News Release: Exchange Publishes ESG Guide Consultation Conclusions and its ESG Disclosure Review Findings (18 December 2019)
1. General Changes Adopted
- Shortening the deadline for publication of ESG reports to within 5 months after the financial year-end
- Printed ESG report is not required (unless responding to shareholders’ specific request) with a notification of online publication
- Notify intended recipients of: the presence of the ESG report, website address, place on website where it may be accessed, and how to access the ESG report
2. Introduction of Mandatory Disclosure Requirements
- A board statement setting out the board’s consideration of ESG matters with revised wordings to provide greater clarity, including:
i. A disclosure of the board’s oversight of ESG issues
ii. The board’s ESG management approach and strategy, including the process used to evaluate, prioritise, and manage ESG-related issues (including the risks to the issuer’s businesses)
iii. How the board reviews progress made against ESG-related goals and targets (with explanation of how they relate to the issuer’s businesses)
- Application of Reporting Principles “materiality”, "quantitative", and "consistency"
- Explanation of reporting boundaries and identification process for including specific entities or operations
3. Changes on Environmental Aspects Disclosure
- Introducing a new A4 for Climate Change
- Amending the “Environmental” key performance indicators (KPIs) to require disclosure of relevant targets set for KPI A1.5 Emissions, KPI A1.6 Waste Reduction, KPI A2.3 Energy Use, and KPI A2.4 Water Efficiency, and steps taken to achieve them.
4. Changes on Social Aspects Disclosure
- Upgrading the disclosure obligation of all “Social” KPIs from recommended disclosures to “comply or explain”
- Revising KPI B1 Employment to clarify that “employment types” should include “full- and part-time staff”
- Revising KPI B2 Health and Safety to require disclosure of the number and rate of work-related fatalities occurred for each of the past three years including the reporting year
- Revising KPI B5 Supply Chain Management to require disclosure of KPI B5.3: Description of practices used to identify environmental and social risks along the supply chain, and how they are implemented and monitored, as well as KPI B5.4:Description of practices used to promote environmentally preferable products and services when selecting suppliers, and how they are implemented and monitored
- Revising KPI B7 Anti-corruption to require disclosure of description of anti-corruption training provided to directors and staff
For further information regarding the consultation conclusion, please visit https://www.hkex.com.hk/News/News-Release/2019/191218news?sc_lang=en
Our presentation slides from relevant training seminar for public sharing is available here
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