Navigating through ESG and the macro-economic outlook with EY Boardroom Briefing for INEDs

Considering the key trends driving the ESG agenda locally and globally, it is imperative for boards of directors (boards) to stay updated with the latest ESG developments to ensure that their organizations are ready to support the transition to a low-carbon future and comply with the latest regulatory requirements.

At the EY¹ “Boardroom Briefing for INEDs: ESG · Economy” hosted last week, over 100 independent non-executive directors (INEDs) of Hong Kong listed companies were joined by EY professionals and representatives from the regulator, academia, corporates and financial institutions to explore the boardroom strategies in areas of environment, social and governance (ESG) and the macro economy.

Jasmine Lee, EY Hong Kong and Macau Managing Partner, says in her welcome speech: “Boards play a huge role in all of this as their responsibilities go beyond leading the company in regulatory compliance. As part of fulfilling its fiduciary duty, the board must ensure that business practice is reliable and transparent to major stakeholders. Effective sustainability governance requires leadership that can actively challenge management on sustainability strategies, monitor commitment implementation, and proactively engage with investors. Regardless of the company's chosen approach to ESG solutions, these key actions are crucial for strong sustainability oversight.”

The EY team is dedicated to co-creating shared value for sustainability, reflected through both our solutions for clients and our own commitment to decarbonization. With carbon reduction efforts and coordination from all EY business units, we are proud to remain carbon negative in FY2022, keeping us on track to reach net zero in 2025. Evidenced by a plethora of collaborations and programs, EY has taken the initiative to collaborate with all parties, government, businesses, academia and NGOs alike, for a sustainable future.

“This is also the reason for today’s event, to bring together professionals with diverse ESG knowledge and to stimulate the exchange of ideas,” Lee adds. “By bringing all the leaders and decision-makers together, we hope to raise ESG awareness and inspire thought leadership. We hope to motivate board members so that they can also contribute to sustainability by fostering collaborations and establishing more valuable partnerships.”

A key board role is to protect and create value to position the company for success. Christine Loh, Chief Development Strategist at the Institute for the Environment of the Hong Kong University of Science and Technology, expresses her view on Sustainability & ESG in the boardroom stressing that boards have to do this in the era of climate change. She emphasizes while ESG disclosure is a compliance matter, its broader function is to give management and board members insight into important functions of the company. She says: “The first step is ESG compliance, but boards will have to review corporate strategy to move towards greater sustainability, and this applies to whether your business is mainly in Hong Kong or beyond. The ultimate goal is greening directors and boards for better stewardship in a time of massive global disruptions.” 

The Stock Exchange of Hong Kong Limited proposed to mandate all issuers to make climate-related disclosures in their ESG reports and introduce new climate-related disclosures aligned with the International Sustainability Standards Board (ISSB) Climate Standard². Katherine Ng, Head of Listing at the Hong Kong Exchanges and Clearing Limited (HKEX), also shares her views on Directors’ role in ESG reporting.

Anthony Leung, EY Assurance Leader, Hong Kong and Macau and Deputy Assurance Leader, Greater China, says: “At EY, we are committed to helping our clients navigate the evolving landscape of sustainability reporting and ESG considerations. We support companies to understand and address the risks and opportunities arising from climate change and sustainability issues. At the forefront of providing sustainability advisory services ranging from decarbonization strategy and target development, climate risk assessment and scenario analysis, capital market advisory, sustainability reporting and ESG data management, we work closely with our clients to develop tailored approaches that integrate sustainability into their business strategies to drive long-term value and resilience.”

In the captivating panel discussion featuring Christine Loh, Chief Development Strategist at the Institute for the Environment of the Hong Kong University of Science and Technology, Kelly Lee, Senior Vice President of Policy and Secretariat Services, Listing at HKEX, Kristy Wong, Associate Director, ESG Investment Specialist at Amundi, and Nadira Lamrad, Head of Sustainability at Jardine Matheson, the incredible line-up of experienced professionals brought a wealth of knowledge and expertise in their respective fields, enriching and diversifying the discussion.

Ee Sin Tan, EY¹ Hong Kong and Macau Climate Change and Sustainability Services (CCaSS) Partner, walks through the Shifting landscape of ESG reporting in Hong Kong. He observes that companies and investors share a common vision: prioritizing sustainability for mutual benefit: “Firstly, companies must identify and invest in sustainability issues that are directly relevant to their business. By focusing on these material issues, resources can be effectively allocated for a more impactful sustainability strategy. Secondly, strong governance and accountability frameworks that foster open discussions and engagement at all levels are crucial. This comprehensive approach ensures a deep understanding of risks and opportunities, integrating sustainability into decision-making processes. Lastly, embracing a more ambitious approach to reporting, ahead of global standards, and considering data assurance enhances transparency and credibility. Together, these priorities pave the way for a sustainable future that benefits both companies and investors.”

Raymond Yeung, Chief Economist for Greater China at Australia and New Zealand Banking Group, discusses the Economic outlook of Mainland China and Hong Kong in 2024, and says: “The world is entering a new regime with a very different inflation outlook between China and the western countries. The position of Hong Kong will inevitably change. The city needs to respond to the shift in global economy proactively.”

¹ Ernst & Young, Hong Kong

² Exchange Publishes Consultation Paper on Enhancement of Climate Disclosure under its ESG Framework (14 Apr 2023)

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