With an array of environmental and social risks stemming from the impacts of climate change, achieving a sustainable future is now a global imperative, and gaining substantial attention and momentum.
Today, corporations are increasingly expected to integrate sustainability considerations into their businesses, to lower environmental and social risks while maintaining conventional financial growth, as well as finding ways to differentiate themselves from competitors.
Meanwhile, an increasing number of investors have committed to responsible investment, which incorporates environmental, social and governance (ESG) factors into their investment decisions. This approach can help better assess the overall performance of companies including their risk reduction and management steps, and generate sustainable, long-term returns.
However, in the current Hong Kong landscape, there are gaps between corporates and investors in their interpretation of what ESG expectations should be set. Lacking a uniform set of criteria or measurements, there is a disconnection between what corporates disclose, and what corporate performance information the investors receive, which results in a difficulty in and significant challenge to investing responsibly.