ESG is picking up globally. How is it doing in APAC?
According to Baker McKenzie’s Asia Pacific Business Renewal Series, the top three ESG risks in APAC are “Regulatory enforcement and investigation”, “New regulations”, and “Changing buyer behavior”. Organizations might increasingly embed ESG into their risk frameworks and corporate strategies.
More organizations are stepping up to more quality ESG reporting. According to PwC, close to 1,700 companies and organizations in APAC support the Task Force on Climate-related Financial Disclosure (TCFD), which is almost 50% of the 3,400 global supporters in 2022. Also, over 600 companies signed up to the Science Based Targets Initiative (SBTi).
Invesco also gave their outlook on ESG in 2023. They believe there will be more nuance in ESG investing approaches. There will be more complexity in ESG investing, leading to innovations in ESG. They envision a larger emphasis on “social” aspects. Climate adaptation and transition might be key, so organizations might capture climate investing opportunities. The definition of ESG might also be more defined to have standards across global geographies.
ESG in Hong Kong
There are increasingly governmental regulations on ESG, like the reporting guideline from Hong Kong Exchanges and Clearing Limited (HKEX). At the same time, non-governmental organizations are also stepping up to advance ESG efforts. For example, Green Monday has launched an ESG Coalition to unify businesses for a sustainable future. Foro example, some business partners in the ESG Coalition work to accelerate the plant-based movement through providing plant-based options in their restaurants. In our previous article, we also mentioned Carbon Care Asia who is providing the CarbonCare® ESG Label for best performers.
ESG awards is another field blooming in Hong Kong. Hong Kong ESG Reporting Awards, Hong Kong Institute of Certified Public Accountants, and Hong Kong Venture Capital and Private Equity Association are among some of the organizations giving out awards to recognize outstanding companies in ESG reporting.
In our previous webinar “ESG: How to Get Started”, speakers also mentioned that “S” is very important in a just transition, but is often left out of the equation. While the driver behind ESG should ideally be the strive towards a livable planet, businesses’ biggest motive to start on ESG is to satisfy regulatory compliance so they can access capital from investors.
If you want to do more around ESG, get in touch with us.
