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HKEx issues new ESG Guidelines

31 August 2012, Hong Kong – we are encouraged that the Hong Kong Exchanges (HKEx) is stepping up disclosure with new ESG disclosure requirements and KPIs. The new ESG Guidelines for listed companies encourages issuers with a financial year ending after 31 December 2012 to implement the ESG rules and indicates that the HKEx plans to raise the level of obligation to ”comply or explain” by 2015. 

Here are a couple of excerpts on water use …

HKEx ESG Guidelines: Water Excerpts:

 

  • General disclosure:  Policies on efficient use of resources including energy, water and other raw materials
  • KPI B2.2 Water consumption in total and intensity (e.g. per unit of production volume, per facility).
  • KPI B2.4 Description of whether there is any issue in sourcing water that is fit for purpose, water efficiency initiatives and results achieved.

 

What was more encouraging were the comments received on the “Use of Resource” section …

“We received large majority support for the proposed recommended disclosures”

“Some respondents suggested adding:

(a) percentage and total volume of water recycled and reused; and

(b) percentage of operations in water-stressed areas.”

“We note that investors are particularly concerned about percentage of operations in water-stressed areas. However, to incorporate them into the Guide, we need clearer definitions of water-stressed areas in order for issuers to report. We will further consult with investors in this regard.”