意見交流園地 – Karen Ho / Idea Exchange – Karen Ho
In our blog last week, we discussed about the Green Finance development in Hong Kong and the rest of the world with a focus of the Green Bonds market.
This week we will learn more about how policy makers in Hong Kong has ramped up their requirements to issuers in the equities market in regards to their disclosure on their Environmental, Social and Governance (ESG) data.
In December last year, the Stock Exchange of Hong Kong published their conclusion of the ESG guide consultations. They will strengthen the ESG disclosure requirement by making changes to the listing rule, effective for the financial years commencing on or after 1 July 2020.
Key changes on the required disclosure by issuers include:
- New Mandatory disclosure requirements:
．a board statement setting out the board’s oversight of ESG matters;
．application of Reporting Principles “materiality”, “quantitative” and “consistency”; and
．explanation of reporting boundaries of ESG reports;
- Significant climate-related issues impacting the company;
- Additional “Environmental” key performance indicators (KPIs) to require disclosure of relevant targets;
- Upgrading the disclosure obligation of all “Social” KPIs to “comply or explain”
What does it mean to us?
All stakeholders, including you and me as retail investors, or MPF contributors, the professional investing communities, or as a suppliers or customers of a listed company, would now be empowered with improved ESG disclosure to help you make a better investment or business decision. All of us would be able to understand how prepared the Board of a company are in embracing the new era of Sustainable Future, how they identify material risk to their business, such as Climate related risk, and are they setting up targets and metrics and being resilient to increasing demands on addressing ESG issues.
This positive development in Hong Kong, would help us to stay competitive to the rest of the world, while all policy makers across the world has turn their attention to sustainable finance.
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