ESG disclosures of Hong Kong-listed companies have matured: report

In 2022, no companies were labeled underdisclosed as opposed to 3.5% in  2021.

The quality of ESG disclosure of Hong Kong-listed companies has shown a trend of comprehensive optimization and overall improvement as driven by increasingly stringent guidelines as reflected in PwC’s 2023 ESG Reporting Study for Hong Kong Listed Companies.

The report found that in 2022, no companies were labelled as under-disclosed or had an ESG disclosure ratio of less than 50%. This is less than 3.5% of under-disclosed firms in 2021 and 15.8% in 2020.

78.8% of Hong Kong-listed companies were labelled as well-disclosed whilst 21.1% were moderately disclosed in 2022.

According to the survey results, in terms of the degree of disclosure, the proportion of all issues covered by the ESG Reporting Guide that is disclosed in the ESG reports of sampled companies has reached more than 50%, and the level of disclosure completeness of listed companies' ESG reports has been increasing. 

In terms of year-on-year growth, the disclosure ratio of listed companies on issues such as supervision of ESG-related matters, ESG governance policies and strategies, and review progress according to ESG-related objectives shows a rapid growth trend, indicating that listed companies' ESG disclosure has exceeded the basic requirements of compliance, moving towards higher-dimensional ESG management goals, more systematic ESG governance, more in-depth ESG management and better ESG performance.

The study also revealed that more than 92% of sample companies have disclosed ESG management of their supply chains. Altogether, 79% of the sample companies have disclosed their general implementation and inspection practices, and 76% have disclosed considerations in the procurement process.

“Our study found that Hong Kong-listed companies are paying more attention to ESG management and disclosure. Notably, the structure and content of most ESG reports have improved under the current disclosure requirements of HKEX. The improvement of the quality of issue disclosure indicates that ESG disclosure by listed companies exceeded the basic requirements of compliance, moving towards higher-dimensional ESG management goals, more systematic ESG governance, more in-depth ESG management and better ESG performance,” Kanus Yue, PwC China Sustainability Disclosure and Consulting Lead Partner said.