ESG Updates - Issue 3/2022

The incorporation of environmental, social, and governance (ESG) aspects into a company's business strategies, management, and operations is the key to success in achieving corporate sustainability and generating long-term benefits. In our 'ESG Updates', it will include the latest updates on various aspects in ESG and practices for your reference:

SFC outlines future directions for green and sustainable finance 

The Securities and Futures Commission (SFC) announced its Agenda for Green and Sustainable Finance, outlining additional initiatives to enhance Hong Kong's role as a regional green finance centre, having met the targets outlined in its Strategic Framework for Green Finance.

The SFC continues to improve the quality of accessible information, boosting openness, and developing investor trust in order to support the growth of green and sustainable finance in Hong Kong, as well as the transition to a greener economy. Its efforts focus on:

  • Enhancing corporate disclosures;
  • Monitoring the implementation of and enhancing existing measures relating to ESG funds and expectations for fund managers; and
  • Identifying an appropriate regulatory framework for any proposed carbon markets.

Read more from the source:

More businesses are seeking independent assurance on sustainability data, according to a global study

Below summarises the latest findings from the International Federation of Accountants, American Institute of CPAs and Chartered Institute of Management Accountants:

  • 58% of global companies obtained ESG assurance in 2020, compared with 51% in the year before
  • Assurance engagements were mostly limited in scope
  • 61% of ESG assurance services were performed by professional accounting firms, with substantial variation in practice within different jurisdictions

The information for 2020 is an update to the first research conducted by the accounting bodies last year, which looked at worldwide trends in sustainability-related reporting and assurance. This latest update offers the first benchmark of progress relative to the original data. At a later time, a follow-up research with data from 2021 is anticipated to be published.

Read more from the source:

GRI launches new Sector Standard on farming and fishing

The Global Reporting Initiative (GRI) Agriculture, Aquiculture and Fishing Sector Standard (Sector Standard), also referred to as the GRI 13, has been released by the GRI. As the first worldwide and comprehensive sustainability reporting standard that establishes requirements for disclosure of all businesses involved in the upstream production of plants, animals, and fisheries, the new standard addresses:

  • Subjects that are likely to be material for any agriculture, aquaculture or fishing business, based on the impacts of these sectors;
  • New disclosures on food security, land and resource rights, living wage and income, natural ecosystem conversion, animal welfare, soil health, and pesticides use;
  • The multiplying effect of sectors with regard to the Sustainable Development Goals, which supports businesses in connecting their impacts to all 17 Global Goals; and
  • Policy implications for responsible business, based on international frameworks

Read more from the source:

Asset owners are becoming more committed to net zero

According to a white paper issued by a global research and consultancy company, Cerulli, asset owners and managers are prioritizing risk reporting standards and stepping up their efforts to combat climate change. They found that many institutional asset owners have committed to net zero, with 44% in Asia, 43% in Europe, and 32% in North America having done so.

Three out of five of European institutional investors wanted information on their portfolio's carbon footprint, while approximately four out of five asked for information on physical climate risk exposure and energy transition risk. 38% of asset owners in North America demand managers to report climate risk, and 34% expect to do so within the next two years. Security-level exposure to climate risk (74%), portfolio-level exposure to climate risks (69%) and scenario metrics for climate change (57%), will be the data that asset owners in Asia most frequently request during the next two years.

Read more from the source:

How can BDO help?

Our ESG services team is a group of dedicated professionals who have been trained in ESG reporting requirements, GRI Standard, and ISO 14064, as well as knowledge of carbon audit, climate change, ESG due diligence, report assurance, stakeholder engagement. We are experienced in providing all the assistance needed to meet your needs in enhancing ESG practice. Please contact us and speak with one of our specialists. We are happy to give further information or support.



Subscribe to receive the latest BDO News and Insights

Please fill out the following form to access the download.