Click here to read the full article.
No one needs to be reminded that much of the world is in a tailspin. But from Adrian Cheng’s perspective, there is a lot of opportunity in the midst of all the turmoil, especially in terms of sustainability.
With the coronavirus’ third wave looming over Hong Kong and a minor shutdown under way, Cheng shared his views in a phone interview last week about the pandemic’s impact on retail, his sustainability commitment, new development projects and insights into the art world. “Staying put“ in Hong Kong, Cheng, like scores of executives around the globe, has not been traveling. He hopes to travel again in October or November, depending upon the state of the pandemic.
As chief executive officer and executive vice chairman of New World Development, one of Hong Kong’s top three developers, and founder of the K11 Group, a cross-sector combination of innovative companies meant to enrich consumers’ daily lives, Cheng said everything comes together through a shared ethos rooted in innovation, culture, sustainability and creativity.
“I’m always quite positive. I look at change in a more contrarian way. When people see a crisis, I, or more my team, will see more opportunity. I try not to conform to a certain code like how if everyone’s panicking, you have to panic,” he said. “I try to look at it in a different perspective. ‘Maybe this was destined to happen to me.’ That will lead me to another path that will force me to think about it in a different perspective.”
Cheng continued, “At the end of the day, you need to be grateful, treasure what you have and then sleep well. That’s important — and cook some good food. And talk to people who are intellectual and have different perspectives. Learn from people.”
The United Nations Sustainability Development Goals provide a benchmark for all of Cheng’s efforts, he said. As part of NWD’s sustainability mission, the plan is to reduce its carbon footprint by 50 percent by 2030 compared to 2015. Acknowledging the amount of water waste and water pollution caused by his various developments, Cheng said creating an ecosystem that helps to reduce carbon and energy levels and creates climate resilience is important. His mission of Creating Shared Value is meant to connect business success with social progress and environmental conservation.
The green approach extends to Impact Kommons, an incubator accelerator program that saw its first group graduate in March. Participants are introduced to potential investors in NWD’s network. The second batch of participants will be welcomed next year to build “this community of tomorrow’s thoughtful leaders.”
New World Development divested its commercial assets in Sheung Wan’s Shun Tak Centre and in an apartment complex in the Happy Valley neighborhood for a total of $460 million. Cheng said the decision to divest was because these were properties that NWD only had minority stakes in; therefore it was unable to control, manage and implement its eco-friendly ideas and shared value concepts. The plan is “to recycle the cash and invest in more scalable and impactful projects to reach more new customers with holistic and sustainable projects,” he said.
New World’s goal is to build up to 36 K11 projects by 2025 in 11 cities around Greater China. While visitor attendance at the Nature Discovery Park in Hong Kong, part of Cheng’s K11 Musea, increased in May, June and in early July after stay-at-home mandates eased, they have recently declined due to the spike in COVID-19 cases. Through a partnership with the Jane Goodall Institute, the NDP introduced an ambassadors program to help inform younger consumers about biodiversity and other environmental issues.
Asked how his commitment to sustainable practices squares with the waste produced by the fashion industry, Cheng said that is why a lot of brands are now doing sustainable fashion. That is a good cause to build a paradigm shift around, he said. Aside from striving for top-notch WELL, Hong Kong BEAM and the U.S. LEEDS certifications for his projects, Cheng said he tries to promote a circular economy. Offering sustainable fashion brands more subsidies to open stores in his retail projects is one example. Food waste and leftovers will be put into machines to recycle them into fertilizer. Whether it is a K11 or a New World project, Cheng’s intent is to create not just cultural hubs, but sustainability hubs that also promote sustainable fashion. To that end, Cheng singled out last year’s opening of the K11 Atelier, an office building in Hong Kong that has 73 sustainability features and earned all platinum pre-certifications.
As for the current state of retail in Hong Kong, Cheng noted that a lot of stores rely on 50 percent of their business from tourists from Asia. They have not been traveling to Hong Kong, due to COVID-19 as well as the political turmoil that has engulfed the region for a year or more. “A lot of brands are shrinking the number of stores and consolidating the market,” he said, adding that while consumer confidence has waned the locals are still buying.
Revenge buying and revenge consumption aren’t just part of the popular vernacular, according to Cheng, who expects that type of revenge spending to come back once COVID-19 dies down.
Asked about China’s new security law for Hong Kong, which decreases its autonomy, Cheng said “it’s too early to say anything” about whether international companies will stay or not in Hong Kong.
He also seemed to take a wait-and-see approach to the next chapter regarding the U.S.’ decision to end Hong Kong’s preferential trade status. “I’m not an expert in politics. We need to look at the details first,” Cheng said.
In line with NWD’s CSV and part of its #LoveWithoutBorders campaign, four production lines have been set up in Hong Kong to create masks for low-income adults and children. The masks will be distributed for free in vending machines through a network of NGOs.
Corporate responsibility in terms of racial equality, sustainability and inclusion is being talked about now more than ever. Whether that will lead to actual systemic change while so many companies are getting hammered financially remains a question mark. The way Cheng sees it, corporate responsibility is either part of a company’s DNA or it’s not.
“If you think it’s a responsibility because you’re getting pressured to do it, then it’s not really part of your culture. If it’s part of your culture, then you need to do it regardless of the financial part. When people are really getting hammered or nearing bankruptcy, filing Chapter 11, Chapter 8 or whatever, of course you don’t have the time to do that. There are creditors all over you,” he said. “But in a normal hammering, don’t forget your normal operations. It’s important for companies to embrace this corporate responsibility and idea of creating impact for society with shared resources.”
Through K 11 Art Mall, Cheng has made art a key component in shopping centers in Hong Kong and Shanghai. He also set up the K11 Art Foundation to help advance emerging local and mainland Chinese artists in contemporary art. As for the current state of the art market, Cheng noted that masterpieces are selling at record-breaking levels. “Now you either buy the best pieces or you don’t buy. Before you had B-grade and C-grade art pieces. Now people don’t even have the time to think about those. They go for the best A-grade pieces or they stay-at-home and maybe just look at them,” Cheng said.
Staying at home has given him time to build up his personal collection with work from Ed Ruscha, among others. “I’ve acquired quite a lot over the past few months unfortunately,” he said, laughing. “Staying at home, there is too much information and too many pictures online and on social media. I have had more time to understand the artists. Once you have more time you can understand the art, the collection, the series. You have more engagement with art dealers or galleries. You have time to talk to people.”
With ties to the Metropolitan Museum of Art, Cheng said he is hopeful that it will reopen. “It’s a great institution and it’s very important in human history, too. I don’t know. I’m just a very small potato within all these circuits. I don’t know how much money they are short of, but I do hope they can reopen. It is a very monumental cornerstone of the cultural world.”
Sign up for WWD’s Newsletter. For the latest news, follow us on Twitter, Facebook, and Instagram.
