ESG Reporting: Hong Kong’s Hang Seng Companies Have Transparency Shortcomings

Companies in the Hang Seng Index rank in the midrange internationally in terms of the quality of their ESG reporting. This is the finding of the Global ESG Monitor 2022 (GEM), Regional Report on Hong Kong.

The GEM is considered an international leader in analysing the non-financial reporting of leading companies in Europe, North America, Asia and Australia.

According to the latest GEM study, the companies listed in the Hang Seng Index score an average of 57 points out of a maximum possible 100 points for the transparency of their non-financial reports.

This result places the Hang Seng Index at the lower end of the midrange among the total of ten international indices from North America, Europe, Asia and Australia that were examined as part of the GEM, and ranks just above the level of S&P Asia (56 points) and Australia’s ASX50 (53 points).

At the top of the index league are three companies – sports equipment supplier Anta Sports Products, financial services provider Hang Seng Bank and Internet services provider and software developer Tencent Holdings – on a score of 77. Sands China and HSBC Holdings rank 4th and 5th among the blue chips with 75 and 74 points respectively.

Other companies among the top ten include Lenovo Group, Power Assets, Henderson Land Development, China Mobile and Hang Lung Properties.

With a rate of 97 percent, a generally high level of willingness exists among Hang Seng Index companies to base their non-financial reporting on a standard international framework. In a global comparison, however, they tend to be more focused with an average of 6.7 referenced frameworks and standards.

This is also reflected, among other things, in the length of the reports, which rank among the most concise of the ten indices examined. “As you go through the Hang Seng data, you then notice that this focus is not always an advantage,” comments Ariane Hofstetter, co-founder and Head of Research and Data Science at GEM. “In many cases, there’s a lack of important details that would lead to better comprehensibility, reliability and comparability of the data.”

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