The Rising Importance of ESG Metrics in Hong Kong

ESG is no longer optional—it is a strategic imperative. The Hong Kong Exchanges and Clearing Limited (HKEX) mandates ESG disclosures for all listed companies, requiring annual reports aligned with financial reporting cycles. These disclosures encompass a wide range of metrics, from carbon emissions and energy efficiency to labor practices and board governance.

The urgency for robust ESG measurement has intensified with new regulations effective January 1, 2025. Companies must now demonstrate how climate risks are managed across four pillars: Governance, Strategy, Risk Management, and Metrics & Targets.

Key ESG Metrics for Hong Kong Companies

ESG metrics vary by industry and stakeholder priorities but generally fall into three categories:

1. Environmental Metrics

• Carbon Emissions: Scope 1 (direct emissions), Scope 2 (indirect emissions from purchased energy), and Scope 3 (other indirect emissions).
• Resource Use: Energy consumption, water usage, and waste generation.
• Climate Risk Management: Scenario analyses and alignment with the Paris Agreement.

2. Social Metrics

• Employee Welfare: Diversity ratios, health and safety incident rates, and training hours.
• Supply Chain Ethics: Audits for labor standards and anti-corruption measures.
• Community Impact: Philanthropy, volunteer hours, and initiatives supporting local communities.

3. Governance Metrics

• Board Oversight: Climate-related governance structures and board diversity.
• Risk Management: Processes for identifying and mitigating ESG risks.
• Transparency: Anti-corruption policies, whistleblower mechanisms, and stakeholder engagement practices.

Regulatory Frameworks Shaping ESG Metrics

Hong Kong companies must align their ESG disclosures with multiple frameworks:

• HKEX ESG Code: Mandates environmental and social KPIs under the “comply or explain” provision.
• IFRS S2: Requires detailed climate-related financial disclosures, including transition plans and scenario analysis.
• GRI Standards: A globally recognized framework for comprehensive sustainability reporting.
• UN Sustainable Development Goals (SDGs): Metrics linking corporate actions to global priorities like climate action and gender equality.

Under HKEX’s 2025 requirements, listed companies must disclose Scope 1 and 2 emissions and begin reporting Scope 3 emissions as methodologies evolve.

Benefits of Robust ESG Metric Management

Beyond compliance, tracking ESG metrics delivers tangible business advantages:

• Investor Appeal: Companies with strong ESG performance attract ESG-focused funds.
• Operational Efficiency: Metrics like energy use highlight cost-saving opportunities through efficiency upgrades.
• Risk Mitigation: Proactive climate risk assessments prevent disruptions and financial losses.
• Reputation Enhancement: Transparent reporting builds trust with customers, employees, and regulators.

Challenges and Solutions

Many companies struggle with fragmented data, unclear materiality, and evolving standards. Here’s how to overcome these hurdles:

1. Conduct Materiality Assessments: Identify metrics most relevant to your business and stakeholders through surveys and workshops.
2. Leverage Technology: Use ESG data platforms to automate collection and track real-time performance.
3. Engage Experts: Partner with ESG consultants to ensure compliance with HKEX, GRI, and IFRS frameworks.

GreenCo’s end-to-end services—from GHG accounting to climate scenario analysis—enable companies to turn raw data into actionable insights. Our ISO 9001-certified team combines environmental science, finance, and governance expertise to deliver reports that satisfy both local regulators and global investors.

Partnering for ESG Excellence

In Hong Kong’s ESG-driven market, metrics are the language of sustainability. Companies that master this language will not only comply with regulations but also unlock growth opportunities and stakeholder trust. By collaborating with GreenCo, businesses can navigate complexities, streamline reporting, and transform ESG metrics into a competitive advantage.

Contact us to develop a tailored strategy that turns metrics into meaningful progress. Lead the way in sustainability and secure your company’s future in a rapidly evolving world.

Navigating TCFD Reporting in Hong Kong

As climate-related risks reshape global financial markets, the Task Force on Climate-related Financial Disclosures (TCFD) has emerged as a cornerstone framework for organizations to transparently communicate their climate resilience. Established in 2015 by the Financial Stability Board (FSB), the TCFD provides a structured approach to disclosing climate-related risks and opportunities, enabling investors and regulators to assess their financial implications.

For Hong Kong companies—particularly those listed on the HKEX—aligning with TCFD recommendations is no longer optional but a strategic necessity driven by evolving regulations and investor expectations.

Four Core Areas in TCFD:

The TCFD’s recommendations revolve around four core pillars, each critical for demonstrating robust climate governance and strategy:

1. Governance: Businesses should outline their governance frameworks and procedures for addressing climate-related risks and opportunities. This involves detailing board oversight, management roles, and how climate considerations are incorporated into corporate decision-making.
2. Strategy: Organizations should disclose how climate-related risks and opportunities influence their business strategy. This includes insights into scenario planning, risk and opportunity evaluations, and strategic measures implemented to tackle climate challenges.
3. Risk Management: Companies should explain their processes for identifying, evaluating, and mitigating climate-related risks. This covers risk reduction approaches, adaptation plans, and steps taken to enhance resilience against climate change impacts.
4. Metrics & Targets: Firms should report key performance indicators (KPIs) and objectives tied to climate issues. This encompasses data on greenhouse gas emissions, energy and water usage, and other relevant metrics to track progress toward sustainability goals.

While TCFD adoption remains voluntary globally, its principles are increasingly embedded in mandatory regulations. In Hong Kong, the HKEX ESG Code requires listed companies to enhance climate disclosures aligned with IFRS S2, a standard heavily influenced by TCFD. This convergence means Hong Kong firms must now address TCFD-aligned requirements such as scenario analysis, governance oversight, and Scope 1-3 emissions reporting to comply with HKEX rules.

Why TCFD Reporting Matters

Hong Kong’s status as a global financial hub amplifies the urgency for robust climate disclosures. Key drivers include:

• Regulatory Compliance: HKEX’s updated ESG Code mandates detailed climate disclosures, mirroring TCFD’s cores.
• Investor Scrutiny: Most institutional investors globally use TCFD-aligned data to assess companies. Strong disclosures attract ESG-focused capital and improve valuations.
• Operational Resilience: Proactive climate risk management mitigates physical risks (e.g., extreme weather) and transition risks (e.g., carbon pricing), safeguarding long-term profitability.

However, many companies struggle with complexities like scenario analysis, GHG accounting, and aligning disclosures across multiple frameworks (e.g., GRI, IFRS S2). This is where specialized expertise becomes indispensable.

Partner for TCFD-Aligned Report

As a leading ESG consulting firm in Hong Kong, GreenCo empowers organizations to navigate TCFD reporting seamlessly. Our end-to-end services are tailored to HKEX requirements and global standards, ensuring compliance while unlocking strategic value:

1. Governance & Strategy Integration

GreenCo assists in embedding climate oversight into corporate governance structures, from board-level accountability to integrating climate risks into strategic planning. We conduct climate scenario analyses to evaluate business resilience under different warming scenarios, aligning disclosures with TCFD and IFRS S2.

2. Risk Management & Metrics Development

Our team identifies material climate risks across your value chain and designs mitigation strategies. We quantify Scope 1, 2, and 3 emissions using GHG Protocol methodologies and establish science-based targets (SBTi) to align with the Paris Agreement.

3. HKEX & IFRS S2 Compliance

GreenCo ensures your ESG reports meet HKEX’s enhanced climate requirements, including mandatory disclosures on governance, strategy, and emissions metrics. We streamline alignment with IFRS S2, reducing duplication across frameworks.

4. Technology-Driven Data Management

Leveraging custom ESG data platforms, we automate data collection and real-time tracking of KPIs, ensuring accuracy and efficiency. Our partnership with certified assurance providers adds credibility to disclosures.

Lead the Way in Climate Transparency

In a world where climate resilience defines corporate success, TCFD reporting is your gateway to sustainability leadership. Partner with GreenCo to transform regulatory obligations into strategic advantages. Our tailored solutions ensure your disclosures not only comply with HKEX and IFRS S2 but also resonate with global stakeholders, positioning your business as a pioneer in Hong Kong’s ESG landscape.

Contact us to embark on your TCFD journey. Together, we’ll turn climate challenges into opportunities for growth, resilience, and long-term value creation.

ESG Consulting Firm Hong Kong

In Hong Kong’s dynamic financial hub, where ESG performance has become a cornerstone of corporate success, GreenCo ESG Advisory Limited stands out as the premier partner for businesses navigating the complexities of sustainability. Established in 2016 and headquartered in Hong Kong, GreenCo has cemented its reputation as a trailblazer in ESG consulting, offering tailored solutions that bridge regulatory compliance, climate resilience, and long-term value creation. With a relentless focus on quality, innovation, and client success, GreenCo empowers organizations to not only meet stakeholder expectations but also lead in the global sustainability arena.

Why ESG Matters in Hong Kong

Hong Kong’s regulatory environment has undergone a seismic shift, with ESG and climate risk management transitioning from voluntary initiatives to mandatory strategic imperatives. The Hong Kong Stock Exchange (HKEX) now requires all listed companies to publish annual ESG reports aligned with their financial cycles, disclosing metrics ranging from carbon emissions and energy efficiency to labor practices and board governance. By 2025, enhanced climate-related disclosures under the HKEX ESG Code will take effect, demanding alignment with global standards like IFRS S2. These regulations reflect a broader global trend: investors, regulators, and consumers now prioritize transparency, accountability, and climate resilience.

For businesses, robust ESG practices are critical to maintaining investor confidence, accessing sustainable finance, and safeguarding reputations. Companies who excel in ESG integration unlock opportunities such as cost savings through resource efficiency, enhanced operational resilience, and preferential access to capital from ESG-focused investors.

 A Trusted Partner for Sustainable Transformation

GreenCo’s mission is to guide organizations through every phase of their ESG journey, transforming compliance into a competitive advantage. With a multidisciplinary team of experts, ISO 9001-certified processes, and a proven track record spanning over 70 listed clients across Asia, GreenCo combines technical rigor with practical insights to deliver measurable results.

Comprehensive ESG Consulting Services

GreenCo’s end-to-end services are designed to address the full spectrum of sustainability challenges:

1. ESG Strategy & Policy Development

GreenCo assists in crafting ESG policies and integrating sustainability into corporate strategy and daily operations. We assist companies in establishing governance frameworks that embed ESG considerations at every level of decision-making, ensuring alignment with Hong Kong’s corporate governance norms and stakeholder expectations.

2. Stakeholder Engagement & Materiality Assessment

GreenCo identifies the ESG issues most relevant to your business and stakeholders. Through online surveys, face-to-face interviews, and physical workshops, we assist companies in engaging with both internal and external stakeholders to pinpoint the ESG topics that are truly “material” to the organisation. This ensures your ESG report focuses on what matters most — whether it’s carbon emissions, employee welfare, or supply chain management.

3. Reporting & Disclosure

GreenCo offers end-to-end support in preparing ESG / sustainability reports that comply with your selected framework, including the HKEX ESG Code and global reporting frameworks like the GRI Standards. From data collection to report compilation, we assist companies in producing clear and impactful sustainability disclosures.

GreenCo ensures that all required disclosures—environmental KPIs (energy use, waste, water), social KPIs (employment, health & safety, anti-corruption), and governance structures—are thoroughly addressed. Every report is meticulously reviewed against HKEX’s latest guidelines and international best practices to ensure completeness and quality.

4. Climate Risk Assessment & IFRS S2 Disclosures

As experts in climate related disclosures consulting, GreenCo assist companies in the identification and assessment of climate-related risks and opportunities. This includes conducting climate scenario analysis and financial effect analysis to understand how future climate scenarios (such as 2°C vs 4°C warming) could bring risks and opportunities that impact business operations, value chain and financial performance.

With quality working and analysis results, we help companies prepare climate-related disclosure in line with the four pillars of the IFRS S2 standard: governance oversight of climate issues, climate strategies, risk management processes, and measurable metrics and targets, including GHG emissions and carbon reduction targets. With GreenCo’s expertise, companies can stay ahead of the curve and prepare for compliance with HKEX’s New Climate Requirements.

5. GHG Emissions Accounting

A comprehensive GHG profile is crucial for meeting ESG reporting requirements and serves as a foundation for assessing performance and identifying improvement areas. This profile also helps organisations align with international frameworks, such as the Science Based Targets initiative (SBTi), supporting global carbon neutrality efforts in line with the Paris Agreement.

GreenCo’s team specialises in quantifying carbon footprints by accounting Scope 1, Scope 2, and Scope 3 emissions according to the GHG Protocol. By meticulously assessing emissions from direct operations, purchase energy use, and value-chain activities, companies can establish baselines and track their progress over time. We also guide clients in setting science-based targets to demonstrate meaningful climate action to investors and regulators.

6. ESG Data Management & Assurance

To streamline ESG reporting, GreenCo leverages advanced technology solutions, including custom ESG data collection apps and dashboards. These tools enable companies to efficiently gather ESG data across business units and track performance metrics in real time. Additionally, GreenCo can coordinate external assurance services through our partner Certified Public Accountants or internal expertise, verifying ESG data in accordance with standards such as ISAE 3000, adding an extra layer of credibility to your disclosures.

Global Standards, Local Expertise

GreenCo’s ability to harmonize Hong Kong’s regulatory requirements with international frameworks is a hallmark of its success. The firm ensures clients meet the HKEX ESG Code while simultaneously adhering to:

• GRI Standards: Over 78% of the world’s largest companies use GRI, making it essential for global investor appeal.
• IFRS S2: Mandates detailed climate risk disclosures, including financial impacts and transition plans.
• SASB: Provides industry-specific metrics for sectors like finance, manufacturing, and technology.
• UN SDGs: Aligns corporate actions with global sustainability priorities.

This dual focus ensures reports are both locally compliant and globally resonant, positioning Hong Kong companies as leaders in cross-border ESG transparency.

Why GreenCo Stands Out in ESG Landscape

In a market crowded with consultants, GreenCo’s competitive edge lies in its specialization, credentials, and client-centric approach:

1. Dedicated ESG Focus
   Unlike generalist firms, GreenCo specializes exclusively in ESG and climate risk advisory. This singular focus ensures unparalleled depth in emerging trends, from evolving HKEX guidelines to global disclosure frameworks.
2. ISO 9001 Certification
   As one of the few ESG consultancies in Asia with ISO 9001 certification for quality management, GreenCo guarantees consistent, high-standard service delivery.
3. Elite Multidisciplinary Team
   GreenCo’s experts hold advanced degrees and certifications, including PhDs in environmental science, CFA charters, CPA qualifications, and GRI Sustainability Professional credentials. This blend of scientific, financial, and regulatory expertise enables holistic solutions.
4. Proven Track Record
   With projects spanning 70+ listed companies in sectors like finance, utilities, and consumer goods, GreenCo has tackled diverse challenges—from IPO-ready ESG frameworks to elevating MSCI ESG ratings.
5. End-to-End Support
   Beyond reporting, GreenCo builds long-term capacity through tools like carbon neutrality roadmaps, ESG training programs, and UNPRI-aligned investment policies for asset managers.
6. Local and Global Synergy
   Deep familiarity with Hong Kong, Singapore, and mainland China regulations—coupled with mastery of international standards—ensures clients thrive in both regional and global markets.

Client Success Stories

GreenCo’s impact is evident in transformative client outcomes:

Guided IPO Readiness & ESG Framework Development

Supported companies in their IPO journeys by creating first-time ESG reports and establishing comprehensive ESG frameworks, transitioning clients from zero experience to full compliance.

Elevated ESG Ratings for Established Conglomerates

Improved ESG scores and sustainability rankings (e.g., MSCI) for large corporations through gap analysis, implementation of best practices, and strategic alignment with global standards.

Award-Winning ESG Reporting & Performance

Enabled clients to secure prestigious accolades like the BDO Best in ESG Reporting award by enhancing transparency, data quality, and sustainability performance in disclosures.

The Time to Act is Now

With HKEX’s 2025 climate disclosure deadline approaching, Hong Kong companies cannot afford delay. By partnering with GreenCo, businesses gain more than compliance—they unlock opportunities to enhance resilience, attract capital, and lead in sustainability.

In an era where ESG defines corporate legacy, GreenCo offers the expertise, credibility, and passion to help Hong Kong companies thrive. From strategy to reporting, climate risk to carbon neutrality, GreenCo transforms ESG challenges into opportunities for innovation and growth.

Contact today to begin your journey toward ESG excellence. Together, we can build a sustainable future—one report, one strategy, one breakthrough at a time.

GRI Reporting in Hong Kong

In Hong Kong’s dynamic business environment, where ESG transparency is a regulatory and strategic imperative, the Global Reporting Initiative (GRI) has emerged as a cornerstone framework for sustainability disclosure. With the HKEX mandating ESG reporting for listed companies and aligning its requirements with global standards like GRI and IFRS S2, organizations must adopt robust reporting practices to meet stakeholder expectations.

Understanding GRI Report and Its 2021 Updates

The GRI Standards, developed by the Global Reporting Initiative, provide a globally recognized framework for organizations to disclose their economic, environmental, and social impacts. In 2021, GRI introduced revised Universal Standards (effective January 2023), enhancing transparency and accountability while integrating critical themes like human rights and materiality assessment. Key updates include:

1. New Reporting Options:
   • “In Accordance With”: Requires full compliance with nine criteria, including materiality determination, disclosure of GRI Topic Standards for material issues, and submission of a GRI Content Index.
   • “With Reference To”: Allows selective use of GRI Standards but mandates a GRI Content Index and notification to GRI.
2. Mandatory Sector Standards:
   Sector-specific standards (e.g., GRI 11 for Oil & Gas, GRI 12 for Coal) became mandatory in 2023, with Agriculture and Fishing sectors following in 2024. These ensure industry-tailored disclosures.
3. Human Rights Integration:
   Human rights disclosures are now embedded in GRI 2 (General Disclosures), moving from an optional standalone topic to a universal requirement.
4. Rearranged Topic Standards:
   The 31 updated Topic Standards eliminate the former Economic (200), Environmental (300), and Social (400) categories, enabling more flexible, impact-focused reporting.

For Hong Kong companies, these updates align with HKEX’s evolving ESG Code, which now mandates climate-related disclosures akin to IFRS S2.

Why GRI Reporting Matters

Hong Kong’s regulatory landscape demands rigorous ESG transparency:

• HKEX Compliance: Listed companies must publish annual ESG reports aligned with financial cycles, disclosing metrics from carbon emissions to anti-corruption measures.
• 2025 Climate Disclosure Deadline: Enhanced climate-related disclosures under HKEX’s ESG Code will require alignment with IFRS S2, focusing on governance, strategy, risk management, and metrics.
• Global Investor Expectations: Over 78% of the world’s largest companies use GRI, making it a trusted framework for attracting international investors.

GRI report not only fulfills regulatory obligations but also strengthens stakeholder trust, mitigates risks, and uncovers opportunities in energy efficiency, sustainable finance, and operational resilience.

Partner for GRI Excellence in Hong Kong

As a GRI Community Member and ISO 9001-certified advisory firm, GreenCo combines local expertise with global insights to guide Hong Kong companies through GRI compliance. Their end-to-end services include:

1. GRI Gap Analysis & Materiality Assessment

GreenCo identifies gaps in current reporting practices and conducts stakeholder engagement workshops to pinpoint material topics—ensuring disclosures align with both GRI Standards and HKEX requirements.

2. Sector-Specific Compliance

For industries like energy, manufacturing, or finance, GreenCo applies mandatory GRI Sector Standards (e.g., GRI 11, 12) to address unique impacts, from carbon-intensive operations to supply chain labor practices.

3. Human Rights & Governance Integration

GreenCo helps embed human rights due diligence into governance frameworks, as required by GRI 2, and crafts policies that resonate with global benchmarks like the UN Guiding Principles.

4. Data Management & Assurance

Leveraging custom ESG data tools, GreenCo streamlines collection of Scope 1-3 emissions, social KPIs, and governance metrics. They also coordinate third-party assurance to enhance report credibility.

5. Climate Risk Alignment with IFRS S2

GreenCo bridges GRI and HKEX requirements by integrating IFRS S2-aligned climate disclosures into GRI reports, including scenario analysis, transition plans, and GHG reduction targets.

GreenCo’s Competitive Edge

• Dedicated Expertise: A team of GRI Certified Professionals, CFAs, and environmental scientists ensures holistic advice.
• Proven Track Record: Successfully delivered 70+ projects for listed companies across Asia, enhancing ESG ratings and award-winning reports.
• Local-Regional Synergy: Deep understanding of HKEX guidelines paired with global framework proficiency (GRI, IFRS, SDGs).

Prepare for 2025 Deadlines

With HKEX’s enhanced climate disclosures effective January 2025, Hong Kong companies must act swiftly to align GRI reporting with evolving requirements. GreenCo’s proactive approach ensures:

• Seamless integration of GRI’s 2021 updates into existing frameworks.
• Compliance with Sector Standards and mandatory human rights disclosures.
• Strategic storytelling that transforms reports into tools for investor engagement.

In a world where sustainability defines competitiveness, GreenCo empowers Hong Kong businesses to turn GRI report from a compliance exercise into a strategic asset. Contact GreenCo today to craft credible, globally recognized disclosures that elevate your ESG performance and resilience.

Sustainability Reporting Consulting in Hong Kong

With the Hong Kong Stock Exchange (HKEX) mandating enhanced climate-related disclosures by 2025 and global investors prioritizing ESG performance, companies must act swiftly to align their practices with evolving standards. GreenCo, a premier ESG consulting firm in Hong Kong, empowers organizations to transform sustainability reporting from a compliance exercise into a catalyst for long-term value creation.

Why Sustainability Reporting Matters

The HKEX ESG Code, effective January 2025, requires listed companies to disclose climate risks in alignment with the IFRS S2 standard, emphasizing governance, strategy, risk management, and metrics. Beyond compliance, robust ESG reporting enhances investor confidence, operational efficiency, and access to sustainable finance. Companies gain competitive advantages through improved stakeholder trust and market differentiation.

GreenCo’s End-to-End ESG Reporting Services

Whether your organization is new to ESG reporting or refining existing practices, GreenCo offers tailored solutions to elevate disclosures. Our services include:

1. Materiality Assessment

• Identify high-impact ESG issues through stakeholder surveys, interviews, and workshops.
• Prioritize topics like carbon emissions, labor practices, or supply chain ethics based on stakeholder input.

2. Data Collection & Management

• Implement digital tools to collect, manage and validating sustainability data across different dimensions
• Track real-time metrics such as emissions, use of resources, environmental impact, social initiatives, governance practices, etc.

3. Report Writing & Development

• Craft compelling narratives that blend compliance with storytelling, highlighting progress toward goals like net-zero transitions.
• Design reports to align with HKEX, GRI, SASB, or TCFD standards.

4. Framework Guidance & Benchmarking

• Advise on selecting and integrating frameworks (e.g., GRI, TCFD, SDGs and others)
• Guide companies through the process of aligning their reports with selected frameworks

5. Benchmarking and Best Practices

• Evaluate industry standards and leading sustainability practices to guide organizational improvements.
• Compare organizational practices against industry peers to highlight gaps and improvement opportunities.

6. Stakeholder Engagement & Communication

• Develop a multilingual digital platform to share reports with stakeholders to gather feedback.
• Facilitate feedback loops to refine future disclosures.

7. Integration with Corporate Strategy

• Align sustainability goals and disclosures with overall business objectives and long-term vision.

8. Assurance & Verification

• Prepare for external reviews with rigorous ESG data validation.

9. Continuous Improvement

• Post-reporting analysis to incorporate stakeholder feedback and update strategies.
• Support long-term goals like carbon neutrality roadmaps or SDG alignment.

Why Choose GreenCo?

• Proven Expertise: ISO 9001-certified processes and experience serving 70+ listed companies across industries.
• Holistic Approach: From materiality assessments to post-report strategy updates, we cover all of ESG services.
• Global-Local Balance: Deep knowledge of HKEX rules paired with mastery of global standards like ISSB and PRI.

With HKEX’s 2025 climate disclosure deadline approaching, Hong Kong companies cannot afford delays. Robust ESG reporting not only ensures compliance but also unlocks opportunities—from attracting ESG-focused investors to improving operational resilience.

GreenCo simplifies this journey, transforming complex frameworks into actionable insights. By partnering with us, businesses turn mandatory disclosures into strategic assets, fostering trust, enhancing reputations, and driving sustainable growth.

Contact GreenCo today to begin your ESG journey.

ESG Integrated Reporting in Hong Kong

As regulators like the HKEX mandate enhanced ESG disclosures and global investors demand transparency, companies are increasingly adopting frameworks such as the Integrated Reporting Framework (IRF) to holistically communicate their value creation strategies.

The Integrated Reporting Framework (IRF)

The IRF, developed by the International Integrated Reporting Council (IIRC), redefines corporate reporting by integrating financial and non-financial metrics into a cohesive narrative. Unlike traditional reporting, which siloes financial results from ESG factors, the IRF emphasizes:

• Purpose: Integrated reporting aims to empower organizations to transparently convey their strategies for sustaining value creation across time. It advocates for an expanded perspective on value by evaluating diverse capitals—financial assets, physical infrastructure, intellectual property, workforce capabilities, community relationships, and environmental resources.
• Guiding Principles: The IRF operates under core principles that prioritize clear, concise, trustworthy, and material disclosures. It champions integrated thinking, urging businesses to holistically assess how internal operations and external factors interconnect to shape long-term outcomes.
• Content Elements: Organizations adhering to the IRF must address essential components in their reports, such as the external operating landscape, business model mechanics, governance frameworks, operational performance, risk and opportunity profiles, strategic direction, and forward-looking objectives.
• Value Creation: At its heart, integrated reporting positions value creation as the organization’s central mission. It compels companies to detail how they deliver value to stakeholders through financial and non-financial channels, offering investors a multidimensional lens to gauge long-term viability and resilience.
• Connectivity of Information: The IRF mandates illustrating how disparate business elements—from governance to environmental impact—interact to drive value. By mapping these interdependencies, reports foster a cohesive narrative that clarifies organizational health and future prospects.
• Stakeholder Engagement: The framework emphasizes proactive dialogue with stakeholders to identify their priorities and concerns. Transparent communication not only builds credibility but also aligns reporting content with stakeholder expectations, reinforcing trust and collaborative relationships.
• Business Transformation: Beyond retrospective analysis, the IRF positions reporting as a springboard for innovation. It challenges organizations to leverage insights from the reporting process to refine governance, optimize performance, and align strategy with emerging risks and opportunities, thereby catalyzing sustainable transformation.

For Hong Kong-listed companies, this framework aligns seamlessly with regulatory trends. The HKEX’s upgraded ESG Code, effective January 2025, requires enhanced climate disclosures under IFRS S2, while the Financial Services and Treasury Bureau (FSTB) pushes for IFRS-aligned sustainability reporting by 2028. The IRF’s focus on materiality and strategic alignment positions it as a critical tool for compliance and investor engagement.

Why IRF Matters for Hong Kong Companies

Hong Kong’s status as a global financial hub necessitates reporting practices that satisfy both local regulations and international standards. The IRF bridges this gap by:

1. Meeting Regulatory Demands: HKEX’s ESG Code mandates disclosures on governance, strategy, and climate risks—elements central to IRF’s content pillars.
2. Enhancing Investor Appeal: Most of institutional investors consider integrated reporting crucial for assessing long-term viability. By linking ESG performance to financial outcomes, companies attract ESG-focused capital.
3. Driving Operational Resilience: IRF’s emphasis on “integrated thinking” encourages companies to embed ESG into core operations, mitigating risks such as supply chain disruptions or carbon pricing.

Future-Proofing Through Integrated Reporting

As Hong Kong accelerates toward mandatory climate disclosures and global ESG convergence, the integrated reporting offers a structured approach to navigate complexity. By adopting IRF principles, companies not only comply with regulations but also unlock opportunities for sustainable growth, investor confidence, and operational resilience.

GreenCo stands at the forefront of this transition, combining technical excellence with deep regulatory knowledge to deliver integrated reports that resonate with stakeholders and drive business transformation. For Hong Kong organizations, the time to act is now—partner with GreenCo to turn ESG ambitions into measurable, enduring success

ESG Strategy in Investment

ESG factors are no longer just a “nice-to-have” for investors—they are now a critical component of risk management and value creation. Investors are increasingly demanding ESG integration for several reasons:

• Risk Management: ESG performance is seen as a proxy for management quality and a way to mitigate investment risks.
• Fiduciary Duty: Many investors view ESG integration as part of their responsibility to act in the best interests of their clients.
• Client Demand: Investors are increasingly prioritizing ESG factors due to pressure from clients and stakeholders.
• Opportunity Identification: ESG analysis can uncover investment opportunities that align with long-term sustainability trends.

Despite its growing importance, the integration of ESG factors into investment decisions remains a challenge. Asset managers often cite a lack of robust data and advanced analytics as barriers to broader ESG adoption. This is where ESG strategy consulting firms in Hong Kong play a pivotal role.

The Value Driver Adjustment Approach

One of the most effective methods for integrating ESG factors into investment decisions is the Value Driver Adjustment Approach. This approach involves adjusting traditional valuation models to account for ESG-related risks and opportunities. By incorporating these factors into valuation models, investors can gain a more comprehensive understanding of a company’s true value and risk profile.

Key ESG Factors for Investment Decision-Making

ESG strategy consulting firms in Hong Kong emphasize the importance of considering a wide range of ESG factors when making investment decisions. These factors can be categorized into three main areas:

1. Environmental Issues

• Climate change and carbon emissions
• Air and water pollution
• Biodiversity and deforestation
• Energy efficiency and waste management
• Water scarcity

2. Social Issues

• Customer satisfaction and data protection
• Gender diversity and employee engagement
• Community relations and human rights
• Labor standards

3. Governance Issues

• Board composition and audit committee structure
• Bribery and corruption
• Executive compensation and lobbying
• Political contributions and whistleblower schemes

These factors are not only critical for risk management but also serve as indicators of a company’s long-term sustainability and resilience.

Challenges in ESG Integration

While the benefits of ESG integration are clear, asset managers face several challenges:

1. Data Quality: A lack of standardized and reliable ESG data makes it difficult to compare companies and sectors.
2. Analytics: Many firms lack the advanced analytics needed to effectively incorporate ESG factors into their investment processes.
3. Specialist Expertise: ESG integration requires specialized knowledge and skills, which are often in short supply.

To address these challenges, GreenCo is investing in technology and training to help asset managers build robust ESG analytics and reporting frameworks.

How GreenCo Can Help

GreenCo offers a range of services to help investors integrate ESG factors into their investment processes:

1. Tailored ESG Checklists and Tools: GreenCo provides customized checklists and assessment tools to evaluate companies based on specific ESG criteria.
2. Complex Analytics: Expert teams help fund managers develop sophisticated analytics to rate companies on ESG performance.
3. Training and Education: GreenCo offers extensive training on ESG fund management and climate risk management.
4. Continuous Monitoring: GreenCo provides ongoing monitoring and reporting to ensure that investee companies’ ESG performance aligns with investor goals.
5. Sustainability Frameworks: GreenCo helps investors design and implement sustainability management frameworks that align with global best practices.

By leveraging these services, investors can ensure that their portfolios are not only profitable but also sustainable.

Redefining ESG Investment

ESG strategy consulting is playing a critical role in helping investors integrate ESG factors into their valuation models and investment decisions. By addressing challenges such as data quality and analytics, consultants are enabling investors to optimize their portfolios for both risk and return.

As the demand for sustainable investment continues to grow, GreenCo remains at the forefront of this transformation. Together, we are redefining investment strategies to create a more sustainable and profitable future.

Sustainability Report Preparation in Hong Kong

In Hong Kong’s dynamic business environment, sustainability reporting has evolved to a regulatory necessity. With investors, regulators, and stakeholders demanding greater transparency, companies must now align their ESG disclosures with both local and global standards. Recent updates to Hong Kong’s sustainability regulations—particularly the adoption of HKFRS S1 and HKFRS S2—underscore the urgency for businesses to act.

Hong Kong’s Latest Sustainability Regulations

The Hong Kong Institute of Certified Public Accountants (HKICPA) has aligned local sustainability disclosure standards with global benchmarks by adopting IFRS S1 and IFRS S2 (also known as ISSB Standards). Published on 12 December 2024, the new HKFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and HKFRS S2 Climate-related Disclosures will reshape sustainability reporting in Hong Kong. These standards emphasize transparency in governance, strategy, risk management, and metrics related to climate impacts, ensuring disclosures are decision-useful for investors.

Key Compliance Timelines

• 1 January 2025: Main Board issuers must disclose climate-related information on a “comply or explain” basis under HKEX’s ESG Code.
• 1 August 2025: HKFRS S1 and S2 come into effect.
• 1 January 2026: Large Cap Issuers must mandatorily disclose climate-related requirements.
• 2027: HKEX will launch market consultation on mandatory sustainability reporting in accordance with HKFRS S1 and S2.
• 2028: Large publicly accountable entities (PAEs) must fully comply with HKFRS S1 and S2.

Notably, existing HKEX ESG guidelines remain in effect until August 2025, requiring companies to juggle overlapping frameworks during the transition. This phased approach demands proactive planning to avoid last-minute bottlenecks.

Challenges in Sustainability Report Preparation

Preparing a compliant sustainability report involves navigating:

1. Complex Regulatory Overlaps: Balancing HKEX’s ESG Code, HKFRS S1/S2, and global standards like GRI and IFRS.
2. Data Collection Rigor: Accurately quantifying Scope 1-3 emissions, climate risks, and social metrics.
3. Stakeholder Expectations: Addressing material issues identified through engagement with investors, employees, and supply chains.
4. Timely Compliance: Meeting aggressive deadlines while ensuring reports withstand regulatory and investor scrutiny.

Companies that delay risk non-compliance penalties, reputational damage, and missed opportunities to attract ESG-focused capital.

GreenCo’s Earlier Preparation Assistance

GreenCo has taken proactive steps to support companies that want to prepare earlier for the enhanced requirement. Acknowledging the critical role of climate-related disclosures and the necessity for businesses to align with shifting regulatory frameworks, we have enhanced our data collection platform to better support organizations. This upgraded system streamlines the gathering of data essential for comprehensive reporting, allowing companies to fulfill compliance requirements seamlessly.

We recognize that addressing climate change is an ongoing journey requiring sustained effort. To this end, we continue to prioritize helping businesses craft and implement robust ESG strategies. Drawing on our specialized knowledge and tools, we provide tailored guidance to enable organizations to integrate sustainability into their operations and proactively manage climate risks.

Through proactive support, our goal is to equip companies with the tools to anticipate regulatory shifts, improve transparency, and uphold accountability in their climate-related efforts. We are committed to empowering businesses to contribute meaningfully to a resilient, sustainable future and to lead transformative action in the global fight against climate change.

Act Now to Lead in Sustainability

Navigating the publication of a new sustainability reporting standard can be confusing. Partner with GreenCo to navigate complexities, align with HKFRS S1/S2, and turn ESG ambitions into measurable outcomes.

Contact GreenCo today to schedule a consultation. Let our experts help you prepare a sustainability report that not only complies but also captivates stakeholders and drives long-term value.

Climate Risk Management in Hong Kong

Hong Kong’s regulatory landscape is rapidly evolving, with climate risk management becoming a critical priority for businesses. The HKEX is set to implement enhanced climate disclosure requirements aligned with the IFRS 2. These changes demand robust climate risk policies, scenario analysis, and financial impact assessments—areas where GreenCo, a leading ESG consultancy in Hong Kong, excels.

HKEX’s Enhanced Climate Disclosures

Effective January 1, 2025, HKEX’s updated ESG Reporting Code mandates enhanced climate-related disclosures aligned with the IFRS S2 Climate-related Disclosures standard. This requires companies to:

• Develop climate risk management policies integrating governance, strategy, and metrics.

• Conduct scenario analysis to assess physical (e.g., extreme weather) and transition risks (e.g., carbon pricing).
• Quantify the financial impacts of climate change on operations, supply chains, and long-term profitability.
• Disclose greenhouse gas emissions, engaging value chains to meet GHG Protocol standards.

Compliance is no longer optional for Hong Kong-listed companies. The Financial Services and the Treasury Bureau (FSTB) has further outlined a roadmap for mandatory IFRS-aligned disclosures by 2028, emphasizing the urgency for businesses to act now.

Why Climate Risk Management Matters

Beyond compliance, proactive climate risk management offers:

• Investor Confidence: Transparent disclosures attract ESG-focused capital and improve valuations.
• Operational Resilience: Proactive measures, such as energy efficiency improvements and supply chain diversification, mitigate disruptions from extreme weather or policy shifts.
• Strategic Advantage: Leading in sustainability enhances brand reputation and market positioning.

Key Challenges for Businesses

Many companies in climate risk management struggle with:

1. Data Collection: Calculating Scope 1, 2, and 3 emissions requires robust systems and expertise.
2. Scenario Analysis: Predicting climate and financial impacts amid variable future conditions demands sophisticated modelling and specialized knowledge.
3. Policy Integration: Embedding climate risks into governance and strategy requires cross-functional alignment.

How GreenCo Supports in Climate Risk Management

GreenCo combines technical expertise, regulatory insight, and innovative tools to help clients navigate these challenges.

1. Climate Risk Assessments
   • Conduct scenario analyses to evaluate physical (e.g., floods) and transition risks (e.g., carbon pricing).
   • Quantify financial impacts to inform strategic decision-making.
2. IFRS S2-Aligned Disclosures
   • Prepare comprehensive reports covering governance, strategy, risk management, and metrics.
   • Ensure compliance with HKEX requirements while aligning with global standards.
3. GHG Emissions Accounting
   • Measure and verify Scope 1, 2, and 3 emissions using the GHG Protocol.
   • Developing customized data collection tools for supply chain collaboration.
4. Capacity Building
   • In-person workshops and short-term secondments to train teams in sustainability reporting.
   • Practical guidance to ensure long-term, independent ESG management.
5. Long-Term Strategy Development
   • Create roadmaps for carbon neutrality and climate resilience.
   • Integrate climate goals into corporate governance and investor communications.

GreenCo’s Competitive Edge

• Specialized Expertise: A multidisciplinary team with certifications in GRI, CFA ESG Investing, and IEMA.
• Proven Track Record: Successfully guided 70+ listed companies in Hong Kong and Asia.
• ISO 9001 Certified: Ensures quality and compliance in all advisory services.
• Local and Global Insight: Deep knowledge of HKEX regulations paired with international best practices.

The Time to Act Is Now

With HKEX’s 2025 deadline approaching, delaying climate risk management is not an option. Companies that proactively address these challenges will not only comply with regulations but also unlock new opportunities for growth and resilience.

Partner with GreenCo to navigate this complex landscape. Our tailored solutions empower businesses to lead in sustainability while meeting stakeholder expectations.

Contact us today to transform climate risks into strategic advantages and secure your company’s sustainability future.

Climate Risk Disclosure Consulting

As climate risks become more pronounced and regulatory frameworks tighten, many listed companies struggle to conduct comprehensive climate risk management. GreenCo stands out as a leading partner, offering tailored consulting services that guide companies through every phase of climate risk disclosure—from identifying material risks to developing transition plans and analyzing financial impacts.

Addressing Climate Challenges and Regulatory Pressures

With climate change now at the forefront of global concerns, Hong Kong companies are required to meet rigorous ESG and climate disclosure standards. New mandates compel businesses to demonstrate robust governance, transparent strategies, and measurable targets. These evolving regulations not only help mitigate environmental impacts but also foster investor trust and long-term corporate resilience.

Identifying Material Climate Risks and Opportunities

Not every climate-related issue poses a significant threat or opportunity to a business. To effectively allocate resources, companies must differentiate between high-impact risks and less critical issues. GreenCo’s expert team assists clients through a comprehensive materiality assessment process that:

• Evaluates Relevance: Determines which climate risks and opportunities have the greatest impact on operations.
• Prioritizes Issues: Utilizes clearly defined criteria to rate and rank these issues, ensuring that companies focus on the most material factors.
• Visualizes Findings: Implements a Materiality Matrix to present assessment results in an intuitive, visual format that aids decision-making.

This strategic approach enables companies to target efforts where they matter most, ensuring that sustainability initiatives translate into real business value.

Developing Effective Transition Plans

Once material risks and opportunities are identified, the next step is to translate insights into actionable strategies. GreenCo works closely with companies to:

• Formulate Mitigation Measures: Develop strategies that address identified risks while seizing emerging opportunities in a low-carbon economy.
• Enhance Stakeholder Confidence: Transform strategic commitments into tangible actions that reassure investors and stakeholders about the company’s long-term stability.
• Benchmark Performance: Use peer benchmarking and clear guidelines to set realistic yet ambitious transition targets.

By crafting robust transition plans, companies can not only meet regulatory requirements but also position themselves as leaders in sustainable business practices.

Conducting Financial Effect Analysis

Climate risks—such as extreme weather events—can lead to unexpected expenditures and potential capital losses. Moreover, the shift toward a low-carbon economy introduces financial uncertainties that must be managed proactively. GreenCo leverages advanced analytical tools and deep industry expertise to:

• Quantify Financial Impacts: Assess how climate risks and the transition to sustainable practices affect a company’s financial performance.
• Model Future Scenarios: Provide insights into how various climate scenarios (for example, differing global temperature increases) could influence costs, investments, and revenue streams.
• Improve Strategy Formulation: Offer actionable recommendations that help companies refine their climate strategies, turning potential financial vulnerabilities into competitive advantages.

This meticulous financial analysis ensures that companies are well-prepared to navigate the fiscal challenges of climate change.

GreenCo’s ESG and Climate Risk Management Approach

GreenCo is a trusted partner in the journey toward ESG excellence. With a deep focus on sustainability, GreenCo delivers a holistic suite of services that integrates climate risk disclosure within broader ESG strategies. Key differentiators include:

• Expertise in Global and Local Frameworks: GreenCo ensures compliance with local mandates such as the HKEX ESG Code and global standards including GRI and IFRS S2. This dual focus enables clients to produce ESG reports that are both regionally compliant and internationally credible.
• End-to-End Consulting Services: From initial gap analysis and stakeholder engagement to the development of detailed ESG reports and robust data management systems, GreenCo provides comprehensive support tailored to each client’s unique needs.
• A Proven Track Record: With extensive experience advising over 70 listed companies across diverse sectors, GreenCo’s multidisciplinary team—comprising experts in finance, environmental science, and corporate governance—ensures that every client receives high-caliber, actionable advice.

By integrating best practices in materiality assessment, transition planning, and financial effect analysis, GreenCo empowers companies to manage climate risks effectively and transform sustainability challenges into strategic opportunities.

As regulatory requirements tighten and investor expectations rise, robust climate risk disclosure is no longer optional—it is a strategic imperative. Hong Kong companies must proactively manage climate risks to enhance resilience, secure sustainable growth, and maintain competitive advantage. With GreenCo’s deep expertise and comprehensive approach, businesses can confidently navigate the complexities of climate disclosures and ESG reporting.

Empower your organization with GreenCo’s expert guidance and take decisive action to build a sustainable future. Now is the time to transform climate challenges into opportunities and lead the way in ESG excellence.