“Environmental”, “Social” and “Governance” — “ESG” has become a powerful concept and strategy for modern-day enterprises. It was first raised in the United Nations Global Compact in 2005 and, at its core, it is a corporate governance and investment framework. 

What this means in practice is that enterprises that adopt ESG principles are committed to take measures to improve the environmental, social and governance aspects of their businesses alongside their financial parameters like profit, expenses and growth, etc. Likewise, ESG investors examine the environmental, social and governance performance of an enterprise in addition to its financial performance when deciding whether or not, and how, to invest in the enterprise.

It is now the global trend for businesses to integrate ESG concepts into their day-to-day management and operations, and publish reports on ESG implementation.

The United Nations 2030 Agenda for Sustainable Development outlines 17 sustainable development goals (SDGs) that are to be achieved for a more-sustainable global future. These SDGs, including climate change, environmental impact, etc, represent the current challenges faced worldwide. In fact, over half of these SDGs relate to sustainable management of resources and energy and combating climate change. In Hong Kong, the government announced Hong Kong’s Climate Action Plan 2050 last year, setting out the vision of “zero-carbon emission; livable city; sustainable development”, and outlined the major decarbonization strategies and measures, including renewable green energy for electricity generation, energy-saving and green buildings, green transport, waste reduction for combating climate change, and achieving carbon neutrality before 2050.

Many studies show that buildings and construction account for 40 percent of global carbon emissions, and buildings account for almost 90 percent of electricity consumption in Hong Kong. According to data published by the Electrical and Mechanical Services Department, the breakdown of energy consumption of a typical office building is 49 percent from heating, ventilation and air conditioning (HVAC); 20 percent from lighting; 10 percent from office-equipment operation; and 21 percent from other sources. The level of indoor air pollutants is five times higher than the outdoor level. Therefore, the promotion of green buildings, improving energy efficiency, reduction of energy consumption and waste, and indoor ventilation and air quality improvement are some of the action items to be attended to in order to drive sustainability forward. It is very important for property managers to understand how to formulate the right ESG strategy while ensuring the standards of property management services will not unduly be affected.

Property managers are, indeed, the eyes and ears of buildings. They are responsible for fixing things that may go wrong — they know when spaces are uncomfortable, when water doesn’t flow or flows too much, when lights are out and movement through buildings is obstructed. They also see which facilities are heavily used and need more frequent servicing, which areas are less occupied and whether the lifts have regular inspections, and so on. Therefore, property managers will come into play naturally when an enterprise evaluates its indicators for sustainable development. As they have access to the key data, property managers are in a unique position to drive sustainability development by enhancing transparency and ensuring facility users are well aware of the positive effect or negative impact arising from their own conduct and behavior.

We witnessed in the past two years or so, in the midst of a worldwide pandemic, sustainability is no longer a “long-term goal”. The sense of urgency has increased like never before. Sustainability has now become an urgent and immediate priority. With the emergence of new business models, technological innovation, sharpened public awareness of sustainability, health and well-being considerations, the global building technology and property management industry have been going through a fundamental transformation in the past few years. Coupled with COVID-19, all of such have revolutionized the vision for property management. The pandemic has led to new solutions and more widely adopted innovations at a fast pace.

For example, smart-building design for cloud-based analytics and energy consumption monitoring; and remote monitoring and management of building facilities such as HVAC and refrigeration, are now more widely used. Also, with the increase in health awareness, there is now much more emphasis on smart and effective monitoring of indoor air quality. All in all, with the widespread increase in demand, technology and integrated solutions are widely deployed in property management and facility maintenance management, all with the focus of providing a better user experience to serve the customers’ and wider community needs.

In Hong Kong, the Property Management Services Authority has endeavored to enhance the status and professional standards of the industry. I strongly believe that the implementation of the property management licensing regime is the key to enhance the long-term value of property management companies and promote the sustainable development of the industry and good governance.

The licensing regime sets out objective, standardized professional criteria and qualifications for the industry that are readily known to investors and the community at large. At the same time, it provides a clear professional development path for property management practitioners. It will attract talents and promote productive employment.

The licensing regime also seeks to promote and uphold the governance of the property management industry. Through the issuance of various codes of conduct and best-practice guides, it will assist the industry to integrate ESG concepts into its operation.

Whenever there is risk, there is always opportunity ahead. As a property manager, by embracing innovative technologies with a caring heart for people and our environment, I am convinced that we are well-placed and equipped to face the challenges ahead, and to strive to promote ESG strategies and sustainability, to enhance the professionalism and quality of the industry.

The author is a member of the Legislative Council representing the Architectural, Surveying, Planning and Landscape Functional Constituency.

The views do not necessarily reflect those of China Daily.