Environmental, social and governance (ESG) factors are continuing to gain traction in corporate reporting regimes and the financial institution sector from the standpoints of long-term sustainability and responsible investment. Users and investors are demanding an increasingly high quality of ESG information disclosed by listed companies in order to facilitate decisions about investment, interest and value alignment, business partnerships, and joint efforts to overcome global challenges.
ESG issues have impacts across all the business functions of a company, as they are all inter-related. These issues must be integrated into a company's strategy, risk-management framework and business operations if the company is to address those challenges in a systematic and sustainable manner.
This is the fourth survey conducted by BDO on the performance of ESG reporting among Hong Kong listed companies. The survey explores whether their ESG reporting performance has improved since last year, identifies 7 key findings, and makes 12 recommendations for listed companies to consider when preparing their ESG reports.
We have noted improvements in ESG disclosure in some areas and evidenced that the boards of listed companies are increasingly aware of the importance of ESG management. This will have enabled them to be better prepared for meeting the new disclosure requirements under the revised ESG Reporting Guide (the Revised Guide) issued by the Hong Kong Exchanges and Clearing Limited (HKEx), which came into effect on 1 July 2020.
Despite the continued effects of COVID-19 on our daily lives and on operations ranging from supply-chain disruption to employee health and safety, the ESG reporting regime has been evolving to meet users' increasingly high expectations. Now is the time for listed companies to put more effort into their ESG reporting and practices and to work harder to achieve long-term sustainability.
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