Survey: 31% of HKers self-rate their firms as strong in ESG and sustainability

While progress in ESG and sustainability is rated as an important reputational area by 86% of Hong Kong respondents, only 31% self-rate their organisations as strong in this, according to a Sandpiper report. 

The Sandpiper Global Reputation Capital Index, which is based on data from a survey of over 2,700 C- Suite Leaders across 27 markets, identifies four categories for performance in reputation management through analysis of nine areas of reputation management. 

Based on the Index, only 2% in Hong Kong qualify as trailblazers, the lowest of any area, with aspirants at 17%, followers at 40%, and beginners at 41% - the highest percentage of beginners in any area for the market.

This can be attributed to several reasons, according to the report. Less than half of respondent organisations have a sustainability and/or ESG strategy or targets, and only 43% in Hong Kong are regularly producing any form of sustainability and/or ESG reporting at least annually. 

Resources is identified as a key barrier, with only 13% in Hong Kong having a dedicated sustainability or ESG team.

The quality of organisational ESG and sustainability communications is also raising concerns, with 68% in Hong Kong saying they don’t believe these are even accurate. Further to this, climate communications fares poorly, with only 20% locally having established a climate communications strategy. Less than half (34%) also say their organisations’ sustainability strategies are strongly aligned with the United Nations Sustainable Development Goals (SDGs).

The report also found that ESG and sustainability is the weakest area of reputation management for organisations in Hong Kong and globally, with only 2% leading in this area in Hong Kong and 9% globally.

In addition, 65% of respondents’ organisations in Hong Kong were negatively impacted by reputational weaknesses over the past 12 months. These included affecting the ability to do business with customers (65%), to attract and retain talent (41%), to recover from a crisis (50%), incurring financial losses (43%), as well as negatively impacting government and community relationships (46%).

These effects are being felt amid a growing risk landscape, with 53% in Hong Kong saying reputation is becoming more difficult to manage, with just 19% saying it is becoming easier.

More than nine out of 10 leaders are very concerned about a range of emerging reputational risks, including misinformation and disinformation (96%), data privacy and cybersecurity (98%), employee activism (96%), customer and stakeholder activism (96%), DE&I prioritisation (93%), ESG and sustainability scrutiny (96%), geopolitical tensions (97%), impact of AI on communications (93%), greenwashing claims (95%), and media consolidation (96%).

Despite the strong concerns, less than four out of 10 leaders feel well prepared to manage any of these issues. In Hong Kong the rise of misinformation and disinformation (81 pt gap), geopolitical tensions (82 pt gap), greenwashing (82 pt gap), and media consolidation (76 pt gap) top the list, indicating a need for immediate attention in these areas.

While 59% of leaders in Hong Kong believe having a good reputation is important for their organisation’s commercial success, and over 73% see all nine areas of reputation management as important, less than half rate their organisation’s performance as strong in any of these areas.

At the same time, leaders feel somewhat disempowered in reputational matters, with only 74% of CEOs and 39% of corporate affairs leaders in Hong Kong feeling a high level of responsibility for their organisation’s reputation. Over half also lack strong access to critical audience and stakeholder insights, which directly impacts their ability to engage and influence.

These issues appear to be recognised, with over 70% globally planning to increase investment in each area of reputation management over the next year.

Emma Smith, Sandpiper, CEO, said, “While our Index shows some very good signs of progress in reputation management globally, there are still many areas for improvement. A significant strategy to action gap is a consistent theme throughout the data, which shows that organisations have all the right intentions but are failing to mobilise plans. The appetite to increase investment in resources for reputation management efforts in the coming year is a positive sign.”

She added, “As the risk landscape increases and communications channels are increasingly fragmented and complex, the rules of reputation management have changed. Business leaders need to employ a holistic and multi-dimensional approach to reputation management that hyper-targets stakeholders, all while navigating emerging digital risks that have the potential to destroy reputations in seconds. In this environment, visibility, accountability, and transparency are the crucial ingredients for success.”

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