The global outbreak of COVID-19 has seriously disrupted business but, at the same time, has reinforced the importance of emerging sustainability and Environmental, Social and Governance (ESG) factors into business strategy.

Social and economic challenges brought about by COVID-19 have shown the value of identifying a business’ strengths and weaknesses, as well as recognising and mitigating material risks.[1] Results have also shown that ESG indices have outperformed traditional equity funds by 5 to 10% since the start of the pandemic.[2] As corporates with good governance have shown better resilience and suffer less loss from this sudden change, investors are now looking for sustainable investment options which focus on corporates’ long-term ESG vision.


Evolution of Global Risks - Rising Concern of ESG Risk Management Process

The landscape of global risks has been evolving throughout the years. From 2010-2020, as mentioned in the World Economic Forum, the evolution has been from being economic-centric to environmental and social impact being the focus.[3] This paradigm shift means that ESG risks which were once considered to be unimportant are now far more common. It is now essential for companies to develop an ESG risk management process. The most common practice is to include ESG risks into an enterprise risk management (ERM) system,[4] by setting up a governance structure to identify, prioritise and mitigate any ESG risks that a company is exposed to, with escalation procedures to the board or senior governing body as necessary.


Stricter Guidelines of New Regulations – Aim not only to Report 

In Hong Kong, following the revised ESG Reporting Guide by The Stock Exchange of Hong Kong Limited (Exchange) in December 2019, we are observing more stringent ESG disclosure requirements for listed companies, starting from financial years commencing on or after July 1st, 2020. To improve reporting quality, social disclosures are upgraded to “comply or explain”; for environmental disclosures, companies are required to disclose how climate change will impact their businesses, and KPIs are being amended to require disclosure of relevant targets.[5] This represents a shift away from mere ESG reporting to the actual management of ESG issues by listed companies, with an emphasis on the board’s role in the governance structure for ESG matters.

As new regulations emerge, it is time for corporates to emphasise board involvement on ESG issues and ensure ESG considerations become part of the business decision-making process. The board of a company will need to understand the new requirements and identify the gap between them and current practices.[6] To facilitate management of ESG issues, a governance structure and system must be set up. The board should review whether current tools utilised for reporting are sufficient to comply with reporting requirements.

Smart Technology will be to the Forefront of Development


In light of this, smart technology will help. FUJIFILM Business Innovation Hong Kong has developed iESG, an innovative environmental and social data management system which streamlines the ESG reporting process from a secure cloud-based platform.  iESG is based on the Exchange ESG requirements and can be customised to meet diverse sustainability reporting requirements.

A forward-looking ESG strategy can minimise the impact of ESG issues on financial risks.[7] It is important to prioritise a company’s actions by identifying key ESG issues and associated risks. The availability of ESG data will form a large part in determining whether a sustainability strategy is successful. Data enable year-on-year performance reviews act as a baseline against further target setting to mitigate identified risks and contribute in formulating strategic goals. These form a realistic roadmap in achieving a company’s sustainability vision.


Supporting Sustainable Recovery - Innovative Business Solutions

The pandemic has changed how business creates value and what customers expect. New mindsets, new expectations and new values are being created. E-commerce has become the new trend for business as consumers switch from physical to online purchases and remote working enables more flexibility at work with the aid of technology.[8] The situation is encouraging continued technological build-up. However, systems security should continue to be emphasised as financial crimes now target businesses digital transformation.[9]

To support sustainable recovery in line with the ‘new normal’, FUJIFILM Business Innovation Hong Kong has introduced the Anti-epidemic Remote Business Solution. Through our highly secured technologies and devices, we can help companies cope with the impact on businesses by work-from-home scenarios and changes in consumer behaviour.

A sustainable recovery will be a post-pandemic agenda and one main focus will be building an equitable society by contributing to improvements in social protection and workers’ conditions.[10] The definition of sustainability has broadened towards an “all-inclusive” view. It is, therefore, the time for corporates to consider building up sustainable resilience by leveraging ESG as a risk management tool in order to identify ESG risks and opportunities in time of “business as unusual” in the post-pandemic world.



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[1] “Covid-19 teaches Hong Kong businesses important ESG lessons.” The Asset, June 8th, 2020.
[2] “COVID-19 shows ESG matters more than ever.” JPMorgan Asset Management, May 12th, 2020.
[3] “The Global Risks Report 2020.” World Economic Forum, 2020.
[4] “Enterprise Risk Management: Applying enterprise risk management to environmental, social and governance-related risks.” COSO and WBCSD, October 2018.
[5] “Update No. 128 Amendments to the Main Board Listing Rules.” The Stock Exchange of Hong Kong Limited, December 2019.
[6] “Leadership Role and Accountability in ESG” HKEX, March 2020
[7] “How to Prepare an ESG Report.” HKEX, 2020.
[8] “Coronavirus: Flexible working will be a new normal after virus” BBC,  May 22nd, 2020
[9] “The perfect storm: COVID-19 risk shaping digital transformation.” Refinitiv, Apr 16th, 2020
[10] “Sustainable and Inclusive: Covid-19 Recovery and Reform” UNPRI, July 6th, 2020



About the Author

FXHK-CQS General Manager-Katherine Lau

Katherine Lau
General Manager,
Corporate Quality & Sustainability
FUJIFILM Business Innovation Hong Kong Limited

Overseeing operations and risk management, Ms Lau deploys Total Quality Management through the Japan Quality Award framework, and Sustainability through the realisation of the Fujifilm Group's Sustainable Value Plan 2030 (SVP 2030).

Katherine holds a Master’s Degree in Quality Management, a Bachelor’s Degree in Business Communications, is an advanced IEMA approved Environmental Management System auditor, she is a member of the Sustainability Committee of the Hong Kong Management Association. Between 2013-2015, Katherine was also a member of the advisory group for ESG, Waste Management and Energy of Business Environmental Council.

She has more than 15 years' experience in the quality and sustainability field. With her leadership, FUJIFILM Business Innovation Hong Kong has successfully developed a quality and sustainability-oriented culture and won over 100 prestigious quality and sustainability awards.