Last week, Alaya Consulting joined the second Community Investment Forum organized by Community Business, sharing the latest developments of ESG reporting and some of its best practices.
The forum began with Ellie Pang from Hong Kong Exchange presenting key-points on the latest version of The Stock Exchange’s listing rules and the release of the updated ESG reporting guide. This was followed by an overview of the five critical steps in producing a quality ESG report by Tony Wong from Alaya Consulting. Kit Law from the MTR Corporation Limited and Rando Yuan from Sa Sa International Holdings Limited shared their reporting journeys, while Sylvia Chiu from Schroders provided an investor’s view on the calculation of ESG into investment strategy.
Below are some of the key highlights from the forum:
- Following the increasing global trend of investor interest in non-financial information as a part of their investment strategy, HKEX will only continue to deepen its involvement in promoting ESG. Moreover, the HKEX ESG Reporting Guide will continue to evolve. The aim is to balance the demands of issuers and investors.
- In terms of formulating an ESG report, the reporting content should focus on what matters and where. Assessing materiality and forming a clear reporting boundary are essential.
- For a company like Sa Sa, investors are highly important stakeholders. ESG reporting becomes important to them as it is a channel to connect and engage with stakeholders. As a business grows, ESG reporting also become more crucial.
- Even though ESG reporting provides an opportunity to the organisation to tell their story, the idea is to not over-expose the company.
- ESG encourages innovation as identified risks create opportunities. An environmental issue may create a market for resources efficient products.
- The key is to embed a sustainability vision into day to day business. Promote sustainability within the office, and change the mindsets of employees.
- Resistance to the HKEX guide will soon be overcome as demand grows for supply chains to publish ESG reports.
- After box-ticking, companies will see the benefit of sustainability. In Hong Kong, companies used to publish their ESG reports mainly for compliance and now this is shifting to proactive moves by organisations to embrace sustainability.
- ESG reporting can be expected to become a norm like annual financial reporting by companies. The beginning of integrated reporting is a step in the right direction.