The Hong Kong Institute of Certified Public Accountants (HKICPA) announced recently its launch of the Best Corporate Governance and ESG Awards, now inviting listed companies and public sector / not-for-profit organisations to enter the 2021 Awards by August 9, 2021.
According to the accountancy body, the awards — previously known as the Best Corporate Governance Awards — have been renamed and refocused this year to reflect the increasing importance of ESG reporting, and to encourage companies and organisations to integrate the oversight and implementation of their corporate governance (CG) and ESG, as well as uplift the standards of disclosure and practices in both areas.
“We hold the view that, in the final analysis, you can’t have good corporate governance without good ESG, and you can’t have good ESG without having a good CG structure in place”, said Mr. Raymond Cheng, President of HKICPA and Chairman of Judging Panel of Best CG & ESG Awards 2021.
The judges of the Awards have recommended that companies develop clear ESG strategies and objectives from the top down, as well as undertaking ongoing benchmarking with key performance indicators (KPIs) and concrete targets to monitor how they are performing in terms of ESG,” said Patrick Rozario, Chairman of the Review Panel of the BCG & ESG Awards 2021.
Companies and organisations will continue to be judged in seven main categories, including categories for HSI companies, and other listed companies based on market capitalisation, and public sector organizations based on revenue, HKICPA noted.
The judging criteria look beyond the minimum statutory and regulatory requirements to identify voluntary disclosures and practices, the institute added.
The top accolades in this year’s Awards for will be for the Most Sustainable Companies / Organizations, according to the HKICPA.
These will be presented to listed companies and public sector/ not-for-profit organizations that demonstrate excellence in both CG and ESG practices, with equal weight being allocated to these two areas, as they move towards fuller integration of these two key aspects of reporting, said Loren Tang, Chair of the Organizing Committee of the Best CG & ESG Awards 2021.
“Companies and organisations that can integrate their CG and ESG practices and reporting from the perspectives of, for instance, organisational structure, risk management and internal control, and the shareholder/ stakeholder communication and engagement, are more likely to enjoy a long-term sustainable future,” she explained.
ESG reporting in Hong Kong
The Hong Kong Exchanges and Clearing Limited (HKEX) released an enhancement of the Environmental Social and Governance Reporting Guide under the Listing Rules in December 2019, in a bid to strengthen the leadership role and accountability of company boards in relation to ESG reporting, as well as requiring more specific KPIs to be reported in both the environmental and social aspects of ESG.
The enhanced guide has taken effect for companies with financial years commencing on or after July 1, 2020.
The HKICPA said it has recently initiated a brief research on the ESG assurance status of all 55 Hang Seng Index constituent companies, which published their sustainability/ ESG report or incorporated a sustainability/ ESG section in their annual report for 2020/21, as at 28 June.
While 49 of them published this ESG information by the cut-off date, 23 out of 49 companies also sought external assurance on the information disclosed, the institute noted.