The Hong Kong Exchanges and Clearing Limited (“HKEX”) requires all listed companies to submit their Environmental, Social and Governance (“ESG”) Report annually. The ESG Report, can enable stakeholders, such as investors, management, employees and clients, and media to better understand of the goals and commitments of the company in sustainable development practices. The report also promotes the integration of sustainability initiatives with the business in order to bring additional value to the society.
CityLinkers’ ESG professionals have extensive experience and expertise to assist clients in strengthening their ESG/sustainability reporting processes in accordance with the ESG reporting guideline of the HKEX. We can provide the following services according to the needs of our clients:
- Stakeholders survey and needs analysis
- Report verification and assessment support
- Calculation and disclosure of carbon emissions
- Consultation on social responsibilities, effective investment and green finance
An ESG (environmental, social and governance) report is a public document that provides detailed information about a business's ESG performance. This report can be used by investors and other stakeholders to gain insight into the company's operations and strategies surrounding sustainability. The need for increased transparency around these issues has grown in recent years, with more investors and stakeholders asking corporations to disclose their ESG practices.
As global crises – from climate change and pollution to poverty and the Covid-19 pandemic – deepen, sustainability has become more important than ever in public policy. Risk management and internal control on adhering to the Environmental, Social and Governance (ESG) principles have become an essential part of corporate governance and regulatory bodies in several countries; this ultimately influenced the investment decisions of institutional investors along the way.
The international ESG compliance landscape
Companies that issue sustainability reports are obligated to include ESG-related data in their disclosures. Such information follows several international standards and frameworks, including a few of the following:
- Global Reporting Initiative (GRI): GRI is one of the most widely used ESG reporting frameworks worldwide. It provides a comprehensive set of indicators covering various aspects of sustainability.
- Sustainability Accounting Standards Board (SASB): SASB provides industry-specific standards for businesses in the U.S. to disclose material sustainability information to investors.
- Task Force on Climate-related Financial Disclosures (TCFD): TCFD provides recommendations for consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders.
- International Integrated Reporting Council (IIRC): The IIRC framework focuses on integrated reporting that covers six capitals: financial, manufactured, intellectual, human, social and relationship, and natural.
- United Nations Global Compact (UNGC): The UNGC encourages businesses worldwide to adopt sustainable and socially responsible policies and to report on their implementation.
- Carbon Disclosure Project (CDP): CDP runs the global disclosure system for companies, cities, states, and regions to manage their environmental impacts.
- Principles for Responsible Investment (PRI): An international network of investors working together to implement sustainable investment practices.
Hong Kong Stock Exchange ESG compliance
HKEX has implemented a mixed approach to ESG report compliance, setting up clear markers for what should be disclosed but giving companies some degree of freedom in how they gather and present the information. Listed corprations, therefore, must employ standardised metrics when sharing any details related to their environmental and social impacts and activities. The regliation do offer the option to select which aspects are most relevant to them that they will discuss in their ESG reports. If any sections are deemed too insignificant to include, the corporations are expected to give an explanation as to why it was omitted, according to the 'comply or explain' principle.
A collaborative approach
Our team believe sustainability is a necessity. We are ESG professionals with the mission to go beyond compliance and create a resilient business model for clients that drives long-term value for all stakeholders. We will assist in shaping sustainability strategy, influence corporate policies, and help clients navigate ESG reporting standards.