Why Hong Kong firms need to do better on environment, social and governance risks disclosure
KPMG says Hong Kong listed companies must step up their game when it comes to mandatory disclosure on environment, social and governance risks
The quality of the first mandatory disclosure by Hong Kong listed firms on their environment, social and governance performances leaves a lot to be desired and is far from sufficient to help investors make informed decisions, according to a recent survey.
The findings from a review by audit and consulting firm KPMG showed a low regard for ESG risks as principal risks, unclear board engagement in ESG governance and poor disclosure on whether and how companies identified risks that were most relevant to them.
The survey revealed that most companies were at an early stage of the ESG journey. “Many have yet to demonstrate awareness of the significant ESG risks they are exposed to and the effective management of their impacts,” said the KPMG report, which was issued in November.
In its survey of the annual and ESG reports of 366 firms – around a quarter of all firms listed in Hong Kong, KPMG found only 16 per cent had identified one or more ESG risks as principal risks in their business reviews.
“The financial sector had the lowest rate of ESG risk disclosure … this is surprising given the growing environmental and social risks facing the clients [or] investees,” KPMG said.