Stakeholder Engagement

As we progress corporate strategy in international markets, we recognise that our responsibilities towards stakeholders are growing exponentially and as such our accountability to them is a critical component in our Corporate Social Responsibility (CSR) initiatives.

Efforts are in progress to formalise the corporate-wide CSR and related stakeholder engagement policies. We are currently laying the groundwork to develop a meaningful policy that acts to manage corporate reputation and provides the mechanisms to constructively engage in dialogue as well as influence stakeholders' perceptions and decisions about the company.

Current stakeholder engagement activities encompass a priority group of stakeholders, however with engagement tasks specific to selected corporate divisions' undertakings:

Contractors: an ongoing programme for partnering which includes on and off-site training, management dialogue, the MTR Partnering Newsletter, contract briefings and best practice reviews. Refer to the Sustainability Report 2004, Social Performance for full discussion.

Customers: selected surveys, including the regular Service Quality Index and Fare Index. Fare and ad-hoc focus groups are conducted to gain insight to our perceived reputation amongst customers.

Community: the Sustainability Advisory Board (SAB) has been established to engage the 16 identified stakeholders of the Tung Chung cable-car project. The purpose is to build consensus amongst the groups to achieve timely decision making on environmental and social issues affecting the delivery of the project. The SAB serves as a model for the stakeholder engagement processes related to the planning and construction of new lines on Hong Kong Island. Refer to the Sustainability Advisory Board for full discussions.

Staff: a wide variety of communication mechanisms and surveys are conducted to gauge perceptions of our performance as an employer of choice. Refer to the Sustainability Report 2004, Social Performance for full discussions.

During 2004 a series of exercises were undertaken to lay the groundwork for the formalised CSR policy and governance structure. These focused on identifying our broadening universe of stakeholders and their priorities in sustainability. Formal interviews and focus groups were undertaken to field major current stakeholder groups, including our directors and Board members, representative employees, non-affiliated NGOs and selected government departments. Subsequent gap analysis findings comparing results of these exercises to existing corporate documents identified our shortcomings, risks and the priority areas for future action, specifically, to establish coordinated and on-going stakeholder engagement, a corporate reputation management framework and the mechanisms to field, understand and act on stakeholder issues.

Stakeholder engagement carries risk and has been identified as a key component and driver for the Enterprise-Wide Risk Management strategy (EWRM) currently under review. Embedding the engagement process into this strategy will enhance our risk identification and assessment processes as well as necessitate the monitoring and auditing of relevant practices throughout the Corporation. This provisions a future of accountability and clear processes for engagement.

In a move to further our mainland China agenda in understanding the CSR/stakeholder/risk link, a new series of private information exchange sessions with our stakeholders and separately with other multinationals corporations addressing CSR risks for global business practice will be conducted. Subjects will include priority areas such as supply chain and materials sourcing, sub-contracting, HR practices and environmental impact monitoring. Our purpose is to identify and prioritise our own risks and learn through case history and market experience the best practices applicable to our needs. In addition to creating an international benchmarking process, the conclusions will influence internal policy direction and the development of the EWRM strategy.

Current planning calls for a formal CSR/stakeholder engagement steering committee consisting of the internal relationship owners of the major stakeholder groups. This committee will centralise efforts to engage, communicate and implement the strategies that promote CRS, positively influence perceptions and manage the corporate reputation. It will also coordinate the activities and processes to ensure effective implementation of policy.