amount of carbon

emissions. The performance is unsatisfactory as there are only a few organisations in the

Forming and Implementing Phases (Score 2 and 3 respectively). The promotion of an

environmental culture is also being enthusiastically addressed by the participating

organisations. Many of the participating organisations implement measures to prevent

pollution and minimise waste, such as promoting an environmental caring culture to

employees and subcontractors.


To reduce fuel and energy consumption and GHG emissions, some organisations

develop a “Green Technology Model”, which is a green terminal guideline, to consolidate

the experience of energy saving and environmental protection and establish internal

references for newly developed projects. In order to enhance public awareness of

environmental issues, some of the participating organisations launched educational

programmes such as design competitions and quiz shows. They also conducted regular

surveys to gather the views of internal stakeholders on environmental protection.

Organisations have been influencing clients by reducing packaging or using sustainable

resources for packaging.


2.8.10 Fair Operating Practices

Note: This practice is not applicable to some participating organisations, so the average score is calculated with a base less than 23

The performance of property rights protection and corruption prevention are relatively

less mature. Similar to the previous year, some of the organisations established precise

procedures, defined guidelines and issued codes of conduct to address these aspects.

However, the monitoring process for implementation of those procedures and guidelines

still has room for reinforcement.

As indicated in the trend, more participating organisations incorporated social, ethical,

environmental and gender equality criteria in their purchasing, distribution and

contracting policies. However, more efforts will be required to raise the awareness

regarding supply chain management as it has become more discerning.

Comparatively, prevention of anti-competitive behaviour is also less mature. However, it

is anticipated that more organisations will address this issue when the Competition Law is

in force. The awareness of preventing engagement in anti-competitive behaviour for

internal and external stakeholders can be further enhanced. In addition, participating

organisations should develop and implement programmes for protection of property

rights.


Some of the participating organisations employed legal consultants to evaluate the

organisation’s existing operating practices in order to prevent engaging in

anti-competitive behaviour. Sourcing of fair trade products, raw materials and engaging

accredited fair trade companies and social enterprises were practiced by some

participating organisations. Meanwhile, participating organisations continue to implement

programmes to pursue corruption prevention and protection of property rights.


2021

1381

9131

1571

1 2 3 4 5 6

Score

Organisation should develop and implement programs to preventcorruption.

Organisation should prevent engaging in anti-competitive behavior.

Organisation should incorporate social, ethical, environmental and genderequality criteria in its purchasing, distributing and contracting policies.

Organisation should develop and implement programs to protect propertyrights.


2.8.11 Consumer Issues

Consumer Issues

1

2

3

31

1

21

52

51

21

21

20

19

22

20

16

17

1 2 3 4 5 6

Score

Organisation should ensure no unfair or misleading marketing and information isdelivered to customers or consumers.

Organisation should ensure that consumers are aware of their rights andresponsibilities when products and services are delivered.

Organisation should ensure that its products and services will not be inherentlyharmful to consumers' health.

Organisation shall provide customers with socially and environmentally beneficialproducts and services that are able to reduce respective adverse impactsthroughout their life cycle.

Organisation should review complaints and take action to prevent recurrence.

Organisation should implement measures to resolve dispute and enhancecustomer satisfaction.

Organisation should implement measures to protect consumers’ data andprivacy.

Organisation should educate customers or consumers in order to enhance theirunderstanding of the product and awareness of sustainable consumption.


Consumer Issues is one of the most mature subjects among the seven core subjects. It

demonstrates that the participating organisations are thoroughly addressing the

expectations and needs of their customers / clients. Improvement in performance was

shown.

Similar to previous years, addressing the expectations and needs of consumers has

always been a major focus of those participating organisations. Participating

organisations exerted extensive efforts on the development of innovative products

introducing the use of socially- and environmentally-beneficial materials and adopting

greener and cleaner production methods. More participating organisations are deploying

resources to ensure their products and services will not be inherently harmful to

consumers' health.

In addition, participating organisations are actively enhancing consumer awareness of

sustainable consumption by providing instructions and education to consumers. Among

those participating organisations, establishing an ISO 9001 certified quality management

system seemingly is an effective tool for ensuring customer satisfaction and managing

complaints. In practical operation, the participating organisations enhance customer

satisfaction by means of implementing complaint handling procedures, improving product

testing and quality control procedures and developing regular customer engagement

meetings, etc. However, measures to protect consumer data and privacy can be further

enhanced.



Some of the participating organisations developed comprehensive quality control

systems. Data analysis has been conducted proactively with the aim of identifying

improvement opportunities. Mystery shopper schemes have been implemented to

maintain the service quality. Most of the manufacturing companies considered end users’

comfort as one of the major concerns in production, for instance, voluntarily providing

environmentally-friendly materials for customers.


2.8.12 Community Involvement and Development


13442

1841

16411

15611

17411

1 2 3 4 5 6

Score

Organisation should help to conserve and protectheritage, especially where the organization's operationhas an impact on.

Organisation should contribute to programs that provideassistance or other necessities to vulnerable and low-income groups.

Organisation should participate in skills development forthe organizations in its supply chain of the community inwhich they operate.

Organisation should encourage healthy lifestyles in thecommunity.

Organisation should contribute to the development of thecommunity in which they operate.


The overall result of this subject in 2011 indicates a downward trend. In general, the

participating organisations have shown continuous efforts in supporting the community

and volunteerism. Philanthropy is a common practice towards community development.

Vulnerable group assistance and caring programmes were in place. Promotion of healthy

lifestyles was being emphasised by most of the participating organisations.

Heritage conservation and community skills development are the areas which can be

further strengthened. As heritage conservation and protection is a broad issue ranging

from natural heritage, cultural heritage, tradition and inheritance to heredity, it is

worthwhile for participating organisations to actively address this respect so as to

contribute to the sustainable development of our society. Some participating

organisations committed to infrastructure development in the countries where they

operate.


Some participating organisations supported the development of infrastructure for the

community where they operate. Some examples of good practices observed from the

participating organisations were providing child-care services and tutorial classes for staff

members; food donations to support local food banks and organising campaigns on a

regular basis to promote reduction of food waste; skills development for heritage

preservation and facilitated training for local workers, including those from contractors

and internal staff to equip them with knowledge in heritage preservation and protection;

active involvement in experience sharing and conducting research; and development

work relating to heritage preservation, etc.


2.8.13 Carbon and Energy Management Advocate Sub-Index

Carbon & Energy Management Advocate Sub-Index

154211

12731

17321

15431

10652

0 1 2 3 4 5 6

Score

Organization should demonstrate its commitment via policy, strategy,improvement objectives & targets, resources allocation, etc. to support theenergy management system and to continually improve its effectiveness.

Organization should develop record and maintain an energy review andestablish an energy baseline.

Organization should establish criteria for effective operation andmaintenance of significant energy uses.

Organization should consider energy performance improvementopportunities in the design of new, modified and renovated facilities,equipment, systems and processes, and support the purchase of energyefficient products and services.

Organization should implement measures to reduce Greenhouse Gases(GHG) emissions associated with its activities, products and services.


The overall average score of the Carbon and Energy Management Sub-Index is 4.29 out of 5.

Most of the participating organisations performed maturely in The Environment, however, the

overall performance of the Carbon and Energy Management Advocate Sub-Index is

comparatively less mature and the maturity level varies from organisation to organisation.

Most of the participating organisations established criteria for effective operations and

maintenance of significant energy use; 22 out of 23 organisations have conducted energy

reviews to measure the energy use of their operation processes. Most of the participating

organisations consider energy performance improvement opportunities while developing new

projects. Some of them are planning for Carbon Audits, assessments or certification such as

ISO14000 and ISO50001 in order to enhance energy performance.

Some of the participating organisations demonstrated their commitment via established

policy, strategy, improvement objectives and targets, resource allocation, etc. to support the

energy management systems and to continually improve effectiveness. However, coverage

of energy sources can be further extended and it is recommended that an energy baseline

can be defined for future comparison.

Though the majority of participating organisations have implemented measures to reduce

Greenhouse Gas (GHG) emissions associated with their activities, products and services out

of their management commitment to foster a greener and cleaner environment, less than half

of them have taken reviews of the implemented programmes for identifying improvement

areas.


Part Three

HKQAA - HSBC CSR Index – Hong Kong 100 CSR Index

3.1 The Hong Kong 100 CSR Index

The Hong Kong 100 CSR Index is a research project regarding an organisation’s disclosure

of its CSR issues. One hundred organisations from fourteen industrial sectors in Hong Kong

were sampled for analysis. The CSR activities and behaviour of the Hong Kong organisations

will significantly affect the overall CSR image of the Hong Kong business sector.

The project aims to outline the CSR behaviour of Hong Kong organisations based on the

study of CSR disclosure made by the sampled organisations. Foreign investors and buyers

can make reference to the Hong Kong 100 CSR Index in their decision-making. With

reference to ISO 26000, a set of CSR indicators was developed to study and quantify CSR

disclosure by the selected organisations. The research is conducted on a yearly basis.

HKQAA is pleased to share the research results, including the CSR indicators, comparison

between private and public-listed companies and benchmarking of the fourteen sectors.

Organisations in Hong Kong can make use of this research to identify improvement

opportunities. This index can also facilitate future research with city-to-city comparisons.

3.2 CSR Disclosure Indicators

Based on the guidance and principles provided by ISO 26000, sixteen CSR Disclosure

Indicators are defined in the Hong Kong 100 CSR Index.

CSR Core Subjects CSR Disclosure Indicators

Integration of CSR in Organisational Policy




Organisational

Governance


Human Rights Disclosure of Human Rights Issues


Occupational Health and Safety Management Programme

Labour Practices Staff Development and Training


Sustainable Resources Usage Management Programme The Environment


Fair Operating Practices Promotion of CSR in the Sphere of Influence


Consumer Issues Consumer Education Programme

Support for Educational or Cultural Development Community Involvement

and Development Contribution to Community Development

3.3 Methodology

The research is based on the level of CSR disclosure made by the selected organisations,

which includes their websites, policies and reports, as well as other publicly available

information. A score of “1” will be assigned to the organisation if it has implemented activities

and practices in relation to a respective CSR Disclosure Indicator. On the contrary, a score of

“0” will be assigned if relevant information is not found in the information disclosed by the

organisation.

The proportion of “1” scores, which indicates the presence of relevant activities and practices,

out of the 16 indicators will form the Index. A fact-based scoring method was adopted.

Personal judgment on the effectiveness of the implemented CSR activities will not be

involved in the scoring process. By analysing the distribution of the CSR Disclosure Score,

we will be able to outline the CSR behaviour of Hong Kong organisations.

3.4 Information Security and Confidentiality

All of the information collected in the research will be kept in the HKQAA’s dedicated

database and the HKQAA will keep it strictly confidential. Proper information security

procedures are in place to protect the information of the participating organisations.


3.5 Quality Assurance

Internal quality assurance procedures were implemented to ensure the quality of the research

and analysis process.

3.6 The 100 Selected Companies from 14 Industrial Sectors

One hundred companies were selected from 14 industrial sectors, including 55 publicly listed

companies, 33 private companies, 7 public bodies and 5 governmental departments. The

fourteen industrial sectors are:

- Catering

- Construction and Engineering

- Conglomerates

- Education

- Financial

- Government

- Manufacturing

- Property Development and Property Management **

- Public Bodies

- Public Services

- Retail

- Telecommunications

- Hotel and Tourism ***

- Trading and Logistics

* This sector was renamed from “Corporation” to “Conglomerate”

** This sector was renamed from “Property” to “Property Development and Property

Management”

*** This sector was renamed from “Tourism” to “Hotel and Tourism”


3.7 Summary and Recommendations

Like last year, most organisations are

proactive in disclosing their social

performance, specifically their involvement

in the community. This indicator has the

highest score among the 16 indicators

again in 2011. Support and participation in

voluntary services and community

development are common for

organisations to demonstrate their CSR

commitment. Significant improvement has

also been found in the support for

educational and cultural development in

which the score has increased from 66 in

2010 to 84 in 2011. Meanwhile, these

organisations may consider enhancing

their disclosures about complaint and

dispute handling, consumer education and

human rights issues, which are ranked low

in this research. It is also worth noting that significant

improvement has been found in the

integration of CSR into organisational

policy and it has the highest score among the 16 indicators. It demonstrated that

organisations’ commitments to CSR and the awareness of CSR is increasing. Many of the

organisations have implemented corporate governance programmes to ensure sufficient

control over the operations.

More than 80% of the selected organisations have disclosed their staff development and

training programmes, particularly training that develops employee workplace skills. However,

higher transparency of the programmes for enhancing staff well-being, such as workplace

safety and healthy living, is recommended.

The organisations in general, have well-established environmental policies or have

implemented pollution prevention and recycling programmes. They have also paid more

attention to climate change and sustainable resource management. More

environmentally-friendly production practices were chosen and adopted when compared to

2009 and 2010.

However, achievements of these energy efficient programmes were not common.

Organisations are advised to establish energy management systems as a tool to facilitate

quantification and communication of their achievements on energy performance. Therefore,

organisations are advised to establish energy management policy as a tool to enhance

transparency and quantify their reduction target of carbon emissions.

22

40

49

61

64

64

64

70

76

77

77

84

84

85

87

87

34

57

52

70

68

60

63

65

86

69

72

66

80

82

89

77

21

49

49

73

63

60

51

56

77

73

69

62

82

72

86

67

0 20 40 60 80 100


Disclosure of Human Rights Issues

Consumer Education


Sustainable Resource Usage Management

Programme


Promotion of CSR in the Sphere of Influence

Occupational Health and Safety Management

Programme

Contribution to Community Development



Supporting Educational or Cultural Development


Staff Development and Training


Integration of CSR in organisational policy

Average Score of Respective

CSR Disclosure Indicators

Average Score 2009

Average Score 2010

Average Score 2011


It is noticeable that there is a significant difference between the maximum and minimum

scores in some sectors. One of the remarkable examples is the financial sector. The

difference between the maximum and minimum score is 75. This demonstrates that the

maturity level of CSR disclosure among these financial organisations varies significantly. It is

believed that for those organisations which scored low in the disclosure of CSR, they should

place more emphasis on it so as to allow the general public to understand their contribution to

the community.

3.8 Detailed Findings of Respective Sectors

Public Services and Education

“Leading sectors continue to reveal the highest transparency in their social responsibility programmes.”

As compared to last year, the average

score of Education remains unchanged.

The average score of Public Service

shows a small decrease. Most indicators,

such as Corporate Governance

Programme, Staff Development and

Training, etc. have remained more or

less stable.

In general, organisations in these two

sectors provide sufficient and updated

information about their CSR performance.

Some have a CSR or sustainability report

that periodically updates their social and

environmental performance through

different public channels.

Most organisations have exercised CSR

programmes, including staff development,

pollution prevention, occupational health

and safety management, disclosure of

social and environmental performance,

contribution to community development

and sustainable resource use. All

organisations have integrated CSR into their organisational policies and executed corporate

governance programmes.

Some organisations have implemented programmes to mitigate climate change. Typical

examples include a reduction of energy consumption and installation of energy-efficient

lighting.

43

49

58

59

63

66

66

68

71

73

73

79

83

89

40

56

52

53

58

63

60

74

78

70

68

81

89

88

33

36

50

45

48

60

54

72

68

66

66

79

87

89

0 20 40 60 80 100

Manufacturing

Construction & Engineering

Catering

Retail

Public Bodies

Property Development and Property

Management

Tourism and Hotels

Financial

Telecommunications

Government

Trading and Logistics

Conglomerates

Public Services

Education

Average Score of

Respective Sectors

Average Score 2009

Average Score 2010

Average Score 2011


Although the organisations have provided information about their communication channels

with stakeholders in their reports or websites, the extent of said disclosure is limited and

mainly focused on their engagement activities with shareholders and staff. It is recommended

that such disclosures be extended to all key stakeholders and that organisations elaborate

more on how their engagement programmes affect their business operations. In addition, the

general public can find little information about complaint and dispute handling and human

rights issues. Organisations may consider improving the transparency on these issues.

Telecommunications

“Insufficient disclosure of Consumer Issues for most of the companies” This sector has the highest decline in

average scores among all 14 sectors.

Insufficient disclosure was found in

implementation of climate change

mitigation programmes, disclosure of

human rights issues, encouraging

stakeholder engagement, complaint and

dispute handling, and consumer education

programmes.

Some leading telecommunications

companies have disclosed in detail their

CSR strategies for formulating, managing

and promulgating their CSR policy and

initiatives at the corporate level.

Companies continue to disclose various

CSR programmes related to social and

environmental performance, contribution

to social and community development,

promotion of CSR in their sphere of

influence, sustainable resources use,

pollution prevention, and corporate

governance.

However, most of the companies are inactive in responding to climate change and

stakeholder engagement. Only a few of them have developed a set of communications

policies to gather stakeholder opinions, product feedback, etc.

Maximum and Minimum Score

31

38

0

31

38

38

25

38

69

44

63

81

44

19

63

69

81

81

81

88

88

94

94

94

94

94

94

94

0 20 40 60 80 100

Construction & Engineering

Catering

Manufacturing

Retail

Property Development and

Property Management

Hotel and Tourism

Public Bodies

Government

Public Services


Conglomerates

Education

Telecommunications

Financial

Maximum Score

Minimum Score


Financial

“Comprehensive disclosure of their social performance and corporate governance programme” Major financial institutions periodically release their CSR or sustainability reports with

detailed and comprehensive evaluations of their social and environmental performance.

However, only a few organisations have addressed their policies and procedures of

complaint and dispute handling, consumer education, disclosure of human rights issues and

stakeholder engagement programmes.

The majority of organisations continue to disclose CSR information related to social and

environmental performance, contributions to community development, promotion of CSR in

their sphere of influence, support for education and cultural development, pollution

prevention, climate change, staff development and training, corporate governance and

consumer education.

Government

“Disclosure of various environmental programmes are timely and sufficient.” Like last year, the government has released and updated their social and environmental

performances punctually and regularly. Most government departments have disclosed in

detail their programmes on environmental performance, climate change mitigation,

sustainable resource use, pollution prevention and staff training. Disclosure of their social

performance, promotion of CSR in the sphere of influence and occupational health and safety

were quite sufficient. However, detailed policies and procedures in complaint and dispute

handling are not commonly found. The government should place more emphasis on the

disclosure of human rights issues as it is a model for all organisations and corporations in

Hong Kong.


“Disclosure of programmes of stakeholder engagement consumer education are yet to improve.”

The improvement in overall performance is encouraging. Organisations in general have

disclosed to a certain extent their support for charity, community services, waste reduction

and energy-saving programmes. Compared to last year, organisations have disclosed more

of their environmental and social performance, complaint and dispute handling, promotion of

CSR in their sphere of influence, occupational health and safety, and the integration of CSR

into organisational policies. However, only a few organisations have published and disclosed

the performance of their stakeholder engagement programmes and programmes concerning

consumer education.


Property Development and Property Management

“Remarkable performance in the disclosure of Community Involvement and Development” All of the organisations have disclosed their performance for supporting education and

cultural development as well as their contributions to community development. Most

organisations have done well in the disclosure of their integration of CSR into organisational

policies, social performance, staff development and training, and contributions to community

developments. Programmes and disclosures about promotions of CSR in their sphere of

influence, stakeholder engagement and corporate governance are sufficient. However, their

transparency about complaint and dispute handling programmes and human rights requires

improvement.

Construction and Engineering

“Insufficient disclosure of engagement in Human Rights issues and Consumer Issues”

Though it is encouraging to see that organisations in the construction and engineering

sectors show substantial improvement in their disclosure of CSR programmes related to staff

development and training, as well as sustainable resource use, there is insufficient

information about promoting CSR in their sphere of influence, consumer education, complaint

and dispute handling, stakeholder engagement programmes and human rights issues, and

this poor performance has not changed since last year.

Most organisations have disclosed details of their programmes or policies concerning social

and environmental performance, occupational health and safety, contribution to and

participation in voluntary services and social investment, and pollution prevention.

Conglomerates

“Disclosures of environmental performance are solid and sufficient.” As compared to last year, the average score of the Conglomerates sector remains stable

and only a slight decline in the overall performance is found. Most indicators have remained

more or less stable. Most of the organisations have integrated CSR into their organisational

policies, disclosed their remarkable social performance and contributions to community

development, and executed corporate governance programmes.

In general, organisations in this sector are providing sufficient and updated information about

their CSR programmes, including staff development, occupational health and safety

management, pollution prevention, sustainable resource use, and disclosure of

environmental performance. Some have CSR or sustainability reports that periodically update

their social and environmental performance through different public channels. However,

insufficient disclosure of protecting consumer rights is found and more improvement should

be made as it has not improved since last year.


Hotel and Tourism

“The disclosures of environmental performance are remarkable.” Improvement has been seen in most of the indicators. Organisations have been placing much

emphasis on disclosing their performance in all sectors except the disclosure of human rights

issues and corporate governance programmes. Significant improvement is found in the

protection of consumer rights and the environment. Social responsibility issues are

addressed and integrated into organisational policies at most of the organisations.

Outstanding performance has been maintained in the disclosure of social performance and

staff training and development.

Public Bodies “Organisations are active in disclosing their stakeholder engagement programmes.”

Although the overall performance is not the best among all 14 sectors, the degree of

improvement in the overall results is admirable. The average scores of most of the indicators

have been increasing. All of the organisations have disclosures of their stakeholder

engagement programmes. The disclosure of complaint and dispute handling, social

development programmes, staff development and training, corporate governance and the

integration of CSR into organisations’ policies are encouraging. However, their transparency

about climate change mitigation, sustainable resources use and occupational heath and

safety requires further improvement.

Retail

“Organisations are active in disclosing their environmental and social performance.” More organisations are eager to disclose their CSR programmes in relation to contributions to

education and cultural development, disclosure of environmental and social performance,

pollution prevention and sustainable resource use. Most of them have also released their

CSR policy, staff training and corporate governance programmes.

However, although the retail industry is one which has high degree of involvement of people

and services, the transparency in stakeholder engagement, human rights issues, sustainable

resource use, management programmes, and complaint and dispute handling programmes is

insufficient and improvement should be made in these areas.


Catering

“Insufficient disclosure of programmes concerning climate change and complaint and dispute handling” There is improvement in the overall performance when comparing it to the record of last year.

Major catering organisations have done well in the support of and contribution to community

development as well as the disclosure of their social performance. In addition, they have

improved their disclosure of occupational health and safety, stakeholder engagement

programmes, and the integration of CSR into the organisations’ policies.

Some of them have also disclosed to some extent other CSR programmes and activities,

including pollution prevention, educational programmes for customers, staff development and

training and support for education and culture. The disclosure of human rights issues has

also improved. However, their transparency about climate change mitigation, complaint and

dispute handling programmes, promotion of CSR in their sphere of influence, sustainable

resource use, and corporate governance programmes requires improvement.

Manufacturing “Relatively high transparency in the disclosure of integration of CSR into organisational policy”

Organisations in the manufacturing sector have a slight improvement in most of the CSR

indicators. More organisations have disclosed their support for charity programmes and

community services, consumer education, sustainable resource use, pollution prevention,

occupational health and safety and corporate governance. Although an all-around integration

of CSR has been found in corporate policies in most of the organisations, they are seldom

disclosing their policies on human rights issues, stakeholder engagement and staff training

and development.


Part Four

HKQAA-HSBC CSR Index – Research on Effectiveness of the CSR

Advocate Index

4.1 Research on Effectiveness of the CSR Advocate Index

The Research on Effectiveness of the CSR Advocate Index aims to find out how the

participation in the HKQAA - HSBC CSR Advocate Index can benefit the organisation. Out of

the 36 participating advocates in 2009 - 2010, we selected six from different backgrounds

(such as government body, private limited company, listed advocates and multinationals). All

of them have implemented measures of corporate social responsibility for 12 to 18 months

since their enrolment in the HKQAA - HSBC CSR Advocate Index.

The project allows the public to understand the benefits of participating in the HKQAA - HSBC

CSR Advocate Index, such as driving continuous improvement of advocates regarding the

CSR performance, brand building, etc.

The HKQAA is pleased to share the research results, including the benefits from participation

in the HKQAA - HSBC CSR Advocate Index for the six organisations and a summary of these

benefits. Organisations in Hong Kong can make use of this research for identifying the

potential benefits of joining the HKQAA - HSBC CSR Advocate Index.

4.2 Methodology

The research is based on the feedback from interview with the top management of the

selected advocates in regard to positive changes, influences, impacts and the gains they

have made after participating in the HKQAA - HSBC CSR Advocate Index.


4.3 The 6 Selected Advocates from the 36 HKQAA - HSBC CSR Advocates

6 advocates were selected from the 36 CSR Advocates. The 6 chosen advocates are:

1. Alliance Construction Materials Limited

2. Fuji Xerox (Hong Kong) Limited

3. Housing Department

4. Tsuen Lee Metals and Plastics Toys Company Limited

5. Canon Hong Kong Company Limited

6. Leo Paper Group

4.4 Summary of Findings

For Organisational Governance, most advocates enhanced the corporate management tools

for their staff, including internal guidelines, policies and procedures for avoiding conflicts of

interest, anti-corruption, etc. and as a result reduced the risks to corporate governance. They

agree that corporate governance has become more systematic and the operational efficiency

has been improved along with the improvement of organisational governance. Channels for

mutual communications and feedback are improved while protection and management of

business confidentiality is also strengthened.

For Human Rights, one of the advocates indicated that it has effectively avoided sexual,

racial and all other kinds of discrimination in the workplace. The ability of staff to handle

disputes and issues involving minorities has also improved.

For Labour Practices, most of the advocates state that the staff turnover rate has been

dropping since the execution of CSR policies. There is an improvement of goodwill and in the

advocate’s reputation and it is reflected by an advantage gained in the recruitment of staff.

Staff morale, sense of belonging and sense of responsibility have significantly increased. Job

satisfaction of staff was enhanced resulting in an improvement in productivity.

For The Environment, almost all advocates have benefited from the reduction of energy costs

and carbon emissions. Some of the advocates agree that the sense of environmental

protection among workers has been improved and they are more aware of energy saving and

efficient use of resources in production. Some found that more new clients are attracted to

their products and services.


For Fair Operating Practices, an advocate indicated that by developing a fair, open

competition platform for its vendors, suppliers and sub-contractors, it attracts more bids on its


For Consumer Issues, advocates agree that participation in the HKQAA-HSBC CSR

Advocate Index and other kinds of CSR measures has brought a positive image and

enhanced the public’s understanding of the advocates’ efforts in CSR. For most of the

advocates, complaints about products and services from clients have decreased significantly,

customer satisfaction has been significantly improved, and the brand and reputation of the

advocate have improved.

For Community Involvement and Development, one of the advocates mentioned that the

efforts on environmental conservation work have drawn the attention of their staff, customers,

suppliers and the general public for environmental protection and natural species

conservation.

4.5 Detailed Findings of the Chosen Advocates

4.5.1 Alliance Construction Materials Limited

Being incorporated in 2004, Alliance Construction Materials Ltd (“Alliance”) offers

construction materials including concrete, asphalt, and aggregates, which are used in

concrete, asphalt, drainage, highway construction, and marine applications. Alliance is a joint

venture of Hanson plc and Cheung Kong Infrastructure Holdings Ltd. Alliance has been one

of the participants in the HKQAA - HSBC CSR Advocate Index since 2009.

The changes and gains it has experienced since participating in the HKQAA - HSBC CSR

Advocate Index are:

For Organisational Governance:

Alliance enhanced the internal guidelines for their staff and as a result reduced the risks to

corporate governance.

Corporate governance has become more systematic. Staff at all levels understand the need

to monitor and control product and service quality. Better quality management has been

achieved.


For Labour Practices:

Since the execution of CSR policies, the staff turnover rate has dropped for three consecutive

years. The sick-leave rate among staff has been dropping for four consecutive years (from

0.78% in 2007 to 0.60% in 2010) and productivity has been further enhanced.

Most of the job applicants at Alliance, especially those who have a bachelor’s degree or

above, expressed in the job interviews that the reason for joining Alliance is the company’s

outstanding performance in CSR.

For The Environment:

The carbon emission intensity has been reduced by over 20% compared to the base year

2007. It has been clearly reflected in the reduction of energy costs.

References: http://investing.businessweek.com/businessweek/research/stocks/private/snapshot.asp?privcapId=34165703

4.5.2 Fuji Xerox (Hong Kong) Limited

Fuji Xerox (Hong Kong) Limited (“Fuji Xerox”) is a leading provider and system integrator in

knowledge and document management solutions in Hong Kong. Established in 1964 and

known formerly as Rank Xerox (Hong Kong) Limited, Fuji Xerox Hong Kong became part of

Fuji Xerox Company Limited in December 2000. It now has more than 800 employees.

Committed to helping customers increase their competitive edge, Fuji Xerox Hong Kong

provides an unparalleled spectrum of document management solutions and services, ranging

from multifunction systems, printing, imaging, business process outsourcing to document

management and consulting. These solutions and services empower enterprises of all sizes

to enhance their productivity and to achieve effective utilisation of knowledge, leading to the

highest profitability and the utmost competitiveness.


Advocate Index are:



Fuji Xerox has formulated a set of policies which strictly complies with the legal requirements

of Hong Kong. It provides clear guidance to staff on corporate policy and business operations

and in return enhances the confidence level of stakeholders in Fuji Xerox.


The improvement of goodwill and the advocate’s reputation is reflected by the advantages

gained in the recruitment of staff.

The staff turnover rate has dropped by 20% annually compared to the base year 2008.


With the success of “Green Workplace” policies, more new clients are attracted to Fuji

Xerox’s products and services.

Fuji Xerox reduced 142 tons of carbon dioxide in 2010 compared to 2009 which amounted to

7% of the total reduction. The energy cost saved was HKD$200,000. The benefits brought by

the projects from the Quality Improvement Unit reached HK$16 million.

References: http://www.fujixerox.com.hk/index.php/FrontEnd/detail/52/1

4.5.3 Housing Department

The Housing Department supports the Transport and Housing Bureau (THB) in dealing with

all housing-related policies and matters.

The Housing Department also acts as the executive arm of the Hong Kong Housing Authority

(HA), which is a statutory organisation tasked with developing and implementing a

programme to help the government achieve its policy objectives on public housing.

The Housing Department was re-constituted from the merger of the former Housing Bureau

and the former Housing Department in 2002. It is headed by the Permanent Secretary for

Transport and Housing (“Housing”) who also assumes the office of Director of Housing.



Advocate Index are:


The operational efficiency has been improved along with the improvement of Organisational

Governance.

For Human Rights:

The Housing Department has completely avoided sexual, racial and all other kinds of

discrimination in the workplace.

The Housing Department has improved the ability of staff to handle disputes and issues

involving minorities.

For Fair Operating Practices:

The Housing Department has developed a fair, open competition platform for its vendors,

suppliers and sub-contractors. This platform attracts more bids for the Housing Department’s


For Consumer Issues:

Participation in the HKQAA-HSBC CSR Advocate Index and other kinds of CSR measures

has brought the Housing Department a positive image and enhanced the public’s

understanding of the Housing Department.

References: http://www.housingauthority.gov.hk/en/aboutus/hd/0,,1-0-0-0,00.html

4.5.4 Tsuen Lee Metals & Plastic Toys Company Limited

Tsuen Lee Metals & Plastic Toys Company Limited (“Tsuen Lee”) was founded in 1982. It is

an Original Equipment Manufacturer (OEM) specialising in the production of plastic toys,

accessories, consumer goods, gifts, etc. Tsuen Lee has its headquarters in Hong Kong and

factories in Guangdong and Jiangxi.


The changes and gains it has experienced since participating in the HKQAA-HSBC CSR

Advocate Index are:


The staff turnover rate has dropped from 20% to 10%.

The human resources policies have significantly increased the morale, sense of belonging

and sense of responsibility of staff. They have enhanced the job satisfaction of staff resulting

in an improvement in productivity.

The recruitment of staff has become easier even when there is a labour shortage. The

problem of labour shortages is less serious than for their competitors. Competitiveness has

increased and more orders have been received in return.


The sense of environmental protection of workers has been improved. They are more aware

of energy saving and efficient use of resources in production.


Complaints about products and services from clients have decreased significantly. The brand

reputation of the advocate has improved.


4.5.5 Canon Hongkong Company Limited

Established in 1971, Canon Hongkong Company Limited (“Canon”) is responsible for sales,

marketing and services of all Canon product lines in Hong Kong SAR, Macau SAR, Taiwan,

the Philippines and Mongolia, including its digital cameras, digital video camcorders, printers,

copiers, scanners, projectors and other imaging merchandise.

Canon adheres to Canon’s corporate philosophy, Kyosei, which in essence motivates the

company and its staff to proactively strive for harmonious coexistence with other citizens

through participation in various social, charitable and environmental activities. From 2009, the

Hong Kong Quality Assurance Agency has awarded Canon the HKQAA - HSBC CSR

Advocate Mark recognising Canon’s continuous efforts of contributing to corporate social

responsibility.

Furthermore, Canon also endeavours to adopt internationally recognised management

systems, having become certified in conformance with ISO 9001, ISO 14001 and OHSAS

18001 in 2003, 2004 and 2005 respectively. CHK is certified to the COPC-2000 CSP

Standard in 2006.


Advocate Index are:


The all-around training in business ethics ensures that business goodwill will not be

hampered by the inappropriate business activities of staff.

The channels for mutual communication and feedback are improved. Protection and

management of business confidentiality is also strengthened.


The Kyosei corporate culture has attracted talents from around the globe to join the company.

There are now 197,386 staff working for Canon worldwide.

The human resources policies have been paying more attention and care to the needs of staff.

More training and career development opportunities are offered. All of these have

significantly increased the morale and sense of belonging of staff.



The advocate has reduced the negative influence on the natural environment by setting

guiding principles of Green Product Cycles and putting them into action:

- The advocate has developed a non-combustion-supporting plastic called Ecodear

and is using it in the production of machine components.

- The advocate has innovated energy-saving technology for its printers, reducing

energy use by up to 75%, and as a result lowering operational costs for their clients.

- The advocate has launched the Toner Cartridge Recycle Programme. This

programme not only reduces the waste buried in landfills, but also reduces the

consumption of natural resources in the production of products. Since the launch,

the programme has collected 266,000 tons of toner cartridges worldwide and

saved 168,000 tons of raw materials and 402,000 tons of carbon dioxide

emissions.

The environmental policy adopted by Canon Hongkong Limited has brought Canon the

following outstanding achievements:

- With the development of the Carbon Dioxide Management Project, it had an extra

saving of 40,000 tons of carbon dioxide in 2009 as compared to 2008.

- Energy-saving measures have been adopted for years in their Hong Kong office.

The T5 highly efficient energy-saving fluorescent tubes consume 30% less energy

and successfully saved 4.6% of the total energy cost. This will be installed in offices

in other countries in 2011.

- Canon recycled 70 tons of products in the first six months of 2011 in Hong Kong. The

recycle rate is over 99%.


Customer satisfaction has been significantly improved along with better after-sales service.

Reference: http://www.canon.com.hk/en/corporate/main/index.jspx

http://www.canon.com.hk/en/services/toner/toner_welcome.do

http://www.canon.com.hk/en/corporate/main/Sup_Environment_2010.jspx


4.5.6 Leo Paper Group

In 1982 Leo Paper opened its doors as a traditional printing company and since then it has

grown into a leading global printing communications company, providing their clients with

comprehensive services. Committed to being a total solution provider, they make creativity a

reality, enabling people to reach out and communicate with each other in better ways. Their

commitment to quality means that service and product offerings are continuously improved,

making the benefits more tangible.

A value shared by Leo is a deep concern for the environment and for society as a whole. It

supports not only the green programmes, but all aspects of the Leo community; dedication to

staff members and natural resources, coupled with a commitment to honesty, fairness and

ethical operations, ensuring long-lasting and large-scale benefits for society as a whole.


Advocate Index are:


The corporate governance of the group was enhanced. Policies and procedures for avoiding

conflicts of interest, anti-corruption, etc. were developed.


Reduction of energy consumption and carbon emissions were achieved through the

environmental protection work of the group.


Consumers are more confident in Leo Paper Group’s products and services and recognise

the group’s vision and mission along with its dedication to CSR. The brand’s reputation has

improved.

Continuous improvement was shown in the group’s services and in return, customer

satisfaction was raised.

Reference: http://www.leo.com.hk/about/company-information.html


4.6 Conclusion

It is clear that Alliance Construction Materials Limited, Fuji Xerox (Hong Kong) Limited,

Housing Department, Tsuen Lee Metals and Plastics Toys Company Limited, Canon

Hongkong Company Limited and Leo Paper Group have benefited from participation in the

HKQAA - HSBC CSR Advocate Index in terms of the performance of organisational

governance, human rights, labour practices, fair operating practices, consumer issues and

community involvement and development. The productivity and operational efficiency have

been enhanced through their execution of CSR-related policies and measures. All of these

six advocates have joined the HKQAA - HSBC CSR Advocate Index 2011 and we look

forward to seeing more advocates participating in the index in the future.

Hong Kong 香港香港香港香港

Tel: (電話)：(852) 2202 9111

Fax: (傳真)：(852) 2202 9222

Email: (電郵)：[email protected]

Website: (網址)：www.hkqaa.org

Beijing 北京北京北京北京

HKQAA Certification (Shanghai) Ltd Beijing Representative Office 標準認證服務(上海)有限公司

北京辦事處

Tel: (電話)：(86 10) 6833 3262

Fax: (傳真)：(86 10) 6833 0812

E-mail: (電郵)：[email protected]

Shanghai 上海上海上海上海

HKQAA Certification (Shanghai) Ltd 標準認證服務(上海)有限公司

Tel: (電話)：(86 21) 6876 9911

Fax: (傳真)：(86 21) 6876 9922


Guangzhou 廣州廣州廣州廣州

HKQAA Certification (Shanghai) Ltd Guangzhou Branch 標準認證服務(上海)有限公司

廣州分公司

Tel: (電話)：(86 20) 8383 3777

Fax: (傳真)：(86 20) 8382 3066


Suzhou 蘇州蘇州蘇州蘇州

HKQAA Certification (Shanghai) Ltd Suzhou Representative Office 標準認證服務(上海)有限公司

蘇州辦事處

Tel: (電話)：(86 512) 6900 9119

Fax: (傳真)：(86 512) 6512 9119


Chicago 芝加哥芝加哥芝加哥芝加哥

US Representative Office 美國代表處

Tel: (電話)：(1 773) 344 4066

Fax: (傳真)：(1 312) 949 1445


© 2011 Hong Kong Quality Assurance Agency The Hong Kong Quality Assurance Agency owns the copyright and other intellectual property rights in this Report. All rights of the Hong Kong Quality Assurance Agency are hereby reserved. No part of this document may be reproduced or transmitted in any form or by any means, including photocopying and recording, without the written permission of the Hong Kong Quality Assurance Agency. Such written permission must also be obtained before any part of this document is stored in a retrieval system of any nature.

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