The issue of corporate social and environmental responsibility is linked to the principles of sustainable development. In recent years, we have taken a number of steps aimed at raising awareness of these principles, both within the Administration and in the broader community.

I welcome this opportunity to review progress in this area and have heard wonderful views on how we might further develop a culture of corporate sustainability and responsibility. "Corporate sustainability and responsibility" is commonly referred to as "CSR".

Although to many people the concept of sustainable development might appear to be something very abstract and idealistic, in essence it boils down quite simply to safeguarding the well being of this and future generations.

In other words, while looking to improve the quality of our lives, we should also look to ensure that we make provision for our children and grandchildren to enjoy an equal, if not higher, standard of living.

Partnership with business, civil society

In his 1999 Policy Address, the Chief Executive made it clear that in order to achieve sustainable development for Hong Kong, we would need: "Every citizen, every business, every government department and bureau... to start working in partnership."

It is widely accepted that sustainable development cannot be achieved by the Government or by civil society or by the business sector working alone. I agree fully that we need to foster partnerships among the business sector, public organisations as well as voluntary agencies in order to bring about a real change in mindset that will enhance our city's sustainability.

In 2001, we established the Sustainable Development Unit under my own office, with the aim of putting into practice the policies for sustainability set out in the 1999 Policy Address. Our initial focus was on building awareness within the Administration and training colleagues in departments and bureaux to take account of sustainability considerations when putting forward new programmes and policies.

Since 2002, we have extended the scope and initiated a number of programmes and activities aimed at promoting wider public education and establishing a dialogue with business and community organisations. Examples of these initiatives include:

* the organisation of an interactive roving exhibition in the territory on sustainable development;

* an international symposium and workshop on "Sustainability and the City"; and

* a school outreach programme involving secondary schools throughout Hong Kong.

All of our programmes contain one common yet unique feature, that is, partnership with the community. We have collaborated with organisations such as the Business Environment Council, the Hong Kong Council of Social Services, the Business Coalition on the Environment and other non-governmental organisations in organising these activities.

Council for Sustainable Development offers forum

The Chief Executive highlighted the importance of this partnership-based approach by appointing the Council for Sustainable Development in March 2003. The Council provides a forum for the exchange of views on issues related to Hong Kong's long-term sustainability. Its membership includes people with experience and expertise in the environmental, social and business sectors as well as the directors of relevant government bureaux.

Although it has been in existence for just one year, the Council has already tendered valuable advice on two key initiatives, both of which are crucial for enhancing the building of partnerships within the community and broadening awareness of the principles of sustainable development.

Open, participatory process invites public's views

The first initiative is building an open and participatory process aimed at engaging the wider community in preparing together a sustainable development strategy for Hong Kong. Through this process we hope to encourage a wide-ranging dialogue on key issues that will have an impact on the sustainability of our city.

We have already begun preparatory work, and in the coming months we will seek to engage the public in expressing their aspirations for specific issues including Renewable Energy, Solid Waste Management and Sustainable Urban Living Environments.

The second initiative is to make optimal use of the Sustainable Development Fund, launched in September last year, to support community projects that are put forward by organisations in the business, schools and other non-government sectors aimed at promoting the awareness and implementation of sustainable practices in Hong Kong.

Initially, we plan to make about $10 million available annually for such projects, the first of which will be getting underway within the next few months.

Corporate sustainability, responsibility

Although these initiatives will involve engaging the business sector, we accept that they do not specifically target raising levels of corporate sustainability and responsibility. To begin with, we are aware of the growing international trend towards sustainability corporate reporting and the benefits that this can bring both to individual companies and the wider communities. We also recognise the responsibility that governments generally have to set an example for good "corporate citizenship".

In Hong Kong, the private sector is always quick to react to new trends likely to have a positive impact on the business environment. In this regard, the trend towards creating business models and reporting practices that adopt the principles of sustainable development is no exception.

Leading institutions establish sustainability frameworks

Some of our leading corporate institutions have already become involved in the establishment of frameworks for sustainable practices and reporting, and in doing so they are working hand-in-hand with civil society groups. Relatively new organisations, such as the Hong Kong branch of the worldwide Global Reporting Initiative, the Association for Sustainable and Responsible Investment in Asia, and Community Business are now active in raising corporate awareness of the importance of addressing social and environmental issues in ensuring long-term business sustainability.

Some of our well established institutions are also taking a lead in this area. For example, the Association of Chartered Certified Accountants, in initiating an award scheme for sustainability reporting, has recently published an "Introduction to Sustainability Reporting for Organisations in Hong Kong".

The Business Environment Council will shortly launch its Hong Kong Business Guide to Sustainable Development. I have personally endorsed both these publications, which I see as a valuable, corporate-led contribution to creating a more sustainable business environment in Hong Kong.

And I do believe that these private sector-led initiatives will, over time, achieve a CSR index appropriate for Hong Kong, as well as corporate compliance reporting.

Administration committed to responsible practices

I mentioned just now the importance of governments taking concrete action in this area, and I would like to outline here a few examples that demonstrate this Administration's commitment to promoting socially and environmentally responsible practices in our own work.

First on the environment side, recognising that the private sector has an important role to play in this area, the Environmental Campaign Committee organises the annual Hong Kong Eco-Business Awards to promote environmentally friendly practices among companies.

In addition, the Environmental Protection Department has developed partnership programmes with four trades, namely: the construction industry, vehicle repair workshops, property management companies and restaurants. These programmes aim at increasing the environmental awareness of people in these businesses and encouraging them to adopt effective environmental protection measures that go above the legal requirements.

Volunteering actively encouraged

With regard to social responsibility, the Social Welfare Department actively promotes corporate volunteer activities through the Steering Committee on Promotion of Volunteer Service. The department is subventing a Caring Company Scheme run by the Hong Kong Council of Social Service. The scheme is to cultivate corporate citizenship and nurture strategic partnerships between businesses and the social welfare sector.

Last year, about 500 companies were recognised under the scheme for their contributions in areas such as: employee volunteering, employment of vulnerable social groups, mentoring of social service organisations and providing support networks for employees' families.

Furthermore, under the Health, Welfare & Food Bureau, the Community Investment and Inclusion Fund promotes joint efforts between community groups, corporate bodies, professional groups and the Government to work towards building a strong, caring and harmonious community.

Gov't, business, NGOs encouraged to work together

The Chief Executive announced in his Policy Address this year that we would further enhance this tripartite partnership among the Government, business sector and third sector in consultation with the Social Welfare Advisory Committee and the Community Investment and Inclusion Fund Committee.

Together with the Committee for the Promotion of Civic Education, the Home Affairs Bureau will start promoting the concept of "corporate citizenship" this year, having regard to the impact of good corporate practices on the behaviour and values of employers, employees, consumers and members of the community generally.

Furthermore, just last week in this Council, the Financial Secretary proposed in the 2004-05 Budget to earmark an additional $200 million on a one-off basis to promote the development of a tripartite social partnership comprising the Administration, the business community and the welfare sector, and to encourage corporations to take part in helping the disadvantaged.

Community to determine how to best use funds

We will consult the community on how best to use these funds. For instance, we will consider whether to use a matching grant or other modality to incentivise corporate participation and to encourage the business sector to take up a share of social responsibility.

As regards the Administration's own corporate governance for sustainability, for over two years now, we have had in place a system for assessing and ensuring the sustainability of our major policies and initiatives that are put to the Executive Council or the Policy Committee.

In addition, each department has a "green manager" in charge of promoting environmental friendly practices. Furthermore, since 2000, all bureaux and departments have been required to report annually on their environmental performance, and we have also developed procurement guidelines that promote "green purchasing" to prevent waste and promote recycling and energy efficiency.

Environmental responsibility good for image - and for business

An important aspect of the promotion of corporate sustainability and responsibility that is key to the continued growth of environmental and social awareness in the business sector is - if I may borrow a phrase from my colleague, the Financial Secretary - the "market leads and Government facilitates".

We will continue to support corporate social and environmental awareness through partnership-based schemes. We will also explore further ways of ensuring that our own governance is consistent with the principles of sustainable development. However, it is not our place to dictate a path for business to take in adopting sustainable and responsible practices.

As many in the corporate sector are quickly becoming aware, taking a socially and environmentally responsible approach is not only good for the image of the company and the morale of its employees, it is also a key factor in ensuring a vibrant and sustainable business development.