This photo dated Oct 12, 2023 shows Kanus Yue (left), PwC China sustainability disclosure and consulting lead partner, and Cyrus Cheung, PwC Hong Kong sustainability disclosure and consulting partner in Central, Hong Kong. (ZHOU JIANXIN / CHINA DAILY)

Hong Kong-listed companies are paying increasing attention to ESG (environmental, social, and corporate governance) management and disclosure, and the quality of their ESG reports is improving, according to a survey released by consulting firm PwC on Thursday.

Among the 300 Hong Kong-listed companies sampled, the disclosure of all ESG Reporting Guide issues in their ESG reports is maturing, with an increasing level of completeness. The maturity of social issues disclosure has the highest proportion, reaching 90 percent, the “2023 ESG Reporting Study for Hong Kong Listed Companies” showed.

Hong Kong Exchanges and Clearing Ltd (HKEX) launched the ESG Reporting Guide in 2013 and has been reviewing its ESG reporting framework and rules to promote the sector’s development

Enterprises have taken the initiative to address matters concerning the environment and society in their day-to-day operations, said Kanus Yue, sustainability disclosure and consulting lead partner at PwC China.

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This includes implementing policies on environmental preservation, sustainable resource management, fair employment practices, supply chain management, as well as anti-corruption measures, she said.

They are also going the extra mile by employing quantitative indicators to measure their operational impact, she added, pointing out that the level of disclosure in those domains has reached the “mature” level.

“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,” Yue said.

“Following significantly upgraded regulatory requirements, Hong Kong-listed companies can consider providing even more ESG information to investors and stakeholders, further enabling ESG reporting to help Hong Kong listed companies integrate ESG issues into their overall corporate goals and strategies to underpin corporate sustainability value.”

Hong Kong Exchanges and Clearing Ltd (HKEX) launched the ESG Reporting Guide in 2013 and has been reviewing its ESG reporting framework and rules to promote the sector’s development. It took a proactive step in April by publishing a consultation paper that proposed making it mandatory for all listed issuers to incorporate climate-related disclosures in their ESG reports and introduce new climate-related disclosure requirements aligned with the International Sustainability Standards Board (ISSB) Climate Standard.

The reporting guide also requires public firms to disclose their practices related to supply-chain management, focusing on green procurement and identification of ESG risks that affect supply chains.

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The survey found that more than 92 percent of the polled companies have disclosed ESG management of their supply chains. Nearly 80 percent have made a disclosure on their general implementation and inspection practices, while 76 percent have disclosed considerations in the procurement process.

According to the findings of PwC’s 26th Annual Global CEO Survey China Report, 52 percent of CEOs from the Chinese mainland and Hong Kong expect that climate risk will have a significant effect on their respective supply chains in the next 12 months.

“As ESG risks in the supply chain begin to surge, enhancement of supply chain ESG risk identification mechanisms and management of ESG impacts on supply chains will contribute to listed companies’ ESG compliance, while adding to their long-term sustainability and organizational resilience,” said Cyrus Cheung, PwC Hong Kong sustainability disclosure and consulting partner.

Contact the writer at zhoujianxin@chinadailyhk.com