2024 ESG Disclosure Report of Listed Companies
HKEX releases 2024 ESG Disclosure Report of Listed Companies, aimed at analyzing their environmental, social, and governance information disclosure based on ESG Reporting Code.
HKEX stipulates 12 environmental and social disclosure issues in the ESG Reporting Code, requiring listed companies to disclose based on the principle of Comply or Explain.
Related Post: HKEX Releases Annual ESG Review of 400 Listed Companies
Overview of ESG Disclosure of Listed Companies
The HKEX reviews ESG reports released by 2489 listed companies in 2024, a fivefold increase compared to 2022. The ESG reporting standards stipulate disclosure at four environmental issues and eight social issues. Except for the Labor Standards at the social level, the disclosure ratios of the remaining 11 levels are all greater than 91%, with high disclosure ratios for climate change (99%) and environment and natural resources (98%).
In terms of climate related disclosures, the HKEX requires all large cap issuers to comply with climate related disclosure guidelines starting from 2026. This survey shows that all large cap issuers have already mentioned the international climate disclosure framework, with a high proportion of Taskforce on Climate-related Financial Disclosures recommendations (70%), Global Reporting Initiative guidelines (66%), and International Sustainability Standards Board standards (34%).
In terms of climate scenario analysis, 80% of large cap issuers have conducted scenario analysis, and over 70% have used scenario analysis to assess climate related risks. In terms of greenhouse gas emissions, all large cap issuers have disclosed Scope 1 and Scope 2, with 50% disclosing Scope 3. In terms of activities covered by Scope 3, business travel (69%), purchasing products and services (67%), and waste generated during operations (62%) account for a relatively high proportion. The disclosure proportion of downstream activities is generally low, which may be due to the lack of information on the use of customer products and services by large cap issuers.
Among the disclosure items at four environmental levels, 94% of large cap issuers have set qualitative targets and 50% have set quantitative targets. In terms of quantitative goals, the majority of time frames are within 5 years, with a few exceeding 10 years. These disclosure times are closely related to the jurisdiction where the issuer is located, with mainland China and Hong Kong planning to achieve carbon neutrality by 2060 and 2050, respectively.
HKEX’s Recommendations on ESG Disclosure
The HKEX provides the following recommendations for ESG information disclosure of listed companies:
- Understand climate regulations: Listed companies should read and master climate information disclosure guidelines and other relevant materials.
- Implement gap analysis: Listed companies need to evaluate whether there is room for improvement in the existing ESG information disclosure process.
- Consider whether resources are sufficient: Listed companies need to plan internal resources and hire ESG experts if needed.
- Collaborate with value chain partners: Listed companies need to collaborate with value chain partners to collect data and develop infrastructure.
The HKEX plans to continuously review ESG reports of listed companies and provides guidelines and training in the future.
Reference:
Review of Implementation of Environmental, Social and Governance Reporting Guide
