At China Light & Power, toxicologist Jeanne Ng wrestles the demands of generating greener options and ensuring certainty of supply.
Jeanne Ng always wanted to make a difference.
A native of Hong Kong, she spent much of her youth in Canada, where she earned a degree in toxicology and became fascinated by the drugs and poisons that killed people.
While initially she studied the harmful effects of drugs and food, she ended up writing her undergraduate thesis on asbestos. Mesothelioma, a rare form of cancer most commonly caused by exposure to asbestos, had become a big deal in the construction community.
Since asbestos is a mineral, people might just as easily die after being exposed to its fibres when they have leached into the soil. Equally, they might be lethally poisoned through exposure to pollution from a nearby industrial site. This is what sparked Ng’s interest in the environment.
When she returned to Hong Kong in 1992, Ng had a genuine sense of vocation. A calling to “save the people; save the planet” prompted her to enrol in a postgraduate program on environmental management at The University of Hong Kong. Hers was a trailblazing vision of the potential benefits environmentalism could deliver in the business world.
Way back then, the environment was not the hot-button topic it is today. Media coverage was scant and there was little public awareness of the issue. Ng found the idea of being at the vanguard of what would be the next big thing in Asia intriguing.
“I like to do things before others do them and I felt new legislation would ultimately move the environment to the top of the corporate agenda and [it would become] something we’d all have to deal with,” she recalls.
Ng worked as a consultant for almost 10 years, becoming one of very few people in Hong Kong with hardcore experience with air pollution and greenhouse gas emissions, which were emerging as two of the energy industry’s biggest threats. Over time she grew tired of dispensing advice.
“I wanted to be part of the implementation, part of the change,” she says. So in 2003, Ng took the job as head of Group Environmental Affairs for China Light & Power (CLP), a long-established energy provider with operations in Hong Kong, Mainland China, India and South-East Asia.
Ng was drawn in no small part because the power sector was a 40 per cent contributor to the world’s energy-related carbon dioxide (CO2) emissions. In addition, polluted air in Beijing and Shanghai has been a subject of international concern for more than a decade.
But these are just two of hundreds of cities, largely in Asia, where poisonous air is now the fastest growing cause of death. According to The Lancet medical journal, air pollution is now one of the top 10 killer diseases in the world. It says there are up to 1.2 million deaths a year in east Asia and China and 712,000 in south Asia, including India.
"Even today I don’t think there are many companies headquartered in Hong Kong where the environmental person regularly reports to the CEO."
Ng picked the right employer for her determination to make a difference. At the time she was hired, CLP had already recognised the advancing pressures of climate change and, in 2004, voluntarily set a renewable energy target of 5 per cent. Under her guidance, in 2007 the company issued its Climate Vision 2050, which set a more ambitious target of reducing the CO2 intensity of its generating portfolio by about 75 per cent by the middle of this century.
An effervescent personality undoubtedly has played a big part in Ng’s career success.
Colleagues describe her as a force of nature. Her boss wanted her to make some real difference on the ground, working closely with every company department. That meant cutting across the vertical silos within the company, which Ng says can be very hard work, since employees fear being burdened with two bosses and a messy work life with divergent agendas.
For a scientist, there was also the challenge of how to grab and hold the attention of those working in finance, sales and operations.
One critical factor swayed Ng’s decision to join CLP, she recalls. She would report directly to the group chief executive who wanted to see the environmental story driven hard.
“If I didn’t have the CEO reporting line or the support of the C-suite – because of the chief executive’s trust in me – my life would have been very difficult,” she says.
That the chief executive agreed to promote and deal directly with a “tree hugger” was an important sign to her that the company was taking air pollution seriously.
“Even today I don’t think there are many companies headquartered in Hong Kong where the environmental person regularly reports to the CEO.”
Nonetheless, she admits that it has taken a few years to really gel with the finance team. An important trigger was the production of CLP’s first integrated annual report containing non-financial data in 2012. The notion of putting non-finance information into a compliance document really changed the way finance treated environmental data.
Ng says: “[Finance] wanted to ensure the numbers reflected the robustness and accuracy required for a compliance document.”
Renewable energy investment always generates buzz. But to Ng, management theories are invented and then reinvented, and sustainability is really just sensible long-term continuity planning. One of her department’s tasks is to look at potential investments and carry out a carbon risk assessment to determine what that new project would do to CLP’s carbon intensity: will it jeopardise or meet carbon targets?
A great challenge that CLP faces is growing its business, meeting Asia’s soaring energy demands while cutting its carbon footprint. Ng’s job is to convince business development colleagues that their pitch for funds will be more favourably received by the investment committee if they do whatever they can to help meet the company’s targets.
“So we act a little like a monitor. If they want to do another coal project, it will blow our targets by so many years; if we invest in just a few coal projects, we can invest in more nuclear gas-fired or renewable energy.”
The more renewables are pumped into the electricity grid, the more volatile supply becomes. So traditional power plants still need to be built. CLP has grown its renewables business in countries whose policies have helped support and make renewable development commercially viable. China and India, she says, are the ones that have most figured it out – they encourage investment in renewables. CLP is now one of the biggest investors in foreign wind farm energy in those two countries.
“It’s more than just political commitment. We are starting to see a natural push when communities begin to see their lives and health is at stake.”
Part of Ng’s role is to look at emerging risks through new anti-pollution regulations imposed on emitters in the various countries within CLP’s portfolio, which includes Australia. CLP owns EnergyAustralia.
Managing non-financial risk – such as new country policies – has always played an integral part in the power generation business, chiefly because a power company’s licence to operate depends on convincing local communities it is a responsible electricity provider. According to Ng, the need for sustainability means easy efficiency gains are no longer available for the power industry. Management has to make some hard choices about investing in strategies where short-term returns are lower.
“It’s vital for long-term investors to understand the importance of being able to monitor and manage emerging environmental risks which affect the company’s profitability and ultimate long-term survival,” Ng says. She is heartened by the fact that more institutional investors are starting to demand such information with a view to favouring power companies that manage carbon risk well.
“That said, as long as businesses are still pushed to provide quarterly earnings reports, companies will be more inclined to neglect some of the non-financial risks which tend to be bubbling underneath.”
Stakeholder dialogue is critical. Markets differ. Ng’s department is very influenced by what local functions and strengths CLP has on the ground. When dealing with various governments – and energy-hungry corporations – communication efforts vary. Her team’s job isn’t to push renewable energy, but to bring ideas to the table to help organisations judge if renewable strategies are technically possible when they might be economically viable.
Her team supports local CLP teams on the ground by advising on such topics and, when useful, joining in the talks with the relevant government contacts. It also reinforces the work at the local business unit by focusing on ties with government officials who represent their countries at international negotiations on climate change and other environmental agreements.
In the early years of CLP’s sustainability journey, Ng’s role was wide open. It largely involved encouraging people to help identify – and fill – gaps in the company’s strategy. That meant sorting out which tasks would be a permanent priority and which were transient. Now, the energy provider has one of the most sophisticated sustainability strategies around. CLP was one of the first companies to pilot the integrated reporting framework, which looks at all of the ways a company creates value.
“We’re experimenting with the six capitals – financial, manufacturing, human, social and relationship, intellectual, and natural capital – to understand the most important [ones] for us and the inter-relationships between them,” Ng says.
Integrated reporting has another massively important use for Ng. “How we close the gap between our performance and where we might want to be in the coming years and how strategically to move there is key.”
She also conducts investor surveys, and generally tracks CLP’s performance through the business planning process.
In her view, sustainability indices and surveys that measure ethical and environmental efforts are a good gauge of the changing demands of institutional investors.
“We moan and groan and complain when we get the assessment but many times we’ve found the information very helpful. It has helped us benchmark against other industry players or even among our geographical jurisdictions because companies don’t often want to make this type of information public.”
Awareness of the need for sustainability credentials is widespread these days. Being a power industry leader is tougher than it once was. Ng is quick to highlight the danger of being complacent: companies need to be aware of just how quickly the business environment is changing and how swiftly competitors and supply chains are becoming greener.
“It’s difficult when you’re an industry leader since you always think there is a big gap between you and the runner-up. Nowadays, though, that’s not the case and it’s increasingly hard to lead,” she says.
From the start, Ng was employed to inspire and collaborate with her peers. And she’s sticking with her preferred strategy: “Keep up the pressure and never let up with fresh ideas.”