'Hong Kong should have similar projects. Investors should not only consider if they can make money. If they are investing in profitable companies which are polluting the world, the investors themselves will suffer in the end because of the poor living environment,' said Mr Wente.

Philips, one of the world's largest electronics manufacturers, has adopted measures to ensure its factories recycle paper, plastic and other materials.

It also makes sure no mercury is used in its manufacturing processes.

'Philips has a long history of social responsibility and environment protection. We firmly believe that this contributes to sustained profitable growth and value creation. This supports our mission to improve the quality of people's lives,' Mr Wente said.

He said the company promoted energy saving, 'a hot topic since oil prices have shot up to US$75 a barrel' and had developed light bulbs that use 90 per cent less energy.

'Energy-saving products maybe more expensive but in the long term they use less power and save costs,' said Mr Wente.

He said Hong Kong needed to do more to improve water treatment.

'People think it is easier and cheaper to pour waste water into the sea without treatment. It may save them $1 by doing so but it will cost them $10 or even $100 in future to clear up the pollution. If we are saving the short-term money by damaging the environment, we are going to face a much more expensive bill in future,' he said.

Hong Kong Exchanges and Clearing chief executive Paul Chow Man-yiu said social responsibility and environment protection practices were included in the exchange's corporate governance guidelines.

American International Assurance Company (Trust) last month became the first pension fund manager to introduce a 'green fund' for its Mandatory Provident Fund clients. The fund would invest only in firms with good corporate governance and environmental protection practices.

'These stocks tend to be able to achieve good profitability for the long term,' chief executive Peter Crewe said.