Skip to content

30 May, 2023

Subscribe Advertise About Us
  • My Account
  • Register
  • Log In
  • Log Out

Board Agenda

  • Governance
  • Strategy
  • Risk
  • Ethics
  • News
    • Categories

      • View All
      • Board Moves
    • ESG battle

      ‘Change fiduciary laws’ to end ESG battle in US

      Academics suggest a truce between left and right, based on separating political issues from investment...

    • McDonald's antibiotics News round-up: this week in governance

      Investors challenge McDonald’s over antibiotic use; Norges Bank’s ESG push criticised; diversity box-ticking; revolt at...

    • boost audit Corporate governance code review boosts internal controls

      UK watchdog’s proposals include giving audit committees greater reporting responsibilities and addressing ‘overboarding’.

  • Insight
    • Categories

      • View all
      • Governance
      • Strategy
      • Risk
      • Ethics
      • Board Expertise
      • finance
      • Technology
    • Climate finance

      How climate change alters the financial landscape

      To achieve sustainability, companies and boards will need to look not only to their operations,...

    • generative AI

      Five AI issues to consider right now

      We may not know what AI will mean for us all in the long term,...

    • sexual misconduct

      How to prevent sexual misconduct in your organisation

      Revelations about the CBI may be shocking, but there is no place for complacency and...

  • Comment
      • View all
    • hybrid AGM

      Hybrid AGMs maximise shareholder participation

      Avoid virtual-only annual general meetings: although pragmatic in an emergency, they water down shareholders’ rights.

    • ESG break up ESG: Should E and S break up with G?

      In the world of investing, maturity has revealed significant practical shortcomings in combining environmental, social...

    • controlling shareholders The politics and geopolitics of controlling shareholders

      Shareholders with a controlling interest influence not only financial matters but can also wield great...

  • Interviews
      • View All Interviews
      • Podcasts
      • Webinars
    • information resilience IT transformation sees boards moving to ‘continuous’ management

      Data analytics available on demand requires a resilient—and selective—approach to sharing information, a webinar panel...

    • life sciences podcast Reform of NHS levy ‘harms UK competitiveness’

      Boards in the pharmaceutical and life sciences sector face increasingly difficult decisions, according to a...

    • Board priorities 2023 Board priorities 2023: tact, trust and transparency

      We asked key figures what would help boards this year. The answers ranged from 'smarter...

  • Careers
      • View all
      • Selection
      • Board Moves
    • board survey 2023 Board appointments fell sharply in 2022

      Companies appear to be sticking with experienced leaders—to the detriment of progress—suggests FTSE 350 boardroom...

    • diversity statistics Diversity statistics challenged by new scorecard

      Companies can ‘hit the target, but miss the point’, say academics researching a more ‘holistic’...

    • CEO turnover CEO turnover rises steeply

      The researchers say political changes and business difficulties may have accelerated turnover, which has risen...

  • Resource Centre
      • White Paper Downloads
      • Book Reviews
      • Corporate & Advisory Services
    • Mazars c-suite 2023

      Mazars C-suite barometer 2023

      The Mazars C-suite barometer is based on responses from more than 800 C-suite executives from...

    • CFO Career Survey Report

      Our survey, in December 2022, of almost 200 CFOs across the public, private and non-profit...

    • The Engagement Appeal: The Path to Inclusive Investor Engagement

      The Engagement Appeal: The Path to Inclusive Investor Engagement

      The Path to Inclusive Investor Engagement highlights the need for greater engagement between companies and...

  • Events
  • Search by topic
    • Governance
    • Strategy
    • Risk
    • Ethics
    • Regulation
    • ESG
    • Investor Relations
    • Selection
    • Board Expertise
    • finance
    • Technology

Hong Kong companies ‘failing to integrate ESG’ into policies and planning

by Gavin Hinks on January 14, 2020

Report warns that a majority of Hong Kong companies still regard ESG as an “ancillary” subject and not a “key concern in actual company business”.

Hong Kong skyline

Image: Sean Pavone/Shutterstock

Hong Kong markets often draw the eye of global observers, but this time it’s for the wrong reasons. A report says that companies in the territory have yet to integrate environmental, social and governance (ESG) considerations into their policies, while many lack the expertise to do so. The news could form another blow to Hong Kong markets as the jurisdiction attempts to recover from its recent political crisis.

The report says that only 37% of Hong Kong listed companies have integrated ESG issues “into their strategic planning”. It adds that a majority of companies still regard ESG as an “ancillary” subject and did not consider it a “key concern in actual company business”.

Last year the Hong Kong Stock Exchange launched a consultation reviewing its ESG reporting guide. All listed companies are now expected to publish ESG reports for the financial year starting 1 July 2020.

The report, compiled by the Hong Kong Institute of Chartered Secretaries (HKICS), KPMG China and CLP Holdings, one of the region’s biggest power companies, says investor interest in ESG has now reached a tipping point.

Investors are demanding corporate leaders improve sustainability practices that both benefit their firms’ bottom line and create greater impact on the wider community.

‘Increasing demand for ESG’

According to Gillian Meller, president of HKICS, companies should take note because investors and new recruits entering the jobs market expect employers to be acting on ESG.

“This increasing demand for ESG is now noticeable on all fronts. In addition, employees, particularly the younger generation, seek to know what is being done by their employer in areas such as corporate responsibility, community investment, and diversity and inclusion,” Miller said.

Pat Woo, partner at KPMG in Hong Kong, was more emphatic. “Hong Kong companies cannot remain at the box-ticking phase on ESG issues, as cost of capital will increase for laggards in sustainability,” he said.

Hong Kong is all too aware that European investors have been pushing hard on sustainability issues in their homes markets and have found markets elsewhere in the world to be lagging behind in their attempts to adapt to the climate crisis and public pressure for businesses to change their approach to finite resources.

The report calls on Hong Kong businesses to embrace not only local reporting standards but also those endorsed internationally, including those of the Sustainability Accounting Standards Board and the Task Force on Climate-related Financial Disclosures (TCFD), a body created by the G20 group of countries.

Climate risks and resilience

At a special summit in Tokyo last Mark Carney, then governor of the Bank of England and a member of the G20’s Financial Stability Board that established the TCFD, said there was much work to be done embedding the reporting guidelines in to company disclosures.

Only a quarter of companies using TCFD principles used a “fuller set”—six or more—of the recommended disclosures. Around 75% of financial reporting users said they needed more information on the impact of climate risks and the “strategic resilience of firms”.

“To bring climate risks and resilience into the heart of financial decision-making, climate disclosures must become comprehensive, climate risk management must be transformed,” Carney said.

Hong Kong has of late been preoccupied with a debate over ownership structures and the introduction of dual-class shares to attract the listings of Chinese tech firms. It’s time to move on from that discussion.

Last year there was public debate over corporate resistance to more ESG reporting. The administrative area’s Business Environment Council insisted they were on board. Perhaps now they can demonstrate their support by writing the reports.

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • Mail

Related Posts

  • Audit committees and ESG: ‘It’s a difficult journey to navigate’
    February 18, 2022
    CACID discussion on audit committees and ESG

    The rise of ESG as an investor concern is creating new demands of audit committees. A recent CACID event looked at the challenges.

  • Directors need to ‘up their game’ on ESG strategy
    April 4, 2022
    Board members looking at corporate reports

    Study says 70% of board directors say they are “not at all” or only “moderately“ effective at integrating ESG concerns into company strategy.

  • EuropeanIssuers calls for EU law to apply to 'third country' companies
    December 17, 2021
    EU flag

    The proposal raises the possibility of the Corporate Sustainability Reporting Directive being applied to UK firms trading online in the EU.

  • Companies 'may inflate ESG performance' to boost ratings
    June 17, 2022
    Green stock market graph

    Researchers say firms may exaggerate their ESG performance over fears that investors will divest from their stock.

For thoughtful journalism, expert insights on corporate governance and an extensive library of reports, guides and tools to help boards and directors navigate the complexities of their roles, subscribe to Board Agenda

climate change, climate risks, ESG, ESG reporting, Hong Kong, sustainability

Search


Sign up to our Newsletter

Receive independent news, thoughtful journalism & expert insights about leadership, corporate governance & key boardroom issues straight to your inbox every week.

SIGN UP

Follow Us

 

 

 

 

Most Popular

  • Corporate governance code review boosts internal controls
  • New audit committee standards finalised
  • News round-up: this week in governance
  • ESG: Should E and S break up with G?
  • Five AI issues to consider right now

Featured Partner Profile

Diligent

Diligent

Diligent Corporation, which was founded in 2001, is headquartered in New York, NY with a European HQ in London. Diligent’s modern governance platform empowers leaders and teams at every level of the organisation to digitally transform and create ...

Featured Partner Resources

The Engagement Appeal: The Path to Inclusive Investor Engagement

The Engagement Appeal: The Path to Inclusive Investor Engagement

This is the inaugural white paper from The Engagem...

Stakeholder Engagement: A Roadmap for UK Plc Boards

This guide aims to provide directors and their col...

Digital Boards: How Technology Adoption is Driving Culture Change and Resiliency

Digital tools proved their worth to boards during ...
Leadership in AI report

Leadership in AI

This report from Board Agenda and Mazars, in assoc...
Director's Guide to Internal Investigations

A Director's Guide to Conducting Internal Investigations

An internal investigation must be handled meticulo...
 

ADVERTISE – FREE CORPORATE LISTING

FREE - Add your company profile to our Corporate & Advisory Directory.
ADD

ADVERTISE – PROMOTE YOUR REPORTS & WHITEPAPERS

FREE - Add your company profile to our Corporate & Advisory Directory.
Add Resource

Register Free

Register to receive free article views, selected resource downloads, and all the latest news alerts straight to your inbox. Register


  • Editors & Contributors
  • Editorial Advisory Board
  • Corporate & Advisory Services
  • Media Marketing Solutions
  • Contact Us
  • Careers
  • Board Director Network
  • Terms & Conditions
  • Privacy Policy
  • Cookies
  • Sitemap
|