Most Hong Kong firms fall short in ESG disclosures despite progress made, says BDO

Hong Kong listed firms still have a long way to go to meet investors’ expectations on disclosure of environmental, social and governance (ESG) matters despite a general improvement after it became a compulsory requirement, according to BDO Limited which advises listed firms.

“Investors and peers will [demand] greater disclosure from [listed] companies in the future,” said the world’s fifth-largest accountancy network’s head of risk advisory Ricky Cheng. “The journey of good ESG disclosure has just started in Hong Kong, and there is a still a long way to go for a lot of companies.”

He was speaking at BDO’s inaugural ESG Awards presentation ceremony on Thursday, which recognised firms with outstanding ESG disclosure standards.

The “ESG report of the Year” award for large capitalisation firms went to Lenovo Group, while Melco International Development won in the mid-cap category. Panda Green Energy Group stood out among small-cap firms and Northern New Energy won out among Growth Enterprise Market-listed firms.

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

Some 55 firms listed in the city applied or were nominated to contest for the awards, some of which had engaged accountancies or certification bodies to provide third-party assurance on their disclosures.