Role and Impact of Research Component 2: ESG or sustainability reporting is a listing rule requirement at HKEx. In May 2018, HKEx released a review on ESG reporting and shows that only 38% of firms comply with disclosure requirements in all 11 aspects. Using 2017-18 ESG reports of HKEx listed firms, the research component coordinator conducted a preliminary analysis on the accuracy of these reports [1]. Based on 181 randomly selected ESG reports of listed companies, 815 mistakes or an average of 4.5 mistakes per firm were identified, indicating a serious problem of the ESG reports. On December 9, 2020, the research component coordinator was invited by Securities and Futures Commission (SFC) as the only Hong Kong representative (among 6 academics being invited in the world) to attend a global roundtable organized by IOSCO to share his view on pathway to strengthen ESG regulations globally.

Therefore, this research component should bring significant value to the overall ESG intelligence for researchers, regulators and industry professionals who need ESG intelligence reflecting the quality of ESG reports of listed firms. We believe that the research team is positioned with sufficient expertise and experience to achieve this goal.

[1] This analysis classified the mistakes and misinformation into 5 categories, namely, Misunderstanding of Stakeholder Engagement, Environmental Data Collection, Environmental Data Calculation, Misunderstandings in Social Aspect, and Misalignment between HKEx Guidelines.