Listed companies in Hong Kong should go beyond international standards in disclosing greenhouse gas emissions and waste management data to improve the city's response to environmental challenges, say campaigners.
The Green Earth analysed how the 50 constituents of the Hang Seng Index publicised their environmental, social and governance (ESG) reports between early June and mid-July after the Stock Exchange of Hong Kong rolled out a consultation reviewing the requirements.
It found that 38 firms, or 76 per cent, had met international standards in disclosing their greenhouse gas emissions, while 23 businesses, or 46 per cent, did so when publishing their waste management information.
But Edmond Lau Shiu-long, project officer at the Green Earth, which campaigns for proper waste management and is based in Hong Kong, said there was still room for improvement at the city's listed firms and local benchmarks should be revised so they are stricter than those adopted internationally.
"It's nothing strange to see international standards offer a greater degree of freedom because they want to be applied to most of the countries," he said.
"Locally, we need to have an advocacy on making reports to meet the existing needs."
In May, the Stock Exchange of Hong Kong, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing (HKEX), issued a consultation paper on reviewing the ESG reporting guide and related listing rules.
The focus was to support corporations to improve how they manage and disclose their ESG activities and metrics.
Introducing mandatory disclosure requirements in the reporting guide to include a statement setting out the board's consideration of ESG issues was among its key proposals the authority wanted to implement in 2020.
With reference to international standards, the proposals said companies should report direct emissions from the firm's operations, and those indirectly resulting from the generation of bought or acquired electricity, heating, cooling and steam consumed within the firm.
But the green group argued all other indirect emissions that occur outside the company such as those generated by its staff taking planes should also be covered.
Noting that 38 firms could fulfil the official proposed requirements in the study, with 14 of them already meeting the green group's demands, its founder Edwin Lau Che-feng said: "The level of difficulty is not like moon landing."
On waste management data, Edmond Lau noted the official proposals only suggested that firms outline waste reduction targets set and steps taken to achieve them.
He said international standards required firms to list out the volumes of waste generated by categorising them in accordance to how they were being handled in the end.
"We saw this as a weakness," Lau said, referring to the official proposal.
The project officer said the group hoped firms would provide detail on volumes on waste production, disposal and recycling, and it found 10 blue-chip firms, or 20 per cent, did not provide any of this data, so that it could only mark them as ungraded.
He added most of those which fell under the poorest performance category in both disclosing greenhouse gas and waste management data in the study were Chinese-funded companies.
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