ESG Compliance, Regulation & Reporting
ESG Compliance and Regulation
Increasingly, financial services providers are facing more regulatory requirements on ESG- related issues, including climate-related risks disclosures, green products launch and marketing, and product disclosure standards and requirements. It is important for them to implement all relevant ESG regulatory requirements in their business strategies and operational processes. Similarly to other regulatory requirements, we are set to provide our compliance services to support this new area of compliance, including the following areas:
- Formulation of ESG strategy and policy;
- ESG reporting services;
- ESG-related product disclosure requirements;
- ESG risk assessment and gap analysis (compliance health check)
- Regulatory compliance on SFC Climate-related risks disclosure;
- General ESG training and education for front-office staff, directors, senior management teams and other teams;
- Due diligence on ESG-related products and services;
- Review of policy and procedures for incorporating ESG regulatory requirements;
- Establishment of ESG-related risk framework and risk assessment, and monitoring plan;
- Review of ESG promotion and marketing activities; and
- Oher ESG compliance consulting matters.
ESG Reporting
ESG reporting and disclosures is focused on supporting and improving listed companies’ governance and disclosure of ESG activities. As required by the HKEx in Hong Kong, a listed company at the HKEx is obliged to submit its annual ESG report covering the same period reported in its annual report.
ESG measures help determine the future performance of companies and are used to measure how a business interacts with society and the environment. ESG reporting enables businesses to promote corporate sustainability to allow for better decision-making.
HKEx updated a Guidance Letter GL86-16 for new IPO applicants in July 2020, requiring additional disclosure matters relating to ESG. Empirical research has suggested that increasing ESG disclosure is negatively correlated with under-pricing – leads to a decrease in first day returns, price revisions and firm valuation. Our ESG reporting solution can assist the following:
- Preparation of the ESG report that is in compliant with the Guidance Letter GL86-16 and other relevant sections of HKEx’s Listing Rules in connection to IPO applications;
- Implementation of ESG metrics before the IPO process – discuss with external experts and advisors to review ESG programs and to receive advice on improvement strategies through the IPO process;
- Consideration of long term ESG initiatives before preparing for IPOs; and
- Provision of consulting services in respect of EGS governance structure.
In compliance with the ESG reporting guideline published by the HKEx, we assist clients by suggesting improvements on data reporting methods, advising on the reporting framework and preparing annual ESG reports. The reports enable stakeholders to develop an idea of current practices, ESG performance and future operational strategies on maintaining the sustainability of the company. Our services include:
- Undertake stakeholders survey and needs analysis;
- Handle report verification and assessment processes; and
- Manage and mitigate risks in the supply chain and offer supply chain solutions including supplier reviews and code of conduct compliance assessments
Process of preparation of ESG reports:
- Proposal Consultation: Consult with clients to provide tailored services, understanding their requirements and specifications to meet their expectations. We acquire knowledge on the company’s background including ESG governance structure and policies.
- Operations: Research and visit client’s operations / sites to formulate suggestions on improvements in their performance.
- Data Collection: Gather data on policies and KPI, providing data collection templates and evaluating the existing ESG policies of the company ensuring their alignment with best practice.
- Stakeholder Engagement: Engage internal and external stakeholders through surveys, interviews, meetings, training programs and more, as their opinions will influence clients’ operations.
- Data Analysis: Collect ESG data for calculation, analysis and disclosure and display information obtained for audience’s awareness.
- Drafting: Generate a unique, quantitative and qualitive ESG report for each client.
The ESG report will cover the following:
It is mandatory for an ESG report to include a statement relating to ESG governance structure. We adopt a systematic approach in handling ESG matters with implementation of a proper governance ESG structure.
- ESG reporting – Drafting and preparation of annual ESG/sustainability reports in compliance with the ESG reporting guide published by HKEx.
- ESG Governance Structure and Policies – Provision of ESG governance structure and policies consultation.
- ESG Performance – Advising on cost-effective improvement opportunities and implementation strategies of client’s ESG disclosure and assist in implementing them in their organisations to help enhance ESG performance.
- ESG Disclosure – Providing ESG disclosure and addressing all related queries raised by regulators
- Benchmarking – Conducting benchmarking analysis on current performance against competitors
We aspire to conserve the environment, promote environmental consciousness, and improve our environmental performance. We provide innovative solutions to reduce negative environmental impacts, mitigate risks and promote corporate sustainability, leading to long-term competitive advantages.
- Climate Change – Identify, assess and manage climate-related risks involved, provide solutions in managing climate-related issues, and provide reduction targets & action disclosure – explore risks and opportunities associated to climate change issues including mitigating physical, market and reputational risks.
- Environmental KPIs – Collect data on environmental Key Performance Indicators (KPIs) – types of emissions, Greenhouse gas emissions in total, GHG intensity, amount of hazardous & non-hazardous waste disposal and energy management.
- Emission reduction – Disclosure and provision of advice on reducing carbon emissions and negative environmental impacts, with data collection on carbon emissions.
- Waste management – Provide consultation on waste management and green finance.
We are committed to building an inclusive work environment, empowering anti-discrimination and anti-harassment. We also recognise the importance in the development of knowledge and internal awareness; hence we offer training programs to senior management and personnel.
- Training – Provide regular training on anti-corruption and corporate governance best practices for directors and employees to promote internal awareness and depth of knowledge.
- Stakeholder Engagement – Guarantee stakeholder engagement in decision-making processes, expanding community involvement and ensuring fair treatment and social equity. We manage our relationship with stakeholders and develop an understanding of their concerns, responding to their opinions and requests.
- Health and Safety – Provision of occupational health and safety consultation.
- Social KPIs – Collect data on social KPIs – staff diversity, turnover, no. of cyber incidents, total training hours and number of internal promotions.
