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Spelling Out CLP’s Dedication to Reporting

Published 04-10-20

Submitted by CLP Group

CLP colleagues celebrate prizes for the company™s Annual Report and Sustainability Report at the 2019 HKMA Best Annual Reports Awards.

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Effective communication is crucial in today’s complex and fast-changing business world. We need to not only do our jobs well and efficiently, but also inform the public and our many stakeholders so they clearly understand our objectives and progress.

CLP’s Annual Report and Sustainability Report are the channels we use to share our most important developments. The two reports map out the latest actions by CLP, connecting the past with the present and the future as our business continues to grow.

The bilingual reports are painstakingly compiled by colleagues across the Group over the months spanning Christmas, New Year, and the Spring Festival, giving readers insights into the most accurate and relevant information about our operations and our interactions with the communities we serve.

“Our award-winning Annual Reports and Sustainability Reports open a window for our stakeholders through which they can see how we work, and the values driving the continuing growth of CLP,” says Chief Executive Officer Richard Lancaster. “I wish to congratulate and thank all colleagues who work so hard to bring our reports to life.”

Clear financial visibility

CLP’s Annual Report provides readers with detailed information about our business performance in Hong Kong, Mainland China, India, Southeast Asia and Taiwan, as well as Australia. Its content is based on information contributed by different business units and involves multiple rounds of scrutiny coordinated by the Group Public Affairs team.

The multinational nature of CLP’s business means our Group Finance team has to work with colleagues across markets with different reporting standards to reconcile data and present consolidated financial statements in a way that meets Hong Kong requirements.

Geert Peeters, Chief Financial Officer, explains: “Aside from financial information, investors are looking for clarity about our strategy and ESG [environment, social and governance] priorities. In addition, stakeholders are following the business performance and the outlook of our business units, and are increasingly looking for information about our risk appetite and risk governance, and how we address risk management. We provide this information in our Annual Report in a clear and transparent fashion.”

CLP’s innovations in financial reporting such as the Accounting Mini-series are of great value to stakeholders, Geert says. “They contribute to the clarity and transparency of the report, which are key expectations,” he adds.

The importance of good governance

CLP prides itself on a high standard of corporate governance and transparency. The Group Corporate Secretarial team compiles the governance section of the Annual Report to offer readers insights into the company’s decision-making process at the highest levels.

“Our culture is to do the right thing. Compliance is just the baseline. This is a critical ingredient in maintaining the trust of the communities we serve,” says Group General Counsel and Chief Administrative Officer David Simmonds.

Michael Ling, CLP Holdings Deputy Company Secretary, adds, “Our approach to corporate governance supports our culture and values throughout the organisation. Good reporting is something we always strive for.”

Both David and Michael credit CLP’s corporate governance principles to the values and long-term focus of Chairman Sir Michael Kadoorie and his family which is reflected in the family motto: “Adhere and Prosper”.

The origins of CLP’s high standards of reporting can be traced to the company’s creation. China Light & Power produced its first report for shareholders before its inaugural Annual General Meeting in May 1902, a year after the company was founded.

Throughout CLP’s history, the company has always been committed to excellence in reporting and corporate governance, says former Company Secretary April Chan, who was involved in the preparation of each Annual Report from 1989 until her retirement in 2016.

“For CLP, it has never been enough to simply tick the boxes. Our aim was always ongoing improvement, making each edition of the Annual Report better than the one before, exceeding the expectations of stakeholders.”

CLP’s approach to company reporting may be summarised by the five C’s: compliant, complete, clear, creative and communicating the most important information to stakeholders effectively, April says. These traits are key for CLP to meet increasingly rigourous regulatory requirements, as well as growing stakeholder expectations on transparency, risk management, governance and ESG reporting, according to April.

Sustainability matters

Sustainability is increasingly important for us and is built into our strategies and decision-making from the highest levels to our day-to-day operations.

Since 2011, CLP’s annual report has adopted an approach in line with the International Integrated Reporting Council’s guidelines to discuss the company’s strategies around six capitals: financial, manufactured, intellectual, human, social and relationship, and natural.

CLP also publishes a separate Sustainability Report that details our efforts to stay on top of opportunities and challenges that are essential to the long-term viability of our business at a time of rapid environmental and technological changes.

“Sustainability Reports are a key tool to help stakeholders build a deeper understanding of the most critical issues we need to manage, given the changes in our market context,” says Hendrik Rosenthal, Director - Group Sustainability.

Hendrik and his team conducted a materiality assessment in 2018 to identify the most important ESG issues facing CLP. The result was the basis of the redesign of the 2018 Sustainability Report, which focused on the five most material topics: growing our business with purpose; responding to climate change; building an agile, inclusive and sustainable workforce; harnessing the power of technology; and reinforcing cyber resilience and data protection.

“CLP’s Annual Reports and Sustainability Reports continue to raise the bar for company reporting,” says Patrick Wu, Chairman of the Panel of Adjudicators for the Best Annual Report Awards 2019, which was organised by the Hong Kong Management Association (HKMA).

Mr Wu and his panel presented CLP with the Best Report Award for our 2018 Annual Report, while our 2018 Sustainability Report was winner of the general category of the HKMA’s Sustainability Reporting Award. In addition, CLP also won the Platinum Award and the Sustainability and Social Responsibility Award in the Hang Seng Index category of the Hong Kong Institute of Certified Accountants’ Best Corporate Governance Award 2019. Between them, the two reports picked up more than 80 awards internationally.

Keeping pace with social media

As digital media becomes the preferred information channel for an increasing number of stakeholders, CLP is making online version of our reports more user-friendly and interactive. “In today’s world, you will fall behind if you don’t change. The information we provide must be concise, readable, and available in many different formats,” Chief Corporate Development Officer Quince Chong says.

Vivian Au, Deputy Director – Public Affairs (Group), further explains it is essential to use richer and more engaging graphic illustration for both the print version and the online Snapshot of our Annual Report to draw readers’ attention and make the communication more impactful.

“If a picture is worth a thousand words, a good infographic is worth at least ten thousand words as the latter can be much more effective in helping readers visualise key ideas and concepts,” she says.

Running the “Chinese Marathon”

It’s known as the Chinese Marathon – a pivotal and intense part of the CLP’s Annual Report production process during which a Chinese translation of the report is scrutinised line by line against the original English version.

After annual results are announced, a dedicated team of around 20 people, including 10 “Chinese language experts”, will start the Marathon and gather in a room in CLP’s headquarters for seven straight days, often carrying stacks of paper and pens with energy snacks to keep them going. They come from different departments and only meet once a year, but when they do meet, they are kept busy from dawn until long after dusk.

Reviewing and refining the report usually lasts from 10 am until midnight, earning it the Chinese Marathon nickname while participants are referred to as runners. The process began in the early 2000s to ensure synchronisation between the English and Chinese versions and consistency throughout the reports.

“Our Annual Report is drafted in English. However, 80% of our shareholders read Chinese, and quite a lot of them are based in Hong Kong. That is why we want to make sure the Chinese version really reads well,” says Assistant Company Secretary Lyon Leung, who has been a runner 15 times.

As runners come from different departments, the Chinese Marathon is a novel opportunity to bring together people with a variety of expertise for a holistic review of the Annual Report from alternative perspectives.

When Lyon joined CLP in 2003, she admits being taken aback by the amount of time and efforts colleagues put into the Chinese Marathon, but she soon saw how the hard work paid off. “Shareholders have told me they appreciate the high standard of our Chinese Annual Report, which they say they cannot find in other company reports,” Lyon says.

Explaining the numbers game

There is a three-page section in CLP’s Annual Report that looks like a chapter from an accounting textbook. This unique feature, known as the Accounting Mini-series, explains topical accounting concepts in financial statements to readers who may not have a background in accounting.

“Some accounting students and candidates sitting for accounting professional exams actually told me that they were happy to find real-life cases explaining those concepts, which were hard to find in their study materials,” says Doris Chan, Accounting Manager – Technical and Development, who drafts the Accounting Mini-series.

The purpose of this section is more than just educational. Every year, a special topic is selected according to the direction of the company’s development, and the aim is to help the financial community understand the rationale behind the decisions that have been taken, Doris explains.

The 2014 Accounting Mini-series, for instance, was published after CLP Power issued an aggregate of US$750 million perpetual capital securities. Titled “Liability or Equity”, that year’s series explained why the perpetual capital securities should be classified as equity rather than debt and why some investors might call them perpetual bonds.

To learn more about CLP’s connection with society, please check out the latest issue of CLP.CONNECT.

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CLP Group

CLP Group

CLP Holdings Limited, a company listed on the Hong Kong Stock Exchange, is one of the largest investor-owned power businesses in Asia Pacific. It operates a vertically-integrated electricity supply business providing a highly-reliable supply of electricity to 80% of Hong Kong’s population and holds investments in the energy sector in Mainland China, India, Southeast Asia, Taiwan and Australia.

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