HONG KONG (Feb. 23, 12:55 p.m. ET) — Two Hong Kong organizations have launched a rating system to measure sustainable business practices among local small and medium-sized companies (SMEs), including manufacturers.
The groups hope the effort will improve companies’ performance in social and environmental areas and ultimately their competitiveness.
The Hong Kong Polytechnic University and the Hong Kong Productivity Council launched the index Feb. 21 with 40 local companies, and said they plan to update it annually. One of the goals is to demonstrate how implementing such “corporate social responsibility” practices can help companies do better economically in the long-run, organizers said.
“By practicing corporate social responsibility, SMEs can achieve the most important goal of business sustainability, namely enhanced competitiveness” by using resources more efficiently and having strong relations with stakeholders and investors, said HKPC Executive Director Agnes Mak, in a statement.
While the concept of sustainability has been recognized among Hong Kong firms, both industrial and other business sectors are still looking for a model for business sustainability, with the hope that it can help extend the life span of their operations, said Timothy Tong, president of Hong Kong Polytech.
It seems the firms still have some work to do, however. The index said that the companies were only at the “initial stages” of business sustainability, with a mean score of 58 out of 100.
It said manufacturers had the most advanced CSR practices in general, with a mean rating of 65, compared with a rating of 56 for the service industry, according to the HKPC, which is a quasi-governmental organization that provides research and market development support to Hong Kong companies.
While Hong Kong SMEs include thousands of plastic processing companies, organizers said there are no plastics firms in the inaugural Hong Kong SME Business Sustainability Index.
Index organizers do not plan to make the individual scores of companies public, at least in the first year, but they have disclosed the firms on the list and plan to meet with them to discuss how they could improve, said Carlos Lo, a faculty member in the Department of Management and Marketing at Hong Kong Polytech.
“We will give them scores in individual aspects so that the company concerned will get a clear idea of the aspects they have not performed well,” he said.
Lo said the Guangzhou Academy of Social Sciences is considering setting up a similar index to measure the CSR performance of local firms in that city, near Hong Kong.