Letter from Hong Kong

By Fergus Herries

While Hong Kong has experienced a spike in Covid-19 cases in recent weeks, it pales into comparison with the escalating situation in Europe and the United States. However, with one eye on Chinese New Year, the government is taking no chances and has kept in place restrictions on bars, restaurants and leisure facilities. Public gatherings also remain limited to no more than two people. As a result of these measures, the Newgate team held its Christmas party in the office, with some team members dialling in by Zoom.  Despite this, much merriment was had!

As we move into 2021, communications is set to take centre stage as a solution to support some of the key business challenges of our time, with employee satisfaction, M&A activity, IPOs, restructurings, shareholder activism, crisis management, fundraisings and change management set to dominate headlines. 

This year could also be a watershed moment for stakeholder capitalism in Asia. A recent McKinsey & Company article observed that Covid-19 has brought the interconnectedness of business and society into sharp relief: “Stakeholder capitalism isn’t about being the most woke or about fending off pesky activists. It’s about building the trust — call it the social capital.”  

Financial institutions and corporates in Asia, which have arguably lagged behind their western counterparts in embedding purpose and ESG in their strategies, are likely to face greater scrutiny than ever before.  Asian corporates are starting to realise that reconfiguring their businesses and approaches to align with local and global sustainability agendas is not only a means to driving growth and creating value but it is essential to their long-term survival.

From a communications perspective, stakeholders will be merciless in calling out those who only pay lip service to sustainability and stop short of delivering tangible change. Initiatives such as the recent filing of a climate change resolution by fifteen institutional investors calling on HSBC to publish targets for reducing its exposure to coal in line with the Paris climate goals, is likely to be replicated in Asia. Newgate is advocating inclusive, authentic and pre-emptive communications at every stage of a corporate’s journey toward change. 

While developed countries in the Asia Pacific region have, on the whole, handled the virus and economic fallout well, the recovery is likely to be spotty.  

As communicators, we are working with clients who have successfully pivoted toward growth and we are developing strategies where communications can support firms of all sizes as they navigate the headwinds that may continue well into this new year.