BDO ESG Awards to put the spotlight on industry best practice, recognising companies striving to reach net zero

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Climate change is one of the most pressing challenges facing the world today. The need to reduce carbon emissions was high on the agenda at the recent meeting of world leaders at the G7 Summit in Japan, with the heads of the largest economies reaffirming their commitment to decarbonising the energy sector by 2035. China, the world's largest consumer of energy and main emitter of carbon, has also pledged to become carbon neutral by 2060.

Governments around the world have set target dates to be carbon neutral, with Hong Kong aiming to become net zero by 2050. And while corporations have an important role to play in helping to meet these targets, it is essential they incorporate environmental, social and governance (ESG) factors into their operations to help future-proof their business.

"Challenges on climate change, combined with greater social awareness, have driven enterprises to adopt ESG factors into business strategies and demonstrate their utmost effort in making the world greener," says Ricky Cheng, director and head of risk advisory at BDO in Hong Kong.

ESG topping the agenda

BDO, the world's fifth largest accounting and advisory network, has long been an advocate of sustainability. It not only incorporates ESG factors into its own operations but also assists companies with ESG reporting and risk management.

Its latest annual ESG reporting performance survey found ESG is moving up the corporate agenda of Hong Kong-listed companies, with 60 per cent of boards now having direct oversight for sustainability, up from 54 per cent the previous year. It also revealed 48 per cent of companies surveyed are making progress in setting measurable environmental and emission targets, compared with just 15 per cent previously.

But there are still significant gaps, and Hong Kong-listed companies have been slow to respond to changes in Hong Kong Exchanges and Clearing's (HKEX) revised Environmental, Social and Governance Reporting Guide in terms of disclosing relevant, transparent and high-quality climate-related information and the resulting financial impacts. Meanwhile, just 10 per cent of companies listed in Hong Kong have independent assurance for their ESG disclosures.

Driving change

To help promote ESG excellence and share best practices, BDO runs the annual BDO ESG Awards. Now in its fifth year, the programme recognises Hong Kong-listed companies that have made a positive impact in the areas of ESG and implemented outstanding sustainability initiatives. The awards were the first in Hong Kong to encourage companies to be more aware of their responsibility to incorporate sustainability into their business model.

"In order to tackle rapid global warming on Earth, enterprises should discharge their corporate responsibility to adopt carbon reduction solutions and demonstrate their utmost effort in reducing greenhouse gas emissions generated from their business activities, striving to achieve a long-term net-zero carbon emission business model," Cheng explains.

Alongside the awards’ three main categories of Best in ESG; Best in Reporting; and ESG Report of the Year, the 2023 awards will include a special Theme award. This will recognise the company that has achieved the biggest reduction in carbon emissions during the year, in both absolute terms and intensity. The award will also recognise the best carbon reduction initiative launched during the year with the potential to significantly reduce the business’ carbon emissions in the long run. In addition, the judging panel of industry experts will look for the most compelling long-term vision and action plan to achieve carbon neutrality.

This year's awards will also have a new category: Outstanding ESG Performance of H-share companies, to recognise the achievements of mainland Chinese companies listed in Hong Kong in ESG and its reporting.

"With tougher ESG disclosure standards required from the regulators and rising awareness from the market, ESG is not just about solutions to tackle risks and challenges, but also ways to create long-term value for stakeholders and investors," Cheng says. "Coming to the fifth year of the BDO ESG Awards, BDO will continue pushing ESG engagement and further strengthening the position of Hong Kong as an international financial centre and leading green hub."