Increasing demand from institutional investors to invest in sustainable businesses, coupled with growing public expectations around corporate responsibility,1 are placing a greater focus on companies to address environmental, social and governance (ESG) concerns that are material to their business. To better understand how business leaders are addressing these concerns and driving ESG development in the region, KPMG China, in association with CLP and the Hong Kong Institute of Chartered Secretaries (HKICS), conducted a survey of more than 200 senior executives of listed companies in Hong Kong. Interestingly, the survey finds that business leaders acknowledge the value of addressing ESG concerns that are material to their companies, in line with growing evidence that ESG factors contribute to long-term sustainable financial performance.2 However, many of them have not fully incorporated dealing with material ESG concerns as part of their business practice. This can be attributed to the fact that ESG is still a relatively new field in Hong Kong, so companies will need time to learn how to effectively integrate ESG into their core business. This report provides recommendations to help companies think holistically about their decision-making processes related to ESG issues. This includes the careful consideration of ESG business strategy, risk management, compliance and performance to achieve long-term value for the organisation. We hope you find the recommendations in this report helpful as a foundation for effective ESG strategic planning, and would welcome the opportunity to discuss the survey findings and the overall industry landscape.
1 ‘ESG, risk, and return’, KPMG International, April 2018, https://assets.kpmg.com/content/dam/kpmg/be/pdf/2018/05/esg-risk-and-return.pdf
2 ‘ESG 101: What is ESG Investing?’, MSCI, Accessed on 5 June 2018, https://www.msci.com/esg-investing