UpdateHong Kong listed firms must do more to meet ESG reporting standards, says BDO

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Ricky Cheng, head of risk advisory of BDO, said action is needed to raise the level of ESG reporting and quality of disclosure of Hong Kong companies to match international standards. Photo: SCMP

Published: 1:25pm, 31 Jul 2017Updated: 10:37pm, 31 Jul 2017

More than 60 per cent of Hong Kong listed firms which were required for the first time to report on their environment, social and governance (ESG) performance have exceeded the measures, but more needs to be done to reap benefits from ESG reporting to help firms identify and manage risks, according to a survey.

There is also much room for improvement on engaging external stakeholders to identify key ESG risks, according to BDO, the world’s fifth largest accountancy network, which conducted the survey on 300 firms whose shares are listed in the city.

“A majority of Hong Kong-listed companies went beyond meeting the minimum ESG disclosure requirements in their first ESG report after the new ESG reporting regulation was introduced, but related investment was still limited and reporting standard has room for improvement,” BDO said in a statement on Monday.

Ricky Cheng, head of risk advisory for BDO, told a press briefing that the 300 firms were chosen at random from the nearly 2,000 Hong Kong main board listed firms.

He noted requirements by the city’s bourse is less onerous than the internationally recognised Global Reporting Initiative (GRI) standards, and action is needed to raise the level of ESG reporting and quality of disclosure of Hong Kong firms to match international standards.

Besides enhancing firms’ transparency and their reputation, ESG reporting enables them to identify opportunities to reduce operating costs and grow revenues through sustainable development, better governance and risk mitigation.