Climate change: Hong Kong, mainland China firms trail regional peers for credibility of emissions targets, MSCI study finds
- Only 1 per cent of Hong Kong firms in the MSCI AC Asia-Pacific IMI index have set greenhouse gas reduction targets considered ‘fully’ credible
- ‘It is very easy for companies to commit to net zero by 2050 or 2060, but it is really too long a time frame,’ says MSCI ESG Research
This trails 2 per cent to 22 per cent of large-cap constituents in the rest of the region besides mainland China and New Zealand.
Some 29 per cent of Hong Kong’s large-cap firms have “less than fully” credible goals, trailing a range of 33 to 86 per cent of companies listed in other countries in the region, except mainland China’s 6 per cent.
This is partly due to a lower propensity among the Hong Kong firms to have third party verification of whether their climate targets are aligned with global climate ambitions, said Wang Xiaoshu, MSCI ESG Research’s head of Asia-Pacific ESG and climate research.
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“It is very easy for companies to commit to net zero by 2050 or 2060, but it is really too long a time frame,” she said in an interview. “What we need from companies to demonstrate credibility is shorter term targets like 2030 or earlier, a track record in meeting prior targets, besides verification by third parties such as the Science Based Targets initiative (SBTi).”
