ESG investing is a growing force in global finance and a topic that businesses in Hong Kong can no longer avoid. As of 2021, the Hang Seng Index has required all listed companies in Hong Kong to publish annual sustainability reports on their ESG performance alongside mandatory periodic financial reports. Businesses that want to remain relevant and competitive in an increasingly environmentally conscious world must improve their energy efficiency and energy saving. Luckily, plenty of new technology is now available to help local enterprises smooth out this transition. Read on to find out what ESG investing is, and how adapting ESG technology can optimise your business's energy efficiency.
What is ESG investing? Why does it matter?
ESG investing, or Environmental, Social and Governance investing, is an investment approach that considers environmental, social and governance (ESG) criteria to help evaluate companies. ESG investing is based on the idea that companies with good ESG practices have better long-term performance potential. ESG investing has become increasingly popular in recent years due to its focus on sustainability and its ability to be used as a risk management tool.
As climate change continues to deepen its effect on the global economy, ESG investing has become even more important. ESG criteria can help investors identify companies that are taking the initiative to reduce their carbon footprint and improve energy efficiency and assess their investments’ environmental impact while also potentially improving their financial returns. Implementing technology solutions can be an effective way of achieving greater energy efficiency while simultaneously meeting ESG criteria.
Sustainable Investing is here to stay
Climate issues are not going away any time soon, and investors are fully aware of that. According to Robeco's 2022 Global Climate Survey, 84% of investors now believe that climate change will be a significant factor or at the centre of their investment policies within the next two years. Only 34% of investors felt the same way back in 2020.
In the year 2021 alone, over $500 billion were injected into ESG-integrated funds on the market. The global shift towards sustainable investing is both rapid and persuasive and it is evident that the demand is driven from the bottom up. Both individual investors and big institutions are dedicating an increasing proportion of their portfolios towards ESG investing. As governments and investors around the world continue to favour and reward corporates that meet high ESG standards, achieving positive ESG governance will be crucial for a company's success.
Unprecedented energy efficiency with ESG Technology
Investors and consumers simply will not wait for regulations to catch up. They want to see a company that is driving ESG results immediately. One of the fastest ways for any business, including older traditional corporates, to shape up for an age of sustainable investing and enhance their energy efficiency is through adapting ESG technology and digital solutions.
Recent developments in green technology are helping businesses achieve a higher level of energy efficiency than ever. HKT, for example, was able to save approximately 25 million kWh of electricity in 2022 through the implementation of energy management solutions like quantum optimisation devices and AI building energy controls in several machine buildings. It is estimated that these technologies can help reduce these buildings’ energy consumption by 10 to 20% in the coming years.
In addition to improving energy efficiency, digital transformation can also make record-keeping and data analysis much easier. Digital transformation can help businesses improve ESG reporting and track their progress, making it much easier for corporate boards to achieve good ESG governance and for investors and consumers to see concrete and quantifiable results.
Highlight 1:Renewable Energy
The transition to green energy sources is a critical element of ESG and it is essential for businesses to move away from traditional sources of energy like fossil fuels to meet ESG criteria. In addition to helping reduce emissions, the use of renewable energy also helps companies save on their electricity bills in the long run. This can provide businesses with a competitive edge by allowing them to reinvest those savings into their operations or pass them back to their customers.
A corporate's transition to renewable energy can be done through technology such as solar and wind power, which are both clean sources of electricity with relatively low long-term costs. Solar PV solutions, in particular, are quickly gaining traction from corporates in Hong Kong. Aside from being a very cost-effective renewable energy source, solar PV is also one of the most accessible green technologies for corporates to implement, as it does not require behaviour changes within the organisation or industry cooperation like other ESG practices. Solar PV solutions are also not limited to one-off engineering services. They deliver solar harvest simulations and can be used to apply for Feed-in Tariff (FiT) schemes and the associated safety certification.
By integrating technology solutions and making the switch to renewable energy sources, businesses can make ESG investing a part of their core operations and gain a competitive advantage in the ESG investing landscape.
Highlight 2:Energy Efficiency and Optimisation
In addition to using renewable energy, older businesses can also improve ESG governance by upgrading their old technology and optimising the energy efficiency of their existing assets. ESG technology has made this process easier and more cost-effective than ever before. ESG-focused products, such as ESG analytics tools, can help businesses make sense of their energy use data and identify the best areas for optimisation. ESG analytics software can also quickly identify potential operational inefficiencies and suggest ways to improve them.
Furthermore, advanced ESG technologies like artificial intelligence (AI) and machine learning (ML) are being used to develop predictive models that can anticipate energy consumption patterns and help companies optimise their resources accordingly. Technology like AI Building Energy Control enables businesses to reduce waste and improve their overall ESG performance without having to invest a large amount of capital into expensive new equipment.
Highlight 3: Quantum Energy Optimiser
One advanced ESG technology that businesses in Hong Kong are uniquely positioned to take advantage of is HKT's patented Quantum Optimisation Technology (QOT). Through improving the irregular conduction of electrons on power networks to reduce electron collisions and friction during power distribution, QOT can significantly mitigate energy loss due to heat dissipation and improve energy transfer efficiency for various types of facilities. The best thing about this new technology is that it can be implemented in all residential and commercial buildings and there is zero downtime. Users can expect to reduce their annual power consumption by as much as 10%.
New technology often bears the reputation of being inaccessible, but QOT is easily applicable for any corporates and enterprises that want to improve their ESG governance and reduce energy costs. Its set up usually requires an expert to perform onsite assessments and to define an energy baseline before designing the power optimisation solution for deployment. As a key component of HKT's power optimisation solution, QOT has already helped various shopping malls, commercial complexes, and construction sites in Hong Kong to achieve their decarbonising objectives.
Highlight 4: Energy Management and PropTech
ESG-focused companies are now developing ESG PropTech, which is an advanced technology that provides an overview of energy efficiency performance and enables users to manage energy consumption in real time. Energy management solutions and PropTech often incorporate tools such as IoT sensors and AI Building Energy Controls to monitor electricity usage and detect anomalies instantly, ensuring businesses stay on top of their ESG goals.
ESG PropTech also offers detailed data analytics capabilities so that users can easily identify areas for improvement. By incorporating ESG PropTech into existing ESG governance practices, businesses can better understand their current energy use and make improvements where necessary with pinpoint precision.
Business Energy Saving with HKT
ESG investing is no longer just a trend for the future; it is imperative for Hong Kong-based companies to stay ahead of their competition. Technology solutions like QOT, energy management and PropTech, and renewable energy are all effective tools for enterprises in Hong Kong that are looking to improve their ESG performance and boost financial returns and investment. By implementing ESG technology and making smart investments, businesses can make ESG investing sustainable, profitable and viable long-term.
As a preeminent operator and community partner in Hong Kong, HKT is committed to providing comprehensive green tech options for businesses of all sizes. These offerings include Energy Management (Renewable Energy Solutions), PropTech (Smart Lighting) and the state-of-the-art Power Optimisation Solutions--all enabling companies to incorporate various digital technologies into their new constructions or retrofitting projects. We help companies adapt different green technologies in new buildings or building renovation plans to optimise energy efficiency and accelerate the development of ESG and digital transformation. Get in touch with us today and learn how HKT can help tailor your perfect ESG solution.