City University of Hong Kong calls for broader ESG reporting coverage, says all financial institutions licensed by SFC should submit emissions data

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Financial institutions can take a ‘more active role’ in driving Hong Kong’s low-carbon transition, Phyllis Mo, associate director of CityU’s Research Centre for Sustainable Hong Kong, says

Of the firms licensed by the SFC, only about 600 participate in exchanges in the city and therefore publish annual ESG performance reports, while 2,544 do not

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Hong Kong’s Victoria Harbour. Strengthening climate-related disclosure requirements is important for the development of the city as a regional green finance hub, and will contribute to ongoing decarbonisation efforts, the CityU report says. Photo: Yik Yeung-man

Martin Choi

Published: 9:00pm, 11 Apr 2024Updated: 9:18pm, 11 Apr 2024

All financial institutions licensed by the Securities and Futures Commission (SFC) to carry out regulated activities should be required to submit environmental, social and governance (ESG) reports that cover their overall greenhouse gas emissions for the development of a comprehensive ecosystem of sustainability disclosures in the city, City University of Hong Kong (CityU) said.

The SFC has 10 types of regulated activities, which include dealing in securities and asset management.

All of the about 2,600 companies listed in Hong Kong are required to publish annual sustainability reports on their ESG performance, alongside mandatory periodic financial reports. However, of the firms licensed by the SFC, only about 600 participate in exchanges in the city, while 2,544 are not.

“Given that many multinational and local financial institutions operating in Hong Kong are not listed, all licensed financial institutions should be required to submit ESG reports covering overall greenhouse gas emissions data,” said a report called “Estimation of Financed Emissions in Hong Kong and Policy Recommendations” that was released on Thursday by CityU’s Research Centre for Sustainable Hong Kong. Disclosure of such data will facilitate the improved monitoring and assessment of the ecological footprint of financial activities, it added.

“Financial institutions can take a more active role in driving the low-carbon transition,” Phyllis Mo, the research centre’s associate director, said during the launch. “Asset managers should provide by-sector financial activity information, and also develop a localised by-sector asset turnover ratio database to facilitate the estimation of financed emissions.”

Strengthening climate-related disclosure requirements is important for the development of Hong Kong as a regional green finance hub, and will contribute to ongoing decarbonisation efforts in the city, according to the report.