Connecting, Nurturing, Creating for Sustainable Environment

Hong Kong business is generally in favour of ESG disclosures
   

Patrick Temple-West declares that, compared to other markets, the “Hong Kong corporate community” resists mandatory environmental, social and governance disclosures (“Asian companies resist Hong Kong exchange’s ESG disclosure proposals”, July 31). The response to the recent consultation by the Hong Kong Stock Exchange on strengthening ESG disclosure rules is mischaracterised as a “fight” between Asian companies and global asset managers. Referencing a single source, the article provided an unbalanced view of realities in Hong Kong.

Our experience at the Business Environment Council, an independent business membership organisation advocating environmental excellence, directly contradicts Mr Temple-West’s evaluation of the market’s reaction. In drafting our response to the consultation, we solicited views from our 200-plus members resulting in a positive stance towards enhanced disclosures. Other business groups such as the Hong Kong General Chamber of Commerce, the Hong Kong Institute of Directors and the Hong Kong Institute of Company Secretaries also submitted supportive positions.

The Hong Kong business community is serious about adopting leading green finance and ESG disclosure practices at the appropriate pace for this global financial centre. In the past year alone, the momentum for green finance has accelerated significantly. According to the Climate Bonds Initiative and the Hong Kong Monetary Authority, 2018 saw record growth in the local market primarily driven by non-financial companies which altogether issued green bonds and loans worth US$2.3bn, an almost fivefold increase from 2017. When non-local issuers are included in the numbers, Hong Kong is clearly an attractive green finance market with a 237 per cent increase in value in one year to US$11bn in 2018.

As with any jurisdiction, the appreciation of the strategic value of ESG varies but, generally, Hong Kong companies are on board. The forerunners recognise the role of ESG disclosure as a primary source of reliable data for investors to discern director and senior management actions to protect shareholder value and attract capital while addressing increased uncertainty arising from ESG-related risks.

Adam Koo

Chief Executive Officer

Simon Ng

Director, Policy and Research

Dr Nadira Lamrad

Assistant Director, Sustainability and ESG Advisory

Business Environment Council,

Hong Kong SAR

(The article was originally published in Financial Times on 13 August 2019) 

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