HK Listed companies have one more thing on the board’s radar – their ESG ratings
ESG Awards are recognizing corporate sustainability efforts
Globally, the appetite of asset managers for companies with improving performance on environmental, social and governance (ESG) issues has been getting bigger and bigger, triggering increased demand for quality ESG data. Leading indexes provider MSCI, as well as other ESG rating institutions, have been churning out reports on ESG ratings of listed companies. So, in addition to the ‘buy’, ‘sell’ or ‘hold’ signals published by analysts, listed companies and their investor relations experts have one more thing to worry about these days – their ESG ratings.
In Hong Kong, it has been almost three years since the Hong Kong Stock Exchange (HKEX) announced the “Comply or Explain” provisions in December 2015. 2018 however, is the first year when listed companies are required to disclose their environmental KPIs or explain why they haven’t done so. This June, HKEX has also become a Partner of the United Nations (UN) Sustainable Stock Exchanges (SSE) Initiative, committing itself to further promote sustainable and transparent capital markets.
At the same time, UN’s Sustainable Development Solutions Network (SDSN) has extended its reach to Hong Kong. The new network, SDSN Hong Kong, co-hosted by The Chinese University of Hong Kong (CUHK) and The Hong Kong Jockey Club Charities Trust was officially launched in January this year, for promoting practical problem solving for sustainable development by mobilizing global scientific and technological expertise from academia, civil society and the private sector.
It is clear the sustainability landscape in Hong Kong is gaining traction and demanding more from listed companies. Besides ESG ratings provided by indexes such as MSCI and Bloomberg, Hong Kong listed companies’ sustainability efforts are being recognized by various local ESG Awards, such as the Sustainable Business Awards and Hong Kong ESG Reporting Awards (HERA). ESG Awards are bestowed on companies with the most exemplary performances in Corporate Sustainability.