Hong Kong firms urged to work harder as social and governance compliance deadline looms

As the first ever deadline draws closer for Hong Kong’s listed firms to comply with their obligation to make disclosures on their environment, social and governance (ESG) policies, a study showed that they need to work harder to ensure compliance.

As most of the companies have financial year-ends in December, they will need to release the information no later than three months after their next set of annual reports are released next year.

“Demand for help in ESG compliance has been rising steadily throughout this year as companies are actively doing work to ensure compliance,” Tony Wong, founder of Alaya Consulting told the South China Morning Post.

His firm helps listed companies meet disclosure obligations or provide third-party assurance on the quality of the disclosure.

“Adopting sustainable practices is no longer an option but a growing requirement, creating both potential challenges and opportunities,” Wong said.

Following a public consultation exercise, Hong Kong Exchanges and Clearing (HKEX), the operator of the local bourse, last December upgraded the ESG requirement – in effect since January 2013 – from “recommended and voluntary” to “comply or explain”.