Case study: How Hang Seng creates economic value for its stakeholders
Hang Seng Bank Limited is a Hong Kong-based banking and financial services company and one of Hong Kong’s leading public companies in terms of market capitalisation, offering a wide array of financial services including online banking, savings, credit cards, loans, mortgages, and insurance. Hang Seng directly drives Hong Kong’s economy by supporting SMEs and local businesses, paying tax and being one of the region’s largest private sector employers, creating sustainable value for its employees, the government and other stakeholders.
This case study is based on the ESG Report 2020 by Hang Seng, prepared in accordance with the GRI Standards and GRI G4 Financial Services Sector Disclosures, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Hang Seng strives to generate and distribute value for all its stakeholders Tweet This!, contributing to the positive development of its community through its investment in the environment, people and society. In order to create economic value for its stakeholders Hang Seng took action to:
- create economic value for employees
- create economic value for providers of capital
- create economic value for the government
- support communities
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With this case study you will see:
- Which are the most important impacts (material issues) Hang Seng has identified;
- How Hang Seng proceeded with stakeholder engagement, and
- What actions were taken by Hang Seng to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2020 ESG Report Hang Seng identified a range of material issues, such as customer privacy, anti-corruption, financial inclusion, diversity and equal opportunities. Among these, creating economic value for its stakeholders stands out as a key material issue for Hang Seng.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Hang Seng engages with:
| Stakeholder Group | Method of engagement |
| Customers | · Daily operations and interactions · Financial market updates · Relationship manager visits and meetings · Seminars and conferences · Loyalty events · Satisfaction surveys · Online community |
| Shareholders
| · Annual general meeting · Corporate communications · Interim and annual reports · Results announcements |
| Employees
| · Surveys · Focus groups · Face-to-face interviews · Training and workshops · Performance and development discussions · Intranet · Staff mobile app · Business briefings · Town hall meetings hosted by the Chief Executive and business/function heads · Regular exchange meetings hosted by the Chief Executive and managers · Morning broadcasts · Symposiums · Forums hosted by businesses/functions to profile their work and expose staff to internal opportunities · Employee representation on staff retirement committee · Volunteer activities · Community investment programmes and communications |
| Business analysts and investors
| · Results announcements · Shareholder announcements and circulars · Annual general meeting · Investor relations meetings |
| Business partners
| · Visits and meetings · Seminars and events · Reports |
| Regulators
| · Meetings · Compliance reports · On-site/Off-site inspections · Ad hoc enquiries · Circulars and guidelines |
| Media
| · Briefings · Press materials · Senior leaders interviews · Results announcements · Informal meetings |
| Non-governmental organisations (NGOs)
| · Volunteer activities · Community investment programmes and communications · Visits and meetings |
| Financial sector peers | · Hong Kong Association of Banks meetings and events |
| Professional bodies (including rating agencies)
| · Visits and meetings · Memberships · External audits · Index assessments and questionnaires |
| Suppliers
| · Risk management processes · Due diligence processes · Performance reviews · Visits and meetings |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Hang Seng engaged with its stakeholders through an online survey and one-on-one interviews. A total of 358 stakeholders participated in the online survey.
What actions were taken by Hang Seng to create economic value for its stakeholders?
In its ESG Report 2020 Hang Seng reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- Hang Seng’s staff are the engine of its success and the primary bridge between its business and the local community. Hang Seng rewards them with competitive compensation and benefits packages, and engages them with supportive and flexible working conditions. In 2020, Hang Seng paid HK$6,102 million for employee compensation and benefits.
- Creating economic value for providers of capital
- In 2020, Hang Seng paid HK$11,214 million to providers of capital.
- Creating economic value for the government
- In 2020, Hang Seng paid HK$2,287 million to the government in Hong Kong (and HK$92 million to the government outside Hong Kong).
- Supporting communities
- Hang Seng seeks to contribute to a prosperous and sustainable future for the communities in which it operates. Accordingly, during 2020, Hang Seng invested more than HK$30 million in its community investment programmes (including charitable donations and community sponsorships), bringing the total amount in the past 10 years to HK$282 million.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
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References:
This case study is based on published information by Hang Seng, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://www.hangseng.com/cms/fin4/esg-report-2020/en/full-report.pdf
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