HKEx seeking market consultation on making Environmental KPIs and General Disclosures as “Comply or Explain”

Hong Kong Stock Exchange (HKEx) is proposing to upgrade some of the recommended disclosures in the ESG Reporting Guide (the Guide) to “comply or explain”.  In case you don’t have time to read the 58-page document, below are some of the major proposed amendments to the existing ESG Reporting Guide:

  1. Upgrading the General Disclosures under each of the Aspects to “comply or explain”

General Disclosures refer to company policies or information on the policies e.g. compliance with relevant laws and regulations that have a significant impact on the company.  HKEx stated that disclosing this information is an essential first step for companies to take in order to begin incorporating ESG practices into their business operations.  If any particular General Disclosure called upon by the Guide is not relevant, companies should explain this in their ESG report.

  1. Upgrading all 12 Environmental KPIs (from Emissions, Use of resources and The environment & natural resources) to “comply or explain”
  1. Including gender disclosure in the existing recommended disclosures

The Corporate Governance Code addresses diversity only at the board level. HKEx considers that it is appropriate to include gender disclosure in the Guide, as it will give companies the opportunity to provide a fuller picture of the diversity of their entire workforce.

HKEx also encourages companies to publish their ESG reports as close as possible to, and in any event no later than three months after, the publication of their annual reports.

The market consultation will be due on 18 September 2015.  Subject to responses, HKEx intends to implement the new Guide for financial years commencing on or after 1 January 2016.  Companies that have not commenced their ESG reporting would be required to publish their first ESG reports in 2017.

Our take:

Without imposing an undue regulatory burden on listed companies, it is widely expected that HKEx will only upgrade certain recommended ESG disclosure to “comply or explain”.  While still subject to market responses, we welcome the proposed upgrade that will certainly help enhance corporate transparency and strengthen governance in the long run.

The new Guideline, once in place, will drive first-time reporters to kick off their sustainability journey.  Our stance is that if companies wish to publish their first ESG report in 2017, they are advised to start early for the preparation phase e.g. communicating to internal stakeholders, so that data collection can begin on time in January 2016.

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Alaya Consulting has become the GRI data partner for Hong Kong

Alaya Consulting is glad to become the first and only GRI data partner for Hong Kong.  We are committed to creating a more complete database of published ESG reports for Hong Kong by hosting the inventory of all newly released GRI reports and non-GRI reports. The Alaya Consulting’s database is in turn linked to GRI’s international database.

GRI’s Data Partners collect and process information about GRI reporting and ESG reporting in general. We share data with GRI about reports and reporting organizations, and also serve as on-the-ground hubs, identifying reporting trends in Hong Kong.

As a specialist ESG Reporting Consultancy, Alaya Consulting acts as your first point of contact for registering a new ESG report or integrated report.  Hong Kong-based reporters could send an email to to register a report.

For further enquiries, please contact Tony Wong at or +852 3959 5198.

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Alaya Consulting Becomes The First Independent Company To Be An AA1000 Licensed Assurance Provider In Hong Kong

Alaya Consulting Limited has been awarded the status of licensed AA 1000AS (2008) assurance service provider by AccountAbility in UK.  Alaya Consulting strives to provide sustainability assurance services with independence by a distinct set of skills based on our expertise in sustainability areas.

AccountAbility is a leading global organisation providing innovative solutions to the most critical challenges in corporate responsibility and sustainable development. AccountAbility’s AA1000 series of standards have become the gold standard in the industry for performing assurance of non-financial reports (commonly called ESG reports).

Tony Wong, Founder and Principal Consultant, stated: “In its continuing growth as one of  the leading sustainability solution providers in Hong Kong, Alaya Consulting is now vested with the responsibility and privilege to carry our external third party assurance of sustainability reports for organisations that are interested to get a credible statement as well as global recognition of their sustainability commitment. We are committed to appraise the extent to which an organisation adheres to the AccountAbility Principles of Inclusivity, Materiality, and Responsiveness.”

There is a growing interest among stakeholders in assessing a company’s sustainability report. Pursuing a credible third party to accredit the report is seen as a good way to address such stakeholder need. The AA 1000 series are principles-based standards to help organisations become more accountable, responsible and sustainable.

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Alaya Consulting Limited encouraged companies to follow the reporting guideline from Global Reporting Initiative

Alaya Consulting Limited participated a ESG conference in Hong Kong with other industry stakeholders such as CMA Testing & Certification Laboratories and Hong Kong Institute of Society Impact Analysts on 9 December.  Joined by over 60 senior executives from Hong Kong-listed companies, the seminar was held at the Regal Hong Kong Hotel.  Feedback from audience was overwhelming.

During the seminar, speakers have exchanged ideas and views on the latest development of sustainability, including reporting, assurance, ESG investing, collaboration with social enterprises, etc.  Stephen Wong, Vice Chairman of the Institute, shared his views on ESG investing, explaining how being a sustainable business could drive company’s profitability as well as share performance, and the importance of the “Creating Shared Value” concept.

Howard Ling, Senior Consultant of HKCSS, cited successful cases of collaboration between NGOs and For-Profits through achieving social missions.  He also explained the importance of being a company bearing social responsibility should be able to demonstrate genuine care for its customers.

DSC02242In the arena of sustainability reporting, listed companies will need to “comply or explain” on their sustainability initiatives in 2015.  Tony Wong from Alaya Consulting Limited encouraged companies to follow the reporting guideline from Global Reporting Initiative due to its wide acceptability and scalability, seek professional assistance to avoid greenwashing, and get their reports assured in order to raise credibility.

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Hong Kong is lagging behind its peers on sustainability

A recent survey by WWF found that Hong Kong people would consume “Three Earths” if they continue to maintain the current consumption level.  The NGO calls for a cut-down in consumption.

The findings are hardly surprising reflecting a general lack of awareness about sustainability development in Hong Kong. Another indication which suggests the same is the delay of announcing ESG compliance among the local listed companies. While all major stock exchanges in Asia have already implemented some sort of comply or explain requirement, HKEx, one of the major players, maintains its voluntary requirement in terms of ESG Reporting.

To raise the public awareness further among general public, all stakeholders including professional bodies, corporations, and consultancies should work together to improve the awareness of sustainability.


I have joined a ESG seminar recently, one of the panelists said it’s time for the Hong Kong Government to compile a sustainability report, it might not sound like a joke any more.

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