2021年《香港上市公司ESG报告调研》英文版-49页_7mb

ESG Reporting Study for Hong Kong Listed Companies (2020)

Core Content

This study, conducted by PwC Mainland China and Hong Kong in October 2021, analyzed ESG reports of 268 Hong Kong listed companies released before 10 July 2021. The analysis aimed to understand the compliance landscape, identify gaps, and provide insights and recommendations for improving ESG reporting and management.

Main Findings

1. Background and Methodology

• Background: In December 2019, HKEX issued the ESG Reporting Guide (2019 Version), introducing mandatory disclosure requirements and a "comply or explain" approach for social KPIs. These amendments took effect for financial years starting on or after 1 July 2020.
• Methodology: PwC categorized companies into 12 primary industries based on the Hang Seng Industry Classification System and randomly selected samples for in-depth analysis. The study was based on the ESG Reporting Guide (2019 Version), the HKEX "How to Prepare an ESG Report" (March 2020), and other reporting standards.

2. Overall Disclosure Status

• Hong Kong listed companies are increasingly aware of the importance of ESG.
• The quality of ESG reports has improved, with more comprehensive structures and integrated content.
• Over 68% of companies used stand-alone ESG reports in 2020.
• Most companies (94%) disclosed the reporting boundary, with a notable increase in the disclosure of the boundary determination process (64%).

3. Reporting Standards

• Over 34% of the sampled ESG reports referred to other standards in addition to the HKEX ESG Reporting Guide.
• GRI Standards were the most widely adopted (90%).
• TCFD framework and SASB standards were also adopted by 9% and 6% of companies, respectively.
• The utilities, energy, and financial services industries showed the highest adoption of other reporting standards.

4. Report Assurance

• 16% of the sampled ESG reports were assured by third-party organizations, similar to 2019.
• The banking sector had the highest assurance rate (over 50%).
• 55% of assured reports focused on KPIs, while the rest covered the entire report.
• Companies are encouraged to seek independent assurance to improve ESG ratings and credibility.

5. Response to UN SDGs

• Nearly 30% of sampled companies responded to UN SDGs in their ESG reports.
• Around 30% identified key SDGs and set targets and KPIs.
• Companies are increasingly integrating SDGs into their ESG strategies and practices.

6. Governance Structure and Reporting Principles

• Board involvement in ESG oversight increased, with over 70% of companies disclosing this.
• Board monitoring of ESG targets remained low, with only 15% disclosing it.
• The utilities industry led in board monitoring of ESG targets (60%), followed by conglomerates and energy industries (40%).
• Materiality assessment and stakeholder engagement have become more prominent in ESG reporting.
• Only less than 10% of companies failed to meet the disclosure requirements for stakeholder management.
• 40% of companies did not disclose the detailed materiality assessment process.

7. Environmental Aspects

• Emissions:
  • 90% of companies disclosed policies related to emissions.
  • 98% disclosed greenhouse gas emissions data (A1.2), with 63.06% disclosing Scope 1 and Scope 2 data, and 22.39% disclosing Scope 3 data.
  • Hazardous waste (A1.3) and non-hazardous waste (A1.4) were disclosed by 88% and 89% of companies, respectively.
  • Intensity data for waste was disclosed by only 47.39% and 56.72% of companies.
• Resource Use:
  • 71% of companies disclosed policies related to resource use.
  • 95% and 97% disclosed total energy and water consumption data, respectively.
  • 80.6% disclosed energy and water consumption intensity.
  • 84% disclosed packaging material data, with a 7% increase from the previous year.
• Environment and Natural Resources:
  • 65% of companies disclosed policies related to minimizing environmental impacts.
  • 85% disclosed A3.1 data, but 15% did not disclose or explain the reason.
  • Companies in energy, materials, utilities, and conglomerates industries had a higher relevance to this indicator.
  • Leading companies in these industries have implemented sustainable practices, such as sustainable mining, environmental restoration, and ecological impact mitigation.

Key Recommendations

• Establish ESG governance structures: Develop an organizational structure at all levels, including ESG committees, senior management, and working groups, to ensure ESG is integrated into corporate strategy and operations.
• Enhance reporting principles: Follow the "comply or explain" principle, ensuring transparency in the rationale for not disclosing certain ESG KPIs.
• Improve data collection and disclosure: Companies should focus on collecting and disclosing quantitative ESG data, especially intensity metrics, to meet stakeholder expectations and regulatory requirements.
• Adopt international standards: Reference global standards like GRI, TCFD, and SASB to align with international best practices.
• Seek third-party assurance: To improve ESG credibility and ratings, companies should consider independent assurance for key ESG KPIs such as greenhouse gas emissions, energy consumption, and water usage.
• Integrate UN SDGs: Use SDGs as a framework for ESG strategy, setting targets and KPIs aligned with these goals.
• Invest in ESG management systems: Implement ESG data management systems to ensure data integrity and accuracy, and support long-term ESG transformation.

Conclusion

The study highlights that Hong Kong listed companies are making progress in ESG reporting, with improved quality and increased alignment with international standards. However, there are still challenges in areas such as governance structure, intensity data disclosure, and comprehensive stakeholder engagement. To meet future regulatory and market expectations, companies should strengthen their ESG management practices, enhance data transparency, and integrate SDGs into their long-term strategies.