Wealth Management August 09, 2019

Sustainable finance: ESG investment in Hong Kong

Sustainable finance: ESG investment in Hong Kong

“We’re seeing further focus on Environmental, Social and Governance (ESG) in China and Hong Kong, with the most recent example being a controversial consultation in Hong Kong.

Consultations can appear dry at the best of times, but not this one – how this controversy plays out will help to shape ESG uptake and understanding in one of the most populous and economically important parts of the world, and pits large investors against large companies.”

In an article for The Fintech Times, Plentitude Co-Founder Geilan Malet-Bates discusses environmental, social and governance (ESG) investment in Hong Kong and China, and the opportunities open to businesses which take their responsibility to people and planet seriously.

Held to account

Hong Kong Exchnange (HKEX) has launched its own paper “Review of the ESG Reporting Guide and Related Listings rules” due to “a general absence of ESG governance structures and lack of discussions on the process of materiality assessments supposedly conducted”. It primarily redirects ESG responsibility to listed company boards. Now, they must ensure a greater presence of ESG disclosures in a timely fashion.

Still a box-ticking exercise?

Recently, EY revealed that Hong Kong ESG disclosures are very much still a formality for among around 60% of report issuers. “Box ticking is better than nothing, but only just,” says Malet-Bates.

Opportunities within ESG

Malet Bates says there’s a lot to be gained by Hong Kong businesses from growing interest in ESG. A report from the UN’s Principles for Responsible Investment shows China’s ESG investment has increased, with more international investors taking factors like sustainability into consideration. 

You can read more detail on each of these points in the full article.