ESG disclosures: Hong Kong firms should start verifying climate, sustainability data ahead of audit mandate, experts say
- As global trend favours mandatory audits, companies should seek assurance now for key information, says EY’s climate and sustainability partner
- Large companies in Hong Kong trail their global counterparts in verifying ESG data, but have been closing the gap
Companies serious about enhancing the credibility of their sustainability disclosures should proactively engage external auditors to attest to the quality of their disclosures, before auditing of such information becomes mandatory, according to experts.
“As ESG assurance is an emerging trend, companies should be seeking assurance over information that is the most material to key stakeholders, such as investors and creditors, as a first step,” Tan Ee Sin, EY’s climate change and sustainability services partner for Hong Kong and Macau, told the Post.
These material issues differ from company to company depending on industry and location of operation. “Companies should engage internal and external stakeholders regularly to ensure that the material issues are updated to reflect changes in the business landscape and challenges,” Tan said.
Although no comprehensive assurance standard exists, the International Auditing and Assurance Standards Board is developing a global baseline for sustainability assurance to provide greater consistency for information users, said Mohit Grover, lead partner for climate and sustainability services at Deloitte Hong Kong.