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Skin-in-the-Game of ESG

What’s the best approach companies can embrace to improve sustainability and ESG? While there is no easy quick fix answer, at HKBN we believe the most effective path starts with people and motivation. As a company, there’s an interesting analogy we often use which goes like this: the best way to safely build a bridge is to have the builders and their families live underneath it.

According to some estimates, out of all listed companies in the Asia Pacific region, about 300, or less than 1% have a policy on ESG-linked executive compensation – and HKBN is now a part of this tiny group.

But what makes our approach fascinating is that, instead of only rewarding executives with bonuses when ESG-related KPIs have been met (a standard used in most ESG-stipulated performance contracts), some members of our senior executive team have agreed to commit a portion of their salaries towards our FY24 ESG performance. It’s what we call skin-in-the-game… with a pain/GAIN twist.

What that means is, eyeing a FY24 target to reduce HKBN’s overall electricity consumption by 14% (relative to a FY22 baseline), these senior executives are extra motivated to guide our company towards much greater energy efficiency. Because if we fall short of the target, each pain/GAIN executive will lose a chunk of his/her salary. On the other hand, once the KPI is met, each participant will gain an additional financial bonus – a win for the executive, a win for the environment and a win for HKBN, as we improve our ESG and save millions in energy expenditures at the same time!

Leading through purpose, HKBN tops Hong Kong’s telco industry in ESG*
*Based on the Hang Seng Corporate Sustainability Benchmark Index and MSCI’s ESG Ratings
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