Environmental, Social and Governance (ESG) is fast becoming a keyword for listed companies and multi-national organizations. In the United States, the United Kingdom, Australia and Japan have made consistent and reasonable ESG reporting mandatory for some industry segments or listed companies. In Hong Kong, Malaysia and Korea, annual reporting on ESG status has become an important part of prudent management and a common practice for businesses every year. ESG Report is also named as Corporate Social Responsibility (CSR) Report and Sustainability Report.
In Hong Kong, most of Hang Seng Index companies are reporting ESG issues in some form while half of them have a stand-alone report. Internationally, over 90% of Global companies are reporting their ESG performances.
More companies will issue ESG Report with Hong Kong Exchanges and Clearing Limited (HKEx) requirement on ESG disclosure. HKEx is planning to raise the level of obligation of ESG report publication from “voluntary” to “comply or explain” by 2015. This means that the listed companies are required to issue ESG Report in order to fulfill HKEx requirements. Otherwise, they are required to submit explanation for not issuing ESG Report to HKEx.